SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (fee required)
For the fiscal year ended December 31, 1995, or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ___________ to __________
Commission file number 0-14752.
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 35-1665759
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14160 Dallas Parkway, Suite 300, Dallas, Texas 75240
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (214)
770-5600
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Beneficial Unit Certificates
(Title of Class)
Indicate by checkmark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
1<PAGE>
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained herein, and none will be
contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB. __
The registrant's revenues for its most recent fiscal year were:
$15,693,441 .
As of December 31, 1995, there were 1,264,000 Beneficial Unit
Certificates of limited partnership interest of the Partnership
("BUCs") outstanding, of which 580,161 were held by affiliates of
the registrant. The BUCs are not quoted on the NASDAQ System.
DOCUMENTS INCORPORATED BY REFERENCE
None.
2<PAGE>
PART I
Item 1. DESCRIPTION OF BUSINESS
General
Capital Senior Living Communities, Limited Partnership (formerly
known as Retirement Living Tax-Exempt Mortgage Fund Limited
Partnership) (the "Partnership") was formed on December 17, 1985,
under the Delaware Revised Uniform Limited Partnership Act, and
will continue until December 31, 2016, unless terminated earlier
under certain provisions of the partnership agreement. In 1986,
the Partnership issued to the public a total of 1,264,000
Beneficial Unit Certificates ("BUCs"), representing assignments
of limited partnership interest. This issuance generated funds
of $28,758,000, net of issuance costs, which were used
principally to acquire the Mortgage Loans (as defined below) on
April 11, 1986.
The Partnership was originally formed to acquire a portfolio of
five federally tax exempt, participating, non-recourse first
mortgage bonds issued by governmental issuers (the "Bonds") to
finance the construction and/or ownership of real estate projects
(the "Projects"). Each of the Bonds was secured by a
non-recourse note from the owner of a Project and a mortgage on
such
Project (the "Mortgage Loans"). The Projects consisted of four
retirement living centers and one multi-family residential
apartment complex. Each Project was owned by a partnership
(called herein a "Project Owner"). The partners of each Project
Owner ("Guarantors") guaranteed the Mortgage Loan on such Project
until that Project met a base interest target and also guaranteed
all unpaid base interest on such Mortgage Loan until the earlier
of maturity or acceleration (the "Guarantees"). The Project
Owners defaulted under the Mortgage Loans, and effective
September 11, 1991, the Project Owners transferred to a 99%-owned
subsidiary of the Partnership ("Retirement Partnership, Ltd", the
"Partnership Subsidiary"), through a negotiated settlement (the
"Negotiated Settlement"): (a) the five Projects securing the
Mortgage Loans; (b) an option to acquire an additional 132-unit
apartment project owned by an affiliate of the Project Owners and
Guarantors (the "Village Green I Apartments") (this acquisition
was effective December 6, 1991); and (c) an approximate 12%
interest in Encore Limited Partnership, a limited partnership
3<PAGE>
which invests in retirement living communities and is not
affiliated with the Project Owners or Guarantors.
In exchange for the transfer of these properties to the
Partnership, the Partnership agreed to (i) forgive approximately
$6,000,000 of the principal owed under the Mortgage Loans; (ii)
release the Project Owners from any liability under the remaining
balance of the Mortgage Loans; (iii) release the Guarantors from
any obligations under their personal guarantees of the Mortgage
Loans; (iv) purchase the Village Green I Apartments for
$2,633,202, payable $430,000 in cash and by taking the project
subject to a nonrecourse first lien mortgage payable to Banc One
Mortgage Corporation in the amount of approximately $2,203,202;
and (v) release the Project Owners and Guarantors from their
obligation to reimburse the Partnership for $203,500 in costs
related to the Partnership's efforts to collect unpaid base
interest on the Mortgage Loans in 1989. Additionally, in order
to acquire the Projects, the Partnership surrendered the Bonds to
the government issuers for cancellation.
As a result of the acquisition of the Projects and the Village
Green I Apartments pursuant to the Negotiated Settlement, the
Partnership now directly owns these properties and operates and
manages them through management agreements with the general
partner of the Partnership and an affiliate of the general
partner. See "Item 12. Certain Relationships and Related
Transactions."
General Partner
The general partner of the Partnership is Retirement Living
Communities ("RLC"), an Indiana limited partnership, whose sole
general partner was Capital Realty Group Senior Housing, Inc.
(formerly known as Capital Realty Group Properties III,
Inc.)("Senior Housing"). Effective July 1, 1995, Senior Housing
assigned its general partnership interest to Capital Retirement
Group, Inc. ("Retirement Group"), a Texas corporation and an
affiliate of Senior Housing. The address of the principal
executive offices of RLC and its general partner is the same as
the Partnership: 14160 Dallas Parkway, Suite 300, Dallas, Texas
75240, and their telephone number at such address is the same as
the Partnership (214) 770-5600. The limited partner of the
Partnership is Retirement Living Fiduciary Corporation, an
Indiana corporation ("RLFC").
4<PAGE>
Prior to March 23, 1990, the Project Owners were affiliates of
RLC and RLFC. However, on March 23, 1990, the general partners
of RLC sold all of the general partnership interests in RLC and
all of the outstanding shares of RLFC to Senior Housing, which is
not an affiliate of the Project Owners, and the limited partners
of RLC sold all of the limited partnership interests in RLC to
Capital Realty Group Properties, Inc. ("CRGP"), a Texas
corporation and an affiliate of Senior Housing and Retirement
Group. Effective January 1, 1991, CRGP transferred its limited
partnership interest in RLC to two individuals affiliated with
Senior Housing and Retirement Group. See "Item 9. Directors,
Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act." Accordingly, Retirement
Group has sole management authority and control over the affairs
of RLC. On September 12, 1990, RLC completed a tender offer
solicitation of BUC holders in order to acquire BUCs, resulting
in the acquisition of 561,336 BUCs by RLC, representing
approximately 44% of the total BUCs outstanding. As of December
31, 1995, RLC owns 580,161 BUCs, representing 45.90% of the total
BUCs outstanding. See "Item 11. Security Ownership of Certain
Beneficial Owners and Management" for further disclosure of
affiliated ownership.
Status for Federal Income Taxes
The Partnership's operations are fully taxable for federal income
tax purposes and the individual BUC holders are required to
report their respective shares of any taxable income of the
Partnership. Moreover, as a result of federal tax law changes in
1986, BUC holders are not able to use losses from any other
source other than "passive activity" losses, to offset their
share of the Partnership taxable income.
In the event the Partnership is taxed as a corporation because it
is "publicly traded" under Section 7704 of the Internal Revenue
Code of 1986, then the Partnership would be taxed at corporate
rates on all of its taxable income and distributions to the BUC
holders would be treated as fully taxable dividends to the extent
of current and accumulated earnings and profits, while
distributions in excess of current and accumulated earnings and
profits would be treated as the non-taxable return of capital to
the extent of each BUC holder's basis in the BUCs. RLC does not
believe the Partnership will be taxed as "publicly traded" for
fiscal 1995 based on its interpretation of Section 7704 and no
5<PAGE>
provision for income taxes has been reflected in the accompanying
statements of income.
No ruling has been requested from the Internal Revenue Service
regarding this matter and there can be no certainty as to the
ultimate outcome of this matter at this time.
Factors Associated with Real Estate
Risks Inherent in Ownership of Real Property. Since the
principal business of the Partnership is to own, manage and
operate real estate, the Partnership will be subject to all the
risks incident to ownership of real estate and interests
therein, many of which relate to the general illiquidity of real
estate investments. These risks include adverse changes in
general or local economic conditions; adverse changes in interest
rates and in the availability of permanent mortgage funds which
may render acquisitions, sales or refinancing of properties
difficult or unattractive; adverse changes in real estate,
zoning, environmental or land-use laws; increases in real
property taxes and federal or local economic or rent controls;
other governmental rules; increases in operating costs and the
need for additional capital and tenant improvements; the supply
of and demand for properties; over building in certain markets;
ability to obtain or maintain full occupancy of properties or to
provide for adequate maintenance or insurance; the presence of
hazardous waste materials; mechanics liens resulting from
construction; property related claims and litigation; fiscal
policies; and acts of God. The illiquidity of real estate
investments generally will impair the ability of the Partnership
to respond quickly to changed circumstances.
Competition and Marketing. The real estate business is highly
competitive and the Partnership conducts its business of owning
and operating income-producing real properties in competition
with other real estate investment partnerships, as well as
individuals, corporations, bank and insurance company investment
accounts, and other entities engaged in real estate investment
activities, including companies larger than the Partnership with
substantially greater resources. Competition in the market for
such properties varies with changes in the supply and demand for
similar properties in an area, changes in the interest rates and
in the availability of mortgage funds, and changes in tax, real
estate, environmental, and zoning laws.
6<PAGE>
The Partnership's profitability depends in part on maximizing the
occupancy of its rental property held by it at rental rates that
cover all expenses and include a profit component. Occupancy and
rental rates are affected by changes in general economic
conditions in the area where the property is located and by
changes in other local conditions, such as supply of comparable
rental properties, zoning laws, and availability and costs of
energy and transportation.
Insurance. The Partnership carries insurance covering all
Partnership properties for the replacement cost of all buildings,
loss of rents, loss of contents, and general liability. However,
there are certain types of losses (generally of a catastrophic
nature, including floods) which are either uninsurable or not
economically insurable. Should such a disaster occur, the
Partnership would suffer a loss of the capital invested in, as
well as anticipated profits from, any property destroyed by such
casualty.
Environmental Hazards. Owners and operators of real properties
are faced with increasing regulation of environmental hazards,
discharges and emissions. From time to time the Partnership may
be exposed to liability or fines for correcting environmental
problems or bringing properties into compliance with various
environmental standards even if the problems or violations were
unintentional or were caused by a prior owner or operator of the
property. The Partnership obtained an environmental audit of the
Village Green I Apartments in connection with the acquisition of
such property and the property does not appear to be in violation
of any environmental regulations.
Employees
The Partnership has no employees. Certain services are provided
to the Partnership by employees or affiliates of RLC and
Retirement Group, and the Partnership reimburses the affiliates
for such services at cost. The Partnership is not charged and
does not pay for salaries or fringe benefits of any principals of
Retirement Group.
Government Regulations and Reimbursement
The Partnership's retirement living centers are subject to
compliance with various state and local licensing requirements.
7<PAGE>
These requirements relate to the condition of the facilities and
the adequacy and condition of the equipment used therein, the
quality and adequacy of personnel, and the quality of care. Such
requirements are subject to change. There can be no assurance
that, in the future, the Partnership will be able to maintain
such licenses for its facilities or that the Partnership will not
be required to expend significant sums in order to do so.
Towne Centre Retirement Community is subject to regulations in
the State of Indiana regarding its assisted living and nursing
services. The Indiana State Board of Health requires that the
management company be licensed to provide the services that are
performed at Towne Centre. Capital Realty Group Management, Inc.
d/b/a Towne Centre Health Care, an affiliate of Retirement Group,
has received a license from the Indiana State Board of Health to
operate a 64-bed Comprehensive Care and 35-bed Residential Care
facility. Residential Care includes such services as assistance
with dressing, grooming, bathing, ambulating, and medical
supervision. Comprehensive Care encompasses full nursing
services including assistance with daily medication, physical
therapy, and occupational therapy. The license is issued for a
term of one year subject to automatic renewal by the State Board
of Health as long as the project is in compliance with the terms
of the license.
The State of Ohio requires the Canton Regency project to be
licensed to provide nursing services. Canton Regency Retirement
Community has received the license from the State of Ohio
Department of Health to operate a 50-bed nursing home. All
levels of care are included in this license. The License has no
expiration date, but a renewal fee is due on September 11 of each
year.
Medicaid is a medical assistance program for the indigent,
operated by individual states with the financial participation of
the federal government; Medicare is a health insurance program
for the aged and certain other chronically disabled individuals,
operated by the federal government. Changes in the reimbursement
policies of such funding programs as a result of budget cuts by
federal and state governments or other legislative and regulatory
action could adversely affect the revenues of the Partnership.
The Towne Centre project is a provider of services under the
Indiana Medicaid program. Accordingly, Towne Centre is entitled
to reimbursement under the foregoing program at established rates
8<PAGE>
which are lower than private pay rates. Payments from the
Medicaid program are adjusted prospectively, based on the filing
of an annual cost report. The Towne Centre and Canton Regency
projects are also providers of services under the Medicare
program. These Projects are entitled to reimbursement under the
foregoing program in amounts determined based on the filing of an
annual cost report prepared in accordance with Federal
regulations, which reports are subject to audit and retroactive
adjustment in future periods. These Projects receive payments
from this program based on established rates and are adjusted for
differences between such rates and estimated amounts reimbursable
from the program. During fiscal 1995, the Medicaid and Medicare
programs accounted for approximately 15% of the Partnership's
revenues.
Acquisition and Divestiture
In November 1993, the Partnership purchased a 72.73% limited
partnership interest in Beck Properties Trophy Club, L.P. for
$4,000,000. This limited partnership interest was sold in 1994.
Beck Trophy Club, L.P. is a Texas limited partnership formed on
November 28, 1993 for the purpose of acquiring and developing
real estate. At December 31, 1993, the primary assets of Beck
Properties Trophy Club, L.P. included approximately 1,024 acres
of undeveloped land, 114 residential lots, an office building,
sales office building, equestrian center, and a residential
house. These properties were purchased by Beck Properties Trophy
Club, L.P. for $5,042,029 from Beck Properties, Inc., an
affiliate of Jeffrey L. Beck, which had previously purchased the
properties in 1993 for $5,042,029 from an unrelated party. The
general partner of Beck Properties Trophy Club, L.P. is Capital
Realty Group Properties II, Inc., an affiliate of Retirement
Group, which made a capital contribution of $55,000 for its 1.00%
interest, and the other limited partners were Beck Family Trust
No. 1, a family trust for which Jeffrey L. Beck serves as sole
trustee, which made a capital contribution of $963,333 for its
17.52% interest, and James A. Stroud, who made a capital
contribution of $481,667 for his 8.76% interest. During 1994,
the Partnership contributed $435,636 in additional capital to
Beck Properties Trophy Club, L.P. Due to ongoing litigation that
impeded the development of the project, in August 1994, the
Partnership sold its interest in Beck Properties Trophy Club,
L.P. for $4,400,000 to Beck Family Trust No. 1. The
9<PAGE>
Partnership's investment in the Beck Properties Trophy Club, L.P.
incurred $15,523 in losses for 1994; of which $818 relates to
operations and $14,705 from the loss on sale.
During 1995, the Partnership made various purchases of limited
partnership interests in Healthcare Properties, L.P. As of
December 31, 1995, the Partnership has cumulatively paid $308,825
for a 5.8% ownership in Healthcare Properties, L.P. Healthcare
Properties, L.P. is a portfolio comprised of 9 nursing home
facilities.
During 1995, the Partnership made various purchases of
outstanding pension notes of NHP Retirement Housing Partners I,
L.P. As of December 31, 1995, the Partnership has cumulatively
paid $587,580 for a 3.25% ownership of outstanding pension notes
of NHP Retirement Housing Partners I, L.P. NHP Retirement
Housing Partners I, L.P. owns a portfolio of 5 independent living
retirement facilities. The pension notes bear simple interest at
13% annum. Interest of 7% is paid quarterly, with the remaining
6% interest deferred. Deferred interest and principal matures on
December 31, 2001.
The general partner and managing agent of Healthcare Properties,
L.P. and NHP Retirement Housing Partners I, L.P. is an affiliate
of RLC.
The Partnership's Properties
The following table sets forth summary information concerning the
six income-producing real properties owned by the Partnership:
<TABLE>
No.of Units
at December Occupancy
31, 1995 12/31/95 12/31/94 12/31/93
___________ ________ ________ ________
<CAPTION>
<S> <C> <C> <C> <C>
Cottonwood Retirement
Community Cottonwood,
Arizona 65-residential 100% 100% 100%
10<PAGE>
The Harrison Retirement
Community
Indianapolis, Indiana 124- residential 85% 90% 95%
Towne Centre Retirement
Community
Merrillville, Indiana 148- residential
34- assisted living
64- nursing 95% 95% 98%
Canton Regency Retirement
Community
Canton, Ohio 147- residential
34- assisted living
50- nursing 94% 94% 96%
Village Green Apartments I
(Silver Lake Apartments)
Kissimmee, Florida 132- residential 90% 82% 86%
Village Green Apartments II
(Lakeridge Apartments)
Kissimmee, Florida 136- residential 90% 84% 79%
</TABLE>
Village Green I Apartments is pledged as collateral to secure
repayment of a $2,035,148 mortgage loan payable to a
nonaffiliated mortgage company. On July 29, 1994, the
Partnership obtained a $12,000,000 open end mortgage loan from a
non-affiliated mortgage company, and pledged the Cottonwood
Retirement Community, The Harrison Retirement Community, Towne
Centre Retirement Community and Canton Regency Retirement
Community as collateral. On June 30, 1995, the Partnership
increased its mortgage loan commitment from $12,000,000 to
$17,500,000. As of December 31, 1995, there have been no
advances made to the Partnership on this loan.
Cottonwood Retirement Community - Cottonwood, Arizona
The Cottonwood Retirement Community is located on a two-acre site
in Cottonwood about 100 miles north of Phoenix and 65 miles south
of Flagstaff. The community consists of a three-story building
with 65 residential units. A special assistance program was
instituted during 1991 in response to the needs of the residents.
The services provided to residents needing assistance include:
11<PAGE>
medication reminders, dietary monitoring, and activities of daily
living (e.g., bathing, dressing, grooming). In the opinion of
management, the facility has maintained a high occupancy level
due to the special assistance program. No nursing care is
available on site, although a nonaffiliated nursing home is
nearby.
The monthly rental rates range from $1160 for alcoves (19 units),
$960 for studios (13 units), $1470 for one bedrooms (29 units),
and $1885 for two bedrooms (4 units). An additional second
occupant fee of $300 is charged, if applicable.
Capital improvements and repairs during 1995 were minor in
nature. Management has budgeted approximately $124,600 during
1996 for replacing carpets, painting and purchasing new
furniture, equipment and a van.
The Cottonwood market is limited. The closest competition is a
relatively new competitive project located about 30 miles away.
The Harrison Retirement Community - Indianapolis, Indiana
The Harrison Retirement Community ("Harrison") is a 124-unit
residential community located on the west side of Indianapolis in
the Eagle Valley area. The Harrison consists of a two-story
atrium building located on a four and one-half acre site. The
Harrison has a special assistance program but no nursing care
units, although a nonaffiliated 120-bed nursing home is located
on adjacent property. The services provided to residents needing
assistance include: medication reminders, dietary monitoring,
and activities of daily living.
The monthly rental rates for the community range from $1020 to
$1075 for efficiencies (43 units), $1205 to $1270 for
one-bedrooms (67 units), and $1595 to $1650 for two-bedrooms (14
units). The rental rates for the community are market rates and
in line with the competition. An additional second occupancy fee
of $275 is charged, if applicable.
During 1995, property improvements and repairs were completed,
including, acquisition of carpet, furniture and various
equipment. Management has budgeted approximately $149,800 during
1996 for new furnishings, appliances, carpeting and painting.
12<PAGE>
The Harrison has significant competition in the Indianapolis area
due to the number of similar type retirement communities. Three
other projects, totaling 425 units, are also located on the west
side of Indianapolis. However, the property continues to
maintain good occupancy.
Towne Centre Retirement Community - Merrillville, Indiana
The Towne Centre Retirement Community is located in Merrillville
adjacent to a nonaffiliated 182-unit adult rental community. It
consists of a mid-rise atrium building with 148 residential
units, 34 assisted living units and 64 nursing care beds. Towne
Centre is located on a 15-acre site, approximately 100 miles
southeast of Chicago, Illinois, and south of Gary, Indiana.
The monthly rental rates for the community range from $1,211 for
studios (40 units), an average of $1,408 for one-bedrooms (90
units) and an average of $1,920 (depending on location in
building) for two bedrooms (18 units). The monthly rental rate
increases by $290 for a second resident.
The assisted living and nursing care facilities are located in a
separate, adjoining wing. The daily rates range from $68 for a
private assisted living unit, $167 for a private intermediate
bed, $89 for a semi-private intermediate bed, $104 for a
semi-private skilled bed, and $197 for a private skilled bed.
The nursing facility has eleven (11) beds certified for Medicare
reimbursement.
Capital improvements and repairs during 1995 were largely
attributable to the replacement of carpeting, equipment purchases
and a purchase of a new bus. Management has budgeted
approximately $97,000 during 1996 for replacing carpets,
purchasing equipment and driveway resurfacing.
The local Merrillville market is small. Towne Centre has three
directly competitive projects, of which two are currently at full
occupancy. The third competitor is a new non-denominational
church sponsored property that is reporting an occupancy of 90%.
Canton Regency Retirement Community - Canton, Ohio
The Canton Regency Retirement Community consists of an atrium
building located on a 10-acre site in the northwest suburbs of
13<PAGE>
Canton. The building contains 147 residential units, 34 assisted
living units and 50 nursing care beds.
The monthly rental rates for residential units range an average
of $1,243 for studios (39 units), an average of $1,451 for
one-bedrooms (90 units), and an average of $2,060 for
two-bedrooms (18 units). The monthly rental rate increases by
$375 for a second resident.
Canton's assisted living and nursing care facilities are located
in a separate adjoining wing. The daily rates range from $59 for
a private assisted living unit, $105 for a private intermediate
bed, $92 for a semi-private intermediate bed, $117 for a private
skilled bed and $104 for a semi-private-skilled bed. Canton's
nursing facility has twelve (12) beds certified for Medicare
reimbursement.
Property improvements and repairs, budgeted for 1995, were
partially completed during 1995. The property began its 1995
capital management program by acquiring carpeting, furniture and
various equipment. Management has budgeted approximately
$133,500 during 1996 for additional carpeting, painting, new
furnishings, equipment and a bus.
There are two competitive facilities in the Canton market.
However, Canton Regency's good reputation and strong commitment
to service have allowed Canton Regency to maintain a high
occupancy level during 1995.
Silver Lakes Apartments - Kissimmee, Florida
Silver Lakes Apartments is a 132-unit multi-family apartment
complex located on a three-acre site in Kissimmee, Florida,
adjacent to the Lakeridge Apartments. The complex is a
three-story structure with one bedroom and two bedroom - one bath
apartments. The monthly rental rates range from $425 ($.57 per
square foot) for one bedroom/one bath to $515 ($.53 per square
foot) for two bedroom/one bath apartments.
The most recent internal market survey of comparable, competing
properties was completed by on-site management in February 1996.
Ten properties were surveyed by telephone. The average market
occupancy was 93% and the average rental rate was $480. Silver
Lakes' occupancy was 91% in February 1996, and the average rent
14<PAGE>
was 4.6% below market, before specials. Silver Lakes' below
market rents are primarily due to certain apartment units not
having central air conditioning. Competitors in the market area
offered specials ranging from $400 off the first month of rent to
one month of rent free. Silver Lakes currently offers a one
month rent free special. No new construction has been announced,
which should contribute to a stronger market in 1996.
Lakeridge Apartments - Kissimmee, Florida
Lakeridge Apartments is a 136-unit multi-family apartment complex
located in Kissimmee, Florida, adjacent to the Silver Lakes
Apartments. The complex includes efficiencies, one and two
bedroom apartments. The monthly rental rates range from $395
($.85 per square foot) to $535 ($.62 per square foot).
The most recent internal market survey of comparable, competing
properties was completed by the on-site personnel in February
1996. Ten properties were surveyed by telephone. The average
market occupancy was 93%, and the average rental rate was $510.
Lakeridge's occupancy was 92% in February 1996, and the average
rent was 6% below market. Lakeridge's below market rents are
primarily due to certain apartment units not having central air
conditioning. Competitors in the market area offered specials
ranging from $400 off the first month of rent to one month of
rent free. Lakeridge currently offers a one month free rent
special. No new construction in the area has been announced,
which should contribute to a stronger market in 1996.
Leases
Leases on Cottonwood Retirement Community, The Harrison
Retirement Community, Towne Centre Retirement Community, and
Canton Regency Retirement Community provide a 12 month lease with
a 30 day no penalty cancellation clause. These leases also allow
for an immediate lease cancellation in the case of a resident's
death or admission to a higher level of care. Lease up
incentives may include free rent on the 6th month, move-in
allowances and discounted rents on less attractive units. Leases
on the Lake Ridge and Silver Lakes apartments include a 7 month
minimum or 12 month lease with penalties should the tenant not
fulfill the lease term. Lease up incentives include one month of
free rent and a $100 renewal concession.
15<PAGE>
Item 2. DESCRIPTION OF PROPERTY
Other than the properties described under "Item 1. Description of
Business," the Partnership does not own or lease any significant
physical properties. The Partnership operates out of, and uses
the premises of, Retirement Group at no direct cost to the
Partnership.
Item 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the
Partnership is a party.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
16<PAGE>
PART II
Item 5. MARKET FOR REGISTRANT'S PARTNERSHIP INTERESTS AND
RELATED PARTNERSHIP MATTERS
Until July 18, 1989, the BUCs were quoted on the NASDAQ System
under the symbol RLIVZ. The BUCs are not presently listed or
traded on any exchange or quoted on the NASDAQ System. Bid and
asked prices were reported in the "pink sheets" during the second
and third quarters of 1989. However, no bid or asked prices have
been reported since the third quarter of 1989. There is
presently no established trading market for the BUCs.
The number of BUC holders of record as of December 31, 1995 was
933.
The Partnership has not declared or paid any cash distributions
or dividends during the last two fiscal years. The Partnership
presently plans to retain net cash flow. There can be no
assurance as to the timing or amount of future cash distributions
to BUC holders, which will be dependent on the cash flow of the
Partnership's properties.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
This discussion should be read in conjunction with the
consolidated financial statements of the Partnership included in
this Report.
As of December 31, 1995, the Partnership's assets included four
retirement projects (Harrison, Cottonwood Village, Canton
Regency, and Towne Centre), a multi-family apartment project
(Lakeridge Apartments, formerly known as Village Green II
Apartments), a 12% limited partnership interest in Encore Limited
Partnership, and a 99% general partnership interest in Retirement
Partnership, Ltd. (the "Partnership Subsidiary"), which owns a
multi-family apartment project (Silver Lakes Apartments, formerly
known as Village Green I Apartments). The Partnership Subsidiary
acquired these six projects and the 12% limited partnership
interest in Encore Limited Partnership effective September 11,
1991 (except for Silver Lakes Apartments, which was acquired on
December 6, 1991), pursuant to the Negotiated Settlement.
However, effective December 31, 1991, the Partnership Subsidiary
17<PAGE>
deeded all interest except Silver Lakes Apartments to the
Partnership by the execution of a Warranty Deed.
The Partnership originally acquired the six projects in the
Partnership Subsidiary to preserve the Partnership's lien
position in the event the Project owners subsequently filed for
bankruptcy protection after the transfer on September 11, 1991.
If the Project Owners filed for bankruptcy protection, any
transfer made within ninety days previous to the filing could be
treated as a preferential transfer and therefore, the assets
could be brought back into the project Owner's estate. In that
event, the Partnership would still have a lien position that it
could assert in the bankruptcy proceedings.
The five (5) projects (excluding Silver Lakes Apartments) were
then conveyed to the Partnership on December 31, 1991, since the
ninety (90) day period had lapsed. Silver Lakes Apartments was
not subsequently deeded to the Partnership because the lender
would not consent to the transfer to the Partnership.
In November 1993, the Partnership purchased a 72.73% limited
partnership interest in Beck Properties Trophy Club, L.P. for
$4,000,000. Due to ongoing litigation that impeded the
development of assets in Beck Properties Trophy Club, L.P., in
August 1994, the Partnership sold its interest in Beck Properties
Trophy Club, L.P. for $4,400,000 to Beck Family Trust No. 1. See
"Item 1. Description of Business, Acquisition and Divestiture"
and "Item 12. Certain Relationships and Related Transactions".
The Partnership's investment in the Beck Properties Trophy Club,
L.P. incurred $15,523 in losses for 1994; of which $818 relates
to operations and $14,705 from the loss on sale.
As of December 31, 1995, the Partnership's assets also include a
5.8% ownership of limited partnership interests in Healthcare
Properties, L.P. and a 3.25% ownership of outstanding pension
notes of NHP Retirement Housing Partners I, L.P. See "Item 1.
Description of Business - Acquisition and Divestiture".
Results of Operations
1995 Compared with 1994
Rental and other income for fiscal 1995 and 1994 was $15,339,467
and $14,796,204, respectively. The 3.7% increase in rental and
18<PAGE>
other income from 1994 to 1995 was attributable to higher rents.
Rental income for independent and nursing increased from 1994 to
1995 1.0% and 10.9%, respectively. The increases in rental
income categories were attributable to rental rate increases.
Other income increased 8.8% from 1994 to 1995 and was
attributable to an increase in therapy income from Medicare.
Multi-family income decreased 0.4% from 1994 to 1995. Assisted
living income decreased 1.6% from 1994 to 1995 and was
attributable to lost revenues from the Harrison facility to a
contracted assisted living provider. The interest income of $
353,974 and $111,779 for 1995 and 1994, respectively, resulted
primarily from investments of cash reserves and $42,916 of 1995
interest income resulted from interest received on the
Partnership's investment in pension notes of NHP Retirement
Housing Partners, L.P. Operating expenses are maintained by
property and by natural expense classification, but are not
allocated by revenue type. Salaries, wages and benefits of
$5,875,046 were expensed by the Partnership for fiscal 1995.
Approximately $5,213,246 of such amount was paid to Senior
Housing or Capital Senior Living, Inc. ("CSL"), an affiliate of
RLC, as reimbursement for their direct out-of-pocket costs under
the property management agreements for salaries, wages and
benefits of on-site employees employed at the properties, and
$354,830 as reimbursement to CSL for an allocable portion of its
home office employees' salaries and wages for time expended on
matters attributable to the properties. Corresponding payments
of salaries and wages for fiscal 1994 was $5,781,550.
Approximately $5,103,922 of such amount was paid to Senior
Housing for on-site employee payroll reimbursement and $278,511
as reimbursement to Senior Housing for home office employee
payroll. Operating and other administrative expenses (other than
salaries, wages and benefits and loss on investment) increased
3.5 % from $7,911,996 in 1994 to $8,187,726 in 1995. The
increase in 1995 is primarily attributable to increased ancillary
services, bad expense, depreciation and amortization expense.
For 1994, the Partnership recognized a loss of $15,523 in its
investment in Beck Properties Trophy Club, L.P. as explained
above. The Partnership expects its future operating results will
depend in large part on its operating costs and occupancy levels
in its facilities. If the operating costs increase or occupancy
levels decline, the Partnership's operating results will be
adversely affected.
19<PAGE>
Liquidity and Capital Resources
As of December 31, 1995, the Partnership had cash and cash
equivalents of $9,743,330 and unused mortgage loan commitment of
$17,500,000. These reserves will be used to support ongoing
working capital needs, pay existing debt obligations, meet the
capital and marketing improvements necessary to succeed in a
competitive atmosphere, and fund future acquisitions or
development of real estate projects. Furthermore, the
Partnership is subject to audits (and potential adjustments) by
Medicaid and Medicare of its annual cost reports. On December
24, 1992, significant amendments to the Partnership Agreement
were adopted which give the Partnership authority to operate in
accordance with current and contemplated business operations as
an operating entity. With the approved amendments to the
Partnership Agreement, the Partnership has become an entity
whereby cash and income generated from operations or from the
sale or refinancing of assets will be retained in order to
utilize such funds for a variety of purposes, including
acquisitions or development of real estate projects.
Consequently, the Partnership does not expect to make cash
distributions to BUC Holders in the foreseeable future. This may
have an adverse effect on BUC Holders for federal income tax
purposes, as discussed below.
Cash and cash equivalents increased in the amount of $1,724,859
from the end of fiscal year 1994 to the end of fiscal year 1995.
Cash sources consisted of $3,194,370 from operating activities.
Cash uses during fiscal year 1995 were for additions to property
and equipment of $383,711, investments in limited partnerships of
$896,405, payment of loan charges of $130,830 and payments on
notes payable of $58,565.
As a result of the Negotiated Settlement (see "Item 1.
Description of Business-General"), the Partnership no longer owns
Tax-Exempt bonds. Instead, the Partnership holds and operates
the properties. This has adversely impacted the Tax-Exempt
nature of the Partnership's operations in that it causes the
operations of the Partnership to be fully taxable for federal
income tax purposes and requires the individual BUC Holders to
report their respective shares of any taxable income of the
Partnership, without any cash being distributed by the
Partnership to pay any tax due by a BUC Holder on such BUC
Holder's share of Partnership taxable income. For 1995, the
20<PAGE>
Partnership's taxable income was $2,019,835, which is
approximately $1.58 for each BUC. Moreover, as a result of
federal tax law changes in 1986, BUC Holders will not be able to
use losses from any other source, other than "passive activity"
losses, to offset their share of the Partnership's taxable
income. However, the approximate $6,000,000 of mortgage loan
indebtedness forgiven by the Partnership in connection with the
Negotiated Settlement resulted in a taxable loss to the
Partnership for federal income tax purposes which was reported by
BUC Holders on September 11, 1991, in proportion to the number of
BUCs owned and to the extent of each BUC holder's basis in the
BUCs. BUC Holders acquiring BUCs after September 11, 1991, are
not entitled to report any portion of such loss.
In the event the Partnership is taxed as a corporation because it
is "publicly traded" under Section 7704 of the Internal Revenue
Code of 1986, then the Partnership would be taxed at corporate
rates on all of its taxable income and distributions to the BUC
Holders would be treated as fully taxable dividends to the extent
of current and accumulated earnings and profits, while
distributions in excess of current and accumulated earnings and
profits would be treated as the non-taxable return of capital to
the extent of each BUC Holder's basis in the BUCs. RLC does not
believe the Partnership will be taxed as "publicly traded" for
fiscal 1995 based on its interpretation of Section 7704 and no
provision for income taxes has been reflected in the accompanying
consolidated statements of income. No ruling has been requested
from the Internal Revenue Service regarding this matter and there
can be no certainty as to the ultimate outcome of this matter at
this time.
To the extent the Partnership is taxed as a corporation because
it is "publicly traded" under Section 7704, payments of federal
income tax by the Partnership will reduce the liquidity and net
cash flow of the Partnership. On the other hand, in such event,
the BUC Holders would not be required to report any income of the
Partnership in their personal federal income tax returns absent
any cash distributions to them.
The management of the Partnership believes that the projected
1996 cash flow generated from the six properties after the debt
service on the Silver Lakes Apartments will be approximately $3.0
million to $3.7 million. The revenue from each Project is
sufficient to cover the operating expenses from that particular
21<PAGE>
Project. Excess Project funds (approximately $281,000 per month)
are used to pay a portion of Silver Lakes Apartments monthly
mortgage payment. The Partnership is able to use the positive
cash flow from one project to meet any unexpected capital
improvement needs on other projects. To the extent that the
positive cash flow is not used to meet the Silver Lakes debt
service or any unexpected capital improvements on the Projects,
the funds are retained to build up the working capital reserves
of the Partnership and to provide funds for acquisitions of
additional properties. The Silver Lakes mortgage balance matured
on April 1, 1995 and was extended to December 1, 1995. On
December 1, 1995, the mortgage was extended to July 1, 1996, with
an additional option to extend to December 31, 1996. The
Partnership currently intends to refinance the mortgage when it
becomes due.
