ARVIDA JMB PARTNERS L P, 10-K, 2000-03-30

ARVIDA JMB PARTNERS L P
10-K, 2000-03-30
OPERATIVE BUILDERS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the Fiscal Year
Ended December 31, 1999 Commission file no. 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 Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code 312/915-1987

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each Class which registered
- ------------------- ------------------------

None None

Securities registered pursuant to Section 12(g) of the Act:

LIMITED PARTNERSHIP INTERESTS
AND ASSIGNEE INTERESTS THEREIN
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ]

State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Not applicable.

Portions of the Prospectus of the registrant dated September 16, 1987 and
filed with the Commission pursuant to Rules 424(b) and 424(c) under the
Securities Act of 1933 are incorporated by reference in Part III of this
Annual Report on Form 10-K.

<PAGE>

TABLE OF CONTENTS

Page
----
PART I

Item 1. Business. . . . . . . . . . . . . . . . . . . . . 1

Item 2. Properties. . . . . . . . . . . . . . . . . . . . 5

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . 6

Item 4. Submission of Matters to a
Vote of Security Holders. . . . . . . . . . . . . 9

PART II

Item 5. Market for the Partnership's Limited
Partnership Interests and
Related Security Holder Matters . . . . . . . . . 10

Item 6. Selected Financial Data . . . . . . . . . . . . . 11

Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . 13

Item 7A. Quantitative and Qualitative
Disclosures About Market Risk . . . . . . . . . . 23

Item 8. Financial Statements and
Supplementary Data. . . . . . . . . . . . . . . . 24

Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure. . . . . . . . . . . . . . . 56

PART III

Item 10. Director and Executive Officers of
the Registrant. . . . . . . . . . . . . . . . . . 56

Item 11. Executive Compensation. . . . . . . . . . . . . . 59

Item 12. Security Ownership of Certain
Beneficial Owners and Management. . . . . . . . . 62

Item 13. Certain Relationships and
Related Transactions. . . . . . . . . . . . . . . 63

PART IV

Item 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K. . . . . . . . 64

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 70

<PAGE>

PART I

ITEM 1. BUSINESS

All references to "Notes" are to Notes to Consolidated Financial
Statements contained in this report.

The registrant, Arvida/JMB Partners, L.P. (the "Partnership"), is a
limited partnership formed in 1987 and currently governed under the Revised
Uniform Limited Partnership Act of the State of Delaware. The Partnership
was formed to own and develop substantially all of the assets of Arvida
Corporation (the "Seller"), a subsidiary of The Walt Disney Company, which
were acquired by the Partnership from the Seller on September 10, 1987. On
September 16, 1987, the Partnership commenced an offering to the public of
up to $400,000,000 in Limited Partnership Interests and assignee interests
therein ("Interests") pursuant to a Registration Statement on Form S-1
under the Securities Act of 1933 (No. 33-14091). A total of 400,000
Interests were sold to the public (at an offering price of $1,000 per
Interest before discounts) and the holders of 400,000 Interests were
admitted to the Partnership in October 1987. The offering terminated
October 31, 1987. In addition, a holder (an affiliate of the dealer-
manager of the public offering) of 4,000 Interests was admitted to the
Partnership in October 1987. Subsequent to admittance to the Partnership,
no holder of Interests (a "Holder" or "Holder of Interests") has made any
additional capital contribution. The Holders of Interests of the
Partnership generally share in their portion of the benefits of ownership
of the Partnership's real property investments and other assets according
to the number of Interests held.

Pursuant to the Partnership Agreement, the Partnership may continue in
existence until December 31, 2087; however, the General Partner was to
elect to pursue one of the following courses of action on or before
October 31, 1997: (i) to cause the Interests to be listed on a national
exchange or to be reported by the National Association of Securities
Dealers Automated Quotation System; (ii) to purchase, or cause JMB Realty
Corporation or its affiliates to purchase, all of the Interests at their
then appraised fair market value (as determined by an independent
nationally recognized investment banking firm or real estate advisory
company); or (iii) to commence a liquidation phase in which all of the
Partnership's remaining assets will be sold or disposed of by the end of
the fifteenth year from the termination of the offering. On October 23,
1997, the Board of Directors of the General Partner met and approved a
resolution selecting the option to commence an orderly liquidation of the
Partnership's remaining assets that is to be completed by October 2002.

The assets of the Partnership consist principally of interests in land
which is in the process of being developed into master-planned residential
communities (the "Communities") and, to a lesser extent, commercial
properties; accounts receivable; construction, brokerage and other support
businesses; real estate assets held for investment; certain club and
recreational facilities; and until October 1998, a cable television
business serving one of its Communities. The Partnership is principally
engaged in the development of comprehensively planned resort and primary
home Communities containing a diversified product mix designed for the
middle and upper income segments of the various markets in which the
Partnership operates. In addition, the Partnership, directly or through
certain subsidiaries, provides development and management services to the
homeowners associations within the Communities.

<PAGE>

are expected to be developed as retail and/or office properties. The Part-
nership also owns or manages certain club and recreational facilities
within certain of its Communities. Certain assets located in Florida were
acquired by the Partnership from the Seller by purchasing a 99.9% interest
in a joint venture partnership in which the General Partner acquired the
remaining joint venture partnership interest. In addition, other assets
are or were owned by various partnerships, the interests of which are held
by certain indirect subsidiaries of the Partnership and by the Partnership.

The Partnership, directly or through certain subsidiaries, also provides
development and management services to the homeowners associations within
the Communities. In addition, the Partnership sells individual residential
lots and parcels of partially developed and undeveloped land. The third-
party builders and developers to whom the Partnership sells homesites and
land parcels are generally smaller local builders who require project
specific financing for their developments and whose operations are more
susceptible to fluctuations in the availability and terms of financing.

Pursuant to a management agreement with the Partnership, through
December 31, 1997, Arvida Company ("Arvida"), an affiliate of the General
Partner, provided development and management supervisory and advisory
services and the personnel therefor to the Partnership for all of its
projects and operations, subject, in each case, to the overall control of
the General Partner on behalf of the Partnership. In November 1997, The
St. Joe Company, an unaffiliated third party, completed its acquisition of
a majority interest in St. Joe/Arvida Company, L.P. ("St. Joe/Arvida"),
which acquired the major assets of Arvida. In connection with this
transaction, Arvida entered into a sub-management agreement with St.
Joe/Arvida, effective January 1, 1998, whereby St. Joe/Arvida provides (and
is reimbursed for) a substantial portion of the development and management
supervisory and advisory services (and personnel with respect thereto) to
the Partnership that Arvida would otherwise provide pursuant to its
management agreement with the Partnership. Effective January 1, 1998, St.
Joe/Arvida employs most of the same personnel previously employed by
Arvida, and the services provided to the Partnership pursuant to the sub-
management agreement are provided by the same personnel. Affiliates of JMB
Realty Corporation own a minority interest in St. Joe/Arvida. The
transaction did not involve the sale of any assets of the Partnership, nor
the sale of the General Partner's interest in the Partnership.

The business of the Partnership is cyclical in nature and certain
aspects of the development of Community projects are to some degree
seasonal. The Partnership does not expect that such seasonality will have
a material impact on its business. A presentation of information about
industry segments, geographic regions or raw materials is not applicable
and would not be material to an understanding of the Partnership's business
taken as a whole.

The Communities are in various stages of development. The remaining
estimated build-out times for the Communities still under development range
from one to four years. Notwithstanding the estimated duration of the
remaining build-outs, the Partnership currently expects to complete an
orderly liquidation of its remaining assets by October 2002. The
Partnership generally follows the practice with respect to Communities of
(i) developing an overall master plan for the Community, (ii) creating a
unifying architectural theme that is consistent with the Community's master
plan, (iii) offering a variety of recreational facilities, (iv) imposing
architectural standards and other property restrictions on residents and
third-party developers, in order to enhance the long-term value of the
Community, (v) establishing property owners' associations to maintain
compliance with architectural, landscaping and other requirements and to
provide for ownership and maintenance of certain facilities, and/or (vi)
operating and controlling access to golf, tennis and other recreational
facilities.

<PAGE>

The Partnership's development approach, individually or by joint
venture, is intended to enhance the value of real estate in successive
phases. The first step in the development of a property has been to design
a Community master plan that addresses the appropriate land uses and
product mix, including residential, recreational and, where appropriate,
commercial and industrial uses. The Partnership then seeks to obtain the
necessary regulatory and environmental approvals for the development of the
Community in accordance with the master plan. This approval process has
been a major factor in determining the viability and prospects for
profitability of the Partnership's development projects.

In addition, prior to or contemporaneously with zoning approval, the
Partnership, if subject to the applicable filing requirements, has been
required to obtain "Development of Regional Impact" ("DRI") approval from
the applicable local governmental agency after review and recommendations
from the appropriate regional planning agency, with oversight by the
Florida State Department of Community Affairs. Receipt of DRI approval is
a prerequisite to obtaining zoning, platting, building permits or other
approvals required to begin development or construction. Obtaining such
approvals can involve substantial periods of time and expense and may
result in the loss of desired densities, and approvals may need to be
resubmitted if there is any subsequent deviation in current approved plans.

The process may also require committing land for public use and payment of
substantial impact fees. In addition, state laws generally provide further
that a parcel of land cannot be subdivided into distinct segments without
having a plat filed and finalized with the local or municipal authority,
which, in general, requires the approval of various local agencies, such as
environmental and public works departments. In addition, the Partnership
must secure the actual permits for development from applicable Federal
(e.g., the Army Corps of Engineers and/or the Environmental Protection
Agency with respect to coastal and wetlands developments, including
dredging of waterways) and state or local agencies, including construction,
dredging, grading, tree removal and water management and drainage district
permits. The Partnership may, in the process of obtaining such permits or
approvals for platting or construction activities, incur delays or
additional expenses; however, such permits and approvals are customarily
obtained in conjunction with the development process. Failure to obtain or
maintain necessary approvals, or rejection of submitted plans, would result
in an inability to develop the Community as originally planned and would
cause the Partnership to reformulate development plans for resubmission,
which might result in a failure to increase, or a loss of, market value of
the property. The foregoing discussion and the discussion which follows
are also generally applicable to the Partnership's commercial and
industrial developments.

Upon receipt of all approvals and permits required to be obtained by
the Partnership for a specific Community, other than actual approvals or
permits for final platting and/or construction activities, the Partnership
applies for the permits and other approvals necessary to undertake the
construction of infrastructure, including roads, water and sewer lines and
amenities such as lakes, clubhouses, golf courses, tennis courts and
swimming pools. These expenditures for infrastructure and amenities are
generally significant and are usually required early in the development of
a Community project, although the Partnership has attempted, to the extent
feasible, to develop Communities in a phased manner. See Note 11 for
further discussion regarding Tax Increment Financing Entities and their
involvement with infrastructure improvements.

Certain of the Florida Communities described below have applied for
and have been designated as Planned Unit Development ("PUD") by the local
zoning authority (usually the governing body of the municipality or the
county in which the Community is or will be located). Designation as a PUD
generally establishes permitted densities (i.e., the number of residential
units which may be constructed) with respect to the land covered thereby
and, upon receipt, enables the developer to proceed in an orderly, planned

<PAGE>

fashion. Generally, such PUD approvals permit flexibility between single-
unit and multi-unit products since the developer can plan Communities in
either fashion as long as permitted densities are not exceeded. As a
consequence, developments with PUD status are able to meet changing demand
patterns in housing through such flexibility. It should be noted that some
of the Communities, while not having received PUD approval, have obtained
the necessary zoning approvals to create a planned community development
with many of the benefits of PUD approval such as density shifting.

In developing the infrastructure and amenities of its Communities and
building its own housing products, the Partnership may function as a
general contractor although it may also from time to time hire firms for
general contracting work. The Partnership generally follows the practice
of hiring subcontractors, architects, engineers and other professionals on
a project-by-project basis rather than maintaining in-house capabilities,
principally to be able to select the subcontractors and consultants it
believes are most suitable for a particular development project and to
control fixed overhead costs. Although the General Partner does not expect
the Partnership to be faced with any significant material or labor
shortages, the construction industry in general has on occasion experienced
serious difficulties in obtaining certain construction materials and in
having available a sufficiently large and adequately trained work force.

The Partnership's strategy has included the ownership and development
of certain commercial and industrial property not located in a Partnership
Community. In addition, certain of the Partnership's Communities contained
acreage zoned for commercial use, although, except for the Weston
Community, such acreage was generally not substantial. On both of such
types of properties, the Partnership, individually or with a joint venture
partner, has built shopping centers, office buildings and other commercial
buildings or sold land to be so developed.

Certain of the Communities and operations are owned by the Partnership
jointly with third parties. Such investments by the Partnership are
generally in partnerships or ventures which own and operate a particular
property in which the Partnership or an affiliate (either alone or with an
affiliate of the General Partner) has an interest.

The principal assets in which interests have been acquired by the
Partnership are described in more detail under Item 2 below to which
reference is hereby made for a description of such assets.

