SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[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, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transaction period from to
Commission File Number 0-15571
CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
North Carolina 56-1494619
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 100, 4000 Blue Ridge Road
Raleigh, North Carolina 27612
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (919) 781-1700
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 5,900 Units of
Limited Partnership Interests.
Indicate by check mark 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 .
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K [X].
Market Value of 5,875 Units held by nonaffiliates as of March 21, 1997
was $3,927,261 (based upon the offering price of $1,000 less the amount
distributed per Unit).
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
5,900 Units outstanding as of March 21, 1997
The total number of pages contained in this document is 19 pages.
<PAGE>
PART I
Item 1. Business.
Carolina Investment Partners, Limited Partnership (the "Registrant") is
a limited partnership organized in 1985 under the North Carolina Uniform Limited
Partnership Act. The Registrant was formed for the purpose of investing in
certain unimproved real properties located in Cary, North Carolina. The
Registrant acquired these properties, commonly known as the Martin Parcel and
the Wellington Parcel, in 1986. See "Properties." The Registrant has the option
to develop the Martin Parcel for office and institutional uses or hold it for
resale. Its only option for the Wellington Parcel is to hold it for resale. At
this time the Registrant is not developing the Martin Parcel and is attempting
to resell it. However, the Registrant will consider its options with respect to
development of the Martin Parcel and may formulate a plan for development of the
Martin Parcel. A portion of the Wellington Parcel has been sold, and the
remainder (the "Outparcels") is under contract.
Development of real property in the Research Triangle Area is highly
competitive. Factors which affect competition include price, financing terms,
economics, location, social and demographic conditions in the surrounding areas,
roads, sewers, utilities and other items of infrastructure, zoning and similar
governmental regulations which affect the cost of development and the uses of
the property. Many of these factors are beyond the control of the Registrant.
These competitive conditions may affect the Registrant's ability to locate
purchasers for, or develop, the properties at prices acceptable to the
Registrant. The Registrant believes, however, that the proximity of the
properties to the full access highway interchange and overpass which connects
the Cary Parkway and U.S. Highway 1 and 64 (the "Interchange") enhances their
marketability and minimizes the effects of competition. Competitive factors
relating to each property are discussed in greater detail under "Properties".
Item 2. Properties.
The Martin Parcel and the Wellington Parcel are located in the southern
portion of Cary, North Carolina, a rapidly expanding community to the immediate
southwest of Raleigh, North Carolina. Cary is part of a region in central North
Carolina known as the Research Triangle area which includes Raleigh, Durham,
Chapel Hill and the Research Triangle Park. Both properties are located near the
residential single family subdivisions known as Ridgepath, Wellington Park,
MacGregor Downs, Lochmere, Kildaire Farms, Wimbledon, and McDonald Woods. The
map below shows the locations of the Registrant's properties in Cary.
[MAP GOES HERE]
The Martin Parcel contains approximately 25.1 acres of unimproved land
which is divided into two tracts by the Cary Parkway. The tract lying to the
west of the Cary Parkway contains 15.76 acres of land, while the tract lying to
the east of the Cary Parkway contains 9.34 acres of land. The Martin Parcel is
located immediately to the north of the Interchange.
The Wellington Parcel consists of approximately 16.3 acres of land
located
<PAGE>
approximately one-half mile south of the Interchange and adjacent to the
Cary Parkway and Tryon Road. The Wellington Parcel is part of a 216- acre
planned unit development ("PUD") known as Wellington Park. On September 25, 1996
10.9 acres of the Wellington Parcel were sold to Wellington Center Associates,
LLC ("WCA"), successor to Churchill & Banks, Ltd. The remaining 5.40 acres, the
"Outparcels", is under contract by WCA and is scheduled to close by September
10, 1997. The Agreement for the Purchase and Sale of Real Estate, as amended,
between WCA, the Registrant, and ADA Corporation of North Carolina ("ADA"), an
affiliate of the Registrant's General Partner, contains a number of conditions
to closing which must be satisfied prior to closing on the Outparcels.
Consequently, there can be no assurance that the Agreement will result in a
closing on the Outparcels. Under the terms of the amended Agreement, WCA is
developing the Outparcels as it develops the portion it purchased (the "Main
Site").
Construction of the residential portions of the Wellington Park PUD
began in June of 1986. Five residential neighborhoods containing 250 lots have
been developed and sold. The primary infrastructure and recreation facilities
are complete. Additional residential units are under construction. A nursing
home has been built on a parcel of the PUD.
The Wellington Parcel is bordered to the south by Tryon Road, to the
east by Wellingborough Drive, to the north by Parkton Drive, and to the west by
the Cary Parkway. Tryon Road has been widened to a 100 foot right-of-way
fronting on the Wellington Parcel. The Cary Parkway was expanded to four lanes
in 1992 and various extensions of the Cary Parkway have lead to an increase in
traffic at the site.
The purchase contract between the original seller of the Wellington
Parcel (the "Wellington Seller") and the Registrant includes a put option which
permits the Registrant, at its option, to require the Wellington Seller to
repurchase the Wellington Parcel for approximately $3,669,000 on or after July
18, 1989. The contract also provides that the Wellington Seller will share
evenly with the Registrant in any profits resulting from the sale of the
Wellington Parcel. However, this equity sharing arrangement was amended during
1990 to increase to more than 87.5% the percentage of profits to be retained by
the Registrant if the Wellington Parcel is sold to a third party other than by
exercise of the put option by the Registrant. If the put option is exercised,
the Registrant will retain only 50% of the profit from sale of the Wellington
Parcel. See Item 11 "Executive Compensation" for a more detailed discussion of
the amount of appreciation paid to the Wellington Seller upon sale of the
Wellington Parcel to WCA.
Upon the sale of the Wellington Parcel or the Martin Parcel, the
General Partner is entitled to a broker listing fee under some circumstances.
See Item 11 "Executive Compensation." In addition to the broker listing fee, in
the event the parcel is sold by a broker unaffiliated with the General Partner,
the Registrant may pay the unaffiliated broker a 2.5% broker-reallowance fee.
Item 3. Legal Proceedings.