Item 7. FINANCIAL STATEMENTS
The financial statements of the Partnership are listed in Item 13
of this report and are contained at pages 31 through 50 of this
Report.
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants
that are required to be reported herein.
PART III
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT
The Partnership has no directors or officers. RLC is the sole
general partner of the Partnership, and accordingly, manages and
controls the affairs of the Partnership. On March 23, 1990,
Senior Housing became the sole general partner of RLC. Effective
July 1, 1995, Senior Housing assigned its general partnership
interest to Retirement Group.
Retirement Group is a privately owned corporation initially
organized on August 23, 1995. Its principal business activity
has been the ownership and management of real property for its
22<PAGE>
own account and for the account of various limited partnerships
of which it is the general partner. Retirement Group is a wholly
owned subsidiary of Capital Realty Group Corporation, a Texas
corporation ("Capital"), with its corporate headquarters in
Dallas, Texas. Capital is owned 50% by James A. Stroud (through
a trust) and 50% by Jeffrey L. Beck.
The Partnership properties during 1994 and through February 1,
1995, were managed by Senior Housing. On February 1, 1995, Senior
Housing assigned its contract rights to manage the Partnership
properties to Capital Senior Living, Inc. ("CSL"). CSL is a
wholly owned subsidiary of Capital.
The following are the directors and executive officers of CSL and
Retirement Group.
Name Position
James A. Stroud Chief Operating Officer, Secretary
and Director
Jeffrey L. Beck Chief Executive Officer and
Director
Keith N. Johannessen President
Fred Tanner Executive Vice President
Rob L. Goodpaster National Director of Marketing
Marilyn J. Teel Vice President
David Brickman Vice President
Robert F. Hollister Controller
James A. Stroud, age 45. Mr. Stroud has served as an officer and
a director of Capital since December 1988. Mr. Stroud became
Chief Operating Officer and Secretary of Senior Housing in May
1991, CSL in February 1995 and Retirement Group in June 1995. He
owns 50% of Capital (through a trust). From 1984 until 1985, he
was Executive Vice-President of Equity Management Corporation,
Dallas, Texas, a full service real estate company. From 1980 to
1983, he was director in charge of the Tax Department of the law
firm of Baker, Glast & Middleton, Dallas, Texas. From 1978 until
1980, he was an associate with Brice & Mankoff (formerly Durant
and Mankoff), a law firm in Dallas, Texas. Mr. Stroud is a
Certified Public Accountant and a licensed attorney. He received
his B.B.A. from Texas Tech University with highest honors, his
J.D. from the University of Texas with honors, and his L.L.M. in
taxation from New York University with honors. While at New York
University, he was a graduate editor of the New York University
23<PAGE>
Tax Law Review and a Wallace Scholar. Mr. Stroud is a founder
and director of the Assisted Living Facilities Association of
America, a member of the Health Industry Council, President-Elect
of National Association for Senior Living Industries ("NASLI"),
and has delivered speeches on health care topics to the NASLI,
National Investment Conference and the Urban Land Institute.
Jeffrey L. Beck, age 51. Mr. Beck has served as an officer and a
director of Capital since December 1988. Mr. Beck became Chief
Executive Officer of Senior Housing in May 1991, CSL in February
1995 and Retirement Group in June 1995. He owns 50% of Capital.
From 1975 to 1985, he was President of Beck Properties, Inc.,
which was the predecessor of Capital. From 1973 to 1974, he was
Regional Controller with Trammell Crow & Company, a real estate
company based in Dallas, Texas. Mr. Beck is Chairman of the
Board of Directors of United Texas Bank of Dallas. Mr. Beck
serves as Chairman of the American Senior Housing Association.
Keith N. Johannessen, age 39. Mr. Johannessen became Executive
Vice President of Senior Housing in May 1993 with responsibility
for supervising the day-to-day operations of Capital's retirement
communities. Mr. Johannessen became President of Senior Housing
in March 1994, CSL in February 1995 and Retirement Group in June
1995. From September 1992 through May 1993, Mr. Johannessen was
a Senior Manager in the North Central Region for the health care
practice of Ernst & Young LLP, responsible for assisting in the
development and direction of the firm's long term care center
consulting projects in the region as well as on a national basis.
From August 1987 through September 1992, Mr. Johannessen was
Executive Vice President with Oxford Retirement Services, Inc.
responsible for the sales, marketing and operations of retirement
communities and nursing homes. From August 1978 to August 1987,
Mr. Johannessen was employed by Life Care Services Corporation in
a variety of operations management positions, from single
retirement projects to multi-facility responsibilities. He is a
licensed nursing home administrator and holds a Bachelor of Arts
Degree from Nyack College, New York. Mr. Johannessen is active
in the American Senior Housing Association, National Association
for Senior Living Industries and the American Association of
Homes and Services for the Aging.
Fred Tanner, age 40. Mr. Tanner became Executive Vice President
of Senior Housing in 1994, CSL in February 1995 and Retirement
Group in June 1995, providing operational support to congregate,
24<PAGE>
assisted living and nursing facilities. Additionally, he is
responsible for the development and oversight of home health
programs. Prior to joining Capital, Mr. Tanner served in similar
operational roles with Greystone Communities from May 1993 to
November 1994 and Central Park Lodges from December 1988 to May
1993. His experience includes the multiple supervision of both
endowment and rental, including independent, assisted living and
nursing care facilities. Mr. Tanner's involvement in the
industry began in 1979 at the Methodist Home for the Aged in
Charlotte, North Carolina. In 1983 he served as an Executive
Director of various retirement communities in Kansas and
Tennessee before becoming a Regional Director of Operations for
the Forum Group in Indianapolis, Indiana. Mr. Tanner is a member
of the American Senior Housing Association, where he heads the
committee formulating the association's assisted living
regulatory policy. Mr. Tanner is a graduate of the University of
North Texas Center for Studies in Aging with a M.A. in
Gerontology/Retirement Community Administration.
Rob L. Goodpaster, age 43. Mr. Goodpaster became National
Director of Marketing of Senior Housing in December 1992, CSL in
February 1995 and Retirement Group in June 1995, with overall
responsibility for marketing and lease-up functions of Capital's
managed properties. With 19 years of experience in the industry,
Mr. Goodpaster has an extensive background in retirement housing
marketing. His experience includes analyzing demographics,
developing and implementing marketing plans, creating outreach
and advertising programs, hiring and training sales personnel and
implementing lead management and tracking systems. Prior to
joining Capital, Mr. Goodpaster was National Director of
Marketing for Autumn America from January 1990 to November 1992.
From 1985 until December 1989, he was President of Retirement
Living Concepts, Inc. where he marketed retirement properties
throughout the United States. Mr. Goodpaster was formerly Vice
President, Marketing for U.S. Retirement Corp. from 1984 to 1985
and Vice President, Development for American Retirement Corp.
from 1980 to 1984. Mr. Goodpaster is a graduate of Ball State
University with a B.S. in Business Management and Marketing. Mr.
Goodpaster is a member of the National Association of Senior
Living Industry and the Texas Association of Retirement
Communities.
Marilyn J. Teel, age 42. Ms. Teel has served as Vice President
of Senior Housing since 1992, CSL since February 1995 and
25<PAGE>
Retirement Group since June 1995. Ms. Teel has over 15 years
experience in the senior housing industry. She has had extensive
experience in marketing, leasing and management operations for
retirement communities and assisted living facilities. She
joined Capital in 1991 and is currently responsible for
overseeing day-to-day property operations as well as marketing
and leasing operations for multiple retirement communities,
assisted living facilities and nursing home facilities. From
1987 through 1988, Ms. Teel was marketing director with OverCash
Goodman Company, a company located in Fort Worth, Texas,
providing nursing home and congregate care. From 1988 until
1991, Ms. Teel was the on-site administrator for various
retirement communities. She is a member of the Texas Association
of Retirement Communities and the NASLI.
David Brickman, age 37. Mr. Brickman has served as Vice
President and Counsel for Senior Housing since 1992, CSL since
February 1995 and Retirement Group since June 1995. Mr. Brickman
received his Bachelor of Arts degree from Brandeis University.
He holds a J.D. from the University of South Carolina Law School,
an M.B.A. from the University of South Carolina School of
Business Administration and a Masters of Health Administration
from Duke University. Prior to joining Capital in 1992, he
served as in-house counsel from 1986 through 1987 with Cigna
Health Plan, Inc., from 1987 through 1989 with American General
Group Insurance Company and from 1989 until joining Capital, with
LifeCo Travel Management Company located in Houston, Texas. In
addition to his duties as Counsel for Senior Housing, Mr.
Brickman is also responsible for asset management activities,
operational activities and investor relations for Capital's
portfolio.
Robert F. Hollister, age 40. Mr. Hollister has served as
Controller of Senior Housing since 1992, CSL since February 1995
and Retirement Group since June 1995. Mr. Hollister received his
Bachelor of Science in Accounting from the University of
Maryland. His experience includes public accounting and private
experience in fields such as securities, construction, and
nursing homes. Prior to joining Capital in 1992, Mr. Hollister
was the chief financial officer and controller for Kavanaugh
Securities, Inc. from December 1985 until 1992. Mr. Hollister is
the property controller and supervises the day-to-day accounting
and financial aspects of Capital. Mr. Hollister is a Certified
26<PAGE>
Financial Planner and a member of both local and national
professional accounting organizations.
The executive officers of CSL and Retirement Group are required
to spend only such time on the Partnership's affairs as is deemed
necessary in the sole judgment of CSL and Retirement Group. A
significant amount of these officers' time is expected to be
spent on matters unrelated to the Partnership.
Based solely upon a review of Forms 3, 4 and 5 furnished to the
Partnership pursuant to Rule 16a-3(e) promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act"), or upon
written representations received by the Partnership, the
Partnership is not aware of any failure by any officer or
director of Retirement Group or beneficial owner of more than 10%
of the BUCs to timely file with the Securities and Exchange
Commission any Form 3, 4 or 5 relating to 1994 except the
following persons failed to file in a timely basis the following
reports: (1) James A. Stroud filed five late reports on Form 4,
reporting indirect ownership of Capital Trust's 15,028 BUCs, and
(2) Jeffrey L. Beck filed five late reports on Form 4, reporting
indirect ownership of his wife's 15,028 BUCs, for which he
disclaims beneficial ownership.
Item 10. EXECUTIVE COMPENSATION
RLC does not receive a fee for serving as general partner of the
Partnership. None of the executive officers or directors of
Retirement Group receive a fee from the Partnership for serving
in such capacity. As discussed under "Item 12. Certain
Relationships and Related Transactions", Retirement Group and its
affiliates receive fees and expense reimbursements from the
Partnership for other services rendered.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
As of December 31, 1995, RLC owned 580,161 BUCs (approximately
45.90% of the total outstanding), Jeffrey L. Beck owned 10,482
BUCs individually, Janet Sue Beck owned 62,060 BUCs individually,
Capital Trust, a trust for which James A. Stroud is the
beneficiary, owned 8,158 BUCs and James A. Stroud owned 64,384
BUCs individually. Jeffrey L. Beck and James A. Stroud may each
be deemed to beneficially own the BUCs owned by RLC. Jeffrey L.
27<PAGE>
Beck disclaims beneficial ownership of the BUCs owned by Janet
Sue Beck, and Janet Sue Beck disclaims beneficial ownership of
the BUCs owned by Jeffrey L. Beck. No other person is known by
the Partnership to own more than 5% of the BUCs.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to February 1, 1995, Senior Housing managed the projects.
Effective February 1, 1995, CSL manages the retirement living
projects pursuant to separate asset management agreements between
the Partnership and CSL, which can be terminated with 45 days
notice. The management agreements provide for reimbursement of
all expenses of managing the properties, including salaries of
on-site managers and out-of-pocket expenses of CSL, and provide
for payment of a property management fee to CSL equal to 5% of
the gross revenues of each project. For the periods ended
December 31, 1995 and 1994, the Partnership paid Senior Housing
and CSL $986,877 and $975,710, respectively, in property
management fees for managing the projects and paid $430,329 in
1995 and $354,313 in 1994, for reimbursable expenses under the
management agreements. In accordance with the partnership
agreement, RLC does not receive any fees from the Partnership but
it and affiliates may be reimbursed by the Partnership for any
actual costs and expenses incurred in connection with the
operations of the Partnership.
All property employees are paid by an affiliate of RLC.
Reimbursed gross payroll and health insurance premiums, which
were expensed by the Partnership in 1995 and 1994, were
$5,213,246 and $5,103,922, respectively.
In connection with obtaining a $12,000,000 open end mortgage loan
for the Partnership, an affiliate of RLC received a 2% financing
fee of $240,000 in 1994. In 1995, an affiliate of RLC received a
2% financing fee of $110,000 in connection with increasing the
Partnership's mortgage loan commitment from $12,000,000 to
$17,500,000. In connection with the extension of the Silver Lake
mortgage, an affiliate of RLC received $20,830 as a financing
fee.
In August 1994, the Partnership sold its interest in Beck
Properties Trophy Club, L.P. for $4,400,000 to Beck Family Trust
No. 1, a family trust for which Jeffrey L. Beck serves as sole
trustee. The Partnership incurred a $14,705 loss on the
28<PAGE>
transaction. Beck Family Trust No. 1 and James A. Stroud are
limited partners of Beck Properties Trophy Club, L.P. and Jeffrey
L. Beck and Mr. Stroud are executive officers of its general
partner, Capital Realty Group Properties II, Inc. (see "Item 1.
Description of Business-Acquisition and Divestiture" for a
further discussion of this transaction).
In May 1995, the Partnership contracted with Quality Home Care,
Inc., an affiliate of RLC, to provide nursing services to the
assisted living residents at the Harrison facility. The contract
was executed to comply with certain state regulations. As part
of the contract, the Partnership has transferred its share of
assisted living revenues and expenses for the Harrison to Quality
Home Care, Inc. resulting in an approximate decrease of $63,000
in net annualized profits.
Jeffrey L. Beck is an approximate 50% partner in RLC and is
chairman of the board of a bank where the Partnership holds the
majority of its operating cash accounts.
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
Financial Statements.
The following financial statements of the Partnership are filed
as part of this report on pages 31 through 50 hereof:
Report of Ernst & Young, L.L.P., Independent Auditors
Consolidated Balance Sheets as of December 31, 1995 and
1994
Consolidated Statements of Income for the years ended
December 31, 1995 and 1994
Consolidated Statements of Partners' Capital for the
years ended December 31, 1995 and 1994
Consolidated Statements of Cash Flows for the years ended
December 31, 1995 and 1994
Notes to Consolidated Financial Statements
29<PAGE>
Exhibits
The list of exhibits is incorporated herein by reference to the
exhibit index on pages 51 through 58 of this report.
Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of
fiscal 1995.
30
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Partners and Beneficial Unit Certificate Holders of
Capital Senior Living Communities, L.P.
We have audited the accompanying consolidated balance sheets of
Capital Senior Living Communities, L.P. and subsidiary as of
December 31, 1995 and 1994 and the related consolidated
statements of income, partners' capital, and cash flows for each
of the two years in the period ended December 31, 1995. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Capital Senior Living Communities, L.P. and
subsidiary at December 31, 1995 and 1994 and the consolidated
results of their operations and their cash flows for each of the
two years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles.
Ernst & Young LLP
Dallas, Texas
February 16, 1996
31<PAGE>
<TABLE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 and 1994
___________________________
<CAPTION>
ASSETS 1995 1994
______ _____
<S> <C> <C>
PROPERTY AND EQUIPMENT, net (Note 3) $ 17,352,655 $18,598,744
OTHER ASSETS:
Cash and cash equivalents 9,743,330 8,018,471
Cash, restricted (Note 6) 203,788 50,985
Accounts receivable, net of allowance for
doubtful accounts of $141,452 and $86,049,
respectively 409,486 265,351
Prepaid expenses and other 128,728 127,480
Deferred financing charges, less accumulated
amortization of $141,760 and $28,300,
respectively (Note 9) 328,665 311,296
Investment in limited partnerships
(Note 10) 896,405 0
----------- ----------
Total assets $ 29,063,057 $ 7,372,327
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Accrued expenses and other
liabilities $ 1,354,639 $ 1,262,217
Note payable (Note 5) 2,035,148 2,093,713
Customer deposits 279,982 253,778
----------- ----------
Total liabilities 3,669,769 3,609,708
----------- ----------
Commitments and contingencies (Notes 6 and 8)
PARTNERS' CAPITAL (Note 7):
General partner 41,469 25,162
Limited partner 1 1
32<PAGE>
Beneficial unit certificates, 1,264,000
issued and outstanding 25,351,818 23,737,456
----------- ----------
Total partners' capital 25,393,288 23,762,619
----------- ----------
Total liabilities and
partners' capital $ 29,063,057 $ 27,372,327
=========== ==========
The accompanying notes are an integral part
of these consolidated statements.
