<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1995
Commission File No.: 33-9075-LA
Mission Bay Super 8 Ltd., A California Limited Partnership
(Name of small business issuer in its charter)
California 33-0202890
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3145 Sports Arena Blvd., San Diego, California 92110
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (619) 226-1212
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Interests
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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.
/ X / Yes / / No
State issuer's revenues for its most recent fiscal year: $1,143,982.
The aggregate market value of the voting securities held by non-affiliates
is not determinable as there is no established market and the securities
have only limited voting rights.
State the number of limited partnership interests outstanding as of
December 31, 1995: 6,600 interests held by 1,149 limited partners.
DOCUMENT INCORPORATED BY REFERENCE
Definitive Prospectus dated November 19, 1986 is incorporated by reference
into Part III.
<PAGE>
<PAGE>
PART I
Item 1. Business
Mission Bay Super 8 Ltd., A California Limited Partnership,
formerly Motels of America Series IX, A California Limited Partnership,
(the Partnership) was formed on February 5, 1987 pursuant to the California
Revised Uniform Limited Partnership Act. As of December 31, 1995, the
Partnership consisted of a general partner, GHG Hospitality, Inc. (GHG),
and 1,149 limited partners owning 6,600 limited partnership interests. The
limited partnership interests sold at a public offering price of $1,000
each commencing November 19, 1986 pursuant to a Registration Statement on
Form S-18 under the Securities Act of 1933 (Registration 33-9075-LA). The
offering of $6,600,000 was fully subscribed and closed on June 15, 1987.
The Partnership was organized to acquire a parcel of property in
the Mission Bay area of San Diego, California, and build and operate
thereon a 117-room "economy" motel as a franchise of Super 8 Motels, Inc.
The motel was opened for business in November 1987 under a twenty-year
franchise agreement with Super 8 Motels, Inc. which required the payment of
initial franchise fees of $20,000 and requires ongoing royalties equal to
4% of gross room revenues and chain-affiliated advertising fees equal to 2%
of gross room revenues. Since January 1, 1990, the motel has been operated
pursuant to a management agreement with GHG.
As more fully discussed in Item 6, the limited partners have
approved a proposal to exchange substantially all of the Partnership's
assets for common stock in a real estate investment trust which would be
distributed to the limited partners in a final liquidating distribution.
The proposal is conditioned upon the real estate investment trust
completing a $5 million initial public offering by April 3, 1996.
The profitability of a motel is subject to general economic risks,
the management ability of the operator, intense competition, desirability
of a particular location, and other factors relating to its operations.
The demand for particular accommodations may vary seasonally and may be
affected by economic recessions, changes in travel patterns caused by
changes in energy prices, strikes, relocation of highways, the construction
of additional highways and other factors. To meet competition in the
industry and to maintain economic values, continuing expenditures must be
made for modernizing, refurnishing, and maintaining existing facilities
prior to the expiration of their anticipated useful lives.
There is no assurance that the Partnership's motel can be
profitably operated. Further, there is no assurance the motel can be sold
at a profit. Consequently, there is no guarantee of any profit or that the
limited partners' investments will be preserved against loss.
There is significant competition in the lodging market. The
Partnership is in competition either directly or indirectly with a large
number of hotels and motels of varying quality and sizes, including other
motels which are part of national or regional chains. Such hotels and
motels may have greater financial resources and personnel with more
experience than the Partnership and the general partner. The San Diego
area in particular has a large number of hotel and motel projects that in
the aggregate could dilute average occupancy and affect profitability. The
2
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Partnership's motel does not compete directly with any large budget motel
chains, but competes indirectly in the greater San Diego area with such
budget motels as Comfort Inns and E-Z "8" Motels.
The Partnership has no employees.
Item 2. Property
The Partnership acquired the following property on February 5,
1987. The Partnership does not intend to acquire any additional property.
Property name and address Property description
------------------------- -----------------------
Mission Bay Super 8 Motel A 117-room "economy" motel on
4540 Mission Bay Drive approximately 1.056 acres of
San Diego, CA 92109 land.