No material legal proceedings are pending against the Registrant or its
properties.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote by the limited partners of the
Registrant during the fourth quarter of 1996.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
(a) The Registrant has no common stock. There is no
established public trading market for the Units.
(b) The Registrant had 977 Limited Partners holding 5,900 Units
as of March 21, 1997. The number of Limited Partners was determined by the
Partnership's records maintained by the General Partner. An affiliate of the
General Partner owns 25 of these 5,900 units.
(c) On November 4, 1996 the Registrant paid its first cash
distribution since its formation. The Registrant anticipates the sale and
closing of the Outparcels by September 10, 1997. These sales, if closed, will
provide the Registrant with additional funds, of which the Registrant expects to
retain approximately $100,000 for future operating needs, and distribute the
remainder to the partners in accordance with the Partnership Agreement.
Until the Limited Partners have received distributions of cash from the
Registrant of an aggregate amount equal to 100% of the Capital Contributions of
the Limited Partners, plus an additional return equivalent to 10% per annum
simple interest on their "Unreturned Capital Contributions", the Limited
Partners will receive at least 99% of all distributions of cash, which will be
distributed and allocated among them in the ratio which the number of Units
owned by each of them bears to the total number of Units outstanding.
Thereafter, the Registrant's distributions will be allocated 90% to the Limited
Partners and 10% to the General Partner. "Unreturned Capital Contribution" means
the Capital Contribution of a Limited Partner less any distributions of cash
made by the Registrant to such Limited Partner.
<PAGE>
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Summary of Operations:
Gain on Sale of Land $1,382,081 $-0- $-0- $-0- $-0-
Other Income 12,174 39,158 2,776 2,570 4,703
Expenses 58,040 41,455 35,529 40,735 36,343
Net Income (Loss) 1,336,215 (2,297) (32,753) (38,165) (31,640)
Net Income (Loss) per
limited partnership unit:
From gain on sale
of land 231.91 -0- -0- -0- -0-
From other
operations <7.78> <.39> <5.55> <6.47> <5.36>
Total per unit 224.13 <.39> <5.55> <6.47> <5.36>
Distribution per unit 331.53 -0- -0- -0- -0-
Selected Balances:
Land held for
Investment 4,001,280 4,822,183 4,822,183 4,822,183 4,822,183
Total Assets 4,206,804 4,855,624 4,826,351 4,878,893 4,899,144
Long term obligations -0- -0- -0- -0- -0-
General Partner's
equity -0- -0- -0- -0- -0-
Limited Partners' equity 4,184,962 4,818,568 4,820,865 4,853,618 4,891,783
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Registrant's operations resulted in a net income of $1,336,215
during 1996, compared to net losses of $2,297 in 1995 and $32,753 in 1994. The
primary differences between 1996 and 1995 and 1994 were:
1. During 1996 the Registrant sold approximately 10.9 acres of the
Wellington Parcel at a net gain of $1,382,081. There were no land sales
in 1995 or 1994.
2. During 1996 the Registrant received $11,300 of non-refundable deposits
on the sale of the Wellington Parcel. During 1995 the Registrant
received $2,000 in forfeited earnest money deposits. There were no
non-refundable deposits in 1994.
3. In 1995 the Registrant had timber removed from one of its properties
resulting in income of $35,664. Income from the sale of timber was
$1,648 in 1994. There were no timber sales in 1996.
4. Expenses in 1996 include:
(bullet) An increase in property taxes due to revaluation of the
Wellington Parcel and its annexation by the Town of Cary.
Property taxes in 1996 were approximately $13,000 and $10,500
more than 1995 and 1994, respectively.
(bullet) An increase in accounting fees due to the additional services
relating to the sale of the land, determination of the gain
allocation, and preparing the distribution of funds to the
partners. Accounting fees in 1996 were approximately $2,600
and $3,600 more than 1995 and 1994, respectively.
(bullet) Survey costs of approximately $3,100 relating to sale of the
Wellington Parcel. There were no survey costs in 1995 or
1994.
(bullet) Costs of filing the Registrant's reports with the SEC
electronically. Electronic filing was required beginning in
1995. Costs totaled approximately $2,900 in 1996, $1,800 in
1995, and -0- in 1994.
(bullet) Legal, printing, and mailing costs relating to 8-K filings
with the SEC and distribution of the filings to the limited
partners were $1,072 in 1996. Costs of a similar nature in
1995 and 1994 were $2,043 and $1,710 respectively.
On February 2, 1995 the Registrant borrowed $55,000 from the General
Partner to replenish its cash balance which had been depleted by operating
expenses. In February and March 1995, the Registrant had timber removed from its
properties generating income of $35,664, which was repaid against the loan from
the General Partner. Further payments reduced the note balance to $16,064. The
note matured on June 1, 1996. A new note for $16,064 bearing interest at prime
plus one percent was issued on June 1, 1996. This note was repaid in full when
the Registrant sold some of its property in September 1996.
The Registrant, Churchill & Banks, Ltd. ("Churchill & Banks")
(predecessor to WCA), and ADA Corporation of North Carolina ("ADA"), which is
affiliated with the General Partner, executed an agreement (the "Agreement") for
Churchill & Banks to purchase certain tracts of real property owned by the
Registrant (the Wellington Parcel) and ADA. The Agreement was
<PAGE>
amended in August 1995, April 1996, and three times in September 1996. In
addition to other matters, the amendments to the Agreement provided for 10.96
acres (the "Main Site"), of which 10.91 acres were owned by the Registrant, to
close in September 1996 and closing on the remaining 6.21 acres, consisting of
four outparcels (the "Outparcels"), of which 5.40 acres is owned by the
Registrant, to occur by March 10, 1997, with an additional 6 month extension
possible on the Outparcels. The purchase price for the land is $5.25 per net
square foot, which yields a sales price to the Registrant and ADA of $3,927,750.
The closing for the sale of the Main Site was held on September 25, 1996. The
Registrant's net sales proceeds was $2,202,984 (net of closing costs) for the
sale of the Main Site.