</TABLE>
33<PAGE>
<TABLE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995 AND 1994
<CAPTION>
1995 1994
------ -----
<S> <C> <C>
RENTAL AND OTHER INCOME:
Multi-family $ 1,230,859 $ 1,235,130
Independent 7,138,356 7,070,576
Assisted Living 1,658,463 1,684,987
Nursing 4,441,072 4,005,379
Other 870,717 800,132
---------- ----------
Total Rental and Other Income 15,339,467 14,796,204
Interest Income 353,974 111,779
---------- ----------
Total Income 15,693,441 14,907,983
---------- ----------
EXPENSES (Note 9):
Operating Expenses:
Salaries, wages and benefits 5,520,216 5,503,039
Property taxes 673,399 721,120
Management fees 986,877 975,711
Utilities 904,413 936,585
Cost of meals provided 1,005,222 1,040,347
Ancillary services 611,318 530,165
Interest expense 228,605 242,070
Repairs and maintenance 226,005 216,693
Service contracts 149,681 167,078
Insurance 236,322 217,460
Bad debt expense 71,098 0
Other 842,989 809,397
Amortization of deferred financing charges 113,460 28,300
Depreciation 1,629,800 1,581,794
----------- -----------
Total Operating Expenses 13,199,405 12,969,759
----------- -----------
General and Administrative Expenses:
Salaries, wages and benefits 354,830 278,511
Professional fees 144,665 115,280
34<PAGE>
Office supplies, communications, and
reproduction 127,187 118,193
Other 236,685 211,803
----------- ----------
Total General and Administrative
Expenses 863,367 723,787
Loss on investment 0 15,523
----------- ----------
Total Expenses 14,062,772 3,709,069
----------- ---------
NET INCOME $ 1,630,669 $1,198,914
========== =========
NET INCOME ALLOCATION:
General partner 16,307 11,989
Beneficial unit certificate holders 1,614,362 1,186,925
---------- ----------
Total $ 1,630,669 $1,198,914
========== ==========
NET INCOME PER BENEFICIAL UNIT CERTIFICATE,
1,264,000 issued and outstanding $ 1.29 $ 0.95
========== ==========
The accompanying notes are an integral part
of these consolidated statements.
</TABLE>
35<PAGE>
<TABLE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1995 AND 1994
<CAPTION>
Beneficial
Unit Limited General
Certificates Partner Partner Total
------------ ------- ------- ----------
<S> <C> <C> <C> <C>
BALANCE, December 31,
1993 $ 22,550,531 $ 1 $ 13,173 $22,563,705
Net income 1,186,925 - 11,989 1,198,914
------------ ---- ------- ----------
BALANCE, December 31,
1994 23,737,456 1 25,162 23,762,619
Net income 1,614,362 - 16,307 1,630,669
------------ ---- ------- ----------
BALANCE, December 31,
1995 $ 25,351,818 $ 1 $ 41,469 $25,393,288
============ ==== ======= ==========
The accompanying notes are an integral part
of these consolidated statements.
</TABLE>
36<PAGE>
<TABLE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995 AND 1994
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,630,669 $ 1,198,914
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 1,629,800 1,581,794
Amortization of deferred financing
charges 113,460 28,300
Provisions for bad debt 71,098 0
Loss on investment 0 15,523
Changes in operating assets and
liabilities:
Cash, restricted (152,803) (1,604)
Accounts receivable (215,232) 70,734
Prepaid expenses and other (1,248) (23,244)
Accrued expenses and other
liabilities 92,422 104,823
Customer deposits 26,204 (3,311)
---------- ----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 3,194,370 2,971,929
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in limited partnerships (896,405) (435,636)
Sale of limited partnership interest 0 4,400,000
Additions to property and equipment (383,711) (179,352)
---------- ----------
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES (1,280,116) 3,785,012
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan 0 93,815
37<PAGE>
Deferred loan charges paid (130,830) (339,596)
Payments on notes payable (58,565) (272,740)
---------- ----------
NET CASH USED IN FINANCING
ACTIVITIES (189,395) (518,521)
---------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,724,859 6,238,420
CASH AND CASH EQUIVALENTS,
Beginning of Year 8,018,471 1,780,051
---------- -----------
CASH AND CASH EQUIVALENTS, End of Year $ 9,743,330 $ 8,018,471
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 228,605 $ 242,609
========== ==========
The accompanying notes are an integral part
of these consolidated statements.
</TABLE>
38<PAGE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
1. ORGANIZATION:
Capital Senior Living Communities, L.P. (formerly known as
Retirement Living Tax-Exempt Mortgage Fund Limited Partnership)
(the "Partnership") was formed on December 17, 1985, under the
Delaware Revised Uniform Limited Partnership Act. The
Partnership was formed to acquire a portfolio of federally
Tax-Exempt nonrecourse participating first mortgage loans secured
by income-producing real estate consisting of four retirement
living centers and one multifamily residential apartment project
(the "Projects"). The mortgage loans were acquired on April 11,
1986. The Partnership will continue until December 31, 2016,
unless terminated earlier under certain provisions of the
partnership agreement.
On April 10, 1986, the Partnership issued 1,264,000 Beneficial
Unit Certificates ("BUCs") at $25 per BUC. The issuance
generated funds of $28,758,000, net of issuance costs, for the
Partnership. These funds were used principally to acquire the
portfolio of mortgage loans previously discussed.
The general partner of the Partnership is Retirement Living
Communities, an Indiana limited partnership ("RLC"). The limited
partner is Retirement Living Fiduciary Corporation, an Indiana
corporation ("RLFC").
Effective September 11, 1991, a subsidiary of the Partnership
(Retirement Partnership, Ltd.) assumed ownership of the Projects
in exchange for the forgiveness of certain of the related
mortgage indebtedness and the release of the previous project
owners from liability under their personal guarantees.
A description of the Projects now owned and operated by the
Partnership is as follows:
Towne Centre Retirement Community ("Towne Centre") - This project
is located on a 15-acre site in Merrillville, Indiana, and
includes a 148-unit retirement living community, a 34-bed
assisted living unit which is licensed as residential, and a
64-bed intermediate and skilled healthcare unit licensed under a
39<PAGE>
comprehensive license.
The facility was approximately 95% occupied at December 31, 1995
and 1994.
Canton Regency Retirement Community ("Canton Regency") - This
project is located on a 10-acre site in Canton, Ohio, and
includes a 147-unit retirement living community, a 34-bed
assisted living unit, and a 50-bed intermediate and skilled
healthcare unit licensed by the Ohio Department of Health. The
facility was approximately 94% occupied at December 31, 1995 and
1994.
Cottonwood Village Retirement Community ("Cottonwood Village") -
This project is a 65-unit retirement living center located on a
2-acre site in Cottonwood, Arizona. The facility was
approximately 100% occupied at December 31, 1995 and 1994.
Harrison Retirement Community ("Harrison") - This project is a
124-unit retirement living center located on a 4 1/2-acre site in
Indianapolis, Indiana. The facility was approximately 85% and
90% occupied at December 31, 1995 and 1994, respectively.
Village Green II Apartments (subsequently renamed "Lakeridge") -
This project is a 136-unit multifamily apartment complex located
in Kissimmee, Florida. The facility was approximately 90% and
84% occupied at December 31, 1995 and 1994, respectively.
In addition, on December 6, 1991, Retirement Partnership, Ltd.
acquired one additional project as follows:
Village Green I Apartments (subsequently renamed "Silver Lakes")
- - This project is a 132-unit multifamily apartment complex
located in Kissimmee, Florida. This facility was approximately
90% and 84% occupied at December 31, 1995 and 1994, respectively.
On December 24, 1992, the Partnership Agreement was amended to
reflect more accurately the current and anticipated business
operations and asset ownership position of the Partnership. The
amendment allows the general partner sole discretion to determine
cash distributions. It is the general partner's intention to use
current and future cash reserves to acquire additional properties
(see Note 10). The General Partner believes cash and cash
equivalents of $ 9,743,330 at December 31, 1995 is adequate for
40<PAGE>
the working capital needs of the Partnership.
2. OWNERSHIP BY RLC:
On September 12, 1990, RLC completed a solicitation of BUC
holders in order to acquire BUC interests, resulting in the
acquisition of 561,336 BUCs by RLC, representing approximately
44% of the total BUCs outstanding. As of December 31, 1995, RLC
owns 580,161 BUCs, representing 45.9% of the total BUCs
outstanding.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of the Partnership and its 99%-owned subsidiary,
Retirement Partnership, Ltd. All significant intercompany
accounts and transactions have been eliminated in consolidation.
The 1% minority interest in Retirement Partnership, Ltd. is not
presented separately due to its immateriality. The Partnership
accounts for investments in limited partnerships under the equity
method; therefore, operations from such investments are shown
separately in the accompanying consolidated statements of income
as loss on investment.
Property and Equipment
The Partnership provides for depreciation on property and
equipment using the straight-line method by charges to
operations in amounts to allocate the cost of the
property and equipment over their estimated useful
lives ranging from 5 to 27.5 years.
The cost of property and equipment and their useful lives are
summarized as follows:
<TABLE>
Useful Life 1995 1994
----------- ----------- ----------
<CAPTION>
<S> <C> <C> <C>
Land $ 1,281,070 $ 1,281,070
Land improvements 27.5 years 418,665 384,601
41<PAGE>
Buildings and building
improvements 27.5 years 17,586,575 17,383,321
Furniture and equipment 5 years 4,786,064 4,639,671
----------- ----------
24,072,374 23,688,663
Less-accumulated
depreciation (6,719,719) (5,089,919)
----------- -----------
$17,352,655 $18,598,744
=========== ===========
</TABLE>
At each balance sheet date, the Partnership reviews the carrying
value of the property and equipment to determine if facts and
circumstances suggest that they may be impaired or that the
depreciation period may need to be changed. The Partnership
considers external factors, including local market developments,
national trends, and other publicly available information. If
these external factors indicated the property and equipment will
not be recoverable, as determined based upon undiscounted cash
flows of the business, the carrying value of the asset will be
reduced by the estimated shortfall of discounted cash flows. The
Partnership does not believe there currently are any indicators
that would require an adjustment to the carrying value of the
property and equipment or their respective remaining useful lives
as of December 31, 1995.
Cash Equivalents
The Partnership considers investments with original maturities of
three months or less to be cash equivalents.
Revenue Recognition
Revenue from the four retirement living communities and the two
multifamily apartment complexes is recognized in the period in
which the unit rental and/or food services relate.
Revenue from two of the Projects (Towne Centre and Canton
Regency) which offer assisted living, intermediate, and skilled
healthcare (in addition to retirement living), is recognized as
services are performed. The Towne Center healthcare center (the
Center) is a provider of services under the Indiana Medicaid
program. Accordingly, the Center is entitled to reimbursement
42
<PAGE>
under the foregoing program at established rates which are lower
than private pay rates. Patient service revenue for Medicaid
patients is recorded at the reimbursement rates as the rates are
set prospectively by the state upon the filing of an annual cost
report. The Towne Centre and Canton Regency healthcare centers
(the Centers) are also providers of services under the Medicare
program. The Centers are entitled to reimbursement under the
foregoing program in amounts determined based on the filing of an
annual cost report prepared in accordance with Federal
regulations, which reports are subject to audit and retroactive
adjustments in future periods. Revenue from the Medicare program
is recorded at established rates and adjusted for differences
between such rates and estimated amounts reimbursable from the
program. Any differences between estimated and actual
reimbursements are included in operations in the year of
settlement. Adjustments in 1995 and 1994 totaled $ 28,254 in
credits and $76,193 in charges, respectively. Included in
accrued expenses and other liabilities at December 31, 1995 and
1994, is $ 123,000 and $ 80,000, respectively, for amounts due
under the Medicare program.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
4. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of financial instruments at December 31,
1995 and 1994 approximate fair value.
The following methods and assumptions were used by the
Partnership in estimating its fair value disclosures for
financial instruments:
Cash and cash equivalents and cash, restricted: The carrying
amounts reported in the balance sheet for cash and cash
equivalents and cash, restricted approximate fair value.
Investment in limited partnerships: The fair values are based
on quoted market prices.
43<PAGE>
Note payable: The fair value of note payable is estimated
using discounted cash flow analyses, based on current
incremental borrowing rates for similar types of borrowing
arrangements.
5. NOTE PAYABLE:
Note payable consists of the following:
<TABLE>
1995 1994
------------- ------------
<CAPTION>
<S> <C> <C>
Mortgage loan, bearing interest
at 11%, maturing July 1, 1996,
and payable in monthly
installments of $22,725,
including interest with
remaining amounts due at
maturity. This mortgage
is secured by Silver Lakes
Apartments $ 2,035,148 $ 2,093,713
========== ==========
</TABLE>
On July 29, 1994, the Partnership obtained a $12,000,000 open end
mortgage loan from a non-affiliated mortgage company, and pledged
the Cottonwood, Harrison, Towne Centre, and Canton Regency
retirement communities as collateral. On June 30, 1995, the
Partnership increased its mortgage loan commitment from
$12,000,000 to $17,500,000. The loan expires July 29, 1998. As
of December 31, 1995, there have been no advances made to the
Partnership on this loan commitment.
In connection with obtaining the open end mortgage loan, the
Partnership incurred $449,596 in deferred financing charges,
which are being amortized over the life of the loan commitment
using the straight line method.
6. COMMITMENTS:
The Partnership had $53,788 in certificates of deposit at
December 31, 1995 and $50,985 in certificates of deposit at
December 31, 1994, restricted for utility deposits. The
44<PAGE>
certificates of deposit mature one year from the original
purchase date.
In conjunction with the Partnership's increased mortgage loan
commitment on June 30, 1995 (see Note 5), a compensating balance
of $150,000 was established with the mortgage company.
The operating properties have entered into various contracts for
services. The contracts are for a duration of 5 years or less
and are on a fee basis as services are rendered. Future
commitments on fixed cost contracts and leases are as follows:
<TABLE>
<S> <C> <C>
Year Amount
----- --------
1996 $ 17,741
1997 4,604
1998 1,453
-------
$ 23,798
========
</TABLE>
7. CASH DISTRIBUTIONS:
Net operating income, if distributed as determined by the General
Partner at its sole discretion, is to be distributed 99% to the
BUC holders and 1% to RLC until the BUC holders receive
distributions equal to a cumulative noncompounded annual return
of 11% on their adjusted capital contributions. Thereafter,
remaining net operating income is distributed 90% to the BUC
holders and 10% to RLC.
The second amended Partnership Agreement allows the general
partner sole discretion in determining cash distributions. Prior
to this amendment, cash distributions were to be paid within 45
days of each calendar quarter. There were no distributions for
1995 and 1994. It is the general partner's intention to use
current and future cash reserves to acquire additional
properties. Should the General Partner fail to obtain
refinancing on the mortgage for the Silver Lake Apartments (see
Note 5.) upon maturity, cash reserves may be required for payment
of the mortgage balance.
45<PAGE>
Proceeds from the refinancing, sale, or other dispositions of
Partnership assets, less expenses directly attributable thereto
(net residual proceeds), will be distributed 100% to the BUC
holders until the BUC holders have received an amount equal to
the sum of their adjusted capital contributions plus an amount
equal to a cumulative noncompounded annual return of 11% on their
adjusted capital contributions. All remaining net residual
proceeds will be distributed 100% to RLC until such amount equals
1% of all net residual proceeds distributed to the BUC holders.
Thereafter, any remaining net residual proceeds will be
distributed 90% to the BUC holders and 10% to RLC.
8. INCOME TAXES:
No provision has been made in the financial statements for
Federal income taxes because, under current law, no Federal
income taxes are paid directly by the Partnership. The partners
are responsible for their respective shares of Partnership net
income or loss. The Partnership reports certain transactions
differently for tax than for financial statement purposes. A
reconciliation between the financial statement net income and the
net income for tax purposes follows:
<TABLE>
<CAPTION>
For the Year
Ended December 31,
----------- ------------
1995 1994
----------- ------------
<S> <C> <C>
Net income per
Statement of income $ 1,630,669 $ 1,198,914
Add:
Increase in vacation
expense accrual 10,766 6,350
Non-deductible bad debt
expense 55,403 -
Non-deductible meals and
entertainment 1,253 1,250
Increase in workers
compensation accrual 2,463 1,271
Excess of book over tax
depreciation 347,376 170,485
Prepaid rent recognized
for book purposes - (41,416)
Decrease in bad debt reserve - (72,415)
Income (loss) from joint
ventures 51,970 (62,523)
----------- -----------
Tax income $ 2,099,900 $ 1,201,916
=========== ===========
</TABLE>
The tax basis of the Partner's capital accounts are as follows:
<TABLE>
For the Year Ended
December 31,
---------------------------
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
General Partner $ (11,602) $ (32,589)
BUC Holders 20,515,980 18,438,297
------------- -------------
$ 20,504,378 $ 18,405,708
============= ============
</TABLE>
The basis of property and equipment, net of accumulated
depreciation, for Federal income tax purposes was $18,192,768 and
$19,091,482 at December 31, 1995 and 1994, respectively.
In the event the Partnership is taxed as a corporation because it
is "publicly traded" under Section 7704 of the Internal Revenue
Code of 1986, then the Partnership would be taxed at corporate
rates on all of its taxable income and distributions to the BUC
holders would be treated as fully taxable dividends to the extent
of current and accumulated earnings and profits, while
distributions in excess of current and accumulated earnings and
profits would be treated as the nontaxable return of capital to
the extent of each BUC holder's basis in the BUCs. Partnership
management does not believe the Partnership will be taxed as
"publicly traded" for fiscal 1995 based on its interpretation of
Section 7704 and no provision for income taxes has been reflected
47<PAGE>
in the accompanying consolidated statements of income. No ruling
has been requested from the Internal Revenue Service regarding
this matter and there can be no certainty as to the ultimate
outcome of this matter at this time.
9. TRANSACTIONS WITH RELATED PARTIES:
In accordance with the partnership agreement, the general
partner, RLC, does not receive any fees from the Partnership but
may be reimbursed by the Partnership for any actual costs and
expenses incurred in connection with the operations of the
Partnership. All projects are managed by affiliates of RLC.
Partnership expenses incurred by RLC and affiliates, which were
reimbursed and expensed by the Partnership for the years ended
December 31, 1995 and 1994, were $430,329 and $354,313,
respectively. Management fees reimbursed and expensed by the
Partnership to an affiliate of RLC for the years ended December
31, 1995 and 1994 were $986,877 and $975,710, respectively.
All property employees are paid by an affiliate of RLC.
Reimbursed gross payroll and health insurance premiums, which
were expensed by the Partnership in 1995 and 1994, were
$5,213,246 and $5,103,922, respectively.