The Partnership purchased the land for $2,352,000, including
closing costs, demolished the structure on the land, and constructed the
motel.
In the opinion of the Partnership's management, the property is
adequately covered by insurance.
Item 3. Legal Proceedings
The Partnership is not subject to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
A Prospectus/Consent Solicitation Statement was submitted to the
limited partners in December 1995 for the purpose of soliciting their
consent to a proposal to exchange substantially all of the Partnership's
assets for common stock in a real estate investment trust which would be
distributed to the limited partners in a final liquidating distribution.
The proposal, which required the approval of at least 67% of the limited
partnership interests, was approved by 71% of the limited partnership
interests in January 1996. The proposal is conditioned upon the real
estate investment trust completing a $5 million initial public offering by
April 3, 1996.
3
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PART II
Item 5. Market for Limited Partnership Interests and Related Partner
Matters
There is no public trading market for the Partnership's limited
partnership interests. There were approximately 1,149 holders of the
Partnership's 6,600 limited partnership interests as of December 31, 1995.
Cash distributions to holders of limited partnership interests totaled
$189,000 ($28.64 per interest) in 1995 and $180,000 ($27.27 per interest)
in 1994.
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Condition:
On November 19, 1986, the Partnership commenced its public
offering pursuant to its Prospectus. On June 15, 1987, the Partnership
completed the public offering. The Partnership received $5,761,115 (net of
offering costs of $838,885) from the sale of limited partnership interests.
These funds were available for investment in property, to pay legal fees
and other costs related to the investments, to pay operating expenses, and
for working capital. The majority of the proceeds were used to acquire and
construct the property identified in Item 2 above.
The Partnership's liquidity is indicated by net working capital
which was $116,601 at December 31, 1995 and $83,161 at December 31, 1994.
The increase in net working capital is primarily due to cash flow from
operations of $278,860, less investment property expenditures of $21,771
and cash distributions to partners of $210,000, in 1995.
In January 1996, the limited partners approved a proposal to
exchange substantially all of the Partnership's investment property for
251,946 shares of Class A Common Stock in Host Funding, Inc., a real estate
investment trust (REIT). The number of shares to be received is based on
an initial exchange value of $10 per share. Under this proposal, the
common stock in the REIT would be distributed to the limited partners and
the Partnership would be dissolved. Approximately 10% of the limited
partners perfected their rights as dissenting partners and will receive
cash for their limited partnership interests. The total value of the
transaction is approximately $2.8 million based on the initial exchange
value of the common stock and the cash to be paid to dissenting partners.
The proposed transaction is conditioned upon Host Funding, Inc. completing
a proposed $5,000,000 initial public offering of its common stock by April
3, 1996.
In connection with this proposed transaction, an independent
appraiser valued the Partnership's investment property at $2,810,000 as of
August 1, 1994. Because of the significant decrease in the market value of
investment property, and the proposed exchange of investment property for
common stock in the REIT, management elected to writedown the Partnership's
investment property to its appraised value of $2,810,000 as of December 31,
1994.
4
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Prior to December 1994, management expected that the undiscounted
sum of future cash flows from the property would be sufficient to recover
its carrying value and no writedown was recorded. In December 1994,
management signed a letter outlining certain terms of the proposed
transaction. Because of the proposed transaction, management believed, as
of December 1994, that it was no longer reasonable to expect that the
undiscounted sum of future cash flows from the property would be sufficient
to recover its carrying value and, therefore, management decided to
writedown investment property to its appraised value.
During 1995, the Partnership paid certain costs related to the
proposed transaction. The costs paid by the Partnership totaled $60,032 of
which $35,032 is an expense of the Partnership and $25,000 is to be
reimbursed by the REIT when the proposed transaction is completed. The
$25,000 to be reimbursed by the REIT is included in accounts receivable at
December 31, 1995.
Results of Operations:
Net income (loss) was $181,260 in 1995 and $(1,381,028) in 1994.
Total revenues were $1,143,982 in 1995 and $1,054,819 in 1994. The
property operated at an occupancy rate of 57.7% in 1995 and 54.9% in 1994.
The average daily room rate was $43.45 in 1995 and $42.20 in 1994. The net
loss for 1994 resulted from an unrealized loss due to decline in value of
investment property of $1,534,950 as discussed above. In 1995, the
Partnership incurred nonrecurring expenses of $35,032 related to the
proposed sale of its assets to a real estate investment trust as discussed
above.
San Diego is hosting several city-wide conventions including the
Republican National Convention during the summer months of 1996 that should
boost occupancy and average daily room rates.
The effect of current operations on liquidity was net cash
provided by operating activities of $278,860 in 1995 and $250,369 in 1994.
The cash was used primarily for cash distributions to partners which were
$210,000 in 1995 and $200,000 in 1994 and for investment property
expenditures which were $21,771 in 1995 and $16,610 in 1994.
Seasonality:
The motel business is seasonal with the third quarter being the
strongest due to the tourist business and the last half of the fourth
quarter and the first half of the first quarter being the weakest. It is
not unusual for the motel operations to have negative cash flow during this
weak period.
5
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Item 7. Financial Statements and Supplementary Data
MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
I N D E X
Pages
Independent Auditor's Report 7
Balance Sheets, December 31, 1995 and 1994 8-9
Statements of Operations, Years Ended December 31, 1995
and 1994 10
Statements of Partners' Capital, Years Ended December 31,
1995 and 1994 11
Statements of Cash Flows, Years Ended December 31, 1995
and 1994 12
Notes to Financial Statements 13-16
6
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Independent Auditor's Report
The Partners
Mission Bay Super 8 Ltd.,
A California Limited Partnership
We have audited the balance sheets of Mission Bay Super 8 Ltd., A
California Limited Partnership, as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital, and cash flows for the
years then ended. 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 Mission Bay
Super 8 Ltd., A California Limited Partnership, as of December 31, 1995 and
1994, and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting principles.
As more fully discussed in Note 5, the limited partners have approved
a proposal to exchange substantially all of the Partnership's assets for
common stock in a real estate investment trust which would be distributed
to the limited partners in a final liquidating distribution. The proposal
is conditioned upon the real estate investment trust completing an initial
public offering.
/s/ Levitz, Zacks & Ciceric
San Diego, California
February 12, 1996
7
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MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
Balance Sheets
December 31, 1995 and 1994
(Part 1)
<TABLE>
<CAPTION>
ASSETS 1995 1994
---------- ----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 65,349 $ 43,260
Accounts receivable 41,550 15,428
Operating supplies 18,891 19,204
Prepaid expenses 21,729 9,884
Due from affiliates -0- 27,431
---------- ----------
Total current assets 147,519 115,207
---------- ----------
Investment property, at carrying value:
Land 1,212,000 1,212,000
Building and improvements 2,024,033 2,024,033
Furniture, fixtures and equipment 724,183 702,412
---------- ----------
3,960,216 3,938,445
Less accumulated depreciation 1,211,396 1,128,445
---------- ----------
Investment property, net 2,748,820 2,810,000
---------- ----------
Franchise fees, net 11,829 12,829
---------- ----------
Total assets $2,908,168 $2,938,036
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to financial statements.
8
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MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
Balance Sheets
December 31, 1995 and 1994
(Part 2)
<TABLE>
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL 1995 1994
---------- ----------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 12,444 $ 20,782
Accrued expenses 9,136 11,264
Due to affiliates 9,338 -0-
---------- ----------
Total current liabilities 30,918 32,046
---------- ----------
Partners' Capital:
General partner:
Cumulative net income 26,079 7,953
Cumulative cash distributions (307,197) (286,197)
---------- ----------
(281,118) (278,244)
---------- ----------
Limited partners (6,600 interests):
Capital contributions,
net of offering costs 5,761,115 5,761,115
Cumulative net income 234,699 71,565
Cumulative cash distributions (2,837,446) (2,648,446)
---------- ----------
3,158,368 3,184,234
---------- ----------
Total partners' capital 2,877,250 2,905,990
---------- ----------
Total liabilities
and partners' capital $2,908,168 $2,938,036
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to financial statements.
9
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MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
Statements of Operations
Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
Revenues:
Room revenues $1,070,216 $ 989,703
Phone revenues 35,627 41,459
Interest income 1,534 1,207
Other 36,605 22,450
---------- -----------
Total revenues 1,143,982 1,054,819
---------- -----------
Expenses:
Property operating expenses 397,672 377,255
General and administrative 139,568 133,567
Depreciation 82,951 84,204
Management fees 68,638 63,215
Royalties and advertising 64,187 59,391
Repairs and maintenance 56,947 56,895
Marketing 54,382 57,478
Real estate taxes 40,232 44,448
Merger - related expenses 35,032 -0-
Property and liability insurance 22,113 23,444
Amortization 1,000 1,000
Unrealized loss due to decline in value
of investment property (Note 5) -0- 1,534,950
---------- -----------
Total expenses 962,722 2,435,847
---------- -----------
Net income (loss) $ 181,260 $(1,381,028)
---------- -----------
---------- -----------
Net income (loss) per interest $ 24.72 $ (188.32)
---------- -----------
---------- -----------
</TABLE>
See accompanying notes to financial statement.
10
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MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
Statements of Partners' Capital
Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
General Partner Limited Partners
----------------------------------- ----------------------------------------------------
Cumulative Cumulative Total
Cumulative Cash Capital Cumulative Cash Partners'
Net Income Distributions Total Contributions Net Income Distributions Total Capital
---------- ------------- ---------- ------------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance January 1, 1994 $ 146,056 $(266,197) $(120,141) $5,761,115 $1,314,490 $(2,468,446) $4,607,159 $4,487,018
Net loss, year ended
December 31, 1994 (138,103) -0- (138,103) -0- (1,242,925) -0- (1,242,925) (1,381,028)
Cash distributions
($27.27 per interest) - 0- (20,000) (20,000) -0- -0- (180,000) (180,000) (200,000)
--------- ---------- --------- ----------- ---------- ----------- ---------- ----------
Balance December 31,
1994 7,953 (286,197) (278,244) 5,761,115 71,565 $(2,648,446) 3,184,234 $2,905,990
Net income, year ended
December 31, 1995 18,126 -0- 18,126 -0- 163,134 -0- 163,134 181,260
Cash distributions
($28.64 per interest) -0- (21,000) (21,000) -0- -0- (189,000) (189,000) (210,000)
--------- ---------- --------- ---------- ---------- ----------- ---------- ----------
Balance December 31,
1995 $ 26,079 $(307,197) $(281,118) $5,761,115 $ 234,699 $(2,837,446) $3,158,368 $2,877,250
--------- --------- --------- ---------- ---------- ----------- ---------- ----------
--------- --------- --------- ---------- ---------- ----------- ---------- ----------
</TABLE>
See accompanying notes to financial statements.
11<PAGE>
<PAGE>
MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
Statements of Cash Flows
Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 181,260 $(1,381,028)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Unrealized loss due to decline in value of
investment property -0- 1,534,950
Depreciation and amortization 83,951 85,204
(Increase) decrease in:
Accounts receivable (1,122) (3,889)
Operating supplies 313 (683)
Prepaid expenses (11,845) 8,287
Due from affiliates 27,431 (3,931)
Increase (decrease) in:
Accounts payable (8,338) 9,839
Accrued expenses (2,128) 2,646
Due to affiliates 9,338 (1,026)
---------- -----------
Net cash provided by operating
activities 278,860 250,369
---------- -----------
Cash flows from investing activities:
Investment property expenditures (21,771) (16,610)
Reimbursable costs paid for others (25,000) -0-
---------- -----------
Net cash used in investing activities (46,771) (16,610)
---------- -----------
Cash flows from financing activities:
Cash distributions to partners (210,000) (200,000)
---------- -----------
Net cash used in financing activities (210,000) (200,000)
---------- -----------
Net increase in cash and cash equivalents 22,089 33,759
Cash and cash equivalents, beginning of year 43,260 9,501
---------- -----------
Cash and cash equivalents, end of year $ 65,349 $ 43,260
---------- -----------
---------- -----------
Schedule of noncash investing
and financing activities:
Sale of carpeting to related party in 1994 (Note 4).
See accompanying notes to financial statements.
12<PAGE>
<PAGE>
MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statements
Note 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Mission Bay Super 8 Ltd., A California Limited Partnership
(the Partnership), formerly Motels of America Series IX, A
California Limited Partnership, was formed on February 5, 1987
pursuant to the California Revised Uniform Limited Partnership
Act. The purpose of the Partnership is to construct, own, and
operate a 117-room "economy" motel under a Super 8 franchise. The
motel was opened in November 1987.
The following is a summary of the Partnership's
significant accounting policies:
Cash and Cash Equivalents
The Partnership considers all highly liquid instruments
purchased with an original maturity of three months or less to be
cash equivalents.
Investment Property
Investment property is recorded at cost. Writedowns to
fair value are recorded when investment property has been
permanently impaired based on comparing carrying value to the
undiscounted sum of future cash flows expected from the property.
Depreciation is computed using the straight-line method based on
estimated useful lives of 5 to 35 years. Maintenance and repairs
costs are expensed as incurred, while significant improvements,
replacements, and major renovations are capitalized.
Franchise Fees
Franchise fees are amortized over the 20-year life of the
franchise agreement.
Income Taxes
No provision for income taxes has been made as any
liability for such taxes would be that of the partners rather than
the Partnership.
Net Income (Loss) Per Interest
Net income (loss) per interest is based upon the 90%
allocated to limited partners divided by 6,600 limited partner
interests outstanding throughout the year.
13
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MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statements
(Continued)
Note 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Uses of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could differ from
those estimates.
Note 2. PARTNERSHIP AGREEMENT
Net income or loss and cash distributions from operations
of the Partnership are allocated 90% to the limited partners and
10% to the general partner. Profits from the sale or other
disposition of Partnership property are to be allocated to the
general partner until its capital account equals zero; thereafter,
to the limited partners until their capital accounts equal their
capital contributions reduced by prior distributions of cash from
sale or refinancing plus an amount equal to a cumulative but not
compounded annual 8% return thereon which cumulative return shall
be reduced (but not below zero) by the aggregate amount of prior
distributions of cash available for distribution; thereafter, gain
shall be allocated 15% to the general partner and 85% to the
limited partners. Loss from sale shall be allocated 1% to the
general partner and 99% to the limited partners.
Note 3. FRANCHISE AGREEMENT
The Partnership has entered into a twenty-year franchise
agreement with Super 8 Motels, Inc. to provide the Partnership with
consultation in the areas of design, construction, and operation of
the motel. The agreement required the payment of initial franchise
fees of $20,000 and requires ongoing royalties equal to 4% of gross
room revenues and chain-affiliated advertising fees equal to 2% of
gross room revenues.
Note 4. RELATED PARTY TRANSACTIONS
The motel is operated pursuant to a management agreement
with the general partner, GHG Hospitality, Inc. (GHG). The
agreement provides for the payment of monthly management fees of 6%
of gross revenues.
The Partnership has agreed to reimburse GHG for certain
expenses related to services performed in maintaining the books and
administering the affairs of the Partnership.
14
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MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statements
(Continued)
Note 4. RELATED PARTY TRANSACTIONS (continued)
GHG and an affiliate, Grosvenor Management Services, Inc.
(GMS), allocate to the Partnership certain marketing, accounting,
and maintenance salaries and certain other expenses directly
related to the operation of the Partnership.
Fees, reimbursements, salaries, and other expenses paid to
GHG and GMS and included in total expenses for the years ended
December 31, 1995 and 1994 are as follows:
</TABLE>
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Management fees $ 68,638 $ 63,215
Reimbursement for partnership
administration expenses 44,979 40,423
Salaries and other allocated
expenses 103,459 108,740
-------- --------
$217,076 $212,378
-------- --------
-------- --------
</TABLE>
In addition, all motel employees are paid by GMS. The
Partnership reimbursed GMS $250,863 in 1995 and $232,629 in 1994,
including a one percent processing fee, for the wages of these
employees.
During 1994, the Partnership sold carpeting to GMS at the
Partnership's cost of $23,500 and recorded a receivable from GMS.