The Registrant's proceeds were utilized as follows:
Gross sales price $2,388,000
Commissions and broker re-allowance fees (179,100)
Deed stamps and attorney fees (5,916)
---------------
Net sales proceeds $2,202, 984
Wellington Parcel property taxes (16,511)
Repayment of note payable to General Partner (16,819)
Funds reserved for future operating needs (199,833)
---------------
Funds available for distribution to partners $1,969,821
======================
Under the terms of the contract through which the Registrant purchased
the Wellington Parcel none of the profit was due to the Wellington Seller (see
Item 2. "Properties"). The Registrant's Partnership Agreement calls for the
General Partner to be allocated, at a minimum, 1% of any gain from the sale of
property. To the extent the General Partner is allocated gain, it also receives
a distribution. Accordingly, the General Partner's share of the gain is $13,821
(net sales proceeds of $2,202,984 less the Registrant's basis in the property
sold, $820,903, equals a gain of $1,382,081; 1% of which is $13,821).
On November 4, 1996 the Registrant distributed a total of $1,969,821,
with $1,956,000 going to the limited partners ($331.53 per unit) and $13,821 to
the General Partner.
The Churchill & Banks Agreement contains a number of conditions to
closing which must be satisfied prior to closing on the Outparcels.
Consequently, there can be no assurance that the Agreement will result in a
closing on the Outparcels. Wellington Center Associates, LLC, a
successor-in-interest to Churchill & Banks, has exercised its option to extend
closing on the Outparcels.
As of March 20, 1997, the Registrant has $196,128 in cash and
short-term investments, which is sufficient to meet its needs during the next
year. The General Partner anticipates the sale and closing of the Outparcels
(see discussion above) by September 10, 1997. These sales, if closed, will
provide the Registrant with additional funds. The Registrant expects to retain
approximately $100,000 from such sales, if any, for future operating needs and
distribute the remainder to the partners in accordance with the Partnership
Agreement.
The Registrant maintains its excess funds in a money market account at
Triangle Bank. The General Partner believes this account is an appropriate
investment of the Registrant's funds. Until its properties are sold, placed into
development and/or refinanced, the Registrant anticipates deficits from
operations and administrative expenses.
<PAGE>
CAUTIONARY STATEMENT IDENTIFYING IMPORTANT FACTORS THAT COULD CAUSE THE
REGISTRANT'S ACTUAL RESULTS TO DIFFER FROM THOSE PROJECTED IN FORWARD LOOKING
STATEMENTS.
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this document, and any document
incorporated by reference herein, are advised that this document and documents
incorporated by reference into this document contain both statements of
historical facts and forward looking statements. Forward looking statements are
subject to certain risks and uncertainties, which could cause actual results to
differ materially from those indicated by the forward looking statements.
Examples of forward looking statements include, but are not limited to (i)
projections of revenues, income or loss, earnings or loss per share, capital
expenditures, dividends, capital structure and other financial items, (ii)
statements of the plans and objectives of the Registrant or its management,
including the introduction of new products, or estimates or predictions of
actions by customers, suppliers, competitors or regulatory authorities, (iii)
statements of future economic performance, and (iv) statements of assumptions
underlying other statements and statements about the Registrant or its business.
This document and any documents incorporated by reference herein also identify
important factors which could cause actual results to differ materially from
those indicated by the forward looking statements. These risks and uncertainties
include uncertainties about whether real estate sales under contract will close,
the ability of the Registrant to sell its other real estate assets, the price of
real estate sales, environmental and similar liabilities, future operating
expenses and the adequacy of capital resources to meet future operating
expenses, which are described herein and/or in documents incorporated by
reference herein.
The cautionary statements made pursuant to the Private Securities Litigation
Reform Act of 1995 above and elsewhere by the Registrant should not be construed
as exhaustive or as any admission regarding the adequacy of disclosures made by
the Registrant prior to the effective date of such Act. Forward looking
statements are beyond the ability of the Registrant to control and in many cases
the Registrant cannot predict what factors would cause actual results to differ
materially from those indicated by the forward looking statements.
Item 8. Financial Statements and Supplementary Data.
Registrant's financial statements are included elsewhere herein.
See "List of Financial Statements."
Item 9. Changes in and Disagreements with Accountant on Accounting and
Financial Disclosure.
None
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Registrant has no directors or executive officers. The Registrant
is managed, and its investment decisions are made, by the general partners of
the General Partner. The General Partner is Walsmith Associates Two, a North
Carolina general partnership. Except as expressly provided in the Partnership
Agreement, the General Partner has the power to do any and all things necessary
or incident to the conduct of the Registrant's business. The general partners of
the General Partner are:
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Business Experience During
Past Five Years, Family
Relationships and Directorships
NAME AGE in Public Companies
-----------------------------------------------------------------------
<S> <C> <C>
Donald F. Walston 55 President since 1982, and founder of Howard Perry and Walston Realty,
Inc., a residential real estate brokerage company located in the
Research Triangle area of North Carolina.
Alton L. Smith, III 48 Mr. Smith is a principal owner, and Executive Vice President of
Howard Perry & Walston Realty, Inc. Mr. Smith is also an officer and
director of Trademark Properties, Inc. Mr. Smith is the brother of C.
Stephen Smith
C. Stephen Smith 47 Mr. Smith is an independent commercial real estate broker. Mr. Smith
is the brother of Alton L. Smith, III
</TABLE>
To the knowledge of the Registrant, no person is the beneficial owner
of more than 590 units, 10% of the outstanding Units.
Wellington Park Associates, a North Carolina general partnership, is
required to repurchase the Wellington parcel if the Registrant exercises its put
option (See "Properties"). The three general partners of the General Partner of
the Registrant, are all general partners of Wellington Park Associates.
Accordingly, a conflict of interest exists between the general partners of the
General Partner and the Registrant with respect to the put option. For that
reason, the put option may only be exercised with the prior approval of the
limited partners of the Registrant who own at least seventy-five (75%) percent
of the outstanding Units of the Registrant.
Item 11. Executive Compensation.
The Agreement of Limited Partnership of the Registrant (the
"Partnership Agreement") governs the amount of compensation payable to Walsmith
Associates, Two, the General Partner of the Registrant.
Each year any portion of the properties of the Registrant remain
undeveloped, the Registrant pays the General Partner an annual $3,000 management
fee. This fee for 1996 was paid to the General Partner by the Registrant during
the first quarter of 1997.
If any portion of the Registrant's properties are developed by the
Registrant, the Registrant will pay the General Partner a 3% development fee
based upon he cost of improvements, net of land. No amounts were paid to the
General Partner as a development fee during the year ended December 31, 1996.
The Registrant may also pay personnel engaged by or on its behalf to
coordinate or supervise development, construction and operational activities,
including partners and employees of its General Partner. During the year ended
December 31, 1996, the Registrant paid affiliates of the General Partner $5,821
for record keeping, securities law filings and other administrative services.
The Partnership Agreement calls for the General Partner to be allocated
a minimum of 1% of the gain from the sale of property. The General Partner
receives cash to the extent it is
<PAGE>
allocated income. The General Partner received a distribution of $13,821 during
the year ended December 31, 1996. (See Item 7. "Management's Discussion and
Analysis of Financial Condition and Results of Operations.")
Upon the sale of the Martin Parcel and the Wellington Parcel, the
General Partner will be paid a broker listing fee of up to five (5%) percent of
the sales price if the sale is to a party unaffiliated with the General Partner.
If the property is sold by a broker unaffiliated with the General Partner, the
Registrant may also pay the unaffiliated broker a two and one-half (2 1/2%)
percent broker-reallowance fee. The Registrant paid a broker listing fee of
$59,700 (2 1/2% of $2,388,000) to the General Partner during the year ended
December 31, 1996. Additionally, a broker listing fee of $47,760 (2% of
$2,388,000) was paid to an affiliate of the General Partner.
No other amounts were paid for services during the year ended December
31, 1996 to the General Partner or any of its partners or employees.
If the Registrant operates developed projects, the General Partner will
receive standard leasing commissions and standard property management fees. No
amounts were paid during the year ended December 31, 1996.
The General Partner receives cash to the extent it is allocated income.
Pursuant to the Partnership Agreement, the General Partner is allocated 1% of
each material item of Partnership income, gain, loss, deduction, or credit.
Otherwise all distributions are to the limited partners until such time as these
distributions equal their original capital contributions plus an additional
return of 10% per annum simple interest on their outstanding capital
contribution (original contributions as reduced by any prior distributions).
Thereafter, Partnership distributions will be allocated 10% to the General
Partner and 90% to the limited partners.
Under the terms of a put option as amended on February 1, 1990, the
Registrant is required to pay to Wellington Park Associates (the "Wellington
Seller"), an affiliate of the General Partner, a portion of the appreciation on
any sale of the Wellington Parcel, including a sale pursuant to the Registrant's
exercise of the put option. The Wellington Seller will receive fifty (50%)
percent of the appreciation (which is the amount by which the gross sales price
exceeds $1,223,175, the original cost to the Registrant of the Wellington
Parcel) if the put option is exercised. Upon sale of the Wellington Parcel to an
unaffiliated third party other than by exercise of the put option, the amount
payable to the Wellington Seller will equal fifty (50%) percent of the
appreciation reduced by the sum of the following: (a) for each year from March
6, 1990 to the sale date (with partial years prorated according to the number of
days prior to closing of such sale), ten (10%) percent of the amount by which
(i) the gross proceeds from sale of the Wellington Parcel, exceed (ii) fifty
(50%) percent of the appreciation (the "Interest Factor"); plus (b) seventy-five
(75%) percent of the amount the Wellington Seller will receive upon sale of the
Wellington Parcel remaining after subtracting the Interest Factor.
The Interest Factor could result in reduction of the amount to be received by
the Wellington Seller to zero, but cannot result in the Wellington Seller owing
any payment to the Registrant. In relation to the sale of the Main Site of the
Wellington Parcel in September 1996, the Interest Factor exceeded the Wellington
Seller's share of appreciation. Therefore, the Registrant did not pay any
amounts to the Wellington Seller during the year ended December 31, 1996.
Information about comparative five-year return on investment in the
Registrant compared to market indexes has not been included herein because there
is no public market in Units of the Registrant. The limited partnership
agreement of the Registrant places substantial restrictions on transfer of Units
of the Registrant. Accordingly, the Registrant believes comparisons to indexes
of publicly traded securities would not be meaningful disclosure for investors.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) As of March 21, 1997, no person was known by the Registrant to
beneficially own more than 5% of the Units. The table set forth below indicates
the ownership of units by certain general partners of the General Partner as of
March 21, 1997:
<TABLE>
<CAPTION>
Amount and
Title Name & Address Nature Percent of Class
<S> <C> <C> <C>
Limited Partnership Alton L. Smith III 25 units (1) *
Unit 4000 Blue Ridge Road, Suite 100
Raleigh, NC 27612
</TABLE>
* Indicates less than 1%.
(1) Held in trust for Mr. Smith's children. Mr. Smith serves as trustee of
the trust.
(b) As a limited partnership, the Registrant has no officers and
directors, although Alton L. Smith, III, a general partner of the General
Partner, serves the Registrant in the role of its principal financial "officer".
The General Partner has contributed $1,000 to the Registrant's capital account;
however, this contribution is not treated as the equivalent of a Unit of limited
partnership interest. The General Partner's contribution constitutes less than
1% of the total capital contributed to the Registrant. Messrs. Walston, Smith
and Smith are general partners of the General Partner. Alton L. Smith III
beneficially owns 25 units through a trust, for which he serves as trustee.
Neither Mr. Walston nor Mr. C. Stephen Smith beneficially owns any units of the
Registrant.
Item 13. Certain Relationships and Related Transactions.
See Item 11 "Executive Compensation."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(1) List of Financial Statements: See "List of Financial
Statements."
(2) List of Financial Statement Schedules: All schedules
are omitted as they are not applicable or the required
information is shown in the financial statements or the
notes thereto.
(3) Exhibit Index. All exhibits are incorporated by
reference.
(b) No Current Report on Form 8-K was filed during the quarter
ended December 31, 1996.