Amounts due RLC and affiliates at December 31 are as follows:
<TABLE>
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Payroll and health
insurance $ 213,239 $ 215,545
Overhead reimbursement 38,817 23,798
Management fees (269) 5,050
------------ -----------
$ 251,787 $ 244,393
============ ===========
</TABLE>
In connection with obtaining a $12,000,000 open end mortgage loan
for the Partnership, an affiliate of RLC received a 2% financing
fee of $240,000 in 1994. In 1995, an affiliate of RLC received a
2% financing fee of $ 110,000 in connection with increasing the
Partnership's mortgage loan commitment from $ 12,000,000 to $
17,500,000. 48<PAGE>
In connection with the extension of the Silver Lakes mortgage, an
affiliate of RLC received $20,830 as a financing fee.
In May 1995, the Partnership contracted with Quality Home Care,
Inc., an affiliate of RLC, to provide nursing services to the
assisted living residents at the Harrison facility. The contract
was executed to comply with certain state regulations. As part
of the contract, the Partnership has transferred its share of
assisted living revenues and expenses for the Harrison to Quality
Home Care, Inc. resulting in an approximate decrease of $63,000
in net annualized profits.
In August 1994, the Partnership sold its interest in Beck
Properties Trophy Club, L.P. (see Note 10).
In addition, a 50% partner in RLC is chairman of the board of a
bank where the Partnership holds the majority of its operating
cash accounts.
The general partner and managing agent of Healthcare Properties,
L.P. and NHP Retirement Housing Partners I, L.P. is an affiliate
of RLC. See Note 10.
10. ACQUISITION AND DISPOSITION OF INVESTMENTS:
During 1995, the Partnership made various purchases of limited
partnership interests in Healthcare Properties, L.P. As of
December 31, 1995, the Partnership has cumulatively paid $308,825
for a 5.8% ownership in Healthcare Properties, L.P. Healthcare
Properties, L.P. is a portfolio comprised of 9 nursing home
facilities.
During 1995, the Partnership made various purchases of
outstanding pension notes of NHP Retirement Housing Partners I
L.P. As of December 31, 1995, the Partnership has cumulatively
paid $587,580 for a 3.25% ownership of outstanding pension notes
of NHP Retirement Housing Partners I L.P. NHP Retirement
Housing Partners I L.P. owns a portfolio of 5 independent living
retirement facilities. The pension notes bear simple interest at
13% per annum. Interest of 7% is paid quarterly, with the
remaining 6% interest deferred. Deferred interest and principal
matures on December 31, 2001. The Partnership is not accruing
the deferred interest on the pension notes due to uncertainties
regarding their ultimate realization.
49<PAGE>
The Partnership accounts for these investments at fair market
value and classifies them as available for sale.
In November 1993, the Partnership purchased a 72.73% limited
partnership interest in Beck Properties Trophy Club, L.P. for
$4,000,000. Beck Properties Trophy Club, L.P. is a Texas limited
partnership formed on November 28, 1993, for the purpose of
acquiring and developing real estate. At December 31, 1993, the
primary assets of Beck Properties Trophy Club, L.P. included
approximately 1,024 acres of undeveloped land, 114 residential
lots, an office building, sales office building, equestrian
center, and a residential house. These properties were purchased
from Beck Properties, Inc., a related party, which had previously
purchased the properties from an unrelated party. The
Partnership accounted for this investment on the equity method.
During 1994, the Partnership contributed $435,636 in additional
capital to Beck Properties Trophy Club, L.P. In August 1994, the
Partnership sold its interest in Beck Properties Trophy Club,
L.P. for $4,400,000.
50<PAGE>
EXHIBIT LIST
Page Nos.
In This
Exhibit Description Filing
- -------- ------------- --------
3-A Articles of Incorporation of Retirement Living
Fiduciary Corporation, filed as Exhibit 3-A to
Amendment No. 3 to the Partnership's 1933 Act
Registration Statement on Form S-11 under
Registration No. 33-3157 filed with the Commission
on March 31, 1986, and incorporated herein by
reference.
3-B By-Laws of Retirement Living Fiduciary Corporation
filed as Exhibit 3-B to Amendment No. 3 to the
Partnership's 1933 Act Registration Statement on
Form S-11 under Registration No. 33-3157 filed with
the Commission on March 31, 1986, and incorporated
herein by reference.
4-A Agreement of Limited Partnership and Certificate of
Retirement Living Tax-Exempt Mortgage Fund Limited
Partnership filed as Exhibit 4-A to Amendment No. 3
to the Partnership's 1933 Act Registration
Statement on Form S-11 under Registration No. 33-3157
filed with the Commission on March 31, 1986,
and incorporated herein by reference.
4-B Amended and Restated Agreement of Limited
Partnership of Retirement Living Tax-Exempt
Mortgage Fund Limited Partnership filed as Exhibit
4-B to the Partnership's 1986 Form 10-K Annual
Report filed with the Commission on March 31, 1987,
and incorporated herein by reference.
4-C Form of Beneficial Unit Certificates, filed as
Exhibit 4-C to Amendment No. 3 to the Partnership's
1933 Act Registration Statement on Form S-11 under
Registration No. 33-3157 filed with the Commission
on March 31, 1986, and incorporated herein by
reference.
51<PAGE>
4-D Amendment Number 1 to amended and restated
agreement of Limited Partnership dated March 6,
1991, filed as Exhibit 4-D to the Partnership's
1990 Form 10-K Annual Report filed with the
Commission on April 12, 1991, and incorporated
herein by reference.
4-E Certificates of Limited Partnership and Limited
Partnership Agreements of Retirement Partnership,
Ltd. and Valley View Partnership, L.P., filed as
Exhibit 4-E to the Partnership's 1990 Form 10-K
Annual Report filed with the Commission on April
12, 1991, and incorporated herein by reference.
4-F Amended and Restated Certificate of Limited
Partnership of the Partnership dated effective
January 11, 1993 filed as Exhibit 4-F to the
Partnership's 1992 Form 10-K Annual Report filed
with the Commission and incorporated herein by
reference.
4-G Second Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of December
24, 1992 filed as Exhibit 4-G to the Partnership's
1992 Form 10-K Annual Report filed with the
Commission and incorporated herein by reference.
10-A Asset Purchase Agreement between Congregate Housing
Partnership of Canton, in Indiana general
partnership, Congregate Housing Partnership of
Cottonwood, an Indiana general partnership,
Congregate Housing Partnership of Indianapolis, an
Indiana general partnership, Sanibel Investment
Co., an Indiana general partnership, Congregate
Housing Partnership of Merrillville, an Indiana
general partnership, and Congregate Housing
Partnership, an Indiana general partnership,
Retirement Living Partnership, Ltd., a Texas
limited partnership, and Valley View Partnership, a
Texas limited partnership and Retirement Living
Tax-Exempt Mortgage Fund Limited Partnership, a
Delaware limited partnership filed as Exhibit 2-A
to the Partnership's 1990 Form 10-K Annual Report
filed with the Commission on April 12, 1991, and
52<PAGE>
incorporated herein by reference.
10-B First Amendment of Asset Purchase Agreement (filed
as Exhibit 10-A) dated effective September 11,
1991, filed as Exhibit 2 to the Partnership's
Current Report on Form 8-K dated September 25,
1991, and incorporated herein by reference.
10-C Real Estate Sales Contract dated effective
September 11, 1991, relating to acquisition of the
Village Green I Apartments, filed as Exhibit 3 to
the Partnership's Current Report on Form 8-K dated
September 25, 1991, and incorporated herein by
reference.
10-D Banc One Mortgage Corporation letter dated
September 11, 1991 regarding Village Green I
Apartments, filed as Exhibit 4 to the Partnership's
Current Report on Form 8-K dated September 25,
1991, and incorporated herein by reference.
10-E Modification, Consolidation and Extension Mortgage
Note between EFB Development Company and Retirement
Partnership, Ltd. and Banc One Mortgage
Corporation, dated December 6, 1991, filed as
Exhibit 10-E to the Partnership's Annual Report on
Form 10-K for the fiscal year ended December 31,
1991, and incorporated herein by reference.
10-F Management Agreement dated effective August 28,
1991 relating to Village Green I Apartments, filed
as Exhibit 5 to the Partnership's Current Report on
Form 8-K dated September 25, 1991, and incorporated
herein by reference.
10-G Warranty Deed executed by Retirement Partnership,
Ltd. which conveys to the Partnership the real
estate known as Canton Regency Retirement
Community, filed as Exhibit 10-G to the
Partnership's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, and
incorporated herein by reference.
53<PAGE>
10-H Warranty Deed executed by Retirement Partnership,
Ltd. which conveys to the Partnership the real
estate known as Towne Centre Retirement Community,
filed as Exhibit 10-H to the Partnership's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1991, and incorporated herein by
reference.
10-I Warranty Deed executed by Retirement Partnership,
Ltd. which conveys to the Partnership the real
estate known as The Harrison Retirement Community,
filed as Exhibit 10-I to the Partnership's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1991, and incorporated herein by
reference.
10-J Warranty Deed executed by Retirement Partnership,
Ltd. which conveys the Partnership the real estate
known as Cottonwood Village Retirement Community,
filed as Exhibit 10-J to the Partnership's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1991, and incorporated herein by
reference.
10-K Warranty Deed executed by Retirement Partnership,
Ltd. which conveys to the Partnership the real
estate known as Village Green Apartments Phase II,
filed as Exhibit 10-K to the Partnership's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1991, and incorporated herein by
reference.
10-L Management Agreement Dated September 11, 1991,
between Capital Realty Group Senior Housing, Inc.
and Retirement Partnership, Ltd. for the property
management services relating to the Canton Regency
Retirement Community, filed as Exhibit 10-L to the
Partnership's Annual Report on Form 10-K for the
54<PAGE>
fiscal year ended December 31, 1991, and
incorporated herein by reference.
10-M Management Agreement Dated September 11, 1991,
between Capital Realty Group Senior Housing, Inc.
and Retirement Partnership, Ltd. for the property
management services relating to the Towne Centre
Retirement Community, filed as Exhibit 10-M to the
Partnership's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, and
incorporated herein by reference.
10-N Management Agreement Dated September 11,
1991,between Capital Realty Group Senior Housing,
Inc. and Retirement Partnership, Ltd. for the
property management services relating to The
Harrison Retirement Community, filed as Exhibit 10-N
to the Partnership's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991, and
incorporated herein by reference.
10-O Management Agreement Dated September 11, 1991,
between Capital Realty Group Senior Housing, Inc.
and Retirement Partnership, Ltd. for the property
management services relating to the Cottonwood
Village Retirement Community, filed as Exhibit 10-O
to the Partnership's Annual Report on Form 10-K for
the fiscal year ended December 31, 1991, and
incorporated herein by reference.
10-P Three Management Agreements Dated March 1, 1991,
between Capital Realty Group Management, Inc. and
Congregate Housing Partnership of Indianapolis,
Capital Realty Group Management, Inc. and
Congregate Housing Partnership of Cottonwood,
Capital Realty Group Management, Inc. and Sanibel
Investment Company, filed as Exhibit 10-K to the
Partnership's 1990 Form 10-K Annual Report filed
with the Commission on April 12, 1991, and
incorporated herein by reference.
10-Q Management Agreement Dated September 11, 1991,
between Capital Realty Group Management, Inc. and
Retirement Partnership, Ltd. for the property
55<PAGE>
management services relating to Village Green
Apartments Phase II, filed as Exhibit 10-Q to the
Partnership's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, and
incorporated herein by reference.
10-R Management Agreement Dated December 6, 1991,
between Capital Realty Group Management, Inc. and
Retirement Partnership, Ltd. for the property
management services relating to Village Green
Apartments Phase I, filed as Exhibit 10-R to the
Partnership's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, and
incorporated herein by reference.
10-S Management Agreement Dated September 11, 1991,
between Capital Realty Group Management, Inc. and
Retirement Partnership, Ltd. for the property
management services relating to Village Green
Apartments Phase II, filed as Exhibit 10-S to the
Partnership's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, and
incorporated herein by reference.
10-T Management Agreement Dated January 1, 1992, between
Capital Realty Group Senior Housing, Inc. and the
Partnership for the property management services
relating to the Canton Regency Retirement
Community, filed as Exhibit 10-T to the
Partnership's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, and
incorporated herein by reference.
10-U Management Agreement Dated January 1, 1992, between
Capital Realty Group Senior Housing, Inc. and the
Partnership for the property management services
relating to the Towne Centre Retirement Community,
filed as Exhibit 10-U to the Partnership's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1991, and incorporated herein by
reference.
10-V Management Agreement Dated January 1, 1992, between
Capital Realty Group Senior Housing, Inc. and the
56<PAGE>
Partnership for the property management services
relating to The Harrison Retirement Community,
filed as Exhibit 10-V to the Partnership's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1991, and incorporated herein by
reference.
10-W Management Agreement Dated January 1, 1992, between
Capital Realty Group Senior Housing, Inc. and the
Partnership for the property management services
relating to the Cottonwood Village Retirement
Community, filed as Exhibit 10-W to the
Partnership's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, and
incorporated herein by reference.
10-X Congregate Housing Partnership, Inc. Assignment of
its eleven and two-thirds (11.6667%) percent
interest in Encore Retirement Partners, Ltd. - 1985
to Retirement Partnership, Ltd., dated April 1991,
filed as Exhibit 10-X to the Partnership's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1991, and incorporated herein by
reference.
Retirement Partnership, Ltd. Assignment of its
eleven and two-thirds (11.6667%) percent interest
in Encore Retirement Partners, Ltd. - 1985 to the
Partnership, dated January 1, 1992, filed as
Exhibit 10-X to the Partnership's Annual Report on
Form 10-K for the fiscal year ended December 31,
1991, and incorporated herein by reference.
10-Y Beck Trophy Club, L.P. Partnership Agreement dated
November 28, 1993 filed as Exhibit 10-Y to the
Partnership's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1993, and
incorporated herein by reference.
10-Z Beck Trophy Club, L.P. Resale Agreement dated
December 3, 1993 filed as Exhibit 10-Z to the
Partnership's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1993, and
incorporated herein by reference.
57<PAGE>
10-AA Assignment of Limited Partnership Interest and
Second Amendment to Limited Partnership Agreement
of Beck Properties Trophy Club, L.P., filed as
Exhibit 10-AA to the Partnership's Annual Report on
Form 10-KSB for the fiscal year ended December 31,
1994, and incorporated herein by reference.
*10-BB Management Agreement dated February 1, 1995 between
the Partnership and CSL relating to The Harrison At
Eagle Valley.
*10-CC Management Agreement dated February 1, 1995 between
the Partnership and CSL relating to Towne Centre.
*10-DD Management Agreement dated February 1, 1995 between
the Partnership and CSL relating to Cottonwood
Village.
*10-EE Management Agreement dated February 1, 1995 between
the Partnership and CSL relating to Canton Regency
Retirement Community.
*21 List of Subsidiaries.
*27 Financial Data Schedule required by Item 601 of
Regulation S-B.
28-A Orders appointing Capital Realty Group Management,
Inc. as receiver for Congregate Housing Partnership
of Merrillville and Congregate Housing Partnership
of Canton, filed as Exhibit 28-A to the
Partnership's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, and
incorporated herein by reference.
___________________________
* Filed herewith.
58<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
By: RETIREMENT LIVING COMMUNITIES
General Partner
By: CAPITAL RETIREMENT GROUP, INC.
General Partner
March 29, 1996 By: /s/ James A. Stroud
James A. Stroud,
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ James A. Stroud Chief Operating Officer March 29, 1996
James A. Stroud and Director (Chief
financial and accounting
officer)
/s/ Jeffrey L. Beck Chief Executive Officer March 29, 1996
Jeffrey L. Beck and Director
59<PAGE>
EXHIBIT 10-BB<PAGE>
MANAGEMENT AGREEMENT
THIS AGREEMENT, made in Dallas, Texas, as of the 1st day of
February, 1995, by and between:
Capital Senior Living Communities, L.P., a partnership
organized and existing under the laws of the State of Delaware,
hereinafter referred to as "Owner" and Capital Senior Living,
Inc., a corporation organized and existing under the laws of the
State of Texas, hereinafter referred to as "Manager,"
WITNESSETH
WHEREAS, the Owner now owns a business commonly known as The
Harrison At Eagle Valley, in the City of Indianapolis, State of
Indiana, hereinafter called the "Home."
WHEREAS, the Owner desires to employ the Manager to act as
general manager of the Home, and the Manager is willing to accept
such employment subject to the terms and conditions hereinafter
set
forth.
NOW, THEREFORE, in consideration of the foregoing and of the
terms and conditions herein set forth, the parties hereto agree
as follows:
EMPLOYMENT OF MANAGER
The Owner hereby appoints the Manager, and the Manager
hereby accepts the appointment as exclusive Manager of the Home.
TERM
The services of Manager shall commence on _______________,
19____, and shall terminate nine (9) years from the date
thereof, unless sooner terminated as herein provided.
MANAGER'S DUTIES
During the term of this Agreement, which period is
hereinafter referred to as the "Operating Period," the Manager
shall use its best efforts in the management and operation of the
business, services and sales of the Home so that the Home and its
services will be operated and maintained with the maximum of
benefit and in a first quality manner so that the Home shall
remain a first quality convalescent center. In pursuance of the
foregoing, the Manager shall perform the following services:
1. Use its reasonable efforts and due diligence in the
renting of all of the rooms and facilities to desirable tenants.
<PAGE>
2. Employ, at the expense of the facility, such resident
administrator, assistant administrator, employees, agents, clerks
at the Home as may be required to continue the standard and
quality of management and operation at a level not lower than
that heretofore maintained. The Manager shall not be liable to
the Owner or others for any act or omission on the part of such
employees unless the Manager has failed to use reasonable
diligence in their hiring, discharge or supervision so as to
maintain a staff of qualified, competent, and trustworthy
employees. The Manager will negotiate on the Owner's behalf with
any labor union lawfully entitled to represent such employees,
but no collective bargaining agreement or labor contract
resulting from such negotiations shall be valid unless
executed or approved by the Owner. The Manager will not at any
time enter into any agreement with any employee for a period in
excess of one (1) year or for compensation in excess of
$50,000.00 per year without the consent in writing of the Owner.
The Manager shall procure and maintain adequate workman's
compensation insurance in the name of and at the expense of the
facility covering all the facility employees.
3. Keep the facility and all furniture, furnishings and
other equipment therein and appurtenant thereto, in good repair.
4. Arrange for necessary alterations, decorations,
replacements, improvements, or changes in the Home and in the
furniture, furnishings, and other equipment therein and develop
policies with respect to the installation of new features to the
extent that the financial obligations and resources of the
facility permit. All capital expenditures, other than minor
repair and maintenance, must be submitted to Owner for approval
prior to expenditure.
5. Develop policies with respect to publicity for the
purpose of creating the greatest possible net income for the Home
and place and supervise all advertising and promotional material.
6. Arrange at the facility's expense for compliance with
all statutes, ordinances, laws, rules, regulations, orders and
determinations affecting or issued in connection with the Home by
any governmental authority having jurisdiction thereof.
7. Cause the Home to comply with all the terms, conditions
and obligations contained in any mortgage, lease, or other
agreement executed by the Owner which relates to the facility.
The Owner shall promptly notify the Manager of any such mortgage,
lease or other agreement.
8. Deposit in a banking institution or institutions
selected by the Manager, and in accounts in the facility's name
as agent for the Owner, all monies furnished by the Owner as
working funds and all monies received by the Manager for or on
behalf of the Owner. The Manager shall pay on behalf of the
Owner all accounts incurred after the date hereof as required for<PAGE>
the operations of the Home, all assessments and charges of every
kind imposed by any governmental authority having jurisdiction
and interest and penalties thereon, license fees, permit fees and
insurance appraisal fees; fines, penalties, and court
disbursements incurred in connection with the operation of the
Home; premiums on policies of insurance; all disbursements
authorized by this Agreement; and any other charge,
item of expense, or other item which the Owner, in writing,
authorizes as an expense.
9. Receive, consider and handle the complaints of all
tenants, guests or users of any of the services or facilities of
the Home and provide copies upon written request to the Owner.
10. Institute in its own name or in the name of the Owner,
at the expense of the facility and with the approval of the
Owner, any necessary legal actions or proceedings.
11. Place at the reasonable disposal of the Owner its
engineering, maintenance, decorating, general purchasing,
accounting, cost control, taxation, insurance, publicity,
advertising, labor relations, safety and supervisory knowledge
and abilities.
EXPENDITURES BY MANAGER
The Manager shall have power and authority to make all
contracts and disbursements necessary to carry out the duties
conferred and imposed upon it by this Agreement, including, but
not limited to, the authority to pay for all expenses of leasing,
collection of rents, management, operations, maintenance and
insurance in accordance with a budget approved by the Owner.
ACCOUNTING SERVICES
The Manager shall establish and supervise all bookkeeping,
accounting and clerical services, including the maintenance of
payroll records, incident to the efficient operation and
maintenance of the Home.
The Manager shall maintain, for the Owner, proper and
suitable records and books of account in which there shall be
properly recorded all receipts and disbursements connected with
the management and operation of the Home. The Manager shall
prepare and file (or cause to be prepared and filed) all
necessary reports with respect to withholding taxes, social
security taxes, unemployment insurance, disability insurance, the
Fair Labor Standards Act, and all other statements and reports
pertaining to the labor employed on the facility payroll in or
about the Home. All books of account shall at all times be open
to the inspection and audit of any officer of the Owner or any
duly accredited and authorized representative of the Owner. All
books, records, bills, receipts, bank books, check books,
check vouchers, correspondence, lists, files, index cards, and<PAGE>
books of account relating to leases, tenants and prospective
tenants and employees of the Home for the term of this Agreement
and any renewal terms hereof and any and all records existing as
of the commencement of this Agreement and other data and records
pertaining to or in any manner relating to the management and
operation of the Home shall at all times be safely kept and
preserved and shall be the property of the Owner, and upon the
termination of this Agreement shall be retained by the Owner.
Financial statements (including balance sheet, operating
statement and statement of cash flow) shall be provided to Owner
within twenty-one (21) days of month end.
All costs, penalties or expenses incurred by Owner by reason
of Manager's failure to comply with the terms of this section
shall be borne completely by Manager, and Manager shall hold
Owner harmless for all such costs, penalties and other expenses.
Such costs, penalties or expenses shall not include legal and
lawful assessments owed to any governmental entity or regulatory
agency including overpayment by Medicaid or Medicare or
assessments to any governmental agency which were not paid by
reason of a misinterpretation or contested interpretation of any
law or regulation. The Manager shall be held responsible for any
penalty assessed by reason of late payment unless the Owner has
concurred with the interpretation and actions of the Manager in
connection with the said payment. Said costs, penalties or
expenses shall not include any such expenses incurred by reason
of Owner's negligence or delay of payment occasioned by Owner.
ACCESS TO MANAGEMENT RECORDS
The Manager shall make available to all applicable
governmental authorities having jurisdiction or regulatory
authority over or with respect to the Home, including the
Comptroller General, Secretary of Health and Human Services or
their designees, such contracts, books, documents and records
necessary to verify the costs of service contracts of $10,000.00
or more in a twelve (12) month period as reported on Medicare
cost reports.
The Manager shall preserve and maintain such contracts,
books, documents, and records during the term of this Agreement
and any renewal term, until the expiration of four (4) years
after the services are furnished.
DEPOSIT OF COLLECTIONS
All monies collected by the Manager out of and from the
operation of the facility shall be deposited in appropriately
designated and adequately identified accounts in the name of the
facility of Owner in one or more banks. Out of such accounts,
the Manager shall pay for all obligations and expenditures
necessary and properly incurred for and on account of the Owner
in the management and operation of the facility, including but<PAGE>
not limited to compensation of the Manager, insurance premiums,
betterments, and improvements. The Manager may keep on hand for
the account of the Owner such a fund as may be necessary, in the
joint opinion of the Manager and Owner, to provide for working
cash for the operation of the facility. The Manager shall render
to the Owner or persons designated by the Owner any statements
reasonably required by the Owner.
DISBURSEMENT OF CASH FLOW
Cash flow, as calculated, shall be distributed to the Owner
within twenty-one (21) days following each month end. Cash flow
to be distributed shall be calculated at the close of each
monthly accounting period, as follows:
Cash on hand and in bank - end of month
Current accounts receivable to be collected (within 30 days)
Less - current payables (to be paid within 30 days)
Less - reserve for working capital (if any)
Cash for distribution to Owner
MANAGER'S COMPENSATION
As compensation for the services to be rendered by the
Manager during the Operating Period, the Owner will pay the sum
of five percent (5%) of gross rental revenue.
As compensation for all accounting and consulting services
provided by the Manager, a charge of one dollar ($1.00) per
resident day in the nursing center and per occupied apartment day
for the independent living facility shall be paid. This amount
shall be charged and paid in the following month.
The Owner will reimburse the Manager on a monthly basis for
the actual out-of-pocket costs of direct telephone and travel
expenses incurred on Partnership business, direct out-of-pocket
fees, expenses and charges paid by it to third parties for
rendering legal, auditing, accounting, bookkeeping, computer,
printing and public relations services, expenses of preparing and
distributing reports to Limited Partners and BUC Holders, an
allocable portion of the salaries and fringe benefits of
employees of the Manager who are not partners of RLC, insurance
premiums including premiums for liability insurance which will
cover the Owner, the cost of compliance with all state and
federal regulatory requirements and stock exchange or
NASDAQ listing fees and charges, and other payments to third
parties for services rendered to the Partnership. Any
reimbursements pursuant to this provision shall not be in excess
of the lower of actual costs or the amount the Partnership would
be required to pay independent third parties for comparable
services in the same geographic location.
<PAGE>
INSURANCE
The Manager shall advise the Owner in obtaining of insurance
on the Home and all furniture, furnishings, and equipment therein
against all risks usually covered in the care of similar
properties, including, but without limitation, fire, plate glass,
repairs and omissions, liability and fidelity insurance, Federal
Civil Rights Liability insurance and all other usual insurance
(which shall also cover any liability of the Manager). It shall
be the joint responsibility of the Manger and the Owner to
determine the limits and extent of insurance coverage and to
mutually agree upon an agency or company and to provide copies of
said insurance policies to individuals sent. It shall be the
Manager's duty to inform the Owner no less than thirty (30) days
prior to the expiration of any such insurance policy that such
about to expire and to advise the Owner in obtaining a renewal of
said policy or seeking coverage from a different insurance
carrier. All policies of insurance shall name the Owner, the
Manager, and such other parties as may be required by the
provisions of any mortgage as the insured thereunder. All
insurance shall be obtained at the expense of the facility.
TERMINATION AND DAMAGES
This Agreement may be terminated at any time by mutual
consent of the parties if evidenced in writing. In addition, the
Owner may terminate this Agreement without penalty on sixty (60)
days notice by the vote of the Majority in Interest of the
Limited Partners and the Holders as defined in the Amended and
Restated Agreement Of Limited Partnership Of Owner. In the event
of Owner's termination of Manager pursuant to this paragraph,
Owner shall be liable to pay the Manager the accrued amounts due
Manager pursuant to this Agreement up to the day of termination,
less the damages, if any, caused by any such breach or violation
of this Agreement by Manager. Therefore, the parties agree that
the liability of Manager for any breach or violation of this
Agreement or duties hereunder shall be limited to the actual
management fee received by Manager under this Agreement.
Each party shall have all rights and remedies available to them
under applicable laws.
ATTORNEY FEES
In the event that it is necessary for either the Owner or
the Manager to maintain any lawsuit, action or proceeding upon
this Agreement, or if any appeal is taken therefrom, in
connection with any controversy arising out of this Agreement,
the prevailing party shall be entitled to recover, in addition to
such other sums of money or performance due hereunder, such sums
as the Court may adjudge reasonable as attorney's fees in said
suit, action, proceeding or appeal.
<PAGE>
CONTROLLING LAW
This Agreement shall be enforced and interpreted according
to the laws of the State of Indiana. If any provision of this
Agreement is invalid, illegal, or incapable of being enforced,
other conditions of this Agreement shall nevertheless remain in
full force and effect with no provisions being deemed dependent
on any other provision unless so stated herein.
EXCLUSIVE APPLICATION
Nothing in this Agreement is intended or shall be construed
to confer upon or to give any person, firm, or corporation other
than the parties hereto, any right, remedy or claim under or by
reason of this Agreement. All terms and conditions in this
Agreement shall be for the sole and exclusive benefit of the
parties hereto.
NONASSIGNABILITY
This Agreement is not assignable by the Manager without the
prior written consent of the Owner.
NOTICE
All Notices required or permitted hereunder shall be
addressed to the respective parties at the address stated herein,
unless either party notifies the other party in writing of a
different address. Notice shall be made by certified mail,
return receipt requested, and shall be deemed to have been
received by the addressee or an agent of the addressee as
evidenced by the return receipt. The addresses for
notification may be changed upon written notice.
BINDING EFFECT
This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns,
except as herein before limited.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
OWNER:
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
BY: RETIREMENT LIVING COMMUNITIES, L.P.,
Its General Partner
BY: CAPITAL REALTY GROUP SENIOR HOUSING, INC.,
Its General Partner
BY: <PAGE>
MANAGER:
CAPITAL SENIOR LIVING, INC.
BY:
<PAGE>
EXHIBIT 10-CC<PAGE>
MANAGEMENT AGREEMENT
THIS AGREEMENT, made in Dallas, Texas, as of the 1st day of
February, 1995, by and between:
Capital Senior Living Communities, L.P., a partnership
organized and existing under the laws of the State of Delaware,
hereinafter referred to as "Owner" and Capital Senior Living,
Inc., a corporation organized and existing under the laws of the
State of Texas, hereinafter referred to as "Manager,"
WITNESSETH
WHEREAS, the Owner now owns a business commonly known as
Towne Centre, in the City of Merrillville, State of Indiana,
hereinafter called the "Home."
WHEREAS, the Owner desires to employ the Manager to act as
general manager of the Home, and the Manager is willing to accept
such employment subject to the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the foregoing and of the
terms and conditions herein set forth, the parties hereto agree
as follows:
EMPLOYMENT OF MANAGER
The Owner hereby appoints the Manager, and the Manager
hereby accepts the appointment as exclusive Manager of the Home.
TERM
The services of Manager shall commence on ______________,
19___, and shall terminate nine (9) years from the date
thereof, unless sooner terminated as herein provided.
MANAGER'S DUTIES
During the term of this Agreement, which period is
hereinafter referred to as the "Operating Period," the Manager
shall use its best efforts in the management and operation of the
business, services and sales of the Home so that the Home and its
services will be operated and maintained with the maximum of
benefit and in a first quality manner so that the Home shall
remain a first quality convalescent center. In pursuance of the
foregoing, the Manager shall perform the following services:
1. Use its reasonable efforts and due diligence in the
renting of all of the rooms and facilities to desirable tenants.
<PAGE>
2. Employ, at the expense of the facility, such resident
administrator, assistant administrator, employees, agents, clerks
at the Home as may be required to continue the standard and
quality of management and operation at a level not lower than
that heretofore maintained. The Manager shall not be liable to
the Owner or others for any act or omission on the part of such
employees unless the Manager has failed to use reasonable
diligence in their hiring, discharge or supervision so as to
maintain a staff of qualified, competent, and trustworthy
employees. The Manager will negotiate on the Owner's behalf with
any labor union lawfully entitled to represent such employees,
but no collective bargaining agreement or labor contract
resulting from such negotiations shall be valid unless
executed or approved by the Owner. The Manager will not at any
time enter into any agreement with any employee for a period in
excess of one (1) year or for compensation in excess of
$50,000.00 per year without the consent in writing of the Owner.
The Manager shall procure and maintain adequate workman's
compensation insurance in the name of and at the expense of the
facility covering all the facility employees.
3. Keep the facility and all furniture, furnishings and
other equipment therein and appurtenant thereto, in good repair.
4. Arrange for necessary alterations, decorations,
replacements, improvements, or changes in the Home and in the
furniture, furnishings, and other equipment therein and develop
policies with respect to the installation of new features to the
extent that the financial obligations and resources of the
facility permit. All capital expenditures, other than minor
repair and maintenance, must be submitted to Owner for approval
prior to expenditure.
5. Develop policies with respect to publicity for the
purpose of creating the greatest possible net income for the Home
and place and supervise all advertising and promotional material.
6. Arrange at the facility's expense for compliance with
all statutes, ordinances, laws, rules, regulations, orders and
determinations affecting or issued in connection with the Home by
any governmental authority having jurisdiction thereof.
7. Cause the Home to comply with all the terms, conditions
and obligations contained in any mortgage, lease, or other
agreement executed by the Owner which relates to the facility.
The Owner shall promptly notify the Manager of any such mortgage,
lease or other agreement.
8. Deposit in a banking institution or institutions
selected by the Manager, and in accounts in the facility's name
as agent for the Owner, all monies furnished by the Owner as
working funds and all monies received by the Manager for or on
behalf of the Owner. The Manager shall pay on behalf of the
Owner all accounts incurred after the date hereof as required for<PAGE>
the operations of the Home, all assessments and charges of every
kind imposed by any governmental authority having jurisdiction
and interest and penalties thereon, license fees, permit fees and
insurance appraisal fees; fines, penalties, and court
disbursements incurred in connection with the operation of the
Home; premiums on policies of insurance; all disbursements
authorized by this Agreement; and any other charge,
item of expense, or other item which the Owner, in writing,
authorizes as an expense.
9. Receive, consider and handle the complaints of all
tenants, guests or users of any of the services or facilities of
the Home and provide copies upon written request to the Owner.
10. Institute in its own name or in the name of the Owner,
at the expense of the facility and with the approval of the
Owner, any necessary legal actions or proceedings.
11. Place at the reasonable disposal of the Owner its
engineering, maintenance, decorating, general purchasing,
accounting, cost control, taxation, insurance, publicity,
advertising, labor relations, safety and supervisory knowledge
and abilities.
EXPENDITURES BY MANAGER
The Manager shall have power and authority to make all
contracts and disbursements necessary to carry out the duties
conferred and imposed upon it by this Agreement, including, but
not limited to, the authority to pay for all expenses of leasing,
collection of rents, management, operations, maintenance and
insurance in accordance with a budget approved by the Owner.
ACCOUNTING SERVICES
The Manager shall establish and supervise all bookkeeping,
accounting and clerical services, including the maintenance of
payroll records, incident to the efficient operation and
maintenance of the Home.
The Manager shall maintain, for the Owner, proper and
suitable records and books of account in which there shall be
properly recorded all receipts and disbursements connected with
the management and operation of the Home. The Manager shall
prepare and file (or cause to be prepared and filed) all
necessary reports with respect to withholding taxes, social
security taxes, unemployment insurance, disability insurance, the
Fair Labor Standards Act, and all other statements and reports
pertaining to the labor employed on the facility payroll in or
about the Home. All books of account shall at all times be open
to the inspection and audit of any officer of the Owner or any
duly accredited and authorized representative of the Owner. All
books, records, bills, receipts, bank books, check books,
check vouchers, correspondence, lists, files, index cards, and<PAGE>
books of account relating to leases, tenants and prospective
tenants and employees of the Home for the term of this Agreement
and any renewal terms hereof and any and all records existing as
of the commencement of this Agreement and other data and records
pertaining to or in any manner relating to the management and
operation of the Home shall at all times be safely kept and
preserved and shall be the property of the Owner, and upon the
termination of this Agreement shall be retained by the Owner.
Financial statements (including balance sheet, operating
statement and statement of cash flow) shall be provided to Owner
within twenty-one (21) days of month end.
All costs, penalties or expenses incurred by Owner by reason
of Manager's failure to comply with the terms of this section
shall be borne completely by Manager, and Manager shall hold
Owner harmless for all such costs, penalties and other expenses.
Such costs, penalties or expenses shall not include legal and
lawful assessments owed to any governmental entity or regulatory
agency including overpayment by Medicaid or Medicare or
assessments to any governmental agency which were not paid by
reason of a misinterpretation or contested interpretation of any
law or regulation. The Manager shall be held responsible for any
penalty assessed by reason of late payment unless the Owner has
concurred with the interpretation and actions of the Manager in
connection with the said payment. Said costs, penalties or
expenses shall not include any such expenses incurred by reason
of Owner's negligence or delay of payment occasioned by Owner.
ACCESS TO MANAGEMENT RECORDS
The Manager shall make available to all applicable
governmental authorities having jurisdiction or regulatory
authority over or with respect to the Home, including the
Comptroller General, Secretary of Health and Human Services or
their designees, such contracts, books, documents and records
necessary to verify the costs of service contracts of $10,000.00
or more in a twelve (12) month period as reported on Medicare
cost reports.
The Manager shall preserve and maintain such contracts,
books, documents, and records during the term of this Agreement
and any renewal term, until the expiration of four (4) years
after the services are furnished.
DEPOSIT OF COLLECTIONS
All monies collected by the Manager out of and from the
operation of the facility shall be deposited in appropriately
designated and adequately identified accounts in the name of the
facility of Owner in one or more banks. Out of such accounts,
the Manager shall pay for all obligations and expenditures
necessary and properly incurred for and on account of the Owner
in the management and operation of the facility, including but
<PAGE>
not limited to compensation of the Manager, insurance premiums,
betterments, and improvements. The Manager may keep on hand for
the account of the Owner such a fund as may be necessary, in the
joint opinion of the Manager and Owner, to provide for working
cash for the operation of the facility. The Manager shall render
to the Owner or persons designated by the Owner any statements
reasonably required by the Owner.
DISBURSEMENT OF CASH FLOW
Cash flow, as calculated, shall be distributed to the Owner
within twenty-one (21) days following each month end. Cash flow
to be distributed shall be calculated at the close of each
monthly accounting period, as follows:
Cash on hand and in bank - end of month
Current accounts receivable to be collected (within 30 days)
Less - current payables (to be paid within 30 days)
Less - reserve for working capital (if any)
Cash for distribution to Owner
MANAGER'S COMPENSATION
As compensation for the services to be rendered by the
Manager during the Operating Period, the Owner will pay the sum
of five percent (5%) of gross rental revenue.
As compensation for all accounting and consulting services
provided by the Manager, a charge of one dollar ($1.00) per
resident day in the nursing center and per occupied apartment day
for the independent living facility shall be paid. This amount
shall be charged and paid in the following month.
The Owner will reimburse the Manager on a monthly basis for
the actual out-of-pocket costs of direct telephone and travel
expenses incurred on Partnership business, direct out-of-pocket
fees, expenses and charges paid by it to third parties for
rendering legal, auditing, accounting, bookkeeping, computer,
printing and public relations services, expenses of preparing and
distributing reports to Limited Partners and BUC Holders, an
allocable portion of the salaries and fringe benefits of
employees of the Manager who are not partners of RLC, insurance
premiums including premiums for liability insurance which will
cover the Owner, the cost of compliance with all state and
federal regulatory requirements and stock exchange or
NASDAQ listing fees and charges, and other payments to third
parties for services rendered to the Partnership. Any
reimbursements pursuant to this provision shall not be in excess
of the lower of actual costs or the amount the Partnership would
be required to pay independent third parties for comparable
services in the same geographic location.
<PAGE>
INSURANCE
The Manager shall advise the Owner in obtaining of insurance
on the Home and all furniture, furnishings, and equipment therein
against all risks usually covered in the care of similar
properties, including, but without limitation, fire, plate glass,
repairs and omissions, liability and fidelity insurance, Federal
Civil Rights Liability insurance and all other usual insurance
(which shall also cover any liability of the Manager). It shall
be the joint responsibility of the Manger and the Owner to
determine the limits and extent of insurance coverage and to
mutually agree upon an agency or company and to provide copies of
said insurance policies to individuals sent. It shall be the
Manager's duty to inform the Owner no less than thirty (30) days
prior to the expiration of any such insurance policy that such
about to expire and to advise the Owner in obtaining a renewal of
said policy or seeking coverage from a different insurance
carrier.
All policies of insurance shall name the Owner, the Manager, and
such other parties as may be required by the provisions of any
mortgage as the insured thereunder. All insurance shall be
obtained at the expense of the facility.
TERMINATION AND DAMAGES
This Agreement may be terminated at any time by mutual
consent of the parties if evidenced in writing. In addition, the
Owner may terminate this Agreement without penalty on sixty (60)
days notice by the vote of the Majority in Interest of the
Limited Partners and the Buc Holders as defined in the Amended
and Restated Agreement Of Limited Partnership Of Owner. In the
event of Owner's termination of Manager pursuant to this
paragraph, Owner shall be liable to pay the Manager the accrued
amounts due Manager pursuant to this Agreement up to the day of
termination, less the damages, if any, caused by any such breach
or violation of this Agreement by Manager. Therefore, the
parties agree that the liability of Manager for any breach or
violation of this Agreement or duties hereunder shall be limited
to the actual management fee received by Manager under this
Agreement.
Each party shall have all rights and remedies available to them
under applicable laws.
ATTORNEY FEES
In the event that it is necessary for either the Owner or
the Manager to maintain any lawsuit, action or proceeding upon
this Agreement, or if any appeal is taken therefrom, in
connection with any controversy arising out of this Agreement,
the prevailing party shall be entitled to recover, in addition to
such other sums of money or performance due hereunder, such sums
as the Court may adjudge reasonable as attorney's fees in said
suit, action, proceeding or appeal.
CONTROLLING LAW
This Agreement shall be enforced and interpreted according
to the laws of the State of Indiana. If any provision of this
Agreement is invalid, illegal, or incapable of being enforced,
other conditions of this Agreement shall nevertheless remain in
full force and effect with no provisions being deemed dependent
on any other provision unless so stated herein.
EXCLUSIVE APPLICATION
Nothing in this Agreement is intended or shall be construed
to confer upon or to give any person, firm, or corporation other
than the parties hereto, any right, remedy or claim under or by
reason of this Agreement. All terms and conditions in this
Agreement shall be for the sole and exclusive benefit of the
parties hereto.
NONASSIGNABILITY
This Agreement is not assignable by the Manager without the
prior written consent of the Owner.
NOTICE
All Notices required or permitted hereunder shall be
addressed to the respective parties at the address stated herein,
unless either party notifies the other party in writing of a
different address.
Notice shall be made by certified mail, return receipt requested,
and shall be deemed to have been received by the addressee or an
agent of the addressee as evidenced by the return receipt. The
addresses for notification may be changed upon written notice.
BINDING EFFECT
This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns,
except as herein before limited.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
OWNER:
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
BY: RETIREMENT LIVING COMMUNITIES, L.P.,
Its General Partner
<PAGE>
BY: CAPITAL REALTY GROUP SENIOR HOUSING, INC.,
Its General Partner
BY:
MANAGER:
CAPITAL SENIOR LIVING, INC.
BY:
<PAGE>
EXHIBIT 10-DD<PAGE>
MANAGEMENT AGREEMENT
THIS AGREEMENT, made in Dallas, Texas, as of the 1st day of
February, 1995, by and between:
Capital Senior Living Communities, L.P., a partnership
organized and existing under the laws of the State of Delaware,
hereinafter referred to as "Owner" and Capital Senior Living,
Inc., a corporation organized and existing under the laws of the
State of Texas, hereinafter referred to as "Manager,"
WITNESSETH
WHEREAS, the Owner now owns a business commonly known as
Cottonwood Village, in the City of Cottonwood, State of Arizona,
hereinafter called the "Home."
WHEREAS, the Owner desires to employ the Manager to act as
general manager of the Home, and the Manager is willing to accept
such employment subject to the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the foregoing and of the
terms and conditions herein set forth, the parties hereto agree
as follows:
EMPLOYMENT OF MANAGER
The Owner hereby appoints the Manager, and the Manager
hereby accepts the appointment as exclusive Manager of the Home.
TERM
The services of Manager shall commence on _____________,
19___, and shall terminate nine (9) years from the date
thereof, unless sooner terminated as herein provided.
MANAGER'S DUTIES
During the term of this Agreement, which period is
hereinafter referred to as the "Operating Period," the Manager
shall use its best efforts in the management and operation of the
business, services and sales of the Home so that the Home and its
services will be operated and maintained with the maximum of
benefit and in a first quality manner so that the Home shall
remain a first quality convalescent center. In pursuance of the
foregoing, the Manager shall perform the following services:
1. Use its reasonable efforts and due diligence in the
renting of all of the rooms and facilities to desirable tenants.
2. Employ, at the expense of the facility, such resident
administrator, assistant administrator, employees, agents, clerks<PAGE>
at the Home as may be required to continue the standard and
quality of management and operation at a level not lower than
that heretofore maintained. The Manager shall not be liable to
the Owner or others for any act or omission on the part of such
employees unless the Manager has failed to use reasonable
diligence in their hiring, discharge or supervision so as to
maintain a staff of qualified, competent, and trustworthy
employees. The Manager will negotiate on the Owner's behalf with
any labor union lawfully entitled to represent such employees,
but no collective bargaining agreement or labor contract
resulting from such negotiations shall be valid unless
executed or approved by the Owner. The Manager will not at any
time enter into any agreement with any employee for a period in
excess of one (1) year or for compensation in excess of
$50,000.00 per year without the consent in writing of the Owner.
The Manager shall procure and maintain adequate workman's
compensation insurance in the name of and at the expense of the
facility covering all the facility employees.
3. Keep the facility and all furniture, furnishings and
other equipment therein and appurtenant thereto, in good repair.
4. Arrange for necessary alterations, decorations,
replacements, improvements, or changes in the Home and in the
furniture, furnishings, and other equipment therein and develop
policies with respect to the installation of new features to the
extent that the financial obligations and resources of the
facility permit. All capital expenditures, other than minor
repair and maintenance, must be submitted to Owner for approval
prior to expenditure.
5. Develop policies with respect to publicity for the
purpose of creating the greatest possible net income for the Home
and place and supervise all advertising and promotional material.
6. Arrange at the facility's expense for compliance with
all statutes, ordinances, laws, rules, regulations, orders and
determinations affecting or issued in connection with the Home by
any governmental authority having jurisdiction thereof.
7. Cause the Home to comply with all the terms, conditions
and obligations contained in any mortgage, lease, or other
agreement executed by the Owner which relates to the facility.
The Owner shall promptly notify the Manager of any such mortgage,
lease or other agreement.
8. Deposit in a banking institution or institutions
selected by the Manager, and in accounts in the facility's name
as agent for the Owner, all monies furnished by the Owner as
working funds and all monies received by the Manager for or on
behalf of the Owner. The Manager shall pay on behalf of the
Owner all accounts incurred after the date hereof as required for
the operations of the Home, all assessments and charges of every
kind imposed by any governmental authority having jurisdiction<PAGE>
and interest and penalties thereon, scense fees, permit fees and
insurance appraisal fees; fines, penalties, and court
disbursements incurred in connection with the operation of the
Home; premiums on policies of insurance; all disbursements
authorized by this Agreement; and any other charge,
item of expense, or other item which the Owner, in writing,
authorizes as an expense.
9. Receive, consider and handle the complaints of all
tenants, guests or users of any of the services or facilities of
the Home and provide copies upon written request to the Owner.
10. Institute in its own name or in the name of the Owner,
at the expense of the facility and with the approval of the
Owner, any necessary legal actions or proceedings.
11. Place at the reasonable disposal of the Owner its
engineering, maintenance, decorating, general purchasing,
accounting, cost control, taxation, insurance, publicity,
advertising, labor relations, safety and supervisory knowledge
and abilities.
EXPENDITURES BY MANAGER
The Manager shall have power and authority to make all
contracts and disbursements necessary to carry out the duties
conferred and imposed upon it by this Agreement, including, but
not limited to, the authority to pay for all expenses of leasing,
collection of rents, management, operations, maintenance and
insurance in accordance with a budget approved by the Owner.
ACCOUNTING SERVICES
The Manager shall establish and supervise all bookkeeping,
accounting and clerical services, including the maintenance of
payroll records, incident to the efficient operation and
maintenance of the Home.
The Manager shall maintain, for the Owner, proper and
suitable records and books of account in which there shall be
properly recorded all receipts and disbursements connected with
the management and operation of the Home. The Manager shall
prepare and file (or cause to be prepared and filed) all
necessary reports with respect to withholding taxes, social
security taxes, unemployment insurance, disability insurance, the
Fair Labor Standards Act, and all other statements and reports
pertaining to the labor employed on the facility payroll in or
about the Home. All books of account shall at all times be open
to the inspection and audit of any officer of the Owner or any
duly accredited and authorized representative of the Owner. All
books, records, bills, receipts, bank books, check books,
check vouchers, correspondence, lists, files, index cards, and
books of account relating to leases, tenants and prospective
tenants and employees of the Home for the term of this Agreement<PAGE>
and any renewal terms hereof and any and all records existing as
of the commencement of this Agreement and other data and records
pertaining to or in any manner relating to the management and
operation of the Home shall at all times be safely kept and
preserved and shall be the property of the Owner, and upon the
termination of this Agreement shall be retained by the Owner.
Financial statements (including balance sheet, operating
statement and statement of cash flow) shall be provided to Owner
within twenty-one (21) days of month end.
All costs, penalties or expenses incurred by Owner by reason
of Manager's failure to comply with the terms of this section
shall be borne completely by Manager, and Manager shall hold
Owner harmless for all such costs, penalties and other expenses.
Such costs, penalties or expenses shall not include legal and
lawful assessments owed to any governmental entity or regulatory
agency including overpayment by Medicaid or Medicare or
assessments to any governmental agency which were not paid by
reason of a misinterpretation or contested interpretation of any
law or regulation. The Manager shall be held responsible for any
penalty assessed by reason of late payment unless the Owner has
concurred with the interpretation and actions of the Manager in
connection with the said payment. Said costs, penalties or
expenses shall not include any such expenses incurred by reason
of Owner's negligence or delay of payment occasioned by Owner.
ACCESS TO MANAGEMENT RECORDS
The Manager shall make available to all applicable
governmental authorities having jurisdiction or regulatory
authority over or with respect to the Home, including the
Comptroller General, Secretary of Health and Human Services or
their designees, such contracts, books, documents and records
necessary to verify the costs of service contracts of $10,000.00
or more in a twelve (12) month period as reported on Medicare
cost reports.
The Manager shall preserve and maintain such contracts,
books, documents, and records during the term of this Agreement
and any renewal term, until the expiration of four (4) years
after the services are furnished.
DEPOSIT OF COLLECTIONS
All monies collected by the Manager out of and from the
operation of the facility shall be deposited in appropriately
designated and adequately identified accounts in the name of the
facility of Owner in one or more banks. Out of such accounts,
the Manager shall pay for all obligations and expenditures
necessary and properly incurred for and on account of the Owner
in the management and operation of the facility, including but
not limited to compensation of the Manager, insurance premiums,
betterments, and improvements. The Manager may keep on hand for<PAGE>
the account of the Owner such a fund as may be necessary, in the
joint opinion of the Manager and Owner, to provide for working
cash for the operation of the facility. The Manager shall render
to the Owner or persons designated by the Owner any statements
reasonably required by the Owner.
DISBURSEMENT OF CASH FLOW
Cash flow, as calculated, shall be distributed to the Owner
within twenty-one (21) days following each month end. Cash flow
to be distributed shall be calculated at the close of each
monthly accounting period, as follows:
Cash on hand and in bank - end of month
Current accounts receivable to be collected (within 30 days)
Less - current payables (to be paid within 30 days)
Less - reserve for working capital (if any)
Cash for distribution to Owner
MANAGER'S COMPENSATION
As compensation for the services to be rendered by the
Manager during the Operating Period, the Owner will pay the sum
of five percent (5%) of gross rental revenue.
As compensation for all accounting and consulting services
provided by the Manager, a charge of one dollar ($1.00) per
resident day in the nursing center and per occupied apartment day
for the independent living facility shall be paid. This amount
shall be charged and paid in the following month.
The Owner will reimburse the Manager on a monthly basis for
the actual out-of-pocket costs of direct telephone and travel
expenses incurred on Partnership business, direct out-of-pocket
fees, expenses and charges paid by it to third parties for
rendering legal, auditing, accounting, bookkeeping, computer,
printing and public relations services, expenses of preparing and
distributing reports to Limited Partners and BUC Holders, an
allocable portion of the salaries and fringe benefits of
employees of the Manager who are not partners of RLC, insurance
premiums including premiums for liability insurance which will
cover the Owner, the cost of compliance with all state and
federal regulatory requirements and stock exchange or
NASDAQ listing fees and charges, and other payments to third
parties for services rendered to the Partnership. Any
reimbursements pursuant to this provision shall not be in excess
of the lower of actual costs or the amount the Partnership would
be required to pay independent third parties for comparable
services in the same geographic location.
<PAGE>
INSURANCE
The Manager shall advise the Owner in obtaining of insurance
on the Home and all furniture, furnishings, and equipment therein
against all risks usually covered in the care of similar
properties, including, but without limitation, fire, plate glass,
repairs and omissions, liability and fidelity insurance, Federal
Civil Rights Liability insurance and all other usual insurance
(which shall also cover any liability of the Manager). It shall
be the joint responsibility of the Manger and the Owner to
determine the limits and extent of insurance coverage and to
mutually agree upon an agency or company and to provide copies of
said insurance policies to individuals sent. It shall be the
Manager's duty to inform the Owner no less than thirty (30) days
prior to the expiration of any such insurance policy that such
about to expire and to advise the Owner in obtaining a renewal
of said policy or seeking coverage from a different insurance
carrier.
All policies of insurance shall name the Owner, the Manager, and
such other parties as may be required by the provisions of any
mortgage as the insured thereunder. All insurance shall be
obtained at the expense of the facility.
TERMINATION AND DAMAGES
This Agreement may be terminated at any time by mutual
consent of the parties if evidenced in writing. In addition, the
Owner may terminate this Agreement without penalty on sixty (60)
days notice by the vote of the Majority in Interest of the
Limited Partners and the Buc Holders as defined in the Amended
and Restated Agreement Of Limited Partnership Of Owner. In the
event of Owner's termination of Manager pursuant to this
paragraph, Owner shall be liable to pay the Manager the accrued
amounts due Manager pursuant to this Agreement up to the day of
termination, less the damages, if any, caused by any
such breach or violation of this Agreement by Manager.
Therefore, the parties agree that the liability of Manager for
any breach or violation of this Agreement or duties hereunder
shall be limited to the actual management fee received by Manager
under this Agreement.
Each party shall have all rights and remedies available to them
under applicable laws.
ATTORNEY FEES
In the event that it is necessary for either the Owner or
the Manager to maintain any lawsuit, action or proceeding upon
this Agreement, or if any appeal is taken therefrom, in
connection with any controversy arising out of this Agreement,
the prevailing party shall be entitled to recover, in addition to
such other sums of money or performance due hereunder, such sums
as the Court may adjudge reasonable as attorney's fees in said
suit, action, proceeding or appeal.<PAGE>
CONTROLLING LAW
This Agreement shall be enforced and interpreted according
to the laws of the State of Indiana. If any provision of this
Agreement is invalid, illegal, or incapable of being enforced,
other conditions of this Agreement shall nevertheless remain in
full force and effect with no provisions being deemed dependent
on any other provision unless so stated herein.
EXCLUSIVE APPLICATION
Nothing in this Agreement is intended or shall be construed
to confer upon or to give any person, firm, or corporation other
than the parties hereto, any right, remedy or claim under or by
reason of this Agreement. All terms and conditions in this
Agreement shall be for the sole and exclusive benefit of the
parties hereto.
NONASSIGNABILITY
This Agreement is not assignable by the Manager without the
prior written consent of the Owner.
NOTICE
All Notices required or permitted hereunder shall be
addressed to the respective parties at the address stated herein,
unless either party notifies the other party in writing of a
different address. Notice shall be made by certified mail,
return receipt requested, and shall be deemed to have been
received by the addressee or an agent of the addressee as
evidenced by the return receipt. The addresses for
notification may be changed upon written notice.
BINDING EFFECT
This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns,
except as herein before limited.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
OWNER:
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
BY: RETIREMENT LIVING COMMUNITIES, L.P.,
Its General Partner
BY: CAPITAL REALTY GROUP SENIOR HOUSING, INC.,
Its General Partner
<PAGE>
BY:
MANAGER:
CAPITAL SENIOR LIVING, INC.
BY:
EXHIBIT 10-EE<PAGE>
MANAGEMENT AGREEMENT
THIS AGREEMENT, made in Dallas, Texas, as of the 1st day of
February, 1995, by and between:
Capital Senior Living Communities, L.P., a partnership
organized and existing under the laws of the State of Delaware,
hereinafter referred to as "Owner" and Capital Senior Living,
Inc., a corporation organized and existing under the laws of the
State of Texas, hereinafter referred to as "Manager,"
WITNESSETH
WHEREAS, the Owner now owns a business commonly known as
Canton Regency Retirement Community, in the City of Canton, State
of Ohio, hereinafter called the "Home."
WHEREAS, the Owner desires to employ the Manager to act as
general manager of the Home, and the Manager is willing to accept
such employment subject to the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the foregoing and of the
terms and conditions herein set forth, the parties hereto agree
as follows:
EMPLOYMENT OF MANAGER
The Owner hereby appoints the Manager, and the Manager
hereby accepts the appointment as exclusive Manager of the Home.
TERM
The services of Manager shall commence on ________________,
19___, and shall terminate nine (9) years from the date
thereof, unless sooner terminated as herein provided.
MANAGER'S DUTIES
During the term of this Agreement, which period is
hereinafter referred to as the "Operating Period," the Manager
shall use its best efforts in the management and operation of the
business, services and sales of the Home so that the Home and its
services will be operated and maintained with the maximum of
benefit and in a first quality manner so that the Home shall
remain a first quality convalescent center. In pursuance of the
foregoing, the Manager shall perform the following services:
1. Use its reasonable efforts and due diligence in the
renting of all of the rooms and facilities to desirable tenants.
2. Employ, at the expense of the facility, such resident
administrator, assistant administrator, employees, agents, clerks<PAGE>
at the Home as may be required to continue t he standard and
quality of management and operation at a level not lower than
that heretofore maintained. The Manager shall not be liable to
the Owner or others for any act or omission on the part of such
employees unless the Manager has failed to use reasonable
diligence in their hiring, discharge or supervision so as to
maintain a staff of qualified, competent, and trustworthy
employees. The Manager will negotiate on the Owner's behalf with
any labor union lawfully entitled to represent such employees,
but no collective bargaining agreement or labor contract
resulting from such negotiations shall be valid unless
executed or approved by the Owner. The Manager will not at any
time enter into any agreement with any employee for a period in
excess of one (1) year or for compensation in excess of
$50,000.00 per year without the consent in writing of the Owner.
The Manager shall procure and maintain adequate workman's
compensation insurance in the name of and at the expense of the
facility covering all the facility employees.
3. Keep the facility and all furniture, furnishings and
other equipment therein and appurtenant thereto, in good repair.
4. Arrange for necessary alterations, decorations,
replacements, improvements, or changes in the Home and in the
furniture, furnishings, and other equipment therein and develop
policies with respect to the installation of new features to the
extent that the financial obligations and resources of the
facility permit. All capital expenditures, other than minor
repair and maintenance, must be submitted to Owner for approval
prior to expenditure.
5. Develop policies with respect to publicity for the
purpose of creating the greatest possible net income for the Home
and place and supervise all advertising and promotional material.
6. Arrange at the facility's expense for compliance with
all statutes, ordinances, laws, rules, regulations, orders and
determinations affecting or issued in connection with the Home by
any governmental authority having jurisdiction thereof.
7. Cause the Home to comply with all the terms, conditions
and obligations contained in any mortgage, lease, or other
agreement executed by the Owner which relates to the facility.
The Owner shall promptly notify the Manager of any such mortgage,
lease or other agreement.
8. Deposit in a banking institution or institutions
selected by the Manager, and in accounts in the facility's name
as agent for the Owner, all monies furnished by the Owner as
working funds and all monies received by the Manager for or on
behalf of the Owner. The Manager shall pay on behalf of the
Owner all accounts incurred after the date hereof as required for
the operations of the Home, all assessments and charges of every
kind imposed by any governmental authority having jurisdiction<PAGE>
and interest and penalties thereon, license fees, permit fees and
insurance appraisal fees; fines, penalties, and court
disbursements incurred in connection with the operation of the
Home; premiums on policies of insurance; all disbursements
authorized by this Agreement; and any other charge,
item of expense, or other item which the Owner, in writing,
authorizes as an expense.
9. Receive, consider and handle the complaints of all
tenants, guests or users of any of the services or facilities of
the Home and provide copies upon written request to the Owner.
10. Institute in its own name or in the name of the Owner,
at the expense of the facility and with the approval of the
Owner, any necessary legal actions or proceedings.
11. Place at the reasonable disposal of the Owner its
engineering, maintenance, decorating, general purchasing,
accounting, cost control, taxation, insurance, publicity,
advertising, labor relations, safety and supervisory knowledge
and abilities.
EXPENDITURES BY MANAGER
The Manager shall have power and authority to make all
contracts and disbursements necessary to carry out the duties
conferred and imposed upon it by this Agreement, including, but
not limited to, the authority to pay for all expenses of leasing,
collection of rents, management, operations, maintenance and
insurance in accordance with a budget approved by the Owner.
ACCOUNTING SERVICES
The Manager shall establish and supervise all bookkeeping,
accounting and clerical services, including the maintenance of
payroll records, incident to the efficient operation and
maintenance of the Home.
The Manager shall maintain, for the Owner, proper and
suitable records and books of account in which there shall be
properly recorded all receipts and disbursements connected with
the management and operation of the Home. The Manager shall
prepare and file (or cause to be prepared and filed) all
necessary reports with respect to withholding taxes, social
security taxes, unemployment insurance, disability insurance, the
Fair Labor Standards Act, and all other statements and reports
pertaining to the labor employed on the facility payroll in or
about the Home. All books of account shall at all times be open
to the inspection and audit of any officer of the Owner or any
duly accredited and authorized representative of the Owner. All
books, records, bills, receipts, bank books, check books,
check vouchers, correspondence, lists, files, index cards, and
books of account relating to leases, tenants and prospective
tenants and employees of the Home for the term of this Agreement<PAGE>
and any renewal terms hereof and any and all records existing as
of the commencement of this Agreement and other data and records
pertaining to or in any manner relating to the management and
operation of the Home shall at all times be safely kept and
preserved and shall be the property of the Owner, and upon the
termination of this Agreement shall be retained by the Owner.
Financial statements (including balance sheet, operating
statement and statement of cash flow) shall be provided to Owner
within twenty-one (21) days of month end.
All costs, penalties or expenses incurred by Owner by reason
of Manager's failure to comply with the terms of this section
shall be borne completely by Manager, and Manager shall hold
Owner harmless for all such costs, penalties and other expenses.
Such costs, penalties or expenses shall not include legal and
lawful assessments owed to any governmental entity or regulatory
agency including overpayment by Medicaid or Medicare or
assessments to any governmental agency which were not paid by
reason of a misinterpretation or contested interpretation of any
law or regulation. The Manager shall be held responsible for any
penalty assessed by reason of late payment unless the Owner has
concurred with the interpretation and actions of the Manager in
connection with the said payment. Said costs, penalties or
expenses shall not include any such expenses incurred by reason
of Owner's negligence or delay of payment occasioned by Owner.
ACCESS TO MANAGEMENT RECORDS
The Manager shall make available to all applicable
governmental authorities having jurisdiction or regulatory
authority over or with respect to the Home, including the
Comptroller General, Secretary of Health and Human Services or
their designees, such contracts, books, documents and records
necessary to verify the costs of service contracts of $10,000.00
or more in a twelve (12) month period as reported on Medicare
cost reports.
The Manager shall preserve and maintain such contracts,
books, documents, and records during the term of this Agreement
and any renewal term, until the expiration of four (4) years
after the services are furnished.
DEPOSIT OF COLLECTIONS
All monies collected by the Manager out of and from the
operation of the facility shall be deposited in appropriately
designated and adequately identified accounts in the name of the
facility of Owner in one or more banks. Out of such accounts,
the Manager shall pay for all obligations and expenditures
necessary and properly incurred for and on account of the Owner
in the management and operation of the facility, including but
not limited to compensation of the Manager, insurance premiums,
betterments, and improvements. The Manager may keep on hand for<PAGE>
the account of the Owner such a fund as may be necessary, in the
joint opinion of the Manager and Owner, to provide for working
cash for the operation of the facility. The Manager shall render
to the Owner or persons designated by the Owner any statements
reasonably required by the Owner.
DISBURSEMENT OF CASH FLOW
Cash flow, as calculated, shall be distributed to the Owner
within twenty-one (21) days following each month end. Cash flow
to be distributed shall be calculated at the close of each
monthly accounting period, as follows:
Cash on hand and in bank - end of month
Current accounts receivable to be collected (within 30 days)
Less - current payables (to be paid within 30 days)
Less - reserve for working capital (if any)
Cash for distribution to Owner
MANAGER'S COMPENSATION
As compensation for the services to be rendered by the
Manager during the Operating Period, the Owner will pay the sum
of five percent (5%) of gross rental revenue.
As compensation for all accounting and consulting services
provided by the Manager, a charge of one dollar ($1.00) per
resident day in the nursing center and per occupied apartment day
for the independent living facility shall be paid. This amount
shall be charged and paid in the following month.
The Owner will reimburse the Manager on a monthly basis for
the actual out-of-pocket costs of direct telephone and travel
expenses incurred on Partnership business, direct out-of-pocket
fees, expenses and charges paid by it to third parties for
rendering legal, auditing, accounting, bookkeeping, computer,
printing and public relations services, expenses of preparing and
distributing reports to Limited Partners and BUC Holders, an
allocable portion of the salaries and fringe benefits of
employees of the Manager who are not partners of RLC, insurance
premiums including premiums for liability insurance which will
cover the Owner, the cost of compliance with all state and
federal regulatory requirements and stock exchange or
NASDAQ listing fees and charges, and other payments to third
parties for services rendered to the Partnership. Any
reimbursements pursuant to this provision shall not be in excess
of the lower of actual costs or the amount the Partnership would
be required to pay independent third parties for comparable
services in the same geographic location.
INSURANCE
<PAGE>
The Manager shall advise the Owner in obtaining of insurance
on the Home and all furniture, furnishings, and equipment therein
against all risks usually covered in the care of similar
properties, including, but without limitation, fire, plate glass,
repairs and omissions, liability and fidelity insurance, Federal
Civil Rights Liability insurance and all other usual insurance
(which shall also cover any liability of the Manager). It shall
be the joint responsibility of the Manger and the Owner to
determine the limits and extent of insurance coverage and to
mutually agree upon an agency or company and to provide copies of
said insurance policies to individuals sent. It shall be the
Manager's duty to inform the Owner no less than thirty (30) days
prior to the expiration of any such insurance policy that such
about to expire and to advise the Owner in obtaining a renewal
of said policy or seeking coverage from a different insurance
carrier. All policies of insurance shall name the Owner, the
Manager, and such other parties as may be required by the
provisions of any mortgage as the insured thereunder. All
insurance shall be obtained at the expense of the facility.
TERMINATION AND DAMAGES
This Agreement may be terminated at any time by mutual
consent of the parties if evidenced in writing. In addition, the
Owner may terminate this Agreement without penalty on sixty (60)
days notice by the vote of the Majority in Interest of the
Limited Partners and the Buc Holders as defined in the Amended
and Restated Agreement Of Limited Partnership Of Owner. In the
event of Owner's termination of Manager pursuant to this
paragraph, Owner shall be liable to pay the Manager the accrued
amounts due Manager pursuant to this Agreement up to the day of
termination, less the damages, if any, caused by any such breach
or violation of this Agreement by Manager. Therefore,
the parties agree that the liability of Manager for any breach or
violation of this Agreement or duties hereunder shall be limited
to the actual management fee received by Manager under this
Agreement. Each party shall have all rights and remedies
available to them under applicable laws.
ATTORNEY FEES
In the event that it is necessary for either the Owner or
the Manager to maintain any lawsuit, action or proceeding upon
this Agreement, or if any appeal is taken therefrom, in
connection with any controversy arising out of this Agreement,
the prevailing party shall be entitled to recover, in addition to
such other sums of money or performance due hereunder, such sums
as the Court may adjudge reasonable as attorney's fees in said
suit, action, proceeding or appeal.
CONTROLLING LAW
This Agreement shall be enforced and interpreted according
to the laws of the State of Indiana. If any provision of this<PAGE>
Agreement is invalid, illegal, or incapable of being enforced,
other conditions of this Agreement shall nevertheless remain in
full force and effect with no provisions being deemed dependent
on any other provision unless so stated herein.
EXCLUSIVE APPLICATION
Nothing in this Agreement is intended or shall be construed
to confer upon or to give any person, firm, or corporation other
than the parties hereto, any right, remedy or claim under or by
reason of this Agreement. All terms and conditions in this
Agreement shall be for the sole and exclusive benefit of the
parties hereto.
NONASSIGNABILITY
This Agreement is not assignable by the Manager without the
prior written consent of the Owner.
NOTICE
All Notices required or permitted hereunder shall be
addressed to the respective parties at the address stated herein,
unless either party notifies the other party in writing of a
different address. Notice shall be made by certified mail,
return receipt requested, and shall be deemed to have been
received by the addressee or an agent of the addressee as
evidenced by the return receipt. The addresses for
notification may be changed upon written notice.
BINDING EFFECT
This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns,
except as herein before limited.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
OWNER:
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
BY: RETIREMENT LIVING COMMUNITIES, L.P.,
Its General Partner
BY: CAPITAL REALTY GROUP SENIOR HOUSING, INC.,
Its General Partner
BY:
<PAGE>
MANAGER:
CAPITAL SENIOR LIVING, INC.
BY:
EXHIBIT 21<PAGE>
LIST OF SUBSIDIARIES
1. Retirement Partnership, Ltd., a Delaware Limited
Partnership, 99% owned.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet at December 31, 1995 and the consolidated statements
of income and cash flows for the year ended December 31, 1995, and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 9,947,118
<SECURITIES> 896,405
<RECEIVABLES> 550,938
<ALLOWANCES> (141,452)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 24,072,374
<DEPRECIATION> (6,719,719)
<TOTAL-ASSETS> 29,063,057
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,393,288
<TOTAL-LIABILITY-AND-EQUITY> 29,063,057
<SALES> 0
<TOTAL-REVENUES> 15,693,441
<CGS> 0
<TOTAL-COSTS> 13,834,167
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 228,605
<INCOME-PRETAX> 1,630,669
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,630,669
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