The Partnership's real properties are subject to competition from
similar types of properties in the vicinities in which they are located,
including properties owned, advised or managed by affiliates of the General
Partner. The Partnership has no real estate assets located outside of the
United States.

In the opinion of the General Partner of the Partnership, all of the
investment properties held at December 31, 1999 are adequately insured.

The Partnership currently owns no patents, trademarks, licenses or
franchises other than those trademarks and tradenames in respect of the
names of certain of its Communities. The Arvida name and the service marks
with respect to the Arvida name were owned by Arvida, subject to the
Partnership's non-exclusive right to use the Arvida name and service marks
under a license agreement with Arvida (and subject to the non-exclusive
rights of certain third parties to the limited use of the name). As
discussed above, St. Joe/Arvida acquired the major assets of Arvida,
including the Arvida name and service marks with respect to the Arvida
name. In connection with the acquisition of Arvida's assets, St.
Joe/Arvida was assigned Arvida's rights and obligations under the license
agreement with the Partnership.

The Partnership has approximately 510 employees.

<PAGE>

The terms of transactions between the Partnership and the General
Partner and its affiliates are set forth in Items 10, 11, 12 and 13 filed
with this annual report to which reference is hereby made for a description
of such terms and transactions.

ITEM 2. PROPERTIES

The principal assets developed or managed by the Partnership,
currently or during the past five years, are described below. The acreage
amounts set forth herein are approximations of the gross acreage of the
Communities or other properties referred to or described and are not
necessarily indicative of the net developable acreage currently owned by
the Partnership or its joint ventures. All of the Partnership's properties
are subject to mortgages to secure the repayment of the Partnership's
indebtedness as discussed in detail in Note 7.

(a) Palm Beach County, Florida

The Partnership owned property in Broken Sound, a 970-acre Community
located in Boca Raton. The Community offered a wide range of residential
products built by the Partnership or third-party builders, all of which
were sold and closed as of December 31, 1995. However, the Partnership
still has equity memberships in the Broken Sound Club to sell.

(b) Broward County, Florida

The Partnership owns property in Weston, a 7,500-acre Community which
is in its mid-stage of development. The Community offers a complete range
of housing products built by the Partnership or third-party builders, as
well as tennis, swim and fitness facilities, two-18 hole golf courses and
an equestrian center. In addition, the Partnership owns commercial land,
portions of which are currently undeveloped, located in the Weston
Community. Reference is made to Note 11 for a discussion of the
Partnership's use of certain tax-exempt financing in connection with the
development of the Weston Community.

The Partnership owns property known as Arvida's Grand Bay on Longboat
Key, which is a barrier island on Florida's west coast, approximately four
miles from downtown Sarasota and seven miles from Sarasota/Bradenton
airport. The property consists of six condominium buildings, all of which
were sold and closed by January 2000. The Partnership also owns property
in a Community in the Tampa area known as River Hills Country Club, which
is a 1,200-acre Community in its late stage of development.

(d) Jacksonville, Florida

The Partnership owned property in two Communities in Ponte Vedra
Beach, Florida, twenty-five miles from downtown Jacksonville, known as
Sawgrass Country Club and The Players Club at Sawgrass. All units in these
Communities were sold and closed as of December 31, 1996. The Partnership
also owns property in a 730-acre Community known as the Jacksonville Golf &
Country Club which is nearing completion, with only builder units remaining
to be sold. The Partnership also has equity memberships in the
Jacksonville Golf and Country Club to sell.

(e) Atlanta, Georgia

The Partnership owns properties in the Atlanta, Georgia area known as
Water's Edge and Dockside. Water's Edge is in its mid-stage of
development. Reference is made to Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations for a discussion
of the Partnership's plan to sell the remaining assets in Water's Edge.
All of the units in the Partnership's Dockside Community were sold and
closed as of December 31, 1996.

<PAGE>

(f) Highlands, North Carolina

The Partnership owns a 600-acre Community near Highlands, North
Carolina known as The Cullasaja Club. The Community is in its mid-stage of
development. Reference is made to Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations for a discussion
regarding the sale of the remaining lots and equity memberships at
Cullasaja Club.

(g) Other

Through joint venture interests, the Partnership also owns commercial
property in Sarasota and Ocala Florida which is not located in its
residential Communities.

ITEM 3. LEGAL PROCEEDINGS

(A) 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 alleged 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 alleged assumption of Arvida Corporation's
liabilities in connection with the Partnership's purchase of Arvida
Corporation's assets from The Walt Disney Company ("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 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 $9.93 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

<PAGE>

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.

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 sought
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 was also named a defendant in this suit.
Plaintiffs also sought a declaratory judgment seeking to hold the
Partnership and other defendants responsible for amounts American Reliance
might pay in the future to its insured as additional damages beyond the
$10,873,000 previously paid. On or about December 20, 1999, the
Partnership settled this matter for approximately $2.4 million pursuant to
a settlement and release with American Reliance. The settlement was funded
by a payment of approximately $1.8 million from one of the Partnership's
insurance carriers and the use of approximately $606,000 in recoveries from
another Hurricane Andrew related action.

Currently, the Partnership is a defendant in one remaining insurance
subrogation matter. On or about May 10, 1996, a subrogation claim entitled
Juarez 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. 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 is advised that the amount of this claim that
allegedly relates to units it sold is approximately $350,000. The
Partnership is being defended by one of its insurance carriers. Due to the
uncertainty of the outcome of this subrogation action, the accompanying
consolidated financial statements do not reflect any accruals related to
this matter.

The Partnership has been named a defendant in a purported class action
entitled Lakes of the Meadow Village Homes, Condominium Nos. One, Two,
Three, Four, Five, Six, Seven, Eight and Nine Maintenance Associates, Inc.,
v. Arvida/JMB Partners, L.P. and Walt Disney World Company, Case No. 95-
23003-CA-08, filed in the Circuit Court of the 11th Judicial Circuit in and
for Dade County, Florida. The original complaint was filed on or about
November 27, 1995 and an amended complaint, which purports to be a class
action, was filed on or about February 28, 1997. In the case, plaintiffs
seek damages, attorney fees and costs on behalf of the 460 building units
they allegedly represent for, among other things, alleged damages
discovered in the course of making Hurricane Andrew repairs. Plaintiffs
allege that Walt Disney World Company is responsible for liabilities that
may arise in connection with approximately 80% of the buildings at the
Lakes of the Meadow Village Homes and that the Partnership is potentially
liable for the approximately 20% remaining amount of the buildings. In the
three count amended complaint, plaintiffs allege breach of buildings codes
and breach of implied warranties. In addition, plaintiffs seek rescission
and cancellation of various general releases obtained by the Partnership in
the course of the turnover of the community to the residents. Previously,
the trial court had granted the Partnership summary judgment against the
plaintiffs' claims, based on the releases obtained by the Partnership. The

<PAGE>

ruling was reversed on appeal, the appellate court finding that there were
issues of material fact, which precluded the entry of judgment for the
Partnership, and the case was remanded to the trial court for further
proceedings. On or about April 9, 1999, plaintiffs supplied a budget
estimate for repairs of the alleged defects and damages based on a limited
survey of nine buildings only. Based on this limited survey and assuming
that the same alleged defects and damages show up with the same frequency
in the entire 460 buildings, plaintiffs estimate the total repairs to cost
approximately $7.0 million. Based on the allegations of the amended
complaint, it would appear plaintiffs would seek to hold the Partnership
responsible for approximately $1.4 million of this amount. Discovery in
this litigation is in its early stages. The Partnership has not had an
opportunity to examine all of the buildings nor fully assess the alleged
merits of the plaintiffs' report. The Partnership is currently being
defended by counsel for one of its insurance carriers. The Partnership
intends to vigorously defend itself by, among other things, pursuing its
defenses of release and otherwise.

(B) 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 "Council of Villages case"). 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 said facilities to the Broken Sound homeowners on a
timely basis. Plaintiffs seek, through various theories, including but not
limited to breach of ordinances, breach of fiduciary duty, individual
counts for fraudulent inducement, 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.

This action has been consolidated with the Council of Villages case. The
Partnership believes the lawsuit is without merit and intends to vigorously
defend itself.

In April 1997, the Court issued an order certifying as a class action
claims respecting the alleged violation of the Boca Raton ordinances. Both
plaintiffs and defendants appealed the certification order. On appeal, the
appellate court approved certification of a class action for the following
counts: breach of ordinances, breach of fiduciary duty, civil theft
(treble damages), breach of a constructive trust and unjust enrichment.
Plaintiffs moved for an appointment of a receiver over the Club. The
Partnership moved to strike the motion and the Court granted the
Partnership's motion. The Partnership has filed a third-party complaint
for indemnification and contribution against Disney in these consolidated
actions in the event the Partnership is held liable for acts taken by a
subsidiary of Disney prior to the Partnership's involvement in the Club and
property.

<PAGE>

The parties to the Council of Villages case filed cross motions for
summary judgment and other motions on various issues related to the case.
On September 30, 1999, the Court granted the Partnership's motions for
summary judgment as they related to: civil theft (treble damages), all of
the individual counts for fraudulent inducement, and breach of the City of
Boca Raton ordinance regarding open space and PUD regulations of the City.
The Partnership's motion for summary judgment as to unjust enrichment has
been granted and denied in part. The Court granted the plaintiffs' motion
for summary judgment as to the breach of a city ordinance concerning impact
fees for parks and recreation purposes. The Court also allowed the
plaintiffs to amend their complaint to seek reimbursement from the
Partnership for legal fees and expenses paid by the Partnership's co-
defendants in this lawsuit. Currently, defendants' fees are being split
among the County Club Maintenance Association, Inc., Broken Sound Club,
Inc., and the Partnership. Approximately $3.5 million in legal fees and
expenses for the defendants have been incurred in the lawsuit as of
December 31, 1999.

By order dated March 14, 2000, the Court denied Disney's motion for
summary judgment regarding its obligation to indemnify, the Court finding
that there are issues of material fact regarding the circumstances under
which Disney must indemnify the Partnership. The Court granted the
Partnership's motion for summary judgment against Disney finding that
Disney is under a duty to defend the Partnership in this action. On
March 22, 2000, the Court issued an oral ruling denying plaintiffs' motion
to amend the complaint to obtain punitive damages. There are a number of
motions still pending before the Court. Among the other motions still
pending for written orders are the following: the Partnership's motion for
summary judgment regarding fiduciary duty; the Partnership's motion for
summary judgment regarding defendants' attorneys' fees; the Partnership's
motion directed to plaintiffs' attempt to obtain approximately $80 million
in damages; and plaintiffs' motion for rehearing, reconsideration or
clarification with respect to the Court's rulings on the Boca Raton
ordinance regarding open space, fraudulent inducement, and civil theft
(treble damages). The Council of Villages case is set for trial on
April 3, 2000 on all issues remaining after ruling on all pending matters.

There are a number of motions still pending before the Court. Among
the other motions still pending for written orders are the following: the
Partnership's motion for motion for summary judgment regarding fiduciary
duty; the Partnership's motion for summary judgment regarding defendants'
attorneys' fees; the Partnership's motion directed to plaintiffs' attempt
to obtain approximately $80 million in damages and plaintiffs' motion for
rehearing, reconsideration or clarification with respect to the Court's
rulings on the Boca Raton ordinance regarding open space, fraudulent
inducement, and civil theft (treble damages). The Council of Villages case
is set for trial on April 3, 2000 on all issues remaining after ruling on
all pending matters.

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.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during
1998 and 1999.

<PAGE>

PART II

ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS

As of December 31, 1999, there were 17,348 record Holders of the
404,000 Interests outstanding in the Partnership. There is no public
market for Interests, and it is not anticipated that a public market for
Interests will develop. Upon request, the General Partner may provide
information relating to a prospective transfer of Interests to an investor
desiring to transfer his Interests. The price to be paid for the
Interests, as well as any other economic aspects of the transaction, will
be subject to negotiation by the investor. However, there are restrictions
governing the transferability of these Interests as described in
"Transferability of Partnership Interests" on pages A-31 to A-33 of the
Partnership Agreement and limitations on the rights of assignees of Holders
of Interests as described in Sections 3 and 4 of the Assignment Agreement,
which are hereby incorporated by reference to Exhibit 99.1 to this report.

No transfer will be effective until the first day of the next succeeding
calendar quarter after the requisite transfer form satisfactory to the
General Partner has been received by the General Partner. The transferee
consequently will not be entitled to receive any cash distributions or any
allocable share of profits or losses for tax purposes until such next
succeeding calendar quarter. Profits or losses of the Partnership for a
calendar year in which a transfer occurs will, to the extent permitted by
law, be allocated between the transferor and the transferee based upon the
number of quarterly periods for which each was recognized as the Holder of
the Interests, without regard to the results of the Partnership's
operations during particular quarterly periods and without regard to
whether cash distributions were made to the transferor or transferee. Cash
distributions to a Holder of Interests will be distributed to the person
recognized as the Holder of the Interests as of the last day of the
quarterly period preceding the quarter in which such distribution is made.

Reference is made to Item 1. Business for a discussion of the election
made on October 23, 1997 by the General Partner with respect to commencing
an orderly liquidation of all of the Partnership's assets that is to be
completed by October 2002.

Reference is made to Item 6. Selected Financial Data for a discussion
of cash distributions made to the Holders of Interests. For a description
of the provisions of the Partnership Agreement relating to cash
distributions, see Note 13.

Reference is made to Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations for a discussion of
unsolicited tender offers from an unaffiliated third party.

<PAGE>

<TABLE>
ITEM 6. SELECTED FINANCIAL DATA

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

DECEMBER 31, 1999, 1998, 1997, 1996 AND 1995

(NOT COVERED BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REPORT)

Total revenues . . . . . . $373,650,257 351,125,675 355,904,056 342,813,269 382,267,482
============ ============ ============ ============ ============

Net operating
income. . . . . . . . . . $ 71,663,297 64,437,327 47,146,182 29,301,748 45,181,165
============ ============ ============ ============ ============
Equity in earnings
(losses) of uncon-
solidated ventures. . . . $ 1,083,804 335,893 211,217 (177,864) 1,050,994
============ ============ ============ ============ ============
Net income . . . . . . . . $ 73,998,442 65,862,245 46,558,308 28,011,424 41,836,686
============ ============ ============ ============ ============
Net income per
Interest (a). . . . . . . $ 147.73 148.02 105.30 67.47 101.91
============ ============ ============ ============ ============
Total assets (b) . . . . . $310,502,805 316,367,480 326,622,856 340,640,143 366,439,241
============ ============ ============ ============ ============
Total liabilities (b). . . $101,395,480 106,596,954 129,384,146 90,988,318 133,773,954
============ ============ ============ ============ ============
Cash distributions
per Interest (c). . . . . $ 175.08 125.06 235.04 25.85 13.49
============ ============ ============ ============ ============

The above selected consolidated financial data should be read in conjunction with the consolidated financial
statements and the related notes appearing elsewhere in this annual report.

<PAGE>

<FN>

(a) The net income per Interest is based upon the average number of
Interests outstanding during each period.

(b) The Partnership does not present a classified balance sheet as a
matter of industry practice, and as such, does not distinguish between
current and non-current assets and liabilities.

(c) Cash distributions from the Partnership are generally not
equivalent to Partnership income as determined for Federal income tax
purposes or as determined under generally accepted accounting principles.
Cash distributions to the Holders of Interests reflect distributions paid
during the calendar year, a portion of which represents a return of capital
for Federal income tax purposes. During February 2000, the Partnership
made a distribution for 1999 of $48,361,056 to its Holders of Interests
($119.71 per Interest). In addition, during 2000, distributions totaling
$18,864 (approximately $.05 per Interest) were deemed to be paid to the
Holders of Interest, all of which was remitted to North Carolina tax
authorities on their behalf for the 1999 non-resident withholding tax.
During February 1999, the Partnership made a distribution for 1998 of
$58,580,000 to its Holders of Interests ($145.00 per Interest). During
August 1999, the Partnership made a distribution of $12,120,000 to its
Holders of Interests ($30.00 per Interest). In addition, during 1999,
distributions totaling $30,645 (approximately $.08 per Interest) were
deemed to be paid to the Holders of Interests, all of which was remitted to
North Carolina tax authorities on their behalf for the 1998 non-resident
withholding tax. During February 1998, the Partnership made a distribution
for 1997 of $30,300,000 to its Holders of Interests ($75.00 per Interest).
During September 1998, the Partnership made a distribution of $20,200,000
to its Holders of Interests ($50.00 per Interest). In addition, during
1998, distributions totaling $22,705 (approximately $.06 per Interest) were
deemed to be paid to the Holders of Interests, all of which was remitted to
North Carolina tax authorities on their behalf for the 1997 non-resident
withholding tax. During February 1997, the Partnership made a distribution
for 1996 of $24,240,000 to its Holders of Interests ($60.00 per Interest).
During August 1997, the Partnership made a distribution of $70,700,000 to
its Holders of Interests ($175.00 per Interest). In addition, during 1997
distributions totaling $15,457 (approximately $.04 per Interest) were
deemed to be paid to the Holders of Interests, $15,372 of which was
remitted to North Carolina tax authorities on their behalf for the 1996
non-resident withholding tax. During March 1996, the Partnership made a
distribution for 1995 of $10,419,160 to its Holders of Interests ($25.79
per Interest). In addition, during 1996, the Partnership remitted each
Holder of Interests' share of a North Carolina non-resident withholding tax
on behalf of each Holder of Interests. Such payments, which totaled
$25,476 (approximately $.06 per Interest), were deemed distributions to the
Holders of Interests. During February 1995, the Partnership made a
distribution for 1994 of $5,421,680 to its Holders of Interests ($13.42 per
Interest). In addition, during the first quarter of 1995, the Partnership
remitted each Holder of Interests' share of a North Carolina non-resident
withholding tax on behalf of each Holder of Interests. Such payment, which
totaled $26,784 ($.07 per Interest), was deemed a distribution to the
Holders of Interests.

</TABLE>

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

Pursuant to Section 5.5 J of the Partnership Agreement, on October 23,
1997, the Board of Directors of the General Partner met and approved a
resolution selecting the option set forth in Section 5.5 J(i)(c) of the
Partnership Agreement for the Partnership to commence an orderly
liquidation of its remaining assets that is to be completed by October
2002.

At December 31, 1999 and 1998, the Partnership had unrestricted cash
and cash equivalents of approximately $71,965,000 and $82,104,000,
respectively. Cash and cash equivalents were available for future debt
service, working capital requirements and distributions to partners. The
source of both short-term and long-term future liquidity is expected to be
derived primarily from the sale of housing units, homesites and land
parcels, and through the Partnership's credit facility or other financing,
which is discussed below.

The Partnership was able to generate significant cash flow before debt
service during each of the five years ended December 31, 1999. The
Partnership utilized this cash flow to make scheduled and additional
principal repayments on its previous and existing credit facilities, make
distributions to its partners and Holders of Interests, and to increase its
cash reserves. During February 2000, the Partnership made a distribution
for 1999 of $48,361,056 to its Holders of Interests ($119.71 per Interest)
and $13,638,944 to its General Partner and Associate Limited Partners,
collectively. In addition, during 2000, distributions totaling $18,864
(approximately $.05 per Interest) were deemed to be paid to the Holders of
Interest, all of which was remitted to North Carolina tax authorities on
their behalf for the 1999 non-resident withholding tax. During August
1999, the Partnership made a distribution for 1999 of $12,120,000 to its
Holders of Interests ($30.00 per Interest) and $673,326 to its General
Partner and Associate Limited Partners, collectively. In addition, during
1999, distributions totaling $30,645 (approximately $.08 per Interest) were
deemed to be paid to the Holders of Interests, all of which was remitted to
North Carolina tax authorities on their behalf for the 1998 non-resident
withholding tax. Distributions totaling $3,265 were also paid or deemed to
be paid during 1999 to the General Partner and Associate Limited Partners,
collectively, all of which was also remitted to the North Carolina tax
authorities on their behalf. During March 1999, the Partnership made a
distribution for 1998 of $58,580,000 to its Holders of Interests ($145.00
per Interest) and $3,254,407 to its General Partner and Associate Limited
Partners, collectively. During September 1998, the Partnership made a
distribution of $20,200,000 to its Holders of Interest ($50.00 per
Interest) and $1,122,209 to its General Partner and Associate Limited
Partners, collectively. During February 1998, the Partnership made a
distribution for 1997 of $30,300,000 to its Holders of Interests ($75.00
per Interest) and $1,683,314 to the General Partner and Associate Limited
Partners, collectively. In addition, during 1998, distributions totaling
$22,705 (approximately $.06 per Interest) were deemed to be paid to the
Holders of Interests, all of which was remitted to North Carolina tax
authorities on their behalf for the 1997 non-resident withholding tax.
Distributions totaling $2,201 were also paid or deemed to be paid during
1998 to the General Partner and Associate Limited Partners, collectively,
all of which was also remitted to the North Carolina tax authorities on
their behalf.

In accordance with the Partnership Agreement, until the Holders of
Interests received aggregate distributions equal to their Capital
Investments (i.e., $1,000 per Interest) the General Partner and Associate
Limited Partners deferred a portion of their distributions of net cash flow
from the Partnership totaling approximately $12,541,000 through
December 31, 1999. With the distribution made in February 2000, Holders of
Interests have received aggregate distributions in excess of their Capital
Investments. In addition, in connection with the settlement of certain
litigation, the General Partner and the Associate Limited Partners deferred

<PAGE>

approximately $1,259,000 of their share of the August 1997 distribution
which was otherwise distributable to them, and such deferred distribution
amount was used by the Partnership to pay a portion of the legal fees and
expenses in such litigation. The General Partner and Associate Limited
Partners were entitled to receive such deferred amount after the Holders of
Interests received a specified amount of distributions from the Partnership
after July 1, 1996, the remaining amount of which was received by the
Holders of Interest as part of their distribution in February 2000. The
distribution made in February 2000 to the General Partner and Associate
Limited Partners included the $1,259,000 amount of their August 1997
distribution that was previously deferred as well as $6,305,844 of the
approximately $12,541,500 of net cash flow distributions to the General
Partner and Associate Limited Partners previously deferred pursuant to the
terms of the Partnership Agreement. Pursuant to the terms of the
Partnership Agreement, the remaining deferred distributions payable to the
General Partner and Associate Limited Partners totaling $6,235,656 will be
paid to them out of one-half of net cash flow otherwise distributable to
the Holders of Interest until all such deferred amounts have been paid.

The Partnership's previous revolving line of credit, income property
term loan and letter of credit agreement matured in July 1997. On July 31,
1997, the Partnership obtained a new credit facility from certain banks,
with Barnett Bank, N.A. ("Barnett") being the primary agent on the
facility. The credit facility consists of a $75 million term loan, a $20
million revolving line of credit and a $5 million letter of credit facility
and matures on July 31, 2001. The term loan has annual scheduled principal
repayments of $12.5 million, as well as additional annual principal
repayments based upon a specified percentage or amount of the Partnership's
available cash. The maximum required principal repayments, including the
scheduled repayments, generally will not exceed $18.75 million per annum.
The remaining outstanding balance on the new facility is due upon maturity.

Prior to September 1, 1998, interest on the facility was based, at the
Partnership's option, on the relevant LIBOR plus 2.25% per annum or
Barnett's prime rate. Loan origination fees totaling 1% of the total
facility were paid by the Partnership upon the closing of the loan. Such
fees have been capitalized and are being amortized to interest expense over
the life of the loan. The term loan, revolving line of credit and letter
of credit facility are secured by recorded mortgages on the real property
of the Partnership (including certain of its consolidated ventures) and
pledges of certain other assets. The credit facility also requires that
certain financial covenants such as loan-to-value, net worth and debt
ratios be maintained throughout the loan term. All of the loans under this
facility are cross-collateralized and cross-defaulted.

In exchange for a rate reduction of 50 basis points on its credit
facility, the Partnership made a $7.25 million prepayment on the term loan
in August 1998. As a result of this transaction, interest on the credit
facility is now based, at the Partnership's option, on the relevant LIBOR
plus 1.75% per annum or the lender's prime rate (8.5% at December 31,
1999). In November 1998, the Partnership prepaid $7,333,333 of the $12.5
million principal repayment on the term loan scheduled for July 1999. In
June 1999, the Partnership paid the remaining $4,166,667 of the $12.5
million repayment scheduled for July 1999, prepaid the additional
$6,250,000 principal repayment due in February 2000, and prepaid $3,750,000
of the $12.5 million principal repayment scheduled for July 2000. The
remaining $8,750,000 of the $12.5 million July 2000 repayment was prepaid
in March 2000. As of the date of this filing, the balances outstanding on
the term loan, the revolving line of credit and the letter of credit
facility were approximately $18,750,000, $0 and $670,700, respectively.
The Partnership has interest rate swap agreements that are in effect with
respect to the $27.5 million outstanding under the term loan at
December 31, 1999. The interest rate swap agreements fix the interest
rates under the term loan at 8.02% and 7.84% with respect to $16,666,667
and $10,833,333 of the term loan, respectively, and amortize in conjunction
with the scheduled loan repayments. These agreements expire on July 31,
2001. For the year ended December 31, 1999, the combined effective
interest rate for the Partnership's credit facilities, including the
amortization of loan origination fees and the effect of the interest rate
swap agreements was approximately 9.2% per annum.

<PAGE>

Due to the replacement of the Partnership's previous letter of credit
facility by the new credit facility in July 1997, the Partnership was
required to post approximately $4.2 million cash as collateral with its
previous lender for letters of credit which continue to be obligations of
that lender. Such letters of credit are expected to be replaced by either
letters of credit issued under the new facility or by bonds. Once the
letters of credit are replaced, the cash collateral will be released to the
Partnership. As of December 31, 1999, approximately $1.9 million of such
cash collateral had been released to the Partnership, leaving a balance
outstanding under this previous letter of credit facility of approximately
$2.3 million.