Note 5. PROPOSED EXCHANGE OF INVESTMENT PROPERTY AND
WRITEDOWN TO APPRAISED VALUE
In January 1996, the limited partners approved a proposal
to exchange substantially all of the Partnership's investment
property for 251,946 shares of Class A Common Stock in Host
Funding, Inc., a real estate investment trust (REIT). The number
of shares to be received is based on an initial exchange value of
$10 per share. Under this proposal, the common stock in the REIT
would be distributed to the limited partners and the Partnership
would be dissolved. Approximately 10% of the limited partners
perfected their rights as dissenting partners and will receive cash
for their limited partnership interests. The total value of the
15
<PAGE>
MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statements
(Continued)
Note 5. PROPOSED EXCHANGE OF INVESTMENT PROPERTY AND
WRITEDOWN TO APPRAISED VALUE (continued)
transaction is approximately $2.8 million based on the initial
exchange value of the common stock and the cash to be paid to
dissenting partners. The proposed transaction is conditioned upon
Host Funding, Inc. completing a $5 million initial public offering
of its common stock by April 3, 1996.
In connection with this proposed transaction, an
independent appraiser valued the Partnership's investment property
at $2,810,000 as of August 1, 1994. Because of the significant
decrease in the market value of investment property, and the
proposed exchange of investment property for common stock in the
REIT, management elected to writedown the Partnership's investment
property to its appraised value of $2,810,000 as of December 31,
1994.
Prior to December 1994, management expected that the
undiscounted sum of future cash flows from the property would be
sufficient to recover its carrying value and no writedown was
recorded. In December 1994, management signed a letter outlining
certain terms of the proposed transaction. Because of the proposed
transaction, management believed, as of December 1994, that it was
no longer reasonable to expect that the undiscounted sum of future
cash flows from the property would be sufficient to recover its
carrying value and, therefore, management decided to writedown
investment property to its appraised value.
During 1995, the Partnership paid certain costs related to
the proposed transaction. The costs paid by the Partnership
totaled $60,032 of which $35,032 is an expense of the Partnership
and $25,000 is to be reimbursed by the REIT when the proposed
transaction is completed. The $25,000 to be reimbursed by the REIT
is included in accounts receivable at December 31, 1995.
16<PAGE>
<PAGE>
Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
None
PART III
Item 9. Directors and Executive Officers of the Registrant
The general partner has general responsibility and
ultimate authority in all matters affecting the business of the
Partnership.
The general partner and its directors and executive
officers as of December 31, 1995 are as follows:
GHG HOSPITALITY, INC. (GHG) was incorporated in November
1989 under the laws of the state of Delaware. GHG was elected as
general partner effective January 1, 1990.
J. MARK GROSVENOR, 48, is President and a Director of GHG.
From 1976 to 1988, he served as chief executive officer of Nite
Lite Inns, a California corporation, which owned Grosvenor
Enterprises, a California limited partnership, which owns Grosvenor
Inn. In 1984, he acquired Medallion Foods, Inc., a food processing
company, located in Newport, Arkansas. Mr. Grosvenor graduated
from San Diego State University with a bachelor's degree in
business and finance.
STEPHEN D. BURCHETT, 36, is Vice President of GHG. From
1984 to 1991 he worked in private business law practice in San
Diego, California with Schall, Boudreau & Gore and Kaufman, Lorber,
Grady & Farley. Mr. Burchett graduated from California State
University Fullerton in 1981 with a bachelor's degree in finance
and from the University of Santa Clara School of Law in 1984 with
a juris doctorate.
SYLVIA MELLOR CLARK, 51, is Controller of GHG. In 1978,
she joined Grosvenor Industries, Inc., where she is controller and
a director. Prior to joining Grosvenor Industries, Inc., she
operated her own accounting firm from 1976 to 1978. Ms. Clark
graduated from San Diego State University and National University.
Item 10. Executive Compensation
The Partnership has not paid and does not propose to pay
any executive compensation to the general partner or any of its
affiliates (except as described in Item 12 below). There are no
compensatory plans or arrangements regarding termination of
employment or change of control.
17
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and
Management
(a) No person or group is known to the Partnership to be
the beneficial owner of more than 5% of the outstanding limited
partnership interests in the Partnership.
(b) The general partner does not directly or indirectly
own any limited partnership interests in the Partnership. The
general partner does not possess a right to acquire beneficial
ownership of limited partnership interests in the Partnership.
(c) There are no arrangements, known to the Partnership,
which may result in a change in control of the Partnership other
than the proposal to exchange the Partnership's investment property
for common stock in a REIT as discussed in Item 6.
Item 12. Certain Relationships and Related Transactions
The motel is operated pursuant to a management agreement
with GHG. The agreement provides for the payment of monthly
management fees of 6% of gross revenues.
The Partnership has agreed to reimburse GHG for certain
expenses related to services performed in maintaining the books and
administering the affairs of the Partnership.
GHG and an affiliate, Grosvenor Management Services, Inc.
(GMS), allocate to the Partnership certain marketing, accounting,
and maintenance salaries and other expenses directly related to the
operation of the Partnership.
Fees, reimbursements, salaries, and other expenses paid
to GHG and GMS and included in total expenses for the years ended
December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Management fees $ 68,638 $ 63,215
Reimbursement for partnership
administration expenses 44,979 40,423
Salaries and other allocated expenses 103,459 108,740
-------- --------
$217,076 $212,378
-------- --------
-------- --------
</TABLE>
18
<PAGE>
In addition, all motel employees are paid by GMS. The
Partnership reimbursed GMS $250,863 in 1995 and $232,629 in 1994,
including a one percent processing fee, for the wages of these
employees.
During 1994, the Partnership sold carpeting to GMS at the
Partnership's cost of $23,500 and recorded a receivable from GMS.
Item 13. Exhibits and Reports on Form 8-K
(a) The following documents are filed as part of this
report:
1. Financial Statements (see Index to Financial
Statements filed with this annual report).
2. Exhibits:
3-A. The Prospectus of the Partnership dated
November 19, 1986, as filed with the
Commission, is hereby incorporated herein
by reference.
3-B. Agreement of Limited Partnership set forth
as Exhibit B to the Prospectus, as filed
with the Commission, is incorporated
herein by reference.
3-C. Amendment to Agreement of Limited
Partnership dated January 1, 1990, as
filed with the Commission, is incorporated
herein by reference.
(b) No reports on Form 8-K were filed during the last
quarter of the period covered by this report.
No annual report for the fiscal year 1995 has been sent
to the limited partners of the Partnership. An annual report will
be sent to the limited partners subsequent to this filing and the
Partnership has incorporated such reports in this filing.
19
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MISSION BAY SUPER 8 LTD.,
A California Limited Partnership
By: GHG Hospitality, Inc.
Corporate General Partner
By: /s/ J. Mark Grosvenor Date: March 12, 1996
J. Mark Grosvenor
President and Director of GHG
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
By: GHG Hospitality, Inc.
Corporate General Partner
By: /s/ J. Mark Grosvenor Date: March 12, 1996
J. Mark Grosvenor
President and Director of GHG
By: /s/ Stephen D. Burchett Date: March 12, 1996
Stephen D. Burchett
Vice President of GHG
By: /s/ Sylvia Mellor Clark Date: March 12, 1996
Sylvia Mellor Clark
Controller of GHG
20
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 65,349
<SECURITIES> 0
<RECEIVABLES> 41,550
<ALLOWANCES> 0
<INVENTORY> 18,891
<CURRENT-ASSETS> 147,519
<PP&E> 3,960,216
<DEPRECIATION> 1,211,396
<TOTAL-ASSETS> 2,908,168
<CURRENT-LIABILITIES> 30,918
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,908,168
<SALES> 0
<TOTAL-REVENUES> 1,143,982
<CGS> 0
<TOTAL-COSTS> 962,722
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 181,260
<INCOME-TAX> 0
<INCOME-CONTINUING> 181,260
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 181,260
<EPS-PRIMARY> 24.72
<EPS-DILUTED> 24.72
</TABLE>