(c) The following exhibits have been filed by the Registrant with the
Securities and Exchange Commission under the Securities Exchange Act of 1934
(File Number 0-15571) and are incorporated herein by reference:
<TABLE>
<S> <C>
Exhibit No. 3.1 Amended Agreement of Limited Partnership of the
Registrant
(incorporated by reference to Exhibit
4.1 to the Registrant's Annual Report filed on Form
10-K for the year ended December 31, 1986).
Exhibit No. 10.1 Purchase Agreement between Registrant and Walsmith
Associates regarding the Martin Parcel
(incorporated by reference to Exhibit 10.1 to the
Registrant's Annual Report filed on Form 10-K for
the year ended December 31, 1986).
Exhibit No. 10.2 Offer to Purchase and Contract for the Sale and
Purchase of Real Estate, dated as of January 24,
1986, between Wellington Park Associates and the
Registrant (incorporated by reference to Exhibit 6A
to the Registrant's Quarterly Report filed on Form
10-Q for the period ended June 30, 1989).
Exhibit No. 10.3 Agreement between the North Carolina Department of
Transportation and Walsmith Associates
(incorporated by reference to Exhibit 10.3 to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1986).
Exhibit No. 10.4 Assignment and Assumption Agreement between the
Registrant and Walsmith Associates (incorporated by
reference to Exhibit 10.4 to the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1986).
Exhibit No. 10.5 Amendment to Offer to Purchase and Contract for the
Sale and Purchase of Real Estate, dated as of
February 1, 1990, between Wellington Park
Associates and the Registrant (incorporated by
reference to Exhibit 10.6 to the Registrant's
Annual Report filed on Form 10-K for the period
ended December 31, 1989).
Exhibit No. 10.6 Agreement for the Purchase and Sale of Real Estate,
dated as of April 20, 1995, between Churchill &
Banks, Ltd., ADA Corporation of North Carolina, and
the Registrant (incorporated by reference to
Exhibit C to the Registrant's Current Report filed
on Form 8-K, dated April 20, 1995 ).
Exhibit No. 10.7 First Amendment to the Agreement for the
<PAGE>
Purchase and Sale of Real Estate, dated as of August 9,
1995, between Churchill & Banks, Ltd., ADA
Corporation of North Carolina, and the Registrant
(incorporated by reference to Exhibit C to the
Registrant's Current Report filed on Form 8-K,
dated August 9, 1995).
Exhibit No. 10.8 Second Amendment to the Agreement for the Purchase
and Sale of Real Estate, dated as of April 19,
1996, between Churchill & Banks, Ltd., ADA
Corporation of North Carolina, and the Registrant
(incorporated by reference to Exhibit 28.5 to the
Registrant's Quarterly Report filed on Form 10-Q
for the period ended March 31, 1996).
Exhibit No. 10.9 Third Amendment to the Agreement for the Purchase
and Sale of Real Estate, dated as of September 10,
1996, between Churchill & Banks, Ltd., ADA
Corporation of North Carolina, and the Registrant
(incorporated by reference to Exhibit 10.1 to the
Registrant's Current Report filed on Form 8-K,
dated September 25, 1996).
Exhibit No. 10.10 Fourth Amendment to the Agreement for the Purchase
and Sale of Real Estate, dated as of September __,
1996, between Churchill & Banks, Ltd., ADA
Corporation of North Carolina, and the Registrant
(incorporated by reference to Exhibit 10.2 to the
Registrant's Current Report filed on Form 8-K,
dated September 25, 1996).
Exhibit No. 10.11 Fifth Amendment to the Agreement for the Purchase
and Sale of Real Estate, dated as of September 27,
1996, between Wellington Center Associates, LLC,
ADA Corporation of North Carolina, and the
Registrant (incorporated by reference to Exhibit
10.3 to the Registrant's Current Report filed on
Form 8-K, dated September 25, 1996).
Exhibit No. 27 Financial Data Schedule
</TABLE>
(d) All financial statement schedules are omitted because they are not
applicable or the required information is shown in the financial statements
attached hereto or notes thereto.
<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 on March 26, 1997.
CAROLINA INVESTMENT PARTNERS
By: WALSMITH ASSOCIATES TWO,
General Partner
By: /s/ Alton L. Smith, III
---------------------------
Alton L. Smith, III
General Partner and
Principal Financial 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.
<TABLE>
<CAPTION>
Signature Capacity Date
<S> <C> <C>
/s/Donald F. Walston General Partner of Walsmith March 26, 1997
- ------------------------------------
Associates Two, general partner of
the Registrant
/s/Alton, L. Smith, III
General Partner of Walsmith March 26, 1997
Associates Two, general partner of
the Registrant
</TABLE>
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act.
No annual report or proxy statement has been or will be sent to the Limited
Partners of the Registrant.
<PAGE>
ANNUAL REPORT ON FORM 10-K
ITEMS 8 AND 14 (a) (1)
FINANCIAL STATEMENTS
LIST OF FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1996
CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP
RALEIGH, NORTH CAROLINA
<PAGE>
Form 10-K--Items, 8, 14 (a) (1) and (2) and (d)
CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP
December 31, 1996
LIST OF FINANCIAL STATEMENTS
The following financial statements of Carolina Investment Partners, Limited
Partnership are included in Item 8:
Independent Auditors Report F-1
Balance Sheets--December 31, 1996 and 1995.. F-2
Statements of Operations--Years Ended
December 31, 1996, 1995 and 1994 F-3
Statements of Changes in Partners' Equity--Years Ended
December 31, 1996, 1995, and 1994. F-4
Statements of Cash Flows--Years Ended December 31, 1996,
1995, and 1994 F-5
Notes to Financial Statements F-6
Schedules to the financial statements for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission are
inapplicable or the required information is included in the financial statements
or the notes thereto.
<PAGE>
(Lynch & Howard, P.A. Letterhead)
INDEPENDENT AUDITOR'S REPORT
To the Partners
Carolina Investment Partners Limited Partnership
Raleigh, North Carolina
We have audited the accompanying balance sheets of Carolina Investment Partners
Limited Partnership as of December 31, 1996 and December 31, 1995, and the
related statements of operations, changes in partners' equity and cash flows for
each of the three years in the period ended December 31, 1996. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Carolina Investment Partners
Limited Partnership as of December 31, 1996 and December 31, 1995, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1996 in conformity with generally accepted accounting
principles.
/s/ Lynch & Howard, P.A.
March 25, 1997
<PAGE>
Exhibit A
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP
Raleigh, North Carolina
BALANCE SHEETS
ASSETS
December 31
1995 1995
---------- ------------
ASSETS
Cash $ 194,254 $ 542
Short-term investments 11,270 32,796
Land held for investment (Note 6) 4,001,280 4,822,183
Other asset 0 103
----------- ----------
$4,206,804 $4,855,624
=========== =========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable--trade $ 13,898 $ 19,948
Accounts payable--related party 7,944 1,044
Notes payable-related party 0 16,064
---------- ----------
Total Liabilities $ 21,842 $ 37,056
---------- ---------
PARTNERS' EQUITY
General Partner's equity $ 0 $ 0
Limited partners' equity; 5,900 units
authorized, issued and outstanding 4,184,962 4,818,568
---------- ---------
Total Partners' Equity $4,184,962 $4,818,568
---------- ----------
$4,206,804 $4,855,624
========== =========
The Notes to Financial Statements are an integral part of this statement.
F-2
<PAGE>
Exhibit B
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP
Raleigh, North Carolina
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31
1996 1995 1994
----- ------ -----
<S> <C> <C> <C>
REVENUES:
Gain on sale of land--net of related $ 1,382,081 $ 0 $ 0
party commissions paid of $107,460
(Note 7)
Sales of timber--net 0 35,664 1,648
Interest and other income 12,174 3,494 1,128
------------ ------------ -----------
Total Revenues $ 1,394,255 $ 39,158 $ 2,776
------------ ----------- -----------
OPERATING EXPENSES:
General and administrative expenses $ 49,219 $ 35,784 $ 30,006
Related party expenses 8,821 5,671 5,523
------------ ------------ -----------
Total Operating Expenses $ 58,040 $ 41,455 $ 35,529
----------- ----------- -------------
NET INCOME (LOSS) $ 1,336,215 $ (2,297) $ (32,753)
========== ========== ===========
ALLOCATION OF NET INCOME (LOSS) TO
(Note 2):
General Partner:
From gain on sale of land $ 13,821 $ 0 $ 0
From other operations 0 0 0
------------ ------------ -----------
Total to General Partner $ 13,821 $ 0 $ 0
------------ ------------ -----------
Limited partners:
From gain on sale of land $ 1,368,260 $ 0 $ 0
From operations (45,866) (2,297) (32,753)
------------ ------------ -----------
Total to Limited Partners $ 1,322,394 $ (2,297) $ (32,753)
------------ ------------ -----------
$ 1,336,215 $ (2,297) $ (32,753)
============ ============= =============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT:
(Based on 5,900 weighted average limited
partnership units outstanding during
each year)
From gain on sale of land $ 231.91 $ 0 $ 0
From operations (7.78) (0.39) (5.55)
------------ ------------ -----------
$ 224.13 $ (0.39) $ (5.55)
========== =========== ===========
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
F-3
<PAGE>
Exhibit C
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP
Raleigh, North Carolina
STATEMENT OF CHANGES IN PARTNERS' EQUITY
<TABLE>
<CAPTION>
Limited General Limited
Partnership Partner's Partner's
Units Equity Equity Total
<S> <C> <C> <C> <C>
Balance at January 1, 1994 5,900 $ -- $ 4,853,618 $ 4,853,618
Net loss for 1994 -- -- (32,753) (32,753)
------ ------------ ------------ --------
Balance at December 31, 1994 5,900 $ -- $ 4,820,865 $ 4,820,865
Net Loss for 1995 -- -- (2,297) (2,297)
------ ------------ ------------ ---------
Balance at December 31, 1995 5,900 $ -- $ 4,818,568 $ 4,818,568
Net income for 1996 -- 13,821 1,322,394 1,336,215
Distributions for 1996:
General Partner -- (13,821) -- (13,821)
Limited partners ($331.53
per unit) -- -- (1,956,000) (1,956,000)
------ ------------ ------------ ---------
Balance at December 31, 1996 5,900 $ -- $ 4,184,962 $ 4,184,962
===== ============= =========== ===========
</TABLE>
F-4
<PAGE>
Exhibit D
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP
Raleigh, North Carolina
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31
1996 1995 1994
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 1,336,215 $ (2,297) $ (32,753)
Adjustments to reconcile net
income (loss) to net cash used
in operating activities:
Changes in operating assets and
liabilities:
Land held for investment 820,903 0 0
Other asset 103 0 0
Accounts payable--trade (6,050) 14,597 (16,556)
Accounts payable--related party 6,900 909 (3,233)
------------ ------------ ---------
Net Cash Provided By (Used In)
Operating Activities $ 2,158,071 $ 13,209 $ (52,542)
------------ ------------ ---------
FINANCING ACTIVITIES:
Proceeds from note payable--related party $ 0 $ 55,000 $ 0
Repayment of note payable--related party (16,064) (38,936) 0
Distribution to General Partner (13,821) 0 0
Distribution to limited partners (1,956,000) 0 0
------------ ------------ ---------
Net Cash Provided By (Used In)
Financing Activities $(1,985,885) $ 16,064 $ 0
------------ ------------ ---------
NET INCREASE (DECREASE) IN CASH $ 172,186 $ 29,273 $ (52,542)
CASH AND CASH EQUIVALENTS--BEGINNING OF YEAR 33,338 4,065 56,607
------------ ------------ ---------
CASH AND CASH EQUIVALENTS--END OF YEAR $ 205,524 $ 33,338 4,065
============== =============== =========
Supplemental Disclosure of Cash Flows
Information:
Cash paid during the year for interest $ 1,127 $ 1,805 $ 0
========= ========== =============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
F-5
<PAGE>
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP
Raleigh, North Carolina
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(1) ORGANIZATION AND NATURE OF OPERATIONS
Carolina Investment Partners Limited Partnership (the "Partnership")
was organized in 1985 to invest in real property which it will sell or
lease undeveloped or develop into office or commercial projects.
Walsmith Associates Two, a North Carolina General Partnership, is the
general partner ("General Partner"). The Partnership has invested in
two parcels of real estate located in Cary, North Carolina.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Statement of Cash Flows
For the purposes of reporting cash flows, the Partnership considers cash
equivalents to be cash on hand, cash in banks, and all highly debt
instruments with a maturity of less than three months.
Land Held for Investment
Land held for investment is stated at contract cost plus highway
interchange construction costs and capitalized appraisal, survey, and
closing costs and adjusted for impairments as required by Financial
Accounting Standards Board Statement No. 121. Management compares the
cost of land held to sales of similar property to determine the
potential for impairment. There are no material differences between the
book and federal tax cost basis of the property.
Income Taxes
No provision has been made for income taxes since income or loss is
includable in the partner's returns as they report to tax authorities in
their respective capacities as partners.
Management's Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
F-6
<PAGE>
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP
Raleigh, North Carolina
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued
Concentrations of Credit Risk
The Partnership maintains cash deposits in banks in excess of the
federally insured amounts.
Allocation of Net Income or Net Loss
Pursuant to the Partnership Agreement, the General Partner is allocated
1% of each material item of Partnership income, gain, loss, deduction or
credit. The limited partners receive 99% of each material item of
Partnership income, gain, loss, deduction or credit until their original
capital contributions plus interest have been distributed (see Cash
Distribution Policy below). Thereafter, the net income is allocated 10%
to the General Partner and 90% to limited partners.
Net loss is allocated 10% to the General Partner and 90% to the limited
partners. The Partnership Agreement provides that no partner's capital
account balance shall be less than zero. Thus, no loss from operations
was allocated to the General Partner for the years ended December 31,
1996, 1995 or 1994. For purposes of the allocation, net income or net
loss is the amount recognized by the Partnership for federal income tax
purposes, excluding gains or losses from the disposition of land. For the
years ended December 31, 1996, 1995 and 1994 there were no material
differences between net income (loss) as reported for financial statement
and federal income tax purposes.
Cash Distribution Policy
The General Partner receives cash to the extent it is allocated income.
Otherwise, all distributions are to the limited partners until such time
as these distributions equal 100% of their original capital contributions
plus an additional return of 10% per annum simple interest on their
outstanding capital contribution (original contributions as reduced by
any prior distributions). Thereafter, Partnership distributions will be
allocated 10% to the General Partner and 90% to the limited partners.
Reclassifications
Certain 1995 and 1994 amounts have been reclassified to conform with the
1996 presentation. Such reclassifications had no effect on net income or
partners' equity as previously reported.
Page 2
<PAGE>
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP
Raleigh, North Carolina
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(3) FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of the Partnership's note payable-related party is deemed
to be the same as its carrying amount. The fair market value is estimated
based on the quoted market prices for the same or similar issues or on
the current rates that the Partnership can obtain for debt of the same
remaining maturity.
(4) RELATED PARTY TRANSACTIONS
The Partnership Agreement allows the General Partner to receive a broker
listing fee of 5% of the sales price for all properties sold by the
Partnership to unaffiliated buyers. During 1996, an affiliate of the
General Partner received a broker listing fee of $47,760 and the General
Partner received a broker listing fee of $59,700 (See Note 7).
This Partnership Agreement allows the Partnership to pay the General
Partner a $3,000 annual management fee while the properties are in an
undeveloped state. In addition, affiliates of the General Partner
performed Partnership accounting, SEC reporting, administrative services
and engineering consulting totaling $5,821, $2,671 and $2,523 during
1996, 1995 and 1994, respectively. Amounts payable to related parties at
December 31, 1996 and 1995 were $7,944 and $1,044, respectively.
(5) NOTE PAYABLE-RELATED PARTY
On February 2, 1995 the General Partner made a loan to the Partnership of
$55,000. The purpose of this loan was to fund the current operating
expenses of the Partnership. The note is payable upon the sale of
Partnership properties or other sources of funds that become available
but was to be paid in full no later than June 1, 1996. As of June 1, 1996
the Partnership had not closed on the pending land sale; therefore, the
General Partner made another loan to the Partnership of $16,064, the
balance of the first loan. This loan was paid off on September 30, 1996
(See Note 7). Both notes accrued interest at prime plus one percent and
the interest was payable quarterly. The balance of the loans at December
31, 1996 and 1995 was $0 and $16,064, respectively. Interest expense for
the years ended December 31, 1996, 1995 and 1994 was $1,127, $1,805 and
$0, respectively.
Page 3
<PAGE>
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP
Raleigh, North Carolina
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(6) LAND HELD FOR INVESTMENT AND RELATED COMMITMENTS
Martin Parcel
In June 1986, the Partnership purchased for approximately $3,080,200 and
undeveloped 26.7 acre parcel of land in Cary, North Carolina, known as
the Martin Parcel, from an affiliate of the General Partner.
Wellington Parcel
In July 1986, the Partnership purchased for $1,223,175 an undeveloped
16.309 acre parcel of land in Cary, North Carolina, known as the
Wellington Parcel, from an affiliate of the General Partner. The purchase
contract provides that the Partnership will share evenly with the
affiliate in any profits resulting from the sale of the Wellington
Parcel. The Partnership may, at its option, require the affiliate to
repurchase the Wellington Parcel for approximately $3,669,000 (the "Put
Option"). A 75% vote of the limited partners is required for this Put
Option to be exercised.
At a meeting of the limited partners held in March 1990, less than 75% of
the partners voted to exercise the Put Option discussed above. A new
agreement was entered into called the Put Option Agreement Amendment.
Under the terms of the Put Option Agreement Amendment, the Partnership
will retain a greater percentage of the property appreciation upon sale
of the Wellington Parcel to an unaffiliated third party than would be
retained if the Put Option were exercised. If the limited partners elect
to exercise the Put Option at a later date, the Put Option Agreement
Amendment will be void.
The Partnership sold approximately 10.9 acres of the Wellington Parcel
during 1996 (See Note 7).
The remaining 5.4 acres of the Wellington Parcel are under contract to
close on or before September 10, 1997, in conjunction with sale of the
above 10.9 acres. The agreement divides the 5.4 acres into four
outparcels. The agreement contains a number of conditions to closing
which must be satisfied prior to closing on the outparcels. Consequently,
there can be no assurance that the agreement will result in a closing on
the outparcels. In addition, the Partnership has granted the buyer rights
to begin preliminary site grading and construction preparation activities
prior to the outparcel closings.
Page 4
<PAGE>
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP
Raleigh, North Carolina
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(7) GAIN ON SALE OF LAND
In September 1996 the Partnership sold approximately 10.9 acres of the
Wellington Parcel to a third party. The total sales price for the
property, a portion of which was owned by an affiliate of the General
Partner, was $2,400,000. This sales price was allocated among the
Partnership and the affiliate based upon acreage sold by each, with
$2,388,000 to the Partnership and $12,000 to the affiliate. The
Partnership's proceeds were utilized as follows:
Gross sales price $ 2,388,000
Commissions (71,640)
Commissions-related party (107,460)
Deed stamps and attorney fees (5,916)
-----------
Net Sales Proceeds $ 2,202,984
Wellington Parcel property taxes (16,511)
Repayment of note payable and (16,819)
accrued interest to General
Partner
Funds reserved for future operating needs (199,833)
-----------
Funds Distributed To Partners $ 1,969,821
===========
The Partnership Agreement calls for the General Partner to be allocated a
minimum of 1% of any gain from the sale of property. To the extent the
General Partner is allocated gain, it also receives a distribution.
Accordingly, the General Partner's share of the gain is $13,821 (net
sales proceeds of $2,202,984 less the Registrant's basis in the property
sold of $820,903 equals a gain of $1,382,081; 1% of this amount is
$13,821).
On November 4, 1996 the Registrant distributed a total of $1,969,821,
with $1,956,000 going to the limited partners ($331.53 per unit) and
$13,821 to the General Partner.
Page 5
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
3.1 Amended Agreement of Limited
Partnership of the Registrant
(incorporated by reference to
Exhibit 4.1 to the Registrant's
Annual Report filed on Form 10-K for
the year ended December 31, 1986).
10.1 Purchase Agreement between
Registrant and Walsmith Associates
regarding the Martin Parcel
(incorporated by reference to
Exhibit 10.1to the Registrant's
Annual Report filed on Form 10-K for
the year ended December 31, 1986).
10.2 Offer to Purchase and Contract for
the Sale and Purchase of Real
Estate, dated as of January 24,
1986, between Wellington Park
Associates and the Registrant
(incorporated by reference to
Exhibit 6A to the Registrant's
Quarterly Report filed on Form 10-Q
for the period ended June 30, 1989).
10.3 Agreement between the North Carolina
Department of Transportation and
Walsmith Associates (incorporated by
reference to Exhibit 10.3 to the
Registrant's Annual Report on Form
10-K for the year ended December 31,
1986).
10.4 Assignment and Assumption Agreement
between the Registrant and Walsmith
Associates (incorporated by
reference to Exhibit 10.4 to the
Registrant's Annual Report on Form
10-K for the year ended December 31,
1986).
10.5 Amendment to Offer to Purchase and
Contract for the Sale and Purchase
of Real Estate, dated as of February
1, 1990, between Wellington Park
Associates and the Registrant
(incorporated by
<PAGE>
reference to Exhibit 10.6 to the
Registrant's Annual Report filed on
Form 10-K for the period ended
December 31, 1989).
10.6 Agreement for the Purchase and Sale
of Real Estate, dated as of April
20, 1995, between Churchill & Banks,
Ltd., ADA Corporation of North
Carolina, and the Registrant
(incorporated by reference to
Exhibit C to the Registrant's
Current Report filed on Form 8-K,
dated April 20, 1995 ).
10.7 First Amendment to the Agreement for
the Purchase and Sale of Real
Estate, dated as of August 9, 1995,
between Churchill & Banks, Ltd., ADA
Corporation of North Carolina, and
the Registrant (incorporated by
reference to Exhibit C to the
Registrant's Current Report filed on
Form 8-K, dated August 9, 1995).
10.8 Second Amendment to the Agreement
for the Purchase and Sale of Real
Estate, dated as of April 19, 1996,
between Churchill & Banks, Ltd., ADA
Corporation of North Carolina, and
the Registrant (incorporated by
reference to Exhibit 28.5 to the
Registrant's Quarterly Report filed
on Form 10-Q for the period ended
March 31, 1996).
10.9 Third Amendment to the Agreement for
the Purchase and Sale of Real
Estate, dated as of September 10,
1996, between Churchill & Banks,
Ltd., ADA Corporation of North
Carolina, and the Registrant
(incorporated by reference to
Exhibit 10.1 to the Registrant's
Current Report filed on Form 8-K,
dated September 25, 1996).
10.10 Fourth Amendment to the Agreement
for the Purchase and Sale of Real
Estate, dated as of September __,
1996, between Churchill & Banks,
Ltd., ADA Corporation of North
Carolina, and the Registrant
(incorporated by reference to
Exhibit 10.2 to the
<PAGE>
Registrant's Current Report filed
on Form 8-K, dated September 25,
1996).
10.11 Fifth Amendment to the Agreement for
the Purchase and Sale of Real
Estate, dated as of September 27,
1996, between Wellington Center
Associates, LLC, ADA Corporation of
North Carolina, and the Registrant
(incorporated by reference to
Exhibit 10.3 to the Registrant's
Current Report filed on Form 8-K,
dated September 25, 1996).
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 205,524
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,001,280
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,206,804
<CURRENT-LIABILITIES> 21,842
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,184,962
<TOTAL-LIABILITY-AND-EQUITY> 4,206,804
<SALES> 1,382,081
<TOTAL-REVENUES> 1,394,255
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 56,913
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,127
<INCOME-PRETAX> 1,336,215
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,336,215
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,336,215
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