Effective September 1, 1998, First Union National Bank became the
successor agent on the credit facility replacing Barnett as the primary
agent by paying off the outstanding principal balances as of August 31,
1998 owed to Barnett and one of the other lenders on the facility. In
connection with this transaction, the Partnership paid all interest accrued
on the facility through August 31, 1998, as well as certain fees and
closing costs. With the exception of the interest rate reduction discussed
above, all of the terms of the original loan agreement remain the same.

In January 2000, the Partnership received a commitment letter from
First Union National Bank for a $20 million loan for the development and
construction of The Shoppes of Town Center in Weston, a mixed use
retail/office plaza consisting of approximately 148,000 net leaseable
square feet. Interest on the loan will be payable monthly based on the
relevant LIBOR rate plus 180 basis points per annum during the first year
of the loan. Thereafter, subject to the satisfaction of certain
conditions, the loan will be extended for two years and payments of
principal and interest will be due on the loan based upon a 25 year loan
amortization schedule. The loan will be payable in full on the third
anniversary from the date of closing, which is expected to occur in the
second quarter of 2000.

On March 6, 2000, the Partnership entered into a contract with an
unaffiliated third party builder for the bulk sale of the remaining lot
inventory, consisting of approximately 103 developed and undeveloped lots,
and the sales center at its Water's Edge Community for a sale price of
approximately $3.2 million. The contract provides for the lots to be
purchased in three phases, with the final phase expected to close prior to
the end of 2000. The lots which are not currently developed are to be
developed by the Partnership prior to the scheduled lot closings. The
closing of the first phase of 29 lots was completed in March 2000 for
approximately $0.7 million. Any remaining Partnership built housing
inventory in Water's Edge is expected to be completed and sold to third
party individuals prior to the end of 2000. The Partnership's plan to sell
the remaining assets at Water's Edge under this scenario results in more
cash flow when compared with selling the assets over time, due to an
overall reduction of overhead costs which would have been incurred by the
Partnership.

In March 2000, the Partnership closed on the sale of the remaining
lots at its Cullasaja Club Community, as well as its remaining equity
memberships in the Cullasaja Club (the "Club"), to the Cullasaja Club, Inc.
and Cullasaja Realty Development, Inc., for a total sales price of
approximately $3.0 million. In conjunction with this closing, control of
the Club was transferred to the Club members. As a result, effective
March 15, 2000, the Partnership is no longer involved in the ownership of
the Club and has no further obligation to fund the Club's operations. The
Partnership will, however, continue to provide accounting and certain other
management services to the Club for a period of approximately eight months
pursuant to the terms of the purchase agreement for an agreed upon fee plus
direct out of pocket expenses.

Construction of the final building at Arvida's Grand Bay commenced in
1998 and was completed in December 1999. In February 1999, the Partnership
closed on a line of credit with a borrowing capacity of $23,150,000 to fund
its construction, if necessary. However, construction of this building was

<PAGE>

funded with cash generated by the Partnership's operations, and the
Partnership obtained a release of the mortgage in lieu of the loan.

In May 1999, the Partnership entered into an agreement with Disney
which resolved all the claims and counterclaims raised in the Disney
litigation as discussed in Part I, Item 3. Legal Proceedings. Under the
terms of the settlement agreement, Disney, among other things, paid the
Partnership $9.0 million and released any claims relating to the claims
pool. The lawsuit was dismissed on June 3, 1999, pursuant to the terms of
the settlement agreement.

In June 1999, the Partnership closed on the sale of its resale
brokerage operations in Weston, Sawgrass and Boca Raton, Florida to an
affiliate of The St. Joe Company for a sale price of $3.2 million. The
Partnership still retains limited commercial brokerage as well as new home
sale brokerage operations. During 1999, the Partnership also closed on the
sale of several one story commercial office buildings in Weston to
unaffiliated third party purchasers for a total sales price of
approximately $2.5 million, the country club in its River Hills community
in Tampa, Florida to an unaffiliated third party purchaser for a sales
price of approximately $7.5 million, as well as its 50% interest in the
Arvida Corporate Park Associates Joint Venture to its venture partner for a
sales price of $3.7 million. All of these sales generated a profit for
financial reporting and Federal income tax purposes.

In October 1997, the Partnership closed on the sale of its mixed-use
center in Boca Raton known as Parkway Center for a sales price of $38.5
million. Parkway Center consists of approximately 258,000 square feet of
space in a mix of offices, retail shops, and a Radisson Suites Hotel. The
Partnership also closed on the sales of its Cabana Club located within its
Sawgrass Community for a sale price of $3.5 million and its two retail
shopping centers located in Weston for a combined sales price of $26.3
million in November 1997 and December 1997, respectively. All of these
sales were made to unaffiliated third parties and generated profits for
financial reporting and Federal income tax purposes.

In January 1998, the Partnership sold its approximate 33% interest in
the H.A.E. Joint Venture to one of its joint venture partners for a sale
price of approximately $1.7 million. In May 1998, the Partnership sold its
remaining Sawgrass Country Club memberships to the Sawgrass Country Club,
Inc. for a total sales price of approximately $2.4 million. In October
1998, the Partnership closed on the sale of its cable operation in Weston
for a sale price of $31.2 million to an unaffiliated third party. All of
these sales generated profits for financial reporting and Federal income
tax purposes.

All of the above mentioned sales are reflected in Land and property
revenues and cost of revenues on the accompanying consolidated statements
of operations for the years ended December 31, 1997, 1998 and 1999.
Reference is made to Results of Operations below for a further discussion
of land and property transactions.

In April 1998, control of the Jacksonville Golf & Country Club
("JG&CC") was turned over to the club's members. As a result, effective
April 1, 1998, the Partnership no longer has any involvement in the
ownership or management of JG&CC and has no further responsibility to fund
JG&CC's operations. In addition, all outstanding balances owed between the
Partnership and JG&CC were settled, resulting in an approximate $19,800 net
payment to JG&CC upon the turnover of the club to its members. However,
the Partnership still has equity memberships in JG&CC to sell.

<PAGE>

the General Partner on behalf of the Partnership. In November 1997, The
St. Joe Company ("St. Joe"), an unaffiliated third party, completed its
acquisition of a majority interest in St. Joe/Arvida Company, L.P. ("St.
Joe/Arvida"), which acquired the major assets of Arvida. In connection
with this transaction, Arvida entered into a sub-management agreement with
St. Joe/Arvida, effective January 1, 1998, whereby St. Joe/Arvida provides
(and is reimbursed for) a substantial portion of the development and
management supervisory and advisory services (and personnel with respect
thereto) to the Partnership that Arvida would otherwise provide pursuant to
its management agreement with the Partnership. Effective January 1, 1998,
St. Joe/Arvida employs most of the same personnel previously employed by
Arvida, and the services provided to the Partnership pursuant to this sub-
management agreement are provided by the same personnel. Affiliates of JMB
Realty Corporation own a minority interest in St. Joe/Arvida. The
transaction did not involve the sale of any assets of the Partnership, nor
the sale of the General Partner's interest in the Partnership.

The General Partner has established a special committee (the "Special
Committee") consisting of certain directors of the General Partner to
review and respond to unsolicited tender offers for Interests. During each
of February, June and September 1999 First Commercial Guarantee ("FCG")
commenced an offer to acquire between approximately 19,600 (approximately
4.9%) and 16,500 (approximately 4.1%) of the outstanding Interests. The
February 1999 offer had a purchase price of $300 per Interest (which was to
be reduced by the $145 per Interest distribution made in March 1999 for an
adjusted offer price of $155 per Interest), and the June 1999 offer had a
purchase price of $200 per Interest. In regards to these offers by FCG,
the Special Committee determined that with respect to the Holders of
Interests who had the expectation of retaining their Interests though an
anticipated orderly liquidation of the Partnership's assets by October 2002
and who had no current or anticipated need for liquidity, each such offer
was inadequate and not in the best interests of such Holders of Interests.
Accordingly, the Special Committee recommended that such Holders of
Interest reject each such offer and not tender their Interests pursuant to
either such offer. With respect to all other Holders of Interests, the
Special Committee expressed no opinion and remained neutral in regard to
each such offer. In regard to the September 1999 offer, which had a
purchase price of $200 per Interest that was reduced by the $30 per
Interest distribution made in August 1999 for an adjusted offer price of
$170 per Interest, the Special Committee determined that such offer was
inadequate and not in the best interests of the Holders of Interests.
Accordingly, the Special Committee recommended that all Holders of Interest
reject such offer and not tender their Interests pursuant to such offer.

In February 2000, FCG made another offer for up to approximately
16,300 (approximately 4.0%) of the outstanding Interests for a purchase
price of $350 per Interest, which was to be reduced by the $119.70 per
Interest distribution made in February 2000 for an adjusted offer price of
$230.30 per Interest. This offer expired in March 2000. The Special
Committee determined that this offer was inadequate and not in the best
interests of the Holders of Interests. Accordingly, the Special Committee
recommended that Holders of Interests reject this offer and not tender
their Interests pursuant to the offer.

The year 2000 issue is the result of computer programs being written
using two digits rather than four to define a year. Consequently, any
computer programs that have time-sensitive software may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations
including, among other things, a temporary inability to process
transactions or engage in other normal business activities. To be year
2000 compliant, a computer system must be able to do two things. First, it

<PAGE>

must be capable of storing date-related information in a format that can
discern between the 20th and 21st centuries. Secondly, all computer
programs which access the stored information must be able to sort, collate,
and perform calculations properly on information that involves the 20th and
21st centuries. In addition to computer programs, other date-sensitive
electronic devices including, but not limited to, copy machines,
thermostats, elevators, telephones and security systems could experience
various operational difficulties as a result of not being year 2000
compliant.

The Partnership organized a year 2000 project team to review and
prepare its computer systems for year 2000 compliancy. In 1997, this team
completed an internal assessment of its information systems technology and
determined a need to upgrade portions of the Partnership's hardware and
software so that its computer systems would function properly with respect
to dates in the year 2000 and thereafter. An upgrade to the Partnerships's
financial systems was initiated in October 1997 and completed in May 1998
at an approximate cost of $110,000. During the second quarter of 1999 the
Partnership completed its upgrade of its internally developed software
packages at an approximate cost of $75,000, and in the third quarter of
1999, the upgrade to the Partnership's hardware networks was completed at
an approximate cost of $200,000. These amounts do not include employee
costs or reimbursements to St. Joe/Arvida for related management,
supervisory or advisory costs since the Partnership does not separately
identify such costs for year 2000 purposes.

The Partnership also conducted an inventory of its non-information
technology systems such as, but not limited to, alarms, security gates and
phone systems and requested information from the various vendors of those
systems to determine their year 2000 compliance. In addition, the
Partnership sent a questionnaire to all of its vendors deemed key to the
success of the Partnership's operations. Although not all vendors
responded to the questionnaire, the vendors who did respond did not
indicate any material adverse effects on their operations due to the year
2000-related issues.

The Partnership has not experienced any significant interruptions of
its operations due to year 2000-related issues, nor does it anticipate any
significant Year 2000 related issues in the future. In addition, since
January 1, 2000, the Partnership has not been required to undertake any
significant remediation efforts or incur any significant remediation costs
to address year 2000-related issues.

RESULTS OF OPERATIONS

The results of operations for the years ended December 31, 1999, 1998
and 1997 are primarily attributable to the development and sale or
operation of the Partnership's assets. See Note 1 for a discussion
regarding the recognition of profit from sales of real estate.

