ARVIDA JMB PARTNERS L P, 10-Q, 1996-08-14

ARVIDA JMB PARTNERS L P
10-Q, 1996-08-14
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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarter ended June 30, 1996 Commission file #0-16976

ARVIDA/JMB PARTNERS, L.P.
(Exact name of registrant as specified in its charter)

Delaware 36-3507015
(State of organization) (IRS Employer Identification No.)

900 N. Michigan Avenue., Chicago, IL 60611
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code 312/440-4800

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 a shorter period that
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1. Financial Statements. . . . . . . . . . . . . . . . 3

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . . . . . . 18

PART II OTHER INFORMATION

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . 22

Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . 24

<TABLE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 1996 AND DECEMBER 31, 1995

(UNAUDITED)

ASSETS
------

<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------- -----------
<S> <C> <C>
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . $ 12,373,021 20,171,289
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,063,087 13,852,395
Trade and other accounts receivable (net of allowance for doubtful
accounts of $246,339 at June 30, 1996 and $236,052 at
December 31, 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . 22,507,620 28,056,262
Mortgages receivable, net . . . . . . . . . . . . . . . . . . . . . . . . 1,299,649 1,994,583
Real estate inventories . . . . . . . . . . . . . . . . . . . . . . . . . 202,482,610 199,372,799
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . 77,905,737 71,842,531
Investments in and advances to joint ventures, net. . . . . . . . . . . . 3,606,409 13,955,093
Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,376,651 7,367,266
Amounts due from affiliates . . . . . . . . . . . . . . . . . . . . . . . 260,050 1,131,697
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . 8,323,755 8,695,326
------------ ------------

Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . $350,198,589 366,439,241
============ ============

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------

Liabilities:
Bank overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 256,553 3,972,987
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,538,730 22,918,450
Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,391,150 23,825,499
Accrued expenses and other liabilities. . . . . . . . . . . . . . . . . 15,256,641 12,718,654
Notes and mortgages payable, net. . . . . . . . . . . . . . . . . . . . 58,081,166 70,338,364
------------ ------------
Commitments and contingencies

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 116,524,240 133,773,954
------------ ------------

Partners' capital accounts:
General Partner and Associate Limited Partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . . . 35,589,264 34,994,723
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . (34,491,274) (33,912,035)
------------ ------------
1,117,990 1,102,688
------------ ------------
Limited Partners:
Capital contributions, net of offering costs. . . . . . . . . . . . . 364,841,815 364,841,815
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . . . 20,253,732 8,815,556
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . (152,539,188) (142,094,772)
------------ ------------
232,556,359 231,562,599
------------ ------------
Total partners' capital accounts. . . . . . . . . . . . . . . . 233,674,349 232,665,287
------------ ------------

Total liabilities and partners' capital . . . . . . . . . . . . $350,198,589 366,439,241
============ ============
<FN>
The accompanying notes are an integral part
of these consolidated financial statements.

</TABLE>

<TABLE>
ARVIDA/JMB PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995

(UNAUDITED)

<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Housing . . . . . . . . . . . . . . . . . . . . . $50,035,101 55,811,663 100,095,179 100,420,751
Homesites . . . . . . . . . . . . . . . . . . . . 5,309,248 8,300,198 8,421,248 12,496,614
Land and property . . . . . . . . . . . . . . . . 1,639,540 13,153,432 14,760,201 25,222,673
Operating properties. . . . . . . . . . . . . . . 7,257,263 6,801,299 15,574,281 15,206,484
Brokerage and other operations. . . . . . . . . . 7,797,157 7,949,959 13,789,872 14,734,076
----------- ---------- ----------- -----------
Total revenues. . . . . . . . . . . . . . . 72,038,309 92,016,551 152,640,781 168,080,598
----------- ---------- ----------- -----------
Cost of revenues:
Housing . . . . . . . . . . . . . . . . . . . . . 41,643,771 47,466,697 84,548,911 83,106,773
Homesites . . . . . . . . . . . . . . . . . . . . 3,703,417 5,459,845 5,944,055 8,122,393
Land and property . . . . . . . . . . . . . . . . 1,356,631 6,785,455 11,926,747 10,952,116
Operating properties. . . . . . . . . . . . . . . 7,140,931 6,810,992 14,348,278 14,114,936
Brokerage and other operations. . . . . . . . . . 7,014,093 6,807,364 12,835,606 13,726,164
----------- ---------- ----------- -----------
Total cost of revenues. . . . . . . . . . . 60,858,843 73,330,353 129,603,597 130,022,382
----------- ---------- ----------- -----------
Gross operating profit. . . . . . . . . . . . . . . 11,179,466 18,686,198 23,037,184 38,058,216
Selling, general and administrative expenses. . . . (4,560,389) (6,987,196) (9,786,622) (12,448,610)
----------- ---------- ----------- -----------
Net operating income. . . . . . . . . . . . 6,619,077 11,699,002 13,250,562 25,609,606

Interest income . . . . . . . . . . . . . . . . . . 369,365 289,419 781,893 611,662
Equity in earnings (losses) of
unconsolidated ventures . . . . . . . . . . . . . (83,100) (34,877) (116,913) 1,079,185
Interest and real estate taxes, net . . . . . . . . (933,651) (1,146,398) (1,882,825) (2,313,445)
----------- ---------- ----------- -----------
Income before cumulative effect due
to change in accounting for
long-lived assets . . . . . . . . . . . . 5,971,691 10,807,146 12,032,717 24,987,008

Cumulative effect due to change
in accounting for long-lived
assets. . . . . . . . . . . . . . . . . . -- -- -- (2,200,000)
----------- ---------- ----------- -----------

Net income. . . . . . . . . . . . . . . . . $ 5,971,691 10,807,146 12,032,717 22,787,008
=========== ========== =========== ===========

Net income per Limited
Partnership Interest. . . . . . . . . . . $ 14.63 26.49 28.31 55.23
=========== ========== =========== ===========

Cash distributions per
Limited Partnership
Interest. . . . . . . . . . . . . . . . . $ -- -- 25.85 13.49
=========== ========== =========== ===========

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<TABLE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 1996 AND 1995

(UNAUDITED)

<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,032,717 22,787,008
Charges (credits) to net income not requiring (providing) cash:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . 2,845,245 2,867,929
Equity in (earnings) losses of unconsolidated ventures. . . . . . . . . . . . 116,913 (1,079,185)
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . (10,287) (18,599)
Loss (gain) on disposition of property and equipment. . . . . . . . . . . . . (4,491) (3,546,130)
Cumulative effect due to change in accounting for
long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 2,200,000
Changes in:
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,210,692) (688,846)
Trade and other accounts receivable . . . . . . . . . . . . . . . . . . . . . 5,558,929 5,174,637
Real estate inventories:
Additions to real estate inventories. . . . . . . . . . . . . . . . . . . . (100,808,186) (106,304,017)
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,419,713 102,181,282
Capitalized interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,835,956) (4,270,301)
Capitalized real estate taxes . . . . . . . . . . . . . . . . . . . . . . . (1,885,382) (2,185,688)
Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 990,615 832,461
Amounts due from affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 871,647 524,556
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . 194,800 (254,512)
Accounts payable, accrued expenses and other liabilities. . . . . . . . . . . 117,718 1,020,039
Amounts due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . -- 203,956
Deposits and unearned income. . . . . . . . . . . . . . . . . . . . . . . . . (1,434,349) (1,337,477)
------------ -----------

Net cash provided by operating activities . . . . . . . . . . . . . . 16,958,954 18,107,113
------------ -----------
Cash flows from investing activities:
Mortgages receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694,934 95,861
Acquisitions of property and equipment. . . . . . . . . . . . . . . . . . . . (8,747,952) (6,768,965)
Proceeds from sales and disposals of property and equipment . . . . . . . . . 20,763 7,000,000
Joint venture distributions (contributions), net. . . . . . . . . . . . . . . (7,276) 69,624
Payments from (advances to) joint ventures. . . . . . . . . . . . . . . . . . 4,168,156 (50,673)
Proceeds from sales and disposal of joint venture interest. . . . . . . . . . 6,111,440 --
------------ -----------
Net cash provided by investing activities . . . . . . . . . . . . . . 2,240,065 345,847
------------ -----------
Cash flows from financing activities:
Proceeds from notes and mortgages payable . . . . . . . . . . . . . . . . . . 27,871,363 30,811,115
Payments of notes and mortgages payable . . . . . . . . . . . . . . . . . . . (40,128,561) (59,327,897)
Distributions to General Partner and Associate Limited Partners . . . . . . . (579,239) (302,689)
Distributions to Limited Partners . . . . . . . . . . . . . . . . . . . . . . (10,444,416) (5,448,464)
Bank overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,716,434) --
------------ -----------
Net cash used in financing activities . . . . . . . . . . . . . . . . (26,997,287) (34,267,935)
------------ -----------
Decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . (7,798,268) (15,814,975)

Cash and cash equivalents, beginning of year. . . . . . . . . . . . . . . . . . 20,171,289 22,024,390
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . . . . . . . $ 12,373,021 6,209,415
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest, net of amounts capitalized . . . . $ 33,939 9,690
============ ===========
Non-cash investing and financing activities:
Distribution of land from joint venture . . . . . . . . . . . . . . . . . . $ -- 717,472
============ ===========

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1996 AND 1995

(UNAUDITED)

Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1995,
which are included in the Partnership's 1995 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
Capitalized terms used but not defined in this quarterly report have the
same meanings as in the Partnership's 1995 Annual Report.

GENERAL

Capitalized Interest and Real Estate Taxes

Interest, including the amortization of loan fees, of $2,835,956 and
$4,388,425 were incurred for the six months ended June 30, 1996 and 1995,
respectively, of which $2,835,956 and $4,270,301 was capitalized,
respectively. The decrease in interest incurred for the six months ended
June 30, 1996 as compared to the same period in 1995 is due to a decrease
in the average amount of borrowings outstanding during the period.
Interest payments, including amounts capitalized, of $2,869,895 and
$4,279,991 were made during the six months ended June 30, 1996 and 1995,
respectively. Interest, including the amortization of loan fees, of
$1,357,841 and $2,015,648 was incurred for the three months ended June 30,
1996 and 1995, respectively, of which $1,357,841 and $1,905,919 was
capitalized, respectively. Interest payments of $1,278,892 and $1,951,305
were made during the three months ended June 30, 1996 and 1995,
respectively.

Real estate taxes of $3,768,207 and $4,381,009 were incurred for the
six months ended June 30, 1996 and 1995, respectively, of which $1,885,382
and $2,185,688 were capitalized, respectively. Real estate tax payments of
$211,665 and $375,005 were made during the six months ended June 30, 1996
and 1995, respectively. The preceding analysis of real estate taxes does
not include real estate taxes incurred or paid with respect to the Partner-
ship's club facilities and other operating properties as these taxes are
included in cost of revenues for operating properties. Real estate taxes
of $1,891,107 and $2,147,198 were incurred for the three months ended June
30, 1996 and 1995, respectively, of which $957,456 and $1,110,529 was
capitalized, respectively. Real estate tax payments of $175,176 and
$278,273 were made during the three months ended June 30, 1996 and 1995,
respectively.

Property and Equipment and Other Assets

Depreciation expense of $2,668,474 and $2,554,041 was incurred for the
six months ended June 30, 1996 and 1995, respectively. Amortization of
other assets, excluding loan fees, of $26,038 and $89,334 was incurred for
the six months ended June 30, 1996 and 1995. Amortization of loan fees,
which is included in interest expense, of $150,733 and $224,554 was
incurred for the six months ended June 30, 1996 and 1995, respectively.
Depreciation expense of $1,341,734 and $1,288,270 was incurred for the
three months ended June 30, 1996 and 1995, respectively. Amortization of
other assets, excluding loan fees, of $14,107 and $43,191 was incurred for
the three months ended June 30, 1996 and 1995, respectively. Amortization
of loan fees, which is included interest expense, of $77,508 and $84,777
was incurred for the three months ended June 30, 1996 and 1995,
respectively.

Partnership Records

During March 1996, the Partnership made a distribution for 1995 of
$10,419,160 to its Limited Partners ($25.79 per Interest) and $578,835 to
the General Partner and Associate Limited Partners, collectively. In
addition, during March 1996, the Partnership remitted each Limited
Partner's share of a North Carolina non-resident withholding tax on behalf
of each of the Limited Partners. Such payment, which totalled $25,256
(approximately $.06 per Interest), was deemed a distribution to the Limited
Partners. Distributions totalling $1,636 were also paid during March 1996
and July 1996 on behalf of the General Partner, Associate Limited Partners
and a certain Limited Partner, collectively, a portion of which was also
remitted to the North Carolina tax authorities on their behalf. These
distributions are the primary cause for the decrease in cash and cash
equivalents at June 30, 1996 as compared to December 31, 1995.

Reclassifications

Certain reclassifications have been made to the 1995 financial
statements to conform to the 1996 presentation.

NOTES AND MORTGAGES PAYABLE

At June 30, 1996, the Partnership's credit facility consists of a term
loan in the original amount of $85,252,520, a revolving line of credit
facility up to $20 million, an income property term loan in the original
amount of $18,233,326 and a $15 million letter of credit facility. For the
six month period ended June 30, 1996, the effective interest rate for the
combined term loan, income property term loan and revolving line of credit
facility was approximately 8.2% per annum.

Under the term loan agreement, the Partnership made scheduled
principal payments of $10 million in March 1994, February 1995 and February
1996 and $5 million principal payments in July 1995 and July 1996. The
term loan agreement also provides for additional principal repayments based
upon a specified percentage of available cash flow and upon the sale of
certain assets. The Partnership's lender waived the requirement for
principal payments based upon a specified percentage of available cash flow
for the year ended December 31, 1995. During the six month period ended
June 30, 1996, the Partnership made additional term loan payments based
upon the sale of certain assets totalling approximately $6.2 million.
Included in the $6.2 million is a $2 million principal paydown made from a
portion of the proceeds from the sale of the Partnership's 20% joint
venture interest in Coto de Caza. The remaining balance outstanding on the
term loan is due in July 1997. Under the income property term loan,
principal payments of $0.1 million are required to be paid monthly until
maturity. The income property term loan and the revolving line of credit
were scheduled to mature in March 1996 and December 1995, respectively.
During March 1996, the Partnership's lenders reached an agreement with each
other whereby one of the lenders purchased the other's participating
interest in the Partnership's credit facilities. In addition, during March
1996, the successor lender agreed to renew the Partnership's revolving line
of credit, income property term loan and letter of credit facility through
July 1997. At June 30, 1996, all of the term loan proceeds had been
borrowed with a remaining balance outstanding of $16,281,621. The balances
outstanding on the revolving line of credit facility, the income property
term loan and the letter of credit facility at June 30, 1996 are $0,
$12,166,746 and $9,105,373, respectively.

During April 1996, the Partnership refinanced the loan on its retail
property located in its Weston Community with a different lender. The
outstanding principal balance on such loan of approximately $8.1 million is
included in Notes and mortgages payable at June 30, 1996. In addition,
$3.0 million of subordinated debt attributable to the Cullasaja Joint
Venture is included in Notes and mortgages payable at June 30, 1996.

The Partnership also has a $24.0 million revolving construction line
of credit for the buildings and certain amenities within the Partnership's
condominium project on Longboat Key, Florida known as Arvida's Grand Bay.
This line of credit currently bears interest at the lender's prime rate
(8.25% at June 30, 1996) plus 1/2% per annum and matures in January 1997.
At June 30, 1996, approximately $13.2 million was outstanding under this
line of credit. The Partnership currently anticipates that this amount
will be repaid with proceeds from the sale of condominium units.

During January 1996, the Partnership executed a note for a $7.5
million construction loan for the construction and development of a second
retail shopping center located in its Weston Community. This note
currently bears interest at the lender's prime rate (8.25% at June 30,
1996) plus 1/2% per annum and matures in July 1997. At June 30, 1996,
approximately $2.8 million was outstanding under this loan. The proceeds
from such loan have been and are expected to continue to be the primary
source of the estimated funds required for the completion of the shopping
center. The construction and development of this project is the primary
cause for the increase in Property and equipment on the accompanying
Consolidated Balance Sheets at June 30, 1996 as compared to December 31,
1995. The construction of the shopping center is expected to be completed
by December 31, 1996.

On July 29, 1996, the Partnership entered into a letter agreement with
an unaffiliated third party, BSS Capital II, L.L.C. ("BSS"), pursuant to
which the Partnership and BSS agreed to negotiate within ten business days
a commitment setting forth the principal terms, covenants and conditions
for a debt recapitalization of approximately $160 million, consisting of
secured senior and secured mezzanine tranches. On August 7, 1996, the
Partnership and BSS agreed to extend the period in which they agreed to
negotiate a commitment for a debt recapitalization from ten business days
to fifteen business days. The financing, if accomplished, would achieve,
among other things, a refinancing of the Partnership's existing financing
arrangements (other than certain project related financing) and, together
with certain additional project financing, would enable the Partnership to
make a distribution to the Limited Partners of between $350 and $400 per
Interest. The letter agreement also provides for an exclusive period
during which the Partnership would not pursue or negotiate any other offers
for similar portfolio financings or debt recapitalizations. The
Partnership will be required to pay a break-up fee ranging from $2.4
million to $4.4 million if the Partnership enters into a similar financing
with another third party within 90 days. The letter agreement also
provides for indemnification of BSS, its affiliates and representatives
against certain third party claims as a result of or in connection with the
letter agreement or the transactions contemplated thereby. The letter
agreement also provides that BSS is under no obligation to issue a
commitment and that the Partnership is under no obligation to accept one.
Even if a commitment for such financing were to be acceptable to the
Partnership, the closing of such a financing transaction would be subject
to the satisfaction of various conditions and there can be no assurance
that such a financing transaction will be accomplished. If such financing
transaction is accomplished, the Partnership would be highly leveraged and
any future cash distributions would be dependent on the ability of the
Partnership to service the debt incurred by the Partnership in connection
with such financing.

INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

During March 1996, the Partnership closed on the sale of its 20% joint
venture interest in Coco de Caza, including the related promissory note for
advances previously made to the joint venture, to unaffiliated third
parties for a sales price of $12 million. This transaction is reflected in
Land and property revenues for the six months ended June 30, 1996 on the
accompanying Consolidated Statements of Operations and is the primary cause
for the decrease in Investments in and advances to joint ventures on the
accompanying Consolidated Balance Sheets at June 30, 1996 as compared to
December 31, 1995.

TRANSACTIONS WITH AFFILIATES

The Partnership, subject to certain limitations, may engage affiliates
of the General Partner for property management, insurance and certain other
administrative services to be performed in connection with the
administration of the Partnership and its assets. The total of such costs
for the six months ended June 30, 1996 was approximately $94,100, all of
which was paid as of June 30, 1996. The total of such costs for the six
months ended June 30, 1995 was approximately $282,100. In addition, the
General Partner and its affiliates are entitled to reimbursements for
salaries and salary-related costs relating to the administration of the
Partnership and the operation of the Partnership's properties. Such costs
were approximately $50,600 for the six months ended June 30, 1996, all of
which were paid as of June 30, 1996.

The Partnership receives reimbursements from or reimburses other
affiliates of the General Partner engaged in real estate activities for
certain general and administrative costs including, and without limitation,
salary and salary-related costs relating to work performed by employees of
the Partnership and certain out-of-pocket expenditures incurred on behalf
of such affiliates. For the six month period ended June 30, 1996, the
amount of such costs incurred by the Partnership on behalf of these
affiliates totalled approximately $110,200. At June 30, 1996,
approximately $46,000 was owed to the Partnership, of which approximately
$38,700 was received as of August 2, 1996. For the six month period ended
June 30, 1995, the Partnership was entitled to reimbursements of
approximately $322,300.

The Partnership and Arvida/JMB Partners, L.P.-II (a publicly-held
limited partnership affiliated with the General Partner) each employ
project related and administrative personnel who perform services on behalf
of both partnerships. In addition, certain out-of-pocket expenditures
related to such services and other general and administrative costs are
incurred and charged to each partnership as appropriate. The Partnership
receives reimbursements from or reimburses Arvida/JMB Partners, L.P.-II for
such costs (including salary and salary-related costs). For the six month
periods ended June 30, 1996 and 1995, the Partnership was entitled to
receive approximately $1,178,900 and $1,403,000, respectively, from
Arvida/JMB Partners, L.P.-II. At June 30, 1996, approximately $205,500 was
owed to the Partnership, all of which was received as of August 2, 1996.
In addition, for the six month periods ended June 30, 1996 and 1995, the
Partnership was obligated to reimburse Arvida/JMB Partners, L.P.-II
approximately $113,700 and $97,300, respectively. At June 30, 1996,
approximately $16,300 was unpaid, all of which was paid as of August 2,
1996.

Arvida Company ("Arvida"), pursuant to an agreement with the
Partnership, provides development, construction, management and other
personnel and services to the Partnership for all of its projects and
operations. Pursuant to such agreement, the Partnership reimburses Arvida
for all of its salary and salary-related costs incurred in connection with
work performed on behalf of the Partnership, subject to certain
limitations. The total of such costs for the six month periods ended June
30, 1996 and 1995 were approximately $3,568,300 and $3,474,100,
respectively. At June 30, 1996, approximately $7,000 was unpaid, all of
which was paid as of August 2, 1996.

The Partnership pays for certain general and administrative costs on
behalf of its equity clubs, homeowners associations and maintenance
associations. The Partnership receives reimbursements from these entities
for such costs. For the six month periods ended June 30, 1996 and 1995,
the Partnership was entitled to receive approximately $555,900 and
$157,000, respectively, from these entities. At June 30, 1996,
approximately $286,300 was owed to the Partnership, of which approximately
$83,900 was received as of August 2, 1996. In addition, the Partnership
owes its equity clubs for certain costs incurred by the clubs which are
obligations of the Partnership. For the six month period ended
June 30, 1996, the Partnership was obligated to reimburse its equity
clubs approximately $9,200. At June 30, 1996, approximately $20,100
was unpaid (including amounts owed from previous periods), of
which approximately $2,400 was paid as of August 2, 1996.

The Partnership also funds operating deficits of its equity clubs, as
required or deemed necessary. Such amounts are expensed by the
Partnership, but may be reimbursed by these clubs from future cash flow.
At June 30, 1996, the Partnership owed approximately $265,700 for such
funding, none of which was paid as of August 2, 1996.

The Partnership periodically incurs salary and salary-related costs on
behalf of an affiliate of the General Partner of the Partnership. The
Partnership was entitled to receive approximately $0 and $380,600 for such
costs for the six months ended June 30, 1996 and 1995, respectively, of
which approximately $31,400 was owed to the Partnership at June 30, 1996
and August 2, 1996.

In accordance with the Partnership Agreement, the General Partner and
Associate Limited Partners have deferred a portion of their distributions
of net cash flow from the Partnership totalling approximately $1,587,700.
This amount does not bear interest and is expected to be paid in future
periods subject to certain restrictions contained in the Partnership's
credit facility agreement.

All amounts receivable or payable to the General Partner or its
affiliates do not bear interest and are expected to be paid in future
periods.

COMMITMENTS AND CONTINGENCIES

As security for performance of certain development obligations, the
Partnership is contingently liable under standby letters of credit and
performance bonds for approximately $9,105,400 and $4,082,700,
respectively, at June 30, 1996. In addition, certain joint ventures in
which the Partnership holds an interest are also contingently liable under
bonds for approximately $1,020,000 at June 30, 1996.

On June 24, 1996, a lawsuit entitled Irvin Weiss v. Arvida/JMB
Managers, Inc., Neil G. Bluhm, Lehman Brothers Inc. and Arvida/JMB
Partners, L.P. ("Weiss action") was filed in the County Department,
Chancery Division of the Circuit Court of Cook County, Illinois. This
lawsuit is a purported class action lawsuit on behalf of Irvin Weiss and
all other holders of Interests to bar (i) the General Partner and Mr. Bluhm
from taking any action to chill tender offers from non-affiliates, (ii) the
officers, directors and shareholders of the defendants from participating
in any special committee on tender offers, (iii) Lehman Brothers Inc. from
advising any such special committee, and (iv) defendants and their
affiliates from making tender offers. The complaint alleges, inter alia,
that the General Partner and Mr. Bluhm breached their fiduciary duty owed
plaintiff and members of the purported class by chilling tender offers for
Interests by non-affiliates, failing to provide non-affiliated offerors
with information and stifling competition for such interests, and that
Lehman Brothers Inc. participated in such breaches of fiduciary duty by
colluding with them. In addition to seeking the relief described above,
plaintiff seeks such other and further relief as the Court may deem just
and proper and the award of attorneys' fees and costs. The General Partner
for itself and acting for the Partnership believes this action is
groundless and has no merit, and intends to vigorously defend this lawsuit.

A complaint was filed in the County Department, Chancery Division of
the Circuit Court of Cook County, Illinois on July 1, 1996, and amended on
July 8, 1996, in the matter of Jack M. Carlstrom and Lynn M. Carlstrom v.
Arvida/JMB Managers, Inc., Neil G. Bluhm, Walton Street Capital Acquisition
Co. III, L.L.C., Whitehall Street Real Estate Limited Partnership VII,
Lehman Brothers Inc. and Arvida/JMB Partners, L.P. ("Carlstrom action").
This complaint, as amended, is brought derivatively on behalf of the
Partnership and individually on behalf of Jack M. Carlstrom and Lynn M.
Carlstrom and a purported class of all other holders of Interests
(excluding current or former management or affiliates of the General
Partner) and seeks to compel defendants to foster bidding for control of
the Partnership and to bar (i) the General Partner and Mr. Bluhm from
taking any action to chill tender offers from non-affiliates, (ii) the
officers, directors and shareholders of the defendants from participating
in any special committee on tender offers, (iii) Lehman Brothers Inc. from
advising any such special committee, and (iv) defendants and their
affiliates from making tender offers (including enjoining tender offers by
controlling persons and affiliates of the General Partner). The complaint,
as amended, alleges, inter alia, that the General Partner breached its
fiduciary duty owed plaintiffs and members of the purported class by
tilting the playing field in favor of itself and against potential bidders
for the Partnership, preferring the "General Partner's" tender offer over
those of other bidders, failing to disclose non-public information to other
bidders to prevent them from making competing offers, discouraging a fair
bidding contest and entrenching the defendants, and that Whitehall Street
Real Estate Limited Partnership VII and Lehman Brothers Inc. participated
in such breaches of fiduciary duty. In addition to seeking the relief
described above, plaintiffs on behalf of themselves and members of the
purported class seek damages in a sum to be determined at trial, such other
and further relief as the Court may deem just and proper and the award of
attorneys' fees and costs. The General Partner for itself and acting for
the Partnership believes this action is groundless and has no merit, and
intends to vigorously defend this lawsuit.

The Weiss action and the Carlstrom action have been consolidated by
court order and are being heard and administrated by a single judge. The
General Partner has filed motions to dismiss each action. The motions are
currently being briefed and are set for hearing on August 28, 1996.

The Partnership was named a defendant in a number of homeowner
lawsuits, certain of which purported to be class actions, that allegedly in
part arose out of or related to Hurricane Andrew, which on August 24, 1992
resulted in damage to a former community development known as Country Walk.

The homeowner lawsuits alleged, among other things, that the damage
suffered by the plaintiffs' homes and/or condominiums within Country Walk
was beyond what could have been reasonably expected from the hurricane
and/or was a result of the defendants' alleged defective design,
construction, inspection and/or other improper conduct in connection with
the development, construction and sales of such homes and condominiums,
including alleged building code violations. The various plaintiffs sought
varying and, in some cases, unspecified amounts of compensatory damages and
other relief. In certain of the lawsuits injunctive relief and/or punitive
damages were sought.

Several of these lawsuits allege that the Partnership was liable,
among other reasons, as a result of its own alleged acts of misconduct or
as a result of the Partnership's assumption of Arvida Corporation's
liabilities in connection with the Partnership's purchase of Arvida
Corporation's assets from Disney in 1987, which included certain assets
related to the Country Walk development. Pursuant to the agreement to
purchase such assets, the Partnership obtained indemnification by Disney
for certain liabilities relating to facts or circumstances arising or
occurring prior to the closing of the Partnership's purchase of the assets.
Over 80% of the Arvida-built homes in Country Walk were built prior to the
Partnership's ownership of the Community. Where appropriate, the
Partnership has tendered or will tender each of the above-described
lawsuits to Disney for defense and indemnification in whole or in part
pursuant to the Partnership's indemnification rights. Where appropriate,
the Partnership has also tendered these lawsuits to its various insurance
carriers for defense and coverage. The Partnership is unable to determine
at this time to what extent damages in these lawsuits, if any, against the
Partnership, as well as the Partnership's cost of investigating and
defending the lawsuits, will ultimately be recoverable by the Partnership
either pursuant to its rights of indemnification by Disney or under
contracts of insurance.

One of the Partnership's insurance carriers has been funding
settlements of various litigation related to Hurricane Andrew. In some,
but not all, instances, the insurance carrier has provided the Partnership
with written reservation of rights letters. The aggregate amount of the
settlements funded to date by this carrier is approximately $8.0 million.
The insurance carrier that funded these settlements pursuant to certain
reservations of rights has stated its position that it has done so pursuant
to various non-waiver agreements. The carrier's position was that these
non-waiver agreements permitted the carrier to fund settlements without
barring the carrier from raising insurance coverage issues or waiving such
coverage issues. On May 23, 1995, the insurance carrier rescinded the
various non-waiver agreements currently in effect regarding the remainder
of the Hurricane Andrew litigation, allegedly without waiving any future
coverage defenses, conditions, limitations, or rights. For this and other
reasons, the extent to which the insurance carrier may recover any of these
proceeds from the Partnership is uncertain. Therefore, the accompanying
consolidated financial statements do not reflect any accruals related to
this matter.

Currently, the Partnership is involved in three subrogation lawsuits.
On April 19, 1993, a subrogation claim entitled Village Homes at Country
Walk Master Maintenance Association, Inc. v. Arvida Corporation et al., was
filed in the 11th Judicial Circuit for Dade County. Plaintiffs filed this
suit for the use and benefit of American Reliance Insurance Company
("American Reliance"). In this suit, as amended, plaintiffs seek to
recover damages and pre- and post-judgment interest in connection with
$10,873,000 American Reliance has allegedly paid, plus amounts it may have
to pay in the future, to the condominium association at Country Walk in the
wake of Hurricane Andrew. Disney is also a defendant in this suit. The
Partnership believes that the amount of this claim that allegedly relates
to units it built and sold is approximately $3,600,000. Plaintiffs also
seek a declaratory judgement seeking to hold the Partnership and other
defendants responsible for amounts American Reliance must pay in the future
to its insured as additional damages beyond the $10,873,000 previously
paid. The Partnership has filed motions directed to the complaint, as
amended, and the litigation is in the discovery stage. The Partnership
intends to vigorously defend itself. On or about May 10, 1996, a
subrogation claim entitled Juarez et al. v. Arvida Corporation et al. was
filed in the Circuit Court of the Eleventh Judicial Circuit in and for Dade
County. Plaintiffs filed this suit for the use and benefit of American
Reliance Insurance Company ("American Reliance"). In this suit, plaintiffs
seek to recover damages, pre-and post-judgment interest, costs and any
other relief the Court may deem just and proper in connection with
$3,200,000 American Reliance allegedly paid on specified claims at Country
Walk in the wake of Hurricane Andrew. Disney is also a defendant in this
suit. The Partnership believes that the amount of this claim that
allegedly relates to units it sold is approximately $350,000. The
Partnership intends to defend itself vigorously in this matter. The
Partnership is also involved in a subrogation action brought by the
Insurance Company of North America ("INA") arising out of a claim that INA
allegedly paid on a single home in Country Walk. The Partnership has
settled this claim in principle with the settlement being funded by the
Partnership's insurance carrier. The Metropolitan Property and Casualty
Company has advised the Partnership of its intent to file a subrogation
action allegedly in connection with an unspecified number of Arvida-built
homes. The Partnership could be named in other subrogation actions, and in
such event, the Partnership intends to vigorously defend itself in such
actions.

In addition, the Partnership has been advised by Merrill Lynch that
various investors have sought to compel Merrill Lynch to arbitrate claims
brought by certain investors of the Partnership representing approximately
5% of the total of approximately 404,000 Interests outstanding. Merrill
Lynch has asked the Partnership and its General Partner to confirm an
obligation of the Partnership and its General Partner to indemnify Merrill
Lynch in these claims against all loss, liability, claim, damage and
expense, including without limitation attorneys' fees and expenses, under
the terms of a certain Agency Agreement dated September 15, 1987 ("Agency
Agreement") with the Partnership relating to the sale of Interests through
Merrill Lynch on behalf of the Partnership. These claimants have sought
and are seeking to arbitrate claims involving unspecified damages against
Merrill Lynch based on Merrill Lynch's alleged violation of applicable
state and/or federal securities laws and alleged violations of the rules of
the National Association of Securities Dealers, Inc., together with pendent
state law claims. The Partnership believes that Merrill Lynch has resolved
some of these claims through litigation and otherwise, and that Merrill
Lynch is defending other claims. The Agency Agreement generally provides
that the Partnership and its General Partner shall indemnify Merrill Lynch
against losses occasioned by any actual or alleged misstatements or
omissions of material facts in the Partnership's offering materials used in
connection with the sale of Interests and suffered by Merrill Lynch in
performing its duties under the Agency Agreement, under certain specified
conditions. The Agency Agreement also generally provides, under certain
conditions, that Merrill Lynch shall indemnify the Partnership and its
General Partner for losses suffered by the Partnership and occasioned by
certain specified conduct by Merrill Lynch in the course of Merrill Lynch's
solicitation of subscriptions for, and sale of, Interests. The Partnership
is unable to determine at this time the ultimate investment of investors
who have filed arbitration claims as to which Merrill Lynch might seek
indemnification in the future. At this time, and based upon the
information presently available about the arbitration statements of claims
filed by some of these investors, the Partnership and its General Partner
believe that they have meritorious defenses to demands for indemnification
made by Merrill Lynch and intend to vigorously pursue such defenses.
Although there can be no assurance regarding the outcome of the claims for
indemnification, at this time, based on information presently available
about such arbitration statements of claims, the Partnership and its
General Partner do not believe that the demands for indemnification by
Merrill Lynch will have a material adverse effect on the financial
condition of the Partnership.

On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, and amended on or about February 20,
1996, entitled Council of Villages, Inc. et al v. Arvida/JMB Partners,
Arvida/JMB Managers, Inc., Arvida/JMB Partners, Ltd., Broken Sound Club,
Inc., and Country Club Maintenance Association, Inc. The multi-count
complaint, as amended, is brought as a class action, and individually, on
behalf of various residents of the Broken Sound Community, and alleges that
defendants engaged in various acts of misconduct in, among other things,
the establishment, operation, management and marketing of the Broken Sound
golf course and recreational facilities, as well as the alleged improper
failure to turn over such facilities to the Broken Sound homeowners on a
timely basis. Plaintiffs seek, through various theories, including but not
limited to breach of ordinance, breach of fiduciary duty, fraud, unjust
enrichment and civil theft, damages in excess of $45 million, the
appointment of a receiver for the Broken Sound Club, other unspecified
compensatory damages, the right to seek punitive damages, treble damages,
prejudgment interest, attorneys' fees and costs. The Partnership believes
that the lawsuit is without merit and intends to vigorously defend itself
in this matter.

On or about July 30, 1996, Savoy v. Arvida/JMB Partners, Arvida/JMB
Managers, Inc., Arvida/JMB Partners, Ltd., and Broken Sound Club, Inc. was
filed against the Partnership and others in the Circuit Court of the 15th
Judicial Circuit, in and for Palm Beach County, Florida. The lawsuit is
filed as a three-count complaint for dissolution of the Broken Sound Club,
Inc. ("Club"), and seeks, among other things, the appointment of a
custodian or receiver for the Club, a determination that certain acts be
deemed wrongful, the return to the Club of in excess of $2.5 million in
alleged "operating profits", an injunction against the charging of certain
dues, an injunction requiring the Club to produce certain financial
statements, and such other relief as the Court deems just, fair and proper.

The Partnership believes the lawsuit is without merit and intends to
vigorously defend itself.

The Partnership owns a 50% joint venture interest in 31 commercial/
industrial acres in Pompano Beach, Florida, which is encumbered by a
mortgage loan in the principal amount of approximately $4 million at
December 31, 1995. During April 1992, as a result of the Partnership's
previous determination that the development of the land was no longer
economically profitable, the Partnership and its joint venture partner each
tendered payment in the amount of approximately $3.1 million to the lender
for their respective shares of the guarantee payment required under the
loan agreement and certain other holding costs, the majority of which
reduced the outstanding mortgage loan to its current balance. The venture
also intended at that time to convey title to the property to the lender;
however, such conveyance is pending until resolution of certain general
development obligations of the venture as well as certain environmental
issues. The Partnership had been negotiating with the lender regarding the
scope of the development work required to be done. Negotiations with the
lender were unsuccessful. On January 6, 1995, the lender filed a lawsuit
entitled Bankers Trust Company v. Arvida/JMB Partners, L.P., Pompano
Realty, Ltd., Arvida Pompano Associates Joint Venture, Arvida/JMB Managers,
Inc. and Pompano Realty, Inc., in the Circuit Court of the Seventeenth
Judicial Circuit, in and for Broward County, Florida. In the lawsuit, as
amended, the lender asserts, among other things, that the mortgage loan is
with recourse to the joint venture partners as a result of the partners'
failure to perform in accordance with the terms of the loan agreement. The
lender is demanding payment of the outstanding loan balance plus interest
thereon. The Partnership believes this claim is without merit and is
vigorously defending the lawsuit.

The Partnership is also a defendant in several actions brought against
it arising in the normal course of business. It is the belief of the
General Partner, based on knowledge of facts and advice of counsel, that
the claims made against the Partnership in such actions will not result in
any material adverse effect on the Partnership's consolidated financial
position or results of operations.

The Partnership may be responsible for funding certain other ancillary
activities for related entities in the ordinary course of business which
the Partnership does not currently believe will have any material adverse
effect on its consolidated financial position or results of operations.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

The Partnership adopted the Financial Accounting Standard's Board's
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of", effective January 1, 1995. As a
result, an impairment loss of $2.2 million was recorded to the carrying
value of its Cullasaja Community located near Highlands, North Carolina.
As a result of this adjustment, Cullasaja's carrying value is recorded at
approximately $7.4 million and $7.1 million at June 30, 1996 and December
31, 1995, respectively.

ADJUSTMENTS

In the opinion of the General Partner, all adjustments (consisting
solely of normal recurring adjustments) necessary for a fair presentation
have been made to the accompanying consolidated financial statements as of
June 30, 1996 and December 31, 1995 and for the three and six months ended
June 30, 1996 and 1995.

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Reference is made to the notes to the accompanying consolidated
financial statements ("Notes") contained in this report for additional
information concerning certain of the Partnership's investments.

At June 30, 1996 and December 31, 1995, the Partnership had cash and
cash equivalents of approximately $12,373,000 and $20,171,000,
respectively. The decrease in cash and cash equivalents at June 30, 1996
as compared to December 31, 1995 is due primarily to required debt service
payments as well as distributions to partners of approximately $11 million
made in March 1996. Bank overdrafts, which represent checks in transit, of
approximately $256,600 and $3,973,000 at June 30, 1996 and December 31,
1995, respectively, were repaid from cash on hand during July 1996 and
January 1996, respectively.

During June and July of 1996, the Limited Partners received several
unsolicited offers to purchase their Interests in the Partnership. The
General Partner of the Partnership established a special committee (the
"Special Committee") consisting of five of the six directors of the General
Partner to review such offers and make a recommendation to the Limited
Partners with respect to the offers. In addition, the Partnership engaged
Lehman Brothers, Inc. as a financial advisor to assist the Special
Committee in evaluating and responding to the offers as well as independent
counsel to advise the Special Committee in connection with the offers. The
Special Committee directed Lehman Brothers, Inc. to render (a) its estimate
of the present discounted value ("Estimated Liquidation Value") of an
Interest based on the assumption that the Partnership commences an orderly
liquidation in October 1997 and completes that liquidation by October 2002
and (b) its opinion as to the adequacy, from a financial point of view to
the holders of Interests as a class, of the consideration offered in any
offer to acquire Interests, as compared to the Estimated Liquidation Value.

(Lehman was not requested to, and did not, render any opinion as to the
adequacy, from a financial point of view, of the consideration offered in
any of the offers to any particular Interest holder who has immediate need
or desire for liquidity or any particular Interest holder who anticipates a
need for liquidity prior to October 2002.) Lehman Brothers Inc. arrived at
an Estimated Liquidation Value as of July 2, 1996 ranging from $565 to $610
per Interest. Following receipt of the Estimated Liquidation Value, the
Special Committee determined that the Limited Partners who have the
expectation of retaining their Interests through an anticipated orderly
liquidation of the Partnership's assets by October 2002 and who have no
current or anticipated need for liquidity reject the offers received to
date (which are discussed below) as they were inadequate and not in the
best interests of such Limited Partners. The Special Committee recommended
that such Limited Partners reject these offers and not tender their
Interests pursuant to these offers. With respect to all other Limited
Partners, the Special Committee expressed no opinion and remained neutral
with respect to these offers.

One offer for Interests in the Partnership was made by Raleigh Capital
Associates L.P. ("Raleigh"). Raleigh's offer was for up to 185,000
Interests which represents approximately 46% of the outstanding Interests.
Raleigh's offer had a final price of $461 per Interest and expired on
August 1, 1996. Raleigh has reported that it acquired a total of 79,696
Interests which represents approximately 19.7% of the total outstanding
Interests.

The other offer was made by Walton Street Capital Acquisition Co. III,
L.L.C. ("Walton") for up to 185,840 Interests which represents
approximately 46% of the outstanding Interests. Walton is offering a price
of $461 per Interest. Walton's offer is currently scheduled to expire on
August 15, 1996. Walton has entered into a confidentiality agreement with
the Partnership pursuant to which Walton is entitled to review certain non-
public information concerning the Partnership and, in return, Walton
agreed, among other things, to treat such information as confidential in
accordance with the terms of such agreement, and to take or abstain from
taking certain actions, including agreeing that for a period of two years
from the date of such agreement not to acquire any Interests other than
pursuant to an offer made in compliance with the requirements of
Regulations 14D and 14E of the Securities Exchange Act of 1934. Walton is
an affiliate of Neil G. Bluhm who is a director and the President of the
General Partner of the Partnership. Mr. Bluhm is not a member of the
Special Committee and has not been involved in responses made on behalf of
the Partnership relating to tender offers.

Separately, the Partnership has entered into additional
confidentiality agreements with other third parties. Such agreements
entitle such parties to receive certain non-public information concerning
the Partnership solely for use in connection with their consideration of
making a tender offer for Interests. There can be no assurance as to
whether any such other offer will subsequently be amended, withdrawn or
consummated. The Partnership began incurring significant expenditures in
connection with these tender offers during the third quarter of 1996 and
may incur additional costs in the future.

RESULTS OF OPERATIONS

The results of operations for the three and six months ended June 30,
1996 are primarily attributable to the development and sale or operation of
the Partnership's assets.

For the three months ended June 30, 1996, the Partnership (including
its consolidated ventures and its unconsolidated ventures accounted for
under the equity method) closed on the sale of 271 housing units, 70
homesite lots and approximately three acres of developed land. This
compares to closings in the second quarter of 1995 of 309 housing units,
120 homesite lots, approximately 127 acres of undeveloped land as well as
an office building located in downtown Boca Raton, Florida, known as Mizner
Place. Outstanding contracts ("backlog") as of June 30, 1996 were for 823
housing units, 52 homesites and approximately 33 acres of developed and
undeveloped land tracts. This compares to a backlog as of June 30, 1995 of
987 housing units, 77 homesites and approximately 10 acres of developed and
undeveloped land tracts.

The Partnership's Communities are in various stages of development,
with estimated remaining build-outs ranging from one to nine years. The
Weston Community, located in Broward County, Florida, is the Partnership's
largest Community and is in its mid stage of development. Also in their
mid stages of development are the River Hills Country Club in Tampa,
Florida; Jacksonville Golf and Country Club in Jacksonville, Florida; the
Water's Edge Community in Atlanta, Georgia; The Cullasaja Club, near
Highlands, North Carolina and the Partnership's condominium project on
Longboat Key, Florida known as Arvida's Grand Bay. The Partnership's
remaining Communities known as Sawgrass Country Club, in Jacksonville,
Florida and Dockside in Atlanta, Georgia are in their final stages of
development with anticipated close-outs in 1996. The Broken Sound
Community, located in Boca Raton, Florida, is complete and had its final
closings in 1995. Future revenues will be impacted to the extent that
there are lower levels of inventories available for sale as these
Communities approach or undertake their final phases. In addition, due to
the close-out of the Partnership's higher profit margin products within
Broken Sound in 1995, future gross operating profit margins from housing
activities are not expected to be as high as recent years' margins.

Housing revenues for the six months ended June 30, 1996 were generated
from 526 unit closings as compared to 592 unit closings during the same
period in 1995. The decrease in unit closings is due primarily to a
reduction in the number of townhomes closed in the Weston Community as
compared to 1995, as well as decreased closings at Sawgrass Country Club
which is expected to close-out in 1996. In addition, there were no units
closed at Broken Sound in 1996 as that Community closed-out in 1995.
Despite this closing variance, revenues for the six months ended June 30,
1996 were consistent with revenues for the same period in 1995 due to an
increase in the amount of revenues recognized under the percentage of
completion method at Arvida's Grand Bay, and closings of higher priced
products in the Partnership's Weston Community. In addition, the
Partnership generated more closings and revenues at its Water's Edge and
Dockside Communities in Atlanta due to the introduction of several new
housing products in 1995 which had their initial closings in 1996. The
decrease in housing revenues for the three months ended June 30, 1996 as
compared to the same period in 1995 is due to a decrease in the number of
units closed during the second quarter at Weston and the substantial close-
out of the Sawgrass Country Club Community.

The decrease in homesite revenues for the three and six months ended
June 30, 1996 as compared to the same periods in 1995 is due primarily to
fewer lot closings in the Partnership's Weston Community. This decrease is
due to the near close-out of several of the lower-priced products at Weston
as well as a slow down in sales of higher-priced products. Also
contributing to the decrease in homesite revenues for the three and six
month periods ended June 30, 1996 as compared to 1995 are reduced lot
closings in River Hills, Dockside and Sawgrass Country Club due to the
close-out of certain products within these Communities. The decrease in
the gross operating profit margin from homesite activities for the three
and six months ended June 30, 1996 as compared to the same period in 1995
is due to certain development adjustments made to cost of sales in 1995 to
reduce development cost estimates for certain projects which were nearing
completion.

The decrease in land and property revenues for the three and six
months ended June 30, 1996 as compared to the same periods in 1995 is due
to closings in 1995 of approximately 67 acres of undeveloped commercial
land parcels in Palm Beach Country, Florida, the sale of the Partnership's
cable operation in its Broken Sound Community and the sale of the Mizner
Place office building in Boca Raton, Florida. Revenues for 1995 also
include proceeds from the sale of equity club memberships, and the sale of
approximately 82 acres of undeveloped land located in Sarasota, Florida,
which was distributed to the Partnership by one of the joint ventures in
which the Partnership has an interest. Revenues for 1996 were generated
primarily from the sale for $12 million in March 1996 of the Partnership's
20% joint venture interest in Coto de Caza as well as the related
promissory note for advances previously made to the joint venture.
Revenues for 1996 also include proceeds from the sales of equity club
memberships and revenues generated from the closing of an approximate three
acre developed commercial parcel in Weston. The decrease in the gross
operating profit margin from land and property sales for the three and six
months ended June 30, 1996 as compared to the same periods in 1995 is due
to the lower cost basis of the sales generated in 1995.

The decrease in revenues from brokerage and other operations for the
three and six months ended June 30, 1996 as compared to the same periods in
1995 is due primarily to a lower volume of resale activity generated in
Palm Beach County, Florida, as well as a decrease in the number of builder
units closed within the Partnership's Communities.

The increase in operating properties revenues for the three and six
month periods ended June 30, 1996 as compared to the same periods in 1995
is due primarily to an increase in dues charged at the Partnership's Weston
Hills and River Hills Country Clubs. The increase also resulted from an
increase in the number of members at River Hills Country Club. These
favorable variances are partially offset by decreased revenues as a result
of the sale of the Mizner Place office building in May 1995, as well as the
May 1996 closing of a restaurant owned by the Partnership and located in
its Weston Community.

The decrease in selling, general and administrative expenses for the
three and six month periods ended June 30, 1996 is due primarily to
decreased insurance costs, legal fees and consulting fees. The favorable
variance is also the result of a reduction in marketing costs incurred at
the River Hills and Sawgrass Country Club Communities, as well as at
Arvida's Grand Bay.

The increase in interest income for the three and six month periods
ended June 30, 1996 as compared to the same periods in 1995 is due to an
increase in the average balances invested in interest bearing accounts
during 1996.

The decrease in equity in earnings of unconsolidated ventures for the
six months ended June 30, 1996 as compared to the same period in 1995
resulted from the Partnership recording its share of income generated from
a land sale by the commercial joint venture located in Ocala, Florida
during the first quarter of 1995. No land sales were generated by the
unconsolidated joint ventures in which the Partnership holds interests
during 1996.

Interest and real estate taxes decreased for the three and six month
periods ended June 30, 1996 as compared to the same periods in 1995 due
primarily to a reduction in real estate taxes incurred.

The Partnership adopted the Financial Accounting Standards Board's
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of", effective January 1, 1995. As a
result, an impairment loss of $2.2 million was recorded to the carrying
value of its Cullasaja Community located near Highlands, North Carolina.
This loss is reflected as the Cumulative effect due to change in accounting
for long-lived assets on the accompanying Consolidated Statements of
Operations.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Reference is made to the Commitments and Contingencies Section of
Notes for a detailed discussion regarding certain lawsuits which allegedly
in part arose out of or related to Hurricane Andrew, which on August 24,
1992 resulted in damage to a former community development known as Country
Walk.
0
On June 24, 1996, a lawsuit entitled Irvin Weiss v. Arvida/JMB
Managers, Inc., Neil G. Bluhm, Lehman Brothers Inc. and Arvida/JMB
Partners, L.P. ("Weiss action") was filed in the County Department,
Chancery Division of the Circuit Court of Cook County, Illinois. This
lawsuit is a purported class action lawsuit on behalf of Irvin Weiss and
all other holders of Interests to bar (i) the General Partner and Mr. Bluhm
from taking any action to chill tender offers from non-affiliates, (ii) the
officers, directors and shareholders of the defendants from participating
in any special committee on tender offers, (iii) Lehman Brothers Inc. from
advising any such special committee, and (iv) defendants and their
affiliates from making tender offers. The complaint alleges, inter alia,
that the General Partner and Mr. Bluhm breached their fiduciary duty owed
plaintiff and members of the purported class by chilling tender offers for
Interests by non-affiliates, failing to provide non-affiliated offerors
with information and stifling competition for such interests, and that
Lehman Brothers Inc. participated in such breaches of fiduciary duty by
colluding with them. In addition to seeking the relief described above,
plaintiff seeks such other and further relief as the Court may deem just
and proper and the award of attorneys' fees and costs. The General Partner
for itself and acting for the Partnership believes this action is
groundless and has no merit, and intends to vigorously defend this lawsuit.

On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, entitled Council of Villages, Inc.
et al v. Arvida/JMB Partners, Arvida/JMB Managers, Inc., Arvida/JMB
Partners, Ltd., Broken Sound Club, Inc., and Country Club Maintenance
Association, Inc. The multi-count lawsuit, as amended, is brought as a
class action, and individually, on behalf of various residents of the
Broken Sound Community, and alleges that defendants engaged in various acts
of misconduct in, among other things, the establishment, operation,
management and marketing of the Broken Sound golf course and recreational
facilities, as well as the alleged improper failure to turn over said
facilities to the Broken Sound homeowners on a timely basis. Plaintiffs
seek, through various theories, including but not limited to breach of
ordinance, fiduciary duty, fraud, and civil theft, damages in excess of $45
million, the appointment of a receiver for the Broken Sound Club, other
unspecified compensatory damages, the right to seek punitive damages,
treble damages, prejudgment interest, attorneys' fees and costs. The
Partnership believes that the lawsuit is without merit and intends to
vigorously defend itself in this matter.

Other than as described above, the Partnership is not subject to any
material pending legal proceedings, other than ordinary routine litigation
incidental to the business of the Partnership. However, reference is made
to Notes for a discussion of certain claims asserted by Merrill Lynch for
indemnification by the Partnership and the General Partner in connection
with claims for arbitration filed by certain investors of the Partnership.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

3.1. Amended and Restated Agreement of Limited Partnership.*

3.2. Assignment Agreement by and among the General Partner, the
Initial Limited Partner and the Partnership.*

4.1. Amended and Restated Credit Agreement dated October 7, 1992,
among Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast Florida
Holdings, Inc., Center Office Partners, Center Retail Partners, Center
Hotel Limited Partnership, Weston Hills Country Club Limited Partnership
and Chemical Bank and Nationsbank of Florida, N.A. is herein incorporated
by reference to Exhibit No. 4.4 to the Partnership's Report on Form 10-Q
(File number 0-16976) dated November 11, 1992.

4.2. Security Agreement dated as of October 7, 1992 made by
Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings,
Inc., Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership and Weston Hills Country Club Limited Partnership (as
"grantors") in favor of Chemical Bank and Nationsbank of Florida, N.A. (as
"lenders") is herein incorporated by reference to Exhibit No. 4.5 of the
Partnership's Report on Form 10-Q (File number 0-16976) dated November 11,
1992.

4.3. Pledge Agreement dated as of October 7, 1992 among Arvida/JMB
Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings, Inc.,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership and Weston Hills Country Club Limited Partnership (as
"pledgors") and Chemical Bank and Nationsbank of Florida, N.A. (as
"lenders") is herein incorporated by reference to Exhibit No. 4.6 of the
Partnership's Report on Form 10-Q (File number 0-16976) dated November 11,
1992.

4.4. Various mortgages and other security interests dated October
7, 1992 related to the assets of Arvida/JMB Partners, Center Office
Partners, Center Retail Partners, Center Hotel Limited Partnership, Weston
Hills Country Club Limited Partnership which secure loans under the Amended
and Restated Credit Agreement referred to in Exhibit 4.1 are herein
incorporated by reference to Exhibit No. 4.7 of the Partnership's Report on
Form 10-Q (File number 0-16976) dated November 11, 1992.

4.5. $24,000,000 Consolidated Revolving Promissory Note dated
January 14, 1994 by and between Arvida Grand Bay Limited Partnership-I,
Arvida Grand Bay Limited Partnership-II, Arvida Grand Bay Limited
Partnership-III, Arvida Grand Bay Limited Partnership-IV, Arvida Grand Bay
Limited Partnership-V, and Arvida Grand Bay Limited Partnership-VI and
Barnett Bank of Broward County, N.A. is herein incorporated by reference to
Exhibit 4.7 to the Partnership's report for December 31, 1993 on Form 10-K
(File No. 0-16976) dated March 25, 1994.

4.6. Amended and Restated Mortgage and Security Agreement dated
January 14, 1994 by and between Arvida Grand Bay Limited Partnership-I,
Arvida Grand Bay Limited Partnership-II, Arvida Grand Bay Limited
Partnership-III, Arvida Grand Bay Limited Partnership-IV, Arvida Grand Bay
Limited Partnership-V, Arvida Grand Bay Limited Partnership-VI and Arvida
Grand Bay Properties, Inc. and Barnett Bank of Broward County, N.A. is
herein incorporated by reference to Exhibit 4.8 to the Partnership's report
for December 31, 1993 on Form 10-K (File No. 0-16976) dated March 25, 1994.

4.7. Construction Loan Agreement dated January 14, 1994 by and
between Arvida Grand Bay Limited Partnership-I and Arvida Grand Bay
Properties, Inc. and Barnett Bank of Broward County, N.A. is herein
incorporated by reference to the Partnership's report for December 31, 1993
on Form 10-K (File No. 0-16976) dated March 25, 1994.

4.8. Second Amended and Restated Credit Agreement dated November
29, 1994, among Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast
Florida Holdings, Inc., Center Office Partners, Center Retail Partners,
Center Hotel Limited Partnership, Weston Hills Country Club Limited
Partnership and Chemical Bank and Nationsbank of Florida, N.A. ***

4.9. Affirmation and Amendment of Security Documents dated November
29, 1994, among Arvida/JMB Partners, Arvida/JMB Partners, L.P., Southeast
Florida Holdings, Inc., Center Office Partners, Center Retail Partners,
Center Hotel Limited Partnership, Weston Hills Country Club Limited
Partnership and Chemical Bank. ***

4.10. Modification of Mortgage and Security Agreement and Other loan
Documents dated November 29, 1994, among Arvida/JMB Partners, Weston Hills
Country Club Limited Partnership and Chemical Bank. ***

4.11. Modification of First Mortgage and Security Agreement and
Other Loan Documents dated November 29, 1994, among Arvida/JMB Partners,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership and Chemical Bank. ***

4.12. Credit Agreement extension dated July 28, 1995 made by
Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings,
Inc., Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership, Weston Hills Country Club Limited Partnership and Chemical
Bank is incorporated by reference to the Partnership's Report for June 30,
1995 on Form 10-Q (File No. 0-16976) dated August 9, 1995.

4.13. Letter Agreement dated January 17, 1996, among Arvida/JMB
Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings, Inc.,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership, Weston Hills Country Club Limited Partnership and Chemical
Bank and Nationsbank of Florida, N.A. regarding the release of a certain
parcel from the lender's lien is herein incorporated by reference to
Exhibit 4.15 to the Partnership's report for December 31, 1995 on Form 10-K
(File No. 0-16976) dated March 25, 1996.

4.14. Letter Agreement dated March 1, 1996 regarding the sale of the
Partnership's interest in the Coto de Caza Joint Venture and the extension
of the maturity date of the revolving line of credit facility and the
income property term loan is incorporated herein by reference to Exhibit
4.16 to the Partnership's report for December 31, 1995 on Form 10-K (File
No. 0-16976) dated March 25, 1996.

4.15. Letter Agreement dated March 29, 1996 among Arvida/JMB
Partners, Arvida/JMB Partners, L.P., Southeast Florida Holdings, Inc.,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership, Weston Hills Country Club Limited Partnership and Chemical
Bank and Nationsbank of Florida, N.A. regarding the distribution made to
the partners during March 1996 as well as the extension of the maturity
date of the revolving line of credit facility and the income property term
loan is incorporated herein by reference to Exhibit 4.15 to the
Partnership's report for March 31, 1996 on Form 10-Q (File No. 0-16976)
dated May 10, 1996.

10.1. Agreement between the Partnership and The Walt Disney Company
dated January 29, 1987 is hereby incorporated by reference to Exhibit 10.2
to the Partnership's Registration Statement on Form S-1 (File No. 33-14091)
under the Securities Act of 1933 filed on May 7, 1987.

10.2. Management, Advisory and Supervisory Agreement is hereby
incorporated by reference to Exhibit 10.2 to the Partnership's report for
December 31, 1990 on Form 10-K (File No. 0-16976) dated March 27, 1991.

10.3. Letter Agreement, dated as of September 10, 1987, between the
Partnership and The Walt Disney Company, together with exhibits and related
documents.**

10.4. Joint Venture Agreement dated as of September 10, 1987, of
Arvida/JMB Partners, a Florida general partnership. **

10.5. Credit facility restructuring proposal between the Partnership
and Chemical Bank dated March 5, 1992 is hereby incorporated by reference
to Exhibit 10.5 to the Partnership's report for December 31, 1991 on Form
10-K (File No. 0-16976) filed on March 27, 1992.

27. Financial Data Schedule

------------------------------

* Previously filed with the Securities and Exchange
Commission as Exhibits 3. and 4.0, respectively, to the Partnership's Form
10-K Report (File No. 0-16976) filed on March 27, 1990 and incorporated
herein by reference.

** Previously filed with the Securities and Exchange
Commission as Exhibits 10.4 and 10.5, respectively, to the Partnership's
Registration Statement (as amended) on Form S-1 (File No. 33-14091) under
the Securities Act of 1933 filed on September 11, 1987 and incorporated
herein by reference.

*** Previously filed with the Securities and Exchange
Commission as Exhibits 4.10, 4.11, 4.12 and 4.13, respectively, to the
Partnership's Form 10-K Report (File No. 0-16976) filed on March 27, 1995
and hereby incorporated herein by reference.

(b) The following report on Form 8-K was filed by the Partnership
since the beginning of the period covered by this report.

The Partnership's report dated June 26, 1996 describing
certain tender offers made by third parties for limited partnership
interests in the Partnership.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

ARVIDA/JMB PARTNERS, L.P.

BY: Arvida/JMB Managers, Inc.
(The General Partner)

By: GAILEN J. HULL
Gailen J. Hull, Vice President
Date: August 9, 1996

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.

GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: August 9, 1996

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996

<CASH> 27,436,108
<SECURITIES> 0
<RECEIVABLES> 22,753,959
<ALLOWANCES> 246,339
<INVENTORY> 202,482,610
<CURRENT-ASSETS> 0
<PP&E> 77,905,737
<DEPRECIATION> 0
<TOTAL-ASSETS> 350,198,589
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 233,674,349
<TOTAL-LIABILITY-AND-EQUITY> 350,198,589
<SALES> 152,640,781
<TOTAL-REVENUES> 152,640,781
<CGS> 129,603,597
<TOTAL-COSTS> 129,603,597
<OTHER-EXPENSES> 11,004,467
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 12,032,717
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,032,717
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,032,717
<EPS-PRIMARY> 25.85
<EPS-DILUTED> 25.85

</TABLE>