<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.: 33-11224-LA
Mission Valley Comfort Suites Ltd., A California Limited Partnership
(Name of small business issuer in its charter)
California 33-0213497
(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: $1,883,264
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: 5,900 interests held by 918 limited partners.
DOCUMENT INCORPORATED BY REFERENCE
Definitive Prospectus dated February 6, 1987, as supplemented December 2,
1987 is incorporated by reference into Part III.
<PAGE>
PART I
Item 1. Business
Mission Valley Comfort Suites Ltd., A California Limited
Partnership, formerly Motels of America Series X, A California Limited
Partnership, (the Partnership) was formed on September 18, 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 918 limited partners owning 5,900 limited partnership interests.
The limited partnership interests sold at a public offering price of $1,000
each commencing February 6, 1987 pursuant to a Registration Statement on
Form S-18 under the Securities Act of 1933 (Registration 33-11224-LA). The
offering of $5,900,000 was fully subscribed and closed on March 21, 1988.
The Partnership was organized to lease a parcel of land in the
Mission Valley area of San Diego, California and build and operate thereon
a 122-room Comfort Suites motel as a franchise of Choice Hotels
International, Inc. The land was leased from Colony Ventures Ltd., a
nonaffiliated party, by Motels of America, Inc. (MOA) and the former
general partners in November 1986, and was held for the benefit of the
Partnership until the Partnership had raised sufficient funds to build the
motel. MOA and the former general partners assigned the land lease to the
Partnership for their actual carrying costs. The motel was opened for
business in September 1988 under a twenty-year franchise agreement with
Choice Hotels International, 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
$50,000 and requires ongoing royalty and chain-affiliated advertising fees
based on a percentage of gross room revenues. Since January 1, 1990, the
motel has been operated pursuant to a management agreement with GHG.
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 Partnership has no employees.
2
<PAGE>
Item 2. Property
The Partnership was assigned the land lease on September 18, 1987.
The Partnership does not intend to acquire any additional property.
Property name and address Property description
------------------------- -----------------------
Comfort Suites A 122-room "suites only" motel on
631 Camino del Rio South approximately 1.83 acres of land,
San Diego, CA 92108 subject to a 60-year lease
expiring in 2046.
The Partnership was assigned the land lease and reimbursed MOA and
the former general partners for approximately $218,500 in lease payments
they paid prior to the assignment of the land lease to the Partnership.
The Partnership completed construction and opened the motel in September
1988.
In the opinion of the Partnership's management, the property is
adequately covered by insurance.
The property is subject to a trust deed with a balance of
$243,758, as of December 31, 1995.
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
Not applicable.
3
<PAGE>
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 918 holders of the
Partnership's 5,900 limited partnership interests as of December 31, 1995.
Cash distributions to holders of limited partnership interests totalled
$216,000 ($36.61 per interest) in 1995 and $198,000 ($33.56 per interest)
in 1994.
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Condition:
On February 6, 1987, the Partnership commenced its public offering
pursuant to its Prospectus. On March 21, 1988, the Partnership completed
the public offering. The Partnership received $5,117,287 (net of offering
costs of $782,713) 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.
As a result of cost overruns related to the acquisition and
construction of the motel, the Partnership borrowed $200,000 from the party
that is the lessor under its land lease. The note is payable in monthly
installments of $2,175, including interest at 8%, over a 20-year period.
In 1994, the Partnership was notified by its franchisor, Choice
Hotels International, Inc., that it was required to make certain
improvements to its motel property in order to retain the franchise. In
addition, the Partnership decided to make certain discretionary
improvements to its motel property. The total cost of these improvements
were approximately $148,000.
The deferred rent liability represents amounts accrued under the
Partnership's land lease prior to April 1, 1993. Under the original land
lease, annual rent increases were based on the greater of 2-1/2% or the
increase in the Consumer Price Index. The Partnership was required by
generally accepted accounting principles to record rent expense and a
deferred rent liability based on projecting the 2-1/2% minimum annual rent
increase over the 60-year term of the lease. Effective April 1, 1993, the
land lease was amended. Under the amended land lease, monthly rent
payments were reduced from $30,138 per month to $20,000 per month. Annual
rent increases are based on the lesser of the increase in the Consumer
Price Index or 5%, and there is no minimum annual increase. Rent expense
under the amended lease is significantly lower than under the previous
lease. In addition, the deferred rent liability accrued prior to April 1,
1993 is being credited to income on a straight-line basis over the
remaining term of the lease.
4
<PAGE>
Results of Operations:
Net income was $223,984 in 1995 and $140,860 in 1994. Total
revenues were $1,883,264 in 1995 and $1,719,199 in 1994. The property
operated at an occupancy of 69.74% in 1995 and 65.26% in 1994. The average
daily room rate was $58.36 in 1995 and $56.87 in 1994.
The Choice Reservations System of Choice Hotels International,
Inc. was responsible for 12,174 room nights in 1995, a 16.7% decrease from
1994. Reservations provided by Choice decreased in 1995 due to the opening
of a newly-renovated Quality Resort approximately one mile from the
Partnership's motel. In addition, the Partnership's motel was fully booked
more often in 1995 than in 1994 and, consequently, reservations through
Choice were restricted. Although city-wide occupancy rates are expected to
increase slightly in 1996, the Mission Valley area remains overbuilt and
downtown San Diego has become an alternative destination for both corporate
and leisure travelers. To help prevent occupancy rates from falling, the
Partnership will run advertisements in Los Angeles and Phoenix offering
competitive, lower rates. The Partnership has increased its sales efforts
to travel agents, group tours and other leisure travelers, as well as to
business. San Diego is hosting several city-wide conventions during the
summer months which should generate high rates at the motel, and the
property manager continues to participate in co-op advertising committees
to gain more exposure for the motel.
Management has been informed that during 1996 a motel property
approximately one mile from the Mission Valley Comfort Suites will become
a Comfort Inn and Suites franchisee of Choice Hotels International, Inc.
and participate in the Choice Reservations System used by the Partnership's
motel. Due to the proximity of this motel to the Partnership's motel and
the availability of suites, it will be in direct competition with Mission
Valley Comfort Suites and will likely decrease the number of reservations
that otherwise would have been received from the Choice Reservations
System. Unless these reservations can be replaced from other sources, the
Partnership may experience reduced revenues and net income as a result of
this new franchisee.
The effect of current operations on liquidity was net cash
provided by operating activities of $397,692 in 1995 and $237,053 in 1994.
The cash was used primarily for cash distributions to partners which were
$240,000 in 1995 and $220,000 in 1994 and for investment property
expenditures which were $124,718 in 1995 and $23,534 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
<PAGE>
Item 7. Financial Statements and Supplementary Data
MISSION VALLEY COMFORT SUITES 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 11-12
Statements of Cash Flows, Years Ended December 31, 1995
and 1994 13
Notes to Financial Statements 14-17
6
<PAGE>
Independent Auditor's Report
The Partners
Mission Valley Comfort Suites Ltd.,
A California Limited Partnership
We have audited the balance sheets of Mission Valley Comfort Suites
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 Valley
Comfort Suites 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.
/s/ Levitz, Zacks & Ciceric
San Diego, California
February 12, 1996
7
<PAGE>
MISSION VALLEY COMFORT SUITES LTD.,
A California Limited Partnership
Balance Sheets
December 31, 1995 and 1994
(Part 1 of 2)
<TABLE>
<CAPTION>
ASSETS 1995 1994
---------- ----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 55,694 $ 29,042
Accounts receivable 26,647 22,589
Operating supplies 15,603 14,718
Prepaid expenses 14,207 33,956
Due from affiliate 821 12,565
---------- ----------
Total current assets 112,972 112,870
---------- ----------
Investment property, at cost:
Building and improvements 4,541,600 4,482,611
Furniture, fixtures and equipment 1,177,560 1,111,831
---------- ----------
5,719,160 5,594,442
Less accumulated depreciation 1,983,846 1,809,354
---------- ----------
Investment property, net 3,735,314 3,785,088
---------- ----------
Franchise fees, net 31,667 34,167
---------- ----------
Total assets $3,879,953 $3,932,125
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
MISSION VALLEY COMFORT SUITES LTD.,
A California Limited Partnership
Balance Sheets
December 31, 1995 and 1994
(Part 2 of 2)
<TABLE>
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL 1995 1994
---------- ----------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 29,003 $ 32,175
Accrued expenses 14,535 17,498
Due to affiliate 11,852 5,879
Current portion of long-term debt 6,847 6,322
---------- ----------
Total current liabilities 62,237 61,874
Long-term debt, less current portion 236,911 243,758
Deferred rent liability 1,513,261 1,542,933
---------- ----------
Total liabilities 1,812,409 1,848,565
---------- ----------
Partners' Capital:
General partner:
Capital contributions 31,210 31,210
Cumulative net loss (143,161) (165,559)
Cumulative cash distributions (157,640) (133,640)
---------- ----------
(269,591) (267,989)
---------- ----------
Limited partners (5,900 interests):
Capital contributions, net of
offering costs 5,117,287 5,117,287
Cumulative net loss (1,288,444) (1,490,030)
Cumulative cash distributions (1,491,708) (1,275,708)
---------- ----------
2,337,135 2,351,549
---------- ----------
Total partners' capital 2,067,544 2,083,560
---------- ----------
Total liabilities and
partners' capital $3,879,953 $3,932,125
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
MISSION VALLEY COMFORT SUITES 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 $1,812,551 $1,652,676
Phone revenues 42,399 43,983
Interest income 1,188 1,584
Other 27,126 20,956
---------- -----------
Total revenues 1,883,264 1,719,199
---------- -----------
Expenses:
Property operating expenses 589,360 570,038
Rent 218,882 218,970
Depreciation 174,492 159,358
General and administrative 156,910 145,112
Royalties and advertising 145,535 135,177
Management fees 112,996 103,057
Marketing 72,394 71,912
Real estate taxes 47,711 54,607
Repairs and maintenance 87,258 65,064
Property and liability insurance 30,749 31,812
Interest 20,493 20,732
Amortization 2,500 2,500
---------- -----------
Total expenses 1,659,280 1,578,339
---------- -----------
Net income $ 223,984 $ 140,860
---------- -----------
---------- -----------
Net income per interest $ 34.17 $ 21.49
---------- -----------
---------- -----------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
MISSION VALLEY COMFORT SUITES LTD.,
A California Limited Partnership
Statements of Partners' Capital
Years Ended December 31, 1995 and 1994
(Part 1 of 2)
<TABLE>
<CAPTION>
General Partner
---------------------------------------------------
Cumulative Cumulative
Capital Net Cash
Contributions Loss Distributions Total
------------- ---------- ------------- ---------
<S> <C> <C> <C> <C>
Balance,
January 1, 1994 $ 31,210 $(179,645) $(111,640) $(260,075)
Net income, year ended
December 31, 1994 -0- 14,086 -0- 14,086
Cash distributions
($33.56 per interest) -0- -0- (22,000) (22,000)
-------- --------- --------- ---------
Balance,
December 31, 1994 31,210 (165,559) (133,640) (267,989)
Net income, year ended
December 31, 1995 -0- 22,398 -0- 22,398
Cash distributions
($36.61 per interest) -0- -0- (24,000) (24,000)
-------- --------- --------- ---------
Balance,
December 31, 1995 $ 31,210 $(143,161) $(157,640) $(269,591)
-------- --------- --------- ---------
-------- --------- --------- ---------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
MISSION VALLEY COMFORT SUITES LTD.,
A California Limited Partnership
Statements of Partners' Capital
Years Ended December 31, 1995 and 1994
(Part 2 of 2)
<TABLE>
<CAPTION>
Limited Partners
-------------------------------------------------------------------------
Cumulative Cumulative Total
Capital Net Cash Partners'
Contributions Loss Distributions Total Capital
------------- ----------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Balance, January 1,1994 $5,117,287 $(1,616,804) $(1,077,708) $2,422,775 $2,162,700
Net income, year ended
December 31, 1994 -0- 126,774 -0- 126,774 140,860
Cash distributions
($33.56 per interest) -0- -0- (198,000) (198,000) (220,000)
---------- ----------- ------------ ---------- ----------
Balance, December 31, 1994 5,117,287 (1,490,030) (1,275,708) 2,351,549 2,083,560
Net income, year ended
December 31, 1995 -0- 201,586 -0- 201,586 223,984
Cash distributions
($36.61 per interest) -0- -0- (216,000) (216,000) (240,000)
---------- ----------- ------------ ---------- ----------
Balance,
December 31, 1995 $5,117,287 $(1,288,444) $(1,491,708) $2,337,135 $2,067,544
---------- ----------- ------------ ---------- ----------
---------- ----------- ------------ ---------- ----------
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
MISSION VALLEY COMFORT SUITES 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 $ 223,984 $ 140,860
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 176,992 161,858
(Increase) decrease in:
Accounts receivable (4,058) (5,633)
Operating supplies (885) (90)
Prepaid expenses 19,749 11,502
Due from affiliate 11,744 1,793
Increase (decrease) in:
Accounts payable (3,172) 9,966
Accrued expenses (2,963) (45,866)
Due to affiliate 5,973 (7,665)
Deferred rent liability (29,672) (29,672)
--------- ---------
Net cash provided by
operating activities 397,692 237,053
--------- ---------
Cash flows from investing activities:
Investment property expenditures (124,718) (23,534)
--------- ---------
Net cash used in investing activities (124,718) (23,534)
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (240,000) (220,000)
Payments of long-term debt (6,322) (5,837)
--------- ---------
Net cash used in financing activities (246,322) (225,837)
--------- ---------
Net (increase) decrease in cash and
cash equivalents 26,652 (12,318)
Cash and cash equivalents, beginning of year 29,042 41,360
--------- ---------
Cash and cash equivalents, end of year $ 55,694 $ 29,042
--------- ---------
--------- ---------
Supplemental disclosure of
cash flow information:
Interest paid $ (20,493) $ (20,732)
--------- ---------
--------- ---------
See accompanying notes to financial statements.
13
<PAGE>
MISSION VALLEY COMFORT SUITES LTD.,
A California Limited Partnership
Notes to Financial Statements
Note 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Mission Valley Comfort Suites Ltd., A California Limited
Partnership (the Partnership), formerly Motels of America Series X,
A California Limited Partnership, was formed on September 18, 1987
pursuant to the California Revised Uniform Limited Partnership Act.
The purpose of the Partnership is to construct, own, and operate a
112-room "suites only" motel under a franchise agreement with
Choice Hotels International, Inc. The motel was opened in
September 1988.
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. 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 Per Interest
Net income per interest is based upon the 90% allocated to
limited partners divided by 5,900 limited partner interests
outstanding throughout the year.
14
<PAGE>
MISSION VALLEY COMFORT SUITES LTD.,
A California limited Partnership
Notes to Financial Statements
(Continued)
Note 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Use 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 Choice Hotels International, 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 $50,000 and requires ongoing royalty and
chain-affiliated advertising fees based on a percentage of gross
room revenues.
Note 4. LONG-TERM DEBT
The Partnership has a note payable which is due in monthly
installments of $2,175, including 8% interest, through April 2013.
The note is secured by a trust deed on the Partnership's motel.
The balance outstanding was $243,758 as of December 31, 1995 and
$250,080 as of December 31, 1994. The fair value of long-term debt
approximates its carrying amount based on borrowing rates currently
available to the Partnership for loans with similar terms.
15
<PAGE>
MISSION VALLEY COMFORT SUITES LTD.,
A California limited Partnership
Notes to Financial Statements
(Continued)
Note 4. LONG-TERM DEBT (continued)
Principal payments on this note are due as follows:
1996 $ 6,847
1997 7,415
1998 8,031
1999 8,697
2000 9,419
Thereafter 203,349
--------
$243,758
--------
--------
Note 5. LEASE
The Partnership leases the land underlying its motel under
an operating lease which expires in 2046. Prior to April 1, 1993,
rents were subject to annual increases based on the greater of 2-
1/2% or the increase in the Consumer Price Index. The total
minimum rentals over the life of the lease, including the effects
of the 2-1/2% minimum annual increases, were being recognized on
the straight-line basis as required by generally accepted
accounting principles. Effective April 1, 1993, the lease was
amended to lower the rent payment to $20,000 per month. Rents are
still subject to annual increases based on the increase in the
Consumer Price Index, but the maximum annual increase is 5% and
there is no minimum annual increase. The rent payment was $21,063
per month as of December 31, 1995. As a result of the amendment to
the lease agreement, a deferred rent liability of $1,594,894, which
was incurred prior to April 1, 1993, is being credited to income on
a straight-line basis over the remaining term of the lease. The
Partnership is required to pay real estate taxes, insurance, and
maintenance for the leased land and improvements thereon.
Future minimum lease payments are due as follows:
1996 $ 252,756
1997 252,756
1998 252,756
1999 252,756
2000 252,756
Thereafter 11,605,713
-----------
$12,869,493
-----------
-----------
16
<PAGE>
MISSION VALLEY COMFORT SUITES LTD.,
A California limited Partnership
Notes to Financial Statements
(Continued)
Note 6. RELATED PARTY TRANSACTIONS
The motel is operated pursuant to a management agreement
with GHG Hospitality, Inc. (GHG), the general partner. 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 certain other expenses directly
related to the operations 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 $112,996 $103,057
Reimbursement for partnership
administration expenses 36,151 32,422
Salaries and other allocated
expenses 138,446 126,341
-------- --------
$287,593 $261,820
-------- --------
-------- --------
</TABLE>
In addition, all motel employees are paid by GMS. The
Partnership reimbursed GMS $314,663 in 1995 and $312,201 in 1994,
including a one percent processing fee, for the wages of these
employees.
17
<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.
18
<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.
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 $112,996 $103,057
Reimbursement for partnership
administration expenses 36,151 32,422
Salaries and other allocated expenses 138,446 126,341
-------- --------
$287,593 $261,820
-------- --------
-------- --------
</TABLE>
In addition, all motel employees are paid by GMS. The
Partnership reimbursed GMS $314,663 in 1995 and $312,201 in 1994,
including a one percent processing fee, for the wages of these
employees.
19
<PAGE>
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
February 6, 1987, as supplemented December
2, 1987, 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 or proxy material 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.
20
<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 VALLEY COMFORT SUITES 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: /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
21
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 55,694
<SECURITIES> 0
<RECEIVABLES> 26,647
<ALLOWANCES> 0
<INVENTORY> 15,603
<CURRENT-ASSETS> 112,972
<PP&E> 5,719,160
<DEPRECIATION> 1,983,846
<TOTAL-ASSETS> 3,879,953
<CURRENT-LIABILITIES> 62,237
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,879,953
<SALES> 0
<TOTAL-REVENUES> 1,883,264
<CGS> 0
<TOTAL-COSTS> 1,659,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 223,984
<INCOME-TAX> 0
<INCOME-CONTINUING> 223,984
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 223,984
<EPS-PRIMARY> 34.17
<EPS-DILUTED> 34.17
</TABLE>