For the year ended December 31, 1999, the Partnership (including its
consolidated ventures and its unconsolidated ventures accounted for under
the equity method) closed on the sale of 1,348 housing units, 122
homesites, approximately 53 acres of developed land tracts, as well as the
sale of the Partnership's resale brokerage operations in Weston, Sawgrass
and Boca Raton, Florida, the sale of several one story commercial office
buildings in Weston, the sale of the country club in the River Hills
Community, and its 50% interest in the Arvida Corporate Park Associates
Joint Venture. This compares to closings in 1998 of 1,086 housing units,
137 homesites, approximately 78 acres of developed and undeveloped
residential or commercial/industrial land tracts, as well as the remaining
Sawgrass Country Club memberships owned by the Partnership, its cable
operation in Weston, and the Partnership's approximate 33% interest in the
H.A.E. Joint Venture. Closings in 1997 were for 1,104 housing units, 282
homesites, approximately six acres of developed and undeveloped residential

<PAGE>

or commercial/industrial land tracts, its mixed-use center in Boca Raton,
Florida known as Parkway Center, the Cabana Club, and two retail shopping
centers located in Weston. Outstanding contracts ("backlog"), as of
December 31, 1999 were for 850 housing units, 30 homesites and
approximately 2 acres of developed and undeveloped land tracts. This
compares to a backlog as of December 31, 1998 of 756 housing units, 14
homesites and approximately 26 acres of developed and undeveloped land
tracts. The backlog as of December 31, 1997 was for 550 housing units, 37
homesites and approximately 57 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 four years.
Notwithstanding the estimated duration of the build-outs, the Partnership
currently expects to complete an orderly liquidation of its remaining
assets by October 2002. The Weston Community, located in Broward County,
Florida, is the Partnership's largest Community and is in its mid-stage of
development. Also in its mid-stages of development are the Water's Edge
Community in Atlanta, Georgia and The Cullasaja Club, near Highlands, North
Carolina. As discussed above, in March 2000, the remaining lots and equity
club memberships at the Cullasaja Club were sold and the Partnership
entered into a contract for the sale of the remaining lots and the sales
center at the Waters Edge Community. The Partnership's condominium project
on Longboat Key, Florida known as Arvida's Grand Bay was completed in 1999,
and all units were sold and closed by January 2000. The Jacksonville Golf
& Country Club and the River Hills Country Club Communities in Florida are
in their late stages of development. Only builder units and equity
memberships remain to be sold at Jacksonville Golf & Country Club at
December 31, 1999. All of the remaining units in the Partnership's
Sawgrass Country Club, The Players Club at Sawgrass and Dockside
Communities in Jacksonville, Florida and Atlanta, Georgia were sold and
closed as of December 31, 1996. In addition, the Broken Sound Community,
located in Boca Raton, Florida, had its final closings in 1995; however,
the Partnership still has equity memberships in the Broken Sound Club to
sell. Future revenues will be impacted to the extent there are lower
levels of inventories available for sale as the Partnership's remaining
Communities are sold or undertake their final phases.

Revenues from housing and homesite activities are recognized upon the
closing of homes built by the Partnership and developed lots, respectively,
within the Partnership's Communities. Historically, a substantial portion
of the Partnership's housing revenues during the first six months of a
given year are generated from the closing of units contracted in the prior
year. Land and property revenues are generated from the closing of
developed and undeveloped residential and/or commercial land tracts, the
sale of operating properties, as well as gross revenues earned from the
sale of equity memberships in the clubs within the Partnership's Boca Raton
and Jacksonville, Florida Communities, and its Community near Highlands,
North Carolina.

Cost of revenues pertaining to the Partnership's housing sales reflect
the cost of the acquired assets as well as development and construction
expenditures, certain capitalized overhead costs, capitalized interest,
real estate taxes and marketing, as well as disposition costs. The costs
related to the Partnership's homesite sales reflect the cost of the
acquired assets, related development expenditures, certain capitalized
overhead costs, capitalized interest and real estate taxes, as well as
disposition costs. Land and property costs reflect the cost of the
acquired assets, certain development and construction costs and related
disposition costs, as well as the cost associated with the sale of equity
memberships.

<PAGE>

Housing revenues increased for 1999 as compared to 1998 due primarily
to an increase in the number of units closed as well as a change in the mix
of product closed at the Partnership's Weston Community. Revenues
generated from the closings of units in Weston account for approximately
79%, 69% and 77% of the housing revenues recognized for the years ended
December 31, 1999, 1998 and 1997, respectively. In addition, revenues
recognized under the percentage-of-completion method for the final building
at Arvida's Grand Bay also contributed to the increase in housing revenues
for 1999 as compared to 1998. These favorable variances were partially
offset by the close out of the remaining units at the Jacksonville Golf &
Country Club in the fourth quarter of 1998.

In October 1998, construction was completed on one of the two then
remaining buildings at Arvida's Grand Bay. Substantial revenues recognized
from closings of these units during 1998 are the primary cause for the
increase in housing revenues as compared to 1997. Revenues also increased
at the Partnership's Weston Community despite decreased closings as
compared to 1997 due to a variance in the mix of product closed as certain
higher priced units first offered for sale in 1997 had their initial
closings in 1998. In addition, revenues increased at Water's Edge due to
an increase in closings at that community. These favorable variances were
partially offset by decreased revenues at Jacksonville Golf & Country Club
due to the close out of the remaining units in the fourth quarter of 1998.

The Partnership's current plan for the Weston Community includes an
increase in its home building operations which results in a reduced number
of lots available for sale to third-party builders. This is the primary
cause for the decrease in homesite revenues for 1999 as compared to 1998
and 1997. This unfavorable variance was partially offset by an increase in
the number of lots closed in River Hills resulting in increased revenues
contributed by this Community in 1999 as compared to 1998.

Land and property revenues for 1999 were generated primarily from the
sale of the Partnership's country club in River Hills, its 50% interest in
the Arvida Corporate Park Joint Venture to its venture partner, several
one-story commercial office buildings in Weston, the Partnership's resale
brokerage operations in Weston, Sawgrass and Boca Raton, Florida to an
affiliate of The St. Joe Company, and approximately 22 acres of developed
commercial property in Weston. This compares to closings in 1998 of the
Partnership's cable operation in Weston, approximately 29 acres of
undeveloped commercial property owned by the Metrodrama Joint Venture, the
sale of the Partnership's remaining Sawgrass Country Club memberships,
approximately 24 acres of developed residential land in Weston, and the
sale of the Partnership's approximate 33% interest in the H.A.E. Joint
Venture to one of its venture partners. Revenues for 1997 were generated
from closings of the Partnership's mixed-use center in Boca Raton, Florida
(consisting of retail shops, an office building, and a hotel), the Cabana
Club in Jacksonville, the Partnership's two retail shopping centers in
Weston, and approximately six acres of developed and undeveloped land
tracts.

Operating properties represents activity from the Partnership's club
and hotel operations, commercial properties and certain other operating
assets. The decrease in revenues and related costs of revenues from
operating properties for 1999 as compared to 1998 is due primarily to the
sale of the Partnership's cable operations in Weston in the fourth quarter
of 1998, as well as the August 1999 sale of the River Hills Country Club.
The decrease in revenues for 1998 as compared to 1997 is due primarily to
the closings of the Partnership's mixed-use center in Boca Raton, Florida,
the Cabana Club in Jacksonville and the two retail shopping centers in
Weston during 1997. These properties contributed to the higher gross
operating profit recognized in previous years, and the sale of these
properties is the primary cause for the decrease in gross operating profit
margins in 1998 as compared to 1997.

<PAGE>

Brokerage and other operations represent activity from the sale of
unaffiliated third-party builders' homes within the Partnership's
communities, activity from resale of real estate inside and outside the
Partnership's communities, proceeds from the Partnership's property
management activities, and fees earned from various management agreements
with joint ventures. Revenues from brokerage and other operations
decreased in 1999 as compared to 1998 primarily due to the sale of the
Partnership's resale brokerage operations in June 1999 as mentioned above,
as well as a decrease in new home sale brokerage commissions earned in
Weston resulting from a decrease in the number of units closed by third
party builders within the Community. Revenues increased in 1998 as
compared to 1997 due primarily to increased commissions generated by the
Partnership's resale operations in Weston, Boca Raton, Jacksonville and
Atlanta. Also contributing to the increase in revenues was the receipt of
property management fees in 1998 that had been reserved in prior years due
to the uncertainty of the collection of such fees. These favorable
variances were partially offset by a decrease in the amount of commissions
earned from the sales of builders' homes within Weston due to the
Partnership's decision to increase its home building operations in that
Community. The increase in the gross operating profit margins from
Brokerage and other operations for 1998 as compared to 1997 is due
primarily to decreased office overheads resulting from the consolidation of
several of the Partnership's resale offices in 1997.

Selling, general and administrative expenses include all marketing
costs, with the exception of those costs capitalized in conjunction with
the construction of housing units, as well as project and general
administrative costs. These expenses are net of the marketing fees
received from third party builders. Selling, general and administrative
expenses decreased for 1999 as compared with 1998 due primarily to certain
non-recurring payments made in 1998 which increased the expenses in that
year. Such payments included approximately $2,047,000 to Raleigh Capital
Associates, L.P. ("Raleigh") pursuant to a settlement and release agreement
between the Partnership, the General Partner and Raleigh to resolve, among
other things, a claim made by Raleigh for attorneys' fees and expenses. In
addition, during 1998, the Partnership incurred fees to engage Lehman
Brothers, Inc. as a financial advisor to assist in evaluating and
responding to the various tender offers for Partnership Interests made
during 1998 and related matters.

In December 1999, the Partnership recorded an inventory impairment of
$1 million to the carrying value of its Water's Edge Community. This loss
was recorded based upon an analysis of expected future net cash flows from
the sale of the assets in Water's Edge as compared to the future estimated
carrying value of the assets at disposition. As discussed above, the
Partnership anticipates the closing of the remaining lots, houses and sales
center in Water's Edge prior to the end of 2000. As a result of this
adjustment, the carrying value of Water's Edge is recorded at approximately
$5.8 million at December 31, 1999. In December 1997, the Partnership
recorded an inventory impairment of $4.5 million to the carrying value of
its River Hills Community. This loss was recorded based upon an analysis
of estimated discounted cash flows used to determine the fair value of the
Community. This analysis estimated the sell-out of the remaining houses,
homesites and land and property in this Community by the year 2001. As a
result of this adjustment, River Hill's carrying value is recorded at
approximately $7.0 million and $9.0 million at December 31, 1999 and 1998,
respectively.

On May 28, 1999, the Partnership entered into an agreement with Disney
which resolved all the claims and counterclaims raised in certain
litigation related to the Partnership's acquisition of assets from a
subsidiary of Disney. Under the terms of the settlement agreement, Disney,
among other things, paid the Partnership $9.0 million, which is reflected
as Legal Settlement on the accompanying consolidated statements of
operations for the year ended December 31, 1999, and released any claims
relating to the claims pool. The lawsuit was dismissed on June 3, 1999,
pursuant to the terms of the settlement agreement.

<PAGE>

During the first quarter of 1999, the Partnership received an
approximate $0.6 million distribution from the Tampa 301 Associates Joint
Venture. The amount distributed was in excess of the Partnership's
carrying value of its investment in this joint venture. The recognition of
income related to this excess distribution is the primary cause of the
increase in equity in earnings of unconsolidated ventures for 1999 as
compared to 1998. The increase in 1999 as compared to 1998 and 1997 is
also due to the Partnership's recognition of its share of the earnings
generated by A&D Title, L.P., a joint venture in which the Partnership
obtained a 50% ownership interest in July 1997.

The decrease in Interest and real estate taxes, net of amounts
capitalized for 1999 as compared to 1998 is due to the Partnership
receiving a credit from the Indian Trace Community Development District
(the "District") towards its 1999 tax assessment resulting from interest
earned by the District on construction reserves related to the District's
improvement of land owned by the Partnership.

INFLATION

Although the relatively low rates of inflation in recent years
generally have not had a material effect on the Community development
business, inflation in future periods can adversely affect the development
of Communities generally because of its impact on interest rates. High
interest rates not only increase the cost of borrowed funds to developers,
but also have a significant effect on the affordability of permanent
mortgage financing to prospective purchasers. Any increased costs of
materials and labor resulting from high rates of inflation may, in certain
circumstances, be passed through to purchasers of real properties through
increases in sales prices, although such increases may reduce sales volume.

To the extent such cost increases are not passed through to purchasers,
there would be a negative impact on the ultimate margins realized by the
Partnership.

GENERAL PARTNER

The General Partner of the Partnership is Arvida/JMB Managers, Inc., a
Delaware corporation. All of its outstanding shares of stock are owned by
AF Investors, LLC, a Delaware limited liability company, which is
substantially owned by Northbrook Corporation, a Delaware corporation
("Northbrook"). A significant majority of the outstanding stock of
Northbrook is owned by JMB Realty Corporation, a Delaware corporation
("JMB"), and certain of its officers, directors, members of their families
and their affiliates. Substantially all of the shares of JMB are owned by
certain of its officers, directors, members of their families and their
affiliates. Arvida/JMB Managers, Inc. became the general partner of the
Partnership as a result of a merger on March 30, 1990 of an affiliated
corporation that was the then general partner of the Partnership into
Arvida/JMB Managers, Inc., which, as the surviving corporation of such
merger, continues as General Partner. On May 1, 1999, a $20,561,034
portion of a note receivable from Northbrook to Arvida/JMB Managers, Inc.
was assigned and distributed to Northbrook. As a result of such assignment
and distribution, the remaining note has an outstanding principal balance
of $1,000,000 and bears interest at the applicable Federal rate for short-
term loans (5.66% as of December 31, 1999). All interest is deferred and
is added to the principal balance of the note. The note, as extended, is
due June 30, 2001. The General Partner has responsibility for all aspects
of the Partnership's operations. The condensed balance sheet of Arvida/JMB
Managers, Inc. as of December 31, 1999 is as follows:

<PAGE>

Assets

Cash. . . . . . . . . . . . . . . . . . . . . . . . . .$ 859,460
Investment in partnerships. . . . . . . . . . . . . . . 1,596,786
Other assets. . . . . . . . . . . . . . . . . . . . . . 33,550
-----------
$ 2,489,796
===========

Owner's equity

Capital stock . . . . . . . . . . . . . . . . . . . . .$ 1,000
Additional paid-in capital. . . . . . . . . . . . . . . 3,488,796
Net of retained deficit . . . . . . . . . . . . . . . . --
-----------

Less: note receivable from Northbrook . . . . . . . . . (1,000,000)
-----------
$ 2,489,796
===========

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At December 31, 1999, the Partnership had variable rate debt, which
is subject to market risk related to changes in interest rates. In order
to minimize this interest rate risk, the Partnership has entered into
interest rate swap agreements with respect to amounts borrowed under its
term loan. The Partnership also expects to have a construction and short-
term mortgage loan in the principal amount of $20,000,000 with a variable
rate of interest to finance construction of a retail project in Weston in
2000. However, in the event the Partnership's effective borrowing rates
were to increase by 100 or 150 basis points, there would be no expected
material impact to the Partnership's financial statements.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

INDEX

Report of Independent Certified Public Accountants

Consolidated Balance Sheets, December 31, 1999 and 1998

Consolidated Statements of Operations for the years ended
December 31, 1999, 1998 and 1997

Consolidated Statements of Changes in Partners' Capital Accounts
for the years ended December 31, 1999, 1998 and 1997

Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997

Notes to Consolidated Financial Statements

SCHEDULES NOT FILED:

All schedules have been omitted as the required information is
inapplicable or immaterial, or the information is presented in the
consolidated financial statements or related notes.

<PAGE>

REPORT OF ERNST & YOUNG LLP,
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Partners
ARVIDA/JMB PARTNERS, L.P.

We have audited the accompanying consolidated balance sheets of
Arvida/JMB Partners, L.P. and Consolidated Ventures as of December 31, 1999
and 1998, and the related consolidated statements of operations, changes in
partners' capital accounts, and cash flows for each of the three years in
the period ended December 31, 1999. 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 auditing standards
generally accepted in the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Arvida/JMB Partners, L.P. and Consolidated Ventures at
December 31, 1999 and 1998, and the consolidated results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States.

Miami, Florida
February 11, 2000, Except for note 15
as to which the date is March 15, 2000

<PAGE>

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

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1999 AND 1998

ASSETS
------
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
Cash and cash equivalents (note 3) . . . . . . . . . . . . . . . . . . . $ 71,965,185 82,103,559
Restricted cash (note 3) . . . . . . . . . . . . . . . . . . . . . . . . 13,800,070 13,337,171
Trade and other accounts receivable (net of allowance
for doubtful accounts of $189,983 and $198,548
at December 31, 1999 and 1998, respectively) . . . . . . . . . . . . . 27,405,788 13,989,093
Real estate inventories (notes 4 and 7). . . . . . . . . . . . . . . . . 160,011,715 160,922,604
Property and equipment, net (notes 5 and 7). . . . . . . . . . . . . . . 28,306,211 33,816,203
Investments in and advances to joint ventures, net (note 6). . . . . . . 460,805 1,217,327
Equity memberships (note 8). . . . . . . . . . . . . . . . . . . . . . . 1,687,120 2,175,510
Amounts due from affiliates, net (note 9). . . . . . . . . . . . . . . . 650,163 1,438,690
Prepaid expenses and other assets. . . . . . . . . . . . . . . . . . . . 6,215,748 7,367,323
------------ -----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . $310,502,805 316,367,480
============ ===========

<PAGE>

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

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

1999 1998
------------ -----------
Liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 21,692,034 16,447,904
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,704,627 27,655,567
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . 19,434,618 16,151,679
Notes and mortgages payable (note 7) . . . . . . . . . . . . . . . . . 30,564,201 46,341,804
------------ -----------
Commitments and contingencies

Total liabilities. . . . . . . . . . . . . . . . . . . . . . . 101,395,480 106,596,954
------------ -----------
Partners' capital accounts (note 13)
General Partner and Associate Limited Partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . . 60,143,692 45,828,157
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (45,246,973) (41,315,975)
------------ -----------
14,916,719 4,532,182
------------ -----------
Holders of Interests (404,000 Interests):
Initial Holder of Interests:
Capital contributions, net of offering costs. . . . . . . . . . . . 364,841,815 364,841,815
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . . 198,097,006 138,414,099
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (368,748,215) (298,017,570)
------------ -----------
194,190,606 205,238,344
------------ -----------
Total partners' capital accounts . . . . . . . . . . . . . . . 209,107,325 209,770,526
------------ -----------
Total liabilities and partners' capital accounts . . . . . . . $310,502,805 316,367,480
============ ===========

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

<PAGE>

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

AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Revenues:
Housing. . . . . . . . . . . . . . . . . . . . . . . $307,000,615 231,511,130 202,735,713
Homesites. . . . . . . . . . . . . . . . . . . . . . 10,520,143 13,654,463 25,952,527
Land and property. . . . . . . . . . . . . . . . . . 22,050,649 56,943,569 70,824,676
Operating properties . . . . . . . . . . . . . . . . 16,641,088 19,865,338 30,219,498
Brokerage and other operations . . . . . . . . . . . 17,437,762 29,151,175 26,171,642
------------ ------------ ------------

Total revenues . . . . . . . . . . . . . . . 373,650,257 351,125,675 355,904,056
------------ ------------ ------------

Cost of revenues:
Housing. . . . . . . . . . . . . . . . . . . . . . . 240,728,879 186,604,676 170,961,122
Homesites. . . . . . . . . . . . . . . . . . . . . . 6,803,661 9,091,986 16,578,471
Land and property. . . . . . . . . . . . . . . . . . 11,523,280 23,927,979 44,074,899
Operating properties . . . . . . . . . . . . . . . . 16,141,031 18,596,429 26,392,730
Brokerage and other operations . . . . . . . . . . . 15,638,155 24,942,325 23,815,043
------------ ------------ ------------

Total cost of revenues . . . . . . . . . . . 290,835,006 263,163,395 281,822,265
------------ ------------ ------------

<PAGE>

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

AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED

1999 1998 1997
------------ ------------ ------------

Gross operating profit . . . . . . . . . . . . . . . . 82,815,251 87,962,280 74,081,791

Selling, general and administrative expenses . . . . . (19,151,954) (23,524,953) (22,435,609)
Inventory impairment (note 14) . . . . . . . . . . . . (1,000,000) -- (4,500,000)
Legal Settlement . . . . . . . . . . . . . . . . . . . 9,000,000 -- --
------------ ------------ ------------

Net operating income . . . . . . . . . . . . 71,663,297 64,437,327 47,146,182

Interest income. . . . . . . . . . . . . . . . . . . . 2,712,017 3,583,937 2,186,358
Equity in earnings of unconsolidated ventures
(notes 1 and 6). . . . . . . . . . . . . . . . . . . 1,083,804 335,893 211,217
Interest and real estate taxes, net of amounts
capitalized (note 1) . . . . . . . . . . . . . . . . (1,460,676) (2,494,912) (2,985,449)
------------ ------------ ------------

Net income . . . . . . . . . . . . . . . . . $ 73,998,442 65,862,245 46,558,308
============ ============ ============
Net income per Interest. . . . . . . . . . . $ 147.73 148.02 105.30
============ ============ ============
Cash distribution per Interest . . . . . . . $ 175.08 125.06 235.04
============ ============ ============

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

<PAGE>

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

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<CAPTION>
GENERAL PARTNER AND ASSOCIATE LIMITED PARTNERS HOLDERS OF INTERESTS (404,000 INTERESTS)
--------------------------------------------------- -------------------------------------------------------
CONTRIBU- NET NET
TIONS INCOME DISTRIBUTIONS TOTAL CONTRIBUTIONS INCOME DISTRIBUTIONS TOTAL
--------- --------- ------------- ----------- ------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
Decem-
ber 31,
1996. . . .$20,000 35,750,061 (34,492,285) 1,277,776 364,841,815 36,071,642 (152,539,408) 248,374,049

1997 act-
ivity
(note 13) . -- 4,015,966 (4,015,966) -- -- 42,542,342 (94,955,457) (52,413,115)
------- ---------- ----------- ----------- ----------- ----------- ------------ -----------
Balance
Decem-
ber 31,
1997. . . . 20,000 39,766,027 (38,508,251) 1,277,776 364,841,815 78,613,984 (247,494,865) 195,960,934

1998 act-
ivity
(note 13) . -- 6,062,130 (2,807,724) 3,254,406 -- 59,800,115 (50,522,705) 9,277,410
------- ---------- ----------- ----------- ----------- ----------- ------------ -----------
Balance
Decem-
ber 31,
1998. . . . 20,000 45,828,157 (41,315,975) 4,532,182 364,841,815 138,414,099 (298,017,570) 205,238,344

1999 act-
ivity
(note 13) . -- 14,315,535 (3,930,998) 10,384,537 -- 59,682,907 (70,730,645) (11,047,738)
------- ---------- ----------- ----------- ----------- ----------- ------------ -----------
Balance
Decem-
ber 31,
1999. . . .$20,000 60,143,692 (45,246,973) 14,916,719 364,841,815 198,097,006 (368,748,215) 194,190,606
======= ========== =========== =========== =========== =========== ============ ===========

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

<PAGE>

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . $ 73,998,442 65,862,245 46,558,308
Charges (credits) to net income not
requiring (providing) cash:
Depreciation and amortization. . . . . . . . . . . 3,390,613 3,709,561 4,315,485
Equity in earnings of unconsolidated ventures. . . (1,083,804) (335,893) (211,217)
Provision for doubtful accounts. . . . . . . . . . 21,109 32,536 201,869
Gain on sale of joint venture interest . . . . . . (3,161,725) (450,546) --
Gain on sale of operating properties and
of property and equipment. . . . . . . . . . . . (5,991,038) (22,298,796) (25,536,155)
Inventory impairment (note 14) . . . . . . . . . . 1,000,000 -- 4,500,000
Changes in:
Restricted cash. . . . . . . . . . . . . . . . . . (462,899) (893,155) (610,494)
Trade and other accounts receivable. . . . . . . . (13,437,804) 425,322 (9,796,363)
Real estate inventories:
Additions to real estate inventories . . . . . . (233,948,741) (196,086,427) (203,502,849)
Cost of revenues . . . . . . . . . . . . . . . . 239,424,771 207,240,063 216,801,511
Capitalized interest . . . . . . . . . . . . . . (3,663,552) (6,020,204) (4,416,322)
Capitalized real estate taxes. . . . . . . . . . (1,901,589) (2,632,163) (2,167,759)
Equity memberships . . . . . . . . . . . . . . . . 488,390 2,005,223 1,277,147
Amounts due from affiliates, net . . . . . . . . . 788,527 (773,556) 338,598
Prepaid expenses and other assets. . . . . . . . . 341,696 23,412 (2,010,249)
Accounts payable, accrued expenses and
other liabilities. . . . . . . . . . . . . . . . 8,612,560 3,313,431 (7,158,716)
Deposits . . . . . . . . . . . . . . . . . . . . . 2,049,060 5,725,292 4,642,950
------------ ------------ ------------
Net cash provided by operating activities. . 66,464,016 58,846,345 23,225,744
------------ ------------ ------------

<PAGE>

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

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1999 1998 1997
------------ ------------ ------------
Investing activities:
Acquisitions of property and equipment . . . . . . . (1,525,360) (3,049,364) (3,127,344)
Proceeds from sales and disposals of
property and equipment . . . . . . . . . . . . . . 10,445,656 30,330,922 62,937,522
Joint venture distributions (contributions),
net. . . . . . . . . . . . . . . . . . . . . . . . 1,216,560 167,931 418,730
Proceeds from the sale of
joint venture interest . . . . . . . . . . . . . . 3,700,000 1,521,162 --
------------ ------------ ------------

Net cash provided by
investing activities . . . . . . . . . . . 13,836,856 28,970,651 60,228,908
------------ ------------ ------------
Financing activities:
Proceeds from notes and long-term borrowings . . . . 2,327,684 8,834,318 89,216,128
Payments of notes and long-term borrowings . . . . . (18,105,287) (40,628,521) (47,923,899)
Distributions to General Partner and
Associate Limited Partners . . . . . . . . . . . . (3,930,998) (2,807,724) (4,015,966)
Distributions to Holders of Interests. . . . . . . . (70,730,645) (50,522,705) (94,955,457)
------------ ------------ ------------
Net cash used in financing
activities . . . . . . . . . . . . . . . . (90,439,246) (85,124,632) (57,679,194)
------------ ------------ ------------
Increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . (10,138,374) 2,692,364 25,775,458
Cash and cash equivalents,
beginning of year. . . . . . . . . . . . . 82,103,559 79,411,195 53,635,737
------------ ------------ ------------
Cash and cash equivalents,
end of year. . . . . . . . . . . . . . . . $ 71,965,185 82,103,559 79,411,195
============ ============ ============
Supplemental disclosure of cash
flow information:
Cash paid for mortgage and other
interest, net of amounts capitalized . . . . . . . $ -- -- 892,939
============ ============ ============

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

<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) OPERATIONS AND BASIS OF ACCOUNTING

Operations

The assets of Arvida/JMB Partners, L.P. (the "Partnership") consist
principally of interests in land which is in the process of being developed
into master-planned residential communities (the "Communities") and, to a
lesser extent, commercial properties; accounts receivable; construction,
brokerage and other support businesses; real estate assets held for
investment; certain club and recreational facilities; and until October
1998, a cable television business serving one of its Communities. The
Partnership's Communities contain a diversified product mix with both
resort and primary homes designed for the middle and upper income segments
of the various markets in which the Partnership operates.

Within the Communities, the Partnership constructs, or causes to be
constructed, a variety of products, including single-family homes, town-
houses and condominiums to be developed for sale, as well as related
commercial and recreational facilities. The Communities are located
primarily throughout the State of Florida, with Communities also located
near Atlanta, Georgia; and Highlands, North Carolina. Additional
undeveloped properties owned by the Partnership in or near its Communities
are expected to be developed as retail and/or office properties. The Part-
nership also owns or manages certain club and recreational facilities
within certain of its Communities. In addition, the Partnership sells
individual residential lots and parcels of partially developed and
undeveloped land. The third-party builders and developers to whom the
Partnership sells homesites and land parcels are generally smaller local
builders who require project specific financing for their developments and
whose operations are more susceptible to fluctuations in the availability
and terms of financing.

Pursuant to Section 5.5 J of the Partnership Agreement, on October 23,
1997, the Board of Directors of the General Partner met and approved a
resolution selecting the option set forth in Section 5.5 J (i)(c) of the
Partnership Agreement for the Partnership to commence an orderly
liquidation of its remaining assets that is to be completed by October
2002.

Principles of Consolidation

The consolidated financial statements include the accounts of the
Partnership and its consolidated ventures. All material intercompany
balances and transactions have been eliminated in consolidation. The
equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to those investments where
the Partnership's ownership interest is 50% or less.

Recognition of Profit from Sales of Real Estate

For sales of real estate, profit is recognized in full when the
collectability of the sales price is reasonably assured and the earnings
process is virtually complete. When the sale does not meet the require-
ments for recognition of income, profit is deferred until such requirements
are met. In certain circumstances, contracts for sales of real estate
contain provisions which allow the Partnership to repurchase the real
estate in the event certain conditions are not met. Profits generated from
sales subject to these provisions are generally deferred until the
Partnership no longer has any repurchase rights. For sales of residential
units, profit is recognized at the time of closing or if certain criteria
are met, on the percentage-of-completion method.

<PAGE>

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the amounts reported or disclosed in
the financial statements and accompanying notes. Actual results could
differ from those estimates.

Real Estate Inventories and Cost of Real Estate Revenues

Real estate inventories are carried at cost, including capitalized
interest and property taxes. The total cost of land, land development and
common costs are apportioned among the projects on the relative sales value
method. Costs pertaining to the Partnership's housing, homesite, and land
and property revenues reflect the cost of the acquired assets as well as
development costs, construction costs, capitalized interest, capitalized
real estate taxes and capitalized overhead. Certain marketing costs
relating to housing projects, including exhibits and displays, and certain
planning and other pre-development activities, excluding normal period
expenses, are capitalized and charged to housing cost of revenues as
related units are closed. Provisions for value impairment are recorded
whenever the estimated future undiscounted cash flows from operations and
projected net sales proceeds are less than the net carrying value, as
discussed in note 14. A warranty reserve is provided as residential units
are closed. This reserve is reduced by the cost of subsequent work
performed.

Capitalized Interest and Real Estate Taxes

Interest and real estate taxes are capitalized to qualifying assets,
principally real estate inventories. Such capitalized interest and real
estate taxes are charged to cost of revenues as sales of real estate
inventories are recognized. Interest, including the amortization of loan
fees, of $3,663,552, $6,020,204 and $4,909,453 was incurred for the years
ended December 31, 1999, 1998 and 1997, respectively, of which $3,663,552,
$6,020,204 and $4,416,322 was capitalized for the years ended December 31,
1999, 1998 and 1997, respectively. The decrease in interest incurred for
the year ended December 31, 1999 as compared to 1998 is due to prepayments
on the term loan during the fourth quarter of 1998 and 1999. Interest
payments, including amounts capitalized, of $3,162,866, $5,589,418 and
$5,309,261 were made for the years ended December 31, 1999, 1998 and 1997,
respectively.

Real estate taxes of $3,362,265, $5,127,075 and $4,660,077 were
incurred for the years ended December 31, 1999, 1998 and 1997,
respectively, of which $1,901,589, $2,632,163 and $2,167,759 were
capitalized for the years ended December 31, 1999, 1998 and 1997,
respectively. The decrease in real estate taxes incurred during 1999 as
compared to 1998 is due to the Partnership receiving a credit from the
Indian Trace Community Development District (the "District") towards its
1999 tax assessment resulting from interest earned by the District on
construction reserves related to the District's improvement of land owned
by the Partnership. Real estate tax payments of $3,685,853, $5,691,066 and
$5,043,336 were made for the years ended December 31, 1999, 1998 and 1997,
respectively. In addition, real estate tax reimbursements totaling
$278,139, $543,796 and $257,685 were received from the Partnership's escrow
agent during 1999, 1998 and 1997, respectively. The preceding analysis of
real estate taxes does not include real estate taxes incurred or paid with
respect to the Partnership's club facilities and operating properties, as
these taxes are included in cost of revenues for operating properties.

Property and Equipment and Other Assets

Property and equipment are carried at cost less accumulated
depreciation and are depreciated on the straight-line method over the
estimated useful lives of the assets, which range from two to forty years.
Expenditures for maintenance and repairs are charged to expense as
incurred. Costs of major renewals and improvements which extend useful
lives are capitalized.

<PAGE>

Other assets are amortized on the straight-line method, which
approximates the interest method, over the useful lives of the assets,
which range from one to five years. Amortization of other assets,
excluding loan origination fees, of approximately $444,000, $394,000 and
$702,000 was recorded for the years ended December 31, 1999, 1998 and 1997,
respectively. Amortization of loan origination fees, which is included in
interest expense, of approximately $366,000, $351,000 and $279,000 was
recorded for the years ended December 31, 1999, 1998 and 1997,
respectively.

Investments in and Advances to Joint Ventures, Net

In general, the equity method of accounting has been applied in the
accompanying consolidated financial statements with respect to those joint
venture investments for which the Partnership does not have majority
control and where the Partnership's ownership interest is 50% or less.

Investments in the remaining joint ventures are carried at the
Partnership's proportionate share of the ventures' assets, net of their
related liabilities and adjusted for any basis differences. Basis
differences result from the purchase of interests at values which differ
from the recorded cost of the Partnership's proportionate share of the
joint ventures' net assets.

The Partnership periodically advances funds to the joint ventures in
which it holds ownership interests when deemed necessary and economically
justifiable. Such advances are generally interest bearing and are
repayable to the Partnership from amounts earned through joint venture
operations.

Equity Memberships

The amenities within certain of the Partnership's Boca Raton and
Jacksonville, Florida Communities, as well as its Community near Highlands,
North Carolina are conveyed to the respective homeowners through the sale
of equity memberships. Equity membership revenues and related cost of
revenues are included in land and property in the accompanying consolidated
statements of operations.

Interest Rate Swaps

The Partnership has entered into interest rate swap agreements to
manage its exposure to market risks related to changes in interest rates
associated with its variable rate debt under its credit facility. The
interest-rate swap agreements cover the principal balance outstanding under
its term loan and are amortized annually through the scheduled maturity of
the term loan. These agreements involve the exchange of amounts based on
fixed interest rates for amounts based on variable interest rates over the
life of the loan without an exchange of the notional amount upon which the
payments are based. The differential to be paid or received as interest
rates change is calculated and paid monthly by the appropriate party. Such
payments or receipts are recorded as adjustments to interest expense in the
periods in which they are incurred.

Partnership Records

The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments where applicable to reflect
the Partnership's accounts in accordance with GAAP and to consolidate the
accounts of the ventures as described above. Such GAAP and consolidation
adjustments are not reflected on the records of the Partnership. The net
effect of these items is summarized as follows:

<PAGE>

<TABLE>

1999 1998
------------------------------ ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>

Total assets . . . . . . . . . . . . $310,502,805 467,320,587 316,031,135 435,796,825
Partners' capital accounts:
General Partner and
Associate Limited Partners. . . 14,916,719 14,168,689 4,532,182 3,784,680
Holders of Interests . . . . . . 194,190,606 275,612,610 205,238,344 300,430,376
Net income:
General Partner and
Associate Limited Partners. . . 14,315,535 14,313,304 6,062,130 6,060,834
Holders of Interests . . . . . . 59,682,907 45,914,581 59,800,115 53,861,625
Net income per Interest . . . . . . 147.73 113.65 148.02 133.32
=========== =========== ============= =============

</TABLE>

<PAGE>

Reference is made to note 13 for further discussion of the allocation
of profits and losses to the General Partner, Associate Limited Partners
and Holders of Interests.

The net income per Interest is based upon the average number of
Interests outstanding during each period.

Reclassifications

Certain reclassifications have been made to the 1998 and 1997
financial statements to conform to the 1999 presentation.

Income Taxes

No provision for state or Federal income taxes has been made as the
liability for such taxes is that of the partners rather than the
Partnership. However, in certain instances, the Partnership has been
required under applicable state law to remit directly to the state tax
authorities amounts representing withholding on applicable taxable income
allocated to the General Partner, Associate Limited Partners and Holders of
Interests. Such payments on behalf of the Holders of Interests are deemed
distributions to them. The cash distributions per Interest made during the
years ended December 31, 1999, 1998 and 1997 include $.08, $.06 and $.04,
respectively, which represent each Holder of Interests' share of a North
Carolina non-resident withholding tax paid directly to the state tax
authorities on behalf of the Holders of Interests for the 1998, 1997 and
1996 tax years, respectively.

(2) INVESTMENT PROPERTIES

The Partnership's Communities still under development are in various
stages, with estimated remaining build-outs ranging from one to four years.

Notwithstanding the estimated duration of the remaining build-outs, the
Partnership currently expects to complete an orderly liquidation of its
remaining assets by October 2002. 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-stage of development are the
Water's Edge Community in Atlanta, Georgia and the Cullasaja Club, near
Highlands, North Carolina. The Partnership's condominium project on
Longboat Key, Florida known as Arvida's Grand Bay was completed in 1999,
and all units were sold and closed by January 2000. The Jacksonville Golf
& Country Club and the River Hills Country Club Communities in Florida are
in their late stages of development. Only builder units and equity
memberships remain to be sold at Jacksonville Golf & Country Club at
December 31, 1999. All of the remaining units in the Partnership's
Sawgrass Country Club, the Players Club at Sawgrass and Dockside
Communities were sold and closed as of December 31, 1996. In addition, the
Broken Sound Community, located in Boca Raton, Florida, had its final
closings in 1995. However, the Partnership still has equity memberships to
sell in the Broken Sound Club.

Reference is made to note 15 for a discussion regarding the sales of
the Partnership's assets in the Cullasaja Club and Water's Edge
Communities.

(3) CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash and cash equivalents may consist of U.S. Government obligations
with original maturities of three months or less, money market demand
accounts and repurchase agreements, the cost of which approximated market
value. At December 31, 1999, 1998 and 1997, no funds were invested in
treasury bills. Included in Restricted cash are amounts restricted under
various escrow agreements as well as cash which collateralizes letters of
credit as discussed in note 7. Credit risk associated with cash, cash
equivalents and restricted cash is considered low due to the high quality
of the financial institutions in which these assets are held.

<PAGE>

(4) REAL ESTATE INVENTORIES

Real estate inventories at December 31, 1999 and 1998 are summarized
as follows:

1999 1998
------------ -----------
Land held for future development
or sale. . . . . . . . . . . . . . $ 2,358,853 2,292,958
Community development inventory:
Work in progress and
land improvements. . . . . . . . 145,953,986 144,150,322
Completed inventory. . . . . . . . 11,698,876 14,479,324
------------ -----------
Real estate inventories . . . . $160,011,715 160,922,604
============ ===========

Reference is made to note 14 for a discussion regarding the impairment
of long-lived assets.

(5) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1999 and 1998 are summarized as
follows:
1999 1998
----------- ----------

Land . . . . . . . . . . . . . . . . . $ 1,162,331 1,422,465
Land improvements. . . . . . . . . . . 21,279,599 23,164,038
Buildings. . . . . . . . . . . . . . . 18,787,366 22,501,357
Equipment and furniture. . . . . . . . 12,262,289 13,472,140
Construction in progress . . . . . . . 831,379 698,466
----------- ------------

Total . . . . . . . . . . . . . . 54,322,964 61,258,466
Accumulated depreciation. . . . . (26,016,753) (27,442,263)
----------- ------------
Property and equipment, net . . . $28,306,211 33,816,203
=========== ============

Depreciation expense of approximately $2,581,000, $2,965,000 and
$3,335,000 was incurred for the years ended December 31, 1999, 1998 and
1997, respectively.

<PAGE>

(6) INVESTMENTS IN AND ADVANCES TO JOINT VENTURES, NET

The Partnership has or had investments in real estate joint ventures
with ownership interests ranging from approximately 33% to 50%. The
Partnership's joint venture interests accounted for under the equity method
in the accompanying consolidated financial statements are as follows:

LOCATION OF
NAME OF VENTURE % OF OWNERSHIP PROPERTY
- --------------- -------------- ------------

A&D Title, L.P. 50 Florida

Arvida Corporate Park
Associates Joint Venture 50 Florida

Arvida Pompano Associates
Joint Venture 50 Florida

H.A.E. Joint Venture 33-1/3 Florida

Mizner Court Associates
Joint Venture 50 Florida

Mizner Tower Associates
Joint Venture 50 Florida

Ocala 202 Joint Venture 50 Florida

Tampa 301 Associates
Joint Venture 50 Florida

Windmill Lake Estates
Associates
Joint Venture 50 Florida

Arvida/RBG I Joint Venture 40 Florida

Arvida/RBG II Joint Venture 40 Florida

The following is combined unaudited summary financial information of
joint ventures accounted for under the equity method.

<PAGE>

<TABLE>

<CAPTION>
ASSETS
------

DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Real estate inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,176,350 4,495,534
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 820,590 2,447,106
----------- -----------

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,996,940 6,942,640
=========== ===========

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

Accounts payable, deposits and other liabilities . . . . . . . . . . . . . . $ 147,760 790,424
Notes and mortgages payable. . . . . . . . . . . . . . . . . . . . . . . . . -- 3,369,028
----------- -----------

Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 147,760 4,159,452

Venture partners' capital. . . . . . . . . . . . . . . . . . . . . . . . . . 924,590 1,391,594
Partnership's capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . 924,590 1,391,594
----------- -----------

Total liabilities and partners' capital. . . . . . . . . . . . . . $ 1,996,940 6,942,640
=========== ===========

</TABLE>

<PAGE>

<TABLE>

COMBINED RESULTS OF OPERATIONS
------------------------------

<CAPTION>
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
------------ ------------ -------------
<S> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,082,612 1,501,217 3,939,124
=========== ============ ============
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 1,176,245 601,117 493,870
=========== ============ ============
Partnership's proportionate share of
net income . . . . . . . . . . . . . . . . . . . . . . . $ 588,123 300,559 269,048
=========== ============ ============
Partnership's equity in earnings
of unconsolidated ventures . . . . . . . . . . . . . . . $ 1,083,804 335,893 211,217
=========== ============ ============

The following is a reconciliation of the Partnership's Capital accounts within the joint ventures
to its investments in and advances to joint ventures as reflected on the accompanying consolidated balance
sheets:

DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------

Partnership's Capital, equity method . . . . . . . . . . . $ 924,590 1,391,594
Basis difference . . . . . . . . . . . . . . . . . . . . . (474,176) (184,658)
----------- ------------

Investments in joint ventures. . . . . . . . . . . . . . . 450,414 1,206,936
Advances to joint ventures, net. . . . . . . . . . . . . . 10,391 10,391
----------- ------------
Investments in and advances to
joint ventures, net . . . . . . . . . . . . . . . . $ 460,805 1,217,327
=========== ============

</TABLE>

<PAGE>

The Partnership's share of net income is based upon its ownership
interest in investments in joint ventures which are accounted for in
accordance with the equity method of accounting. Equity in earnings of
unconsolidated ventures represents the Partnership's share of each
venture's net income, and may reflect a component of purchase price
adjustments included in the Partnership's basis. Such adjustments are
generally amortized to income in relation to the cost of revenue of the
underlying real estate assets. These factors contribute to the
differential in the Partnership's proportionate share of the net income or
loss of the joint ventures and its Equity in earnings of unconsolidated
ventures as well as to the basis differential between the Partnership's
investments in joint ventures and its equity in underlying net assets, as
shown above.

There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the
Partnership's joint venture partners in an investment might become unable
or unwilling to fulfill their financial or other obligations, or that such
joint venture partners may have economic or business interests or goals
that are inconsistent with those of the Partnership. In addition, under
certain circumstances, either pursuant to the joint venture agreements or
due to the Partnership's obligations as a general partner, the Partnership
may be required to make additional cash advances or contributions to
certain of the ventures.

In March 1999, the Pompano Park Joint Venture closed on the sale of
its commercial/industrial property on an "as is" basis to an unaffiliated
third party for a sales price of $2.9 million. The net closing proceeds
totalling approximately $2.7 million were disbursed to the joint venture's
lender in full satisfaction of the remaining balance outstanding on the
mortgage loan encumbering the property. As a result of the property's
sale, the joint venture and the Partnership have no further obligation to
the purchaser to fund costs related to the environmental clean-up of this
property. With respect to the environmental issues, the clean-up, which
began in July 1994, is in a "monitoring only" phase pursuant to an informal
arrangement with state environmental officials. There are no assurances
that further clean-up will not be required. If further action is required
and the previous owner is unable to fulfill all its obligations as they
relate to this environmental matter, the joint venture and ultimately the
Partnership may be obligated to the State of Florida for such costs.
Should this occur, the Partnership does not anticipate the cost of this
clean-up to be material to its operations.

In January 1998, the Partnership sold its interest in the H.A.E. Joint
Venture to one of its venture partners for a sale price of approximately
$1.7 million. This sale is reflected in Land and property revenues and
cost of revenues on the accompanying consolidated statements of operations
for 1998.

During July 1997, the Partnership entered into a joint venture
agreement with an unaffiliated third party to form A&D Title, L.P. The
joint venture was formed to act as an agent in connection with the issuance
of title insurance, primarily related to closings in the Partnership's
Weston community. The Partnership obtained a 50% ownership interest in the
joint venture, and is accounting for its investment in accordance with the
equity method of accounting. Recognition of the Partnership's share of
this joint venture's profits have contributed to the increase in Equity in
earnings of unconsolidated ventures on the accompanying consolidated
statements of operations for 1999 and 1998 as compared to 1997.

<PAGE>

During August 1997, the remaining properties owned by the Tampa 301
Associates Joint Venture and substantially all of the remaining property
owned by the Ocala 202 Joint Venture were sold. The net profit generated
by the sales of these properties resulted in approximately $91,000 of
earnings for the Partnership, which is included in Equity in earnings of
unconsolidated ventures on the accompanying consolidated statements of
operations for 1997.

(7) NOTES AND MORTGAGES PAYABLE

Notes and mortgages payable at December 31, 1999 and 1998 are
summarized as follows:

1999 1998
----------- -----------
Term loan credit facility of
$75,000,000 bearing interest
at approximately 8.0% at
December 31, 1999(A). . . . . . . . . . $27,500,000 41,666,667

Revolving line of credit of
$20,000,000 (A) . . . . . . . . . . . . -- --

Other notes and mortgages
payable (B). . . . . . . . . . . . . . 3,064,201 4,675,137
----------- -----------

Total. . . . . . . . . . . . . $30,564,201 46,341,804
=========== ===========

(A) The Partnership's previous revolving line of credit, income
property term loan and letter of credit agreement matured in July 1997. On
July 31, 1997, the Partnership obtained a new credit facility from certain
banks with Barnett Bank, N.A. ("Barnett") being the primary agent on the
facility. The credit facility consists of a $75 million term loan, a $20
million revolving line of credit and a $5 million letter of credit facility
and matures on July 31, 2001. The term loan has annual scheduled principal
repayments of $12.5 million, as well as additional annual principal
repayments based upon a specified percentage or amount of the Partnership's
available cash. The maximum required principal repayments prior to
maturity, including the scheduled repayments, generally will not exceed
$18.75 million per annum. The remaining outstanding balance on the new
facility is due upon maturity. Prior to September 1, 1998, interest on the
facility was based, at the Partnership's option, on the relevant LIBOR plus
2.25% per annum or Barnett's prime rate. Loan origination fees totaling 1%
of the total facility were paid by the Partnership upon the closing of the
loan. Such fees have been capitalized and are being amortized to interest
expense over the life of the loan. The term loan, revolving line of credit
and letter of credit facility are secured by recorded mortgages on the real
property of the Partnership (including certain of its consolidated
ventures) and pledges of certain other assets, the carrying value of which
exceeds the balance outstanding under the credit facility at December 31,
1999. The credit facility also requires that certain financial covenants
such as loan-to-value, net worth and debt ratios be maintained throughout
the loan term. All of the loans under this facility are cross-
collateralized and cross-defaulted.

<PAGE>

In exchange for a rate reduction of 50 basis points on its credit
facility, the Partnership made a $7.25 million prepayment on the term loan
in August 1998. As a result of this transaction, interest on the credit
facility is now based, at the Partnership's option, on the relevant LIBOR
plus 1.75% per annum or the lender's prime rate (8.5% at December 31,
1999). The Partnership has interest rate swap agreements that are in
effect with respect to the $27.5 million outstanding under the term loan at
December 31, 1999. The interest rate swap agreements fix the interest
rates under the term loan at 8.02% and 7.84% with respect to $16,666,667
and $10,833,333 of the term loan, respectively, and amortize in conjunction
with the scheduled loan repayments. These agreements expire on July 31,
2001. In November 1998, the Partnership also prepaid $7,333,333 of the
$12.5 million additional repayment scheduled for July 1999. In June 1999,
the Partnership paid the remaining $4,166,667 of the $12.5 million
repayment scheduled for July 1999, prepaid the additional $6,250,000
principal repayment due in February 2000, and prepaid $3,750,000 of the
$12.5 million principal repayment scheduled for July 2000. At December 31,
1999, the balances outstanding on the term loan, the revolving line of
credit and the letter of credit facility were approximately $27,500,000, $0
and $670,700, respectively. For the year ended December 31, 1999, the
combined effective interest rate for the Partnership's credit facilities,
including the amortization of loan origination fees, and the effect of the
interest rate swap agreements was approximately 9.2% per annum.

Due to the replacement of the Partnership's existing letter of credit
facility by the new credit facility, the Partnership was required to post
approximately $4.2 million cash as collateral with its previous lender for
letters of credit which continue to be obligations of that lender. Such
letters of credit are expected to be replaced by either letters of credit
issued under the new facility or by bonds. Once the letters of credit are
replaced, the cash collateral will be released to the Partnership. As of
December 31, 1999, approximately $1.9 million of such cash collateral had
been released to the Partnership due to the replacement of the letters of
credit issued by the previous lender, leaving a balance outstanding under
this previous letter of credit facility of approximately $2.3 million.

(B) Other notes and mortgages payable represents $3.1 million of
subordinated debt attributable to the Cullasaja Joint Venture.

During 1998, the Partnership borrowed against its revolving
construction line of credit to fund the construction of one of the two
remaining buildings within Arvida's Grand Bay. This line of credit had a
borrowing capacity up to $24 million, and was originally scheduled to
mature in January 1997; however, it was subsequently renewed with a revised
borrowing capacity of $21 million, and its term extended to August 1999.
The line of credit bore interest at the lender's prime rate (7.75% at
December 31, 1998) plus 1/2% per annum. Construction of this building was
completed in October 1998, and the outstanding principal balance on this
line of credit was paid in full during the fourth quarter of 1998 with
proceeds from the sale of units within this building. Construction of the
final building at Arvida's Grand Bay commenced in 1998 and was completed in
December 1999. In February 1999, the Partnership closed on a new line of
credit to fund its construction, if needed. However, construction of this
building was funded with cash generated by the Partnership's operations,
and the Partnership obtained a release of the mortgage in lieu of the loan.

<PAGE>

Following is a schedule of the maturities of notes and mortgages
payable at December 31, 1999:

2000 . . . . . . . . . . . . . . . . . . $ 8,750,000
2001 . . . . . . . . . . . . . . . . . . 18,750,000
2002 . . . . . . . . . . . . . . . . . . --
2003 . . . . . . . . . . . . . . . . . . --
2004 . . . . . . . . . . . . . . . . . . --
Thereafter . . . . . . . . . . . . . . . 3,064,201
-----------
Total notes and
mortgages payable. . . . . . . . . $30,564,201
===========

(8) EQUITY MEMBERSHIPS

Equity memberships represent the accumulation of costs incurred in
constructing club houses, golf courses, tennis courts and various other
related assets, less amounts allocated to memberships sold. These
amenities are conveyed to homeowners through the sale of equity
memberships.

In April 1998, control of the Jacksonville Golf & Country Club
("JG&CC") was turned over to the club's members. As a result, effective
April 1, 1998, the Partnership is no longer involved in the ownership or
management of JG&CC and has no further responsibility to fund JG&CC's
operations (note 9). However, the Partnership still has equity memberships
in JG&CC to sell.

In May 1998, the Partnership sold its remaining Sawgrass Country Club
memberships to the Sawgrass Country Club, Inc. for a sale price of
approximately $2.4 million. This transaction is reflected in Land and
property revenues and cost of revenues on the accompanying consolidated
statements of operations for the year ended December 31, 1998.

(9) TRANSACTIONS WITH AFFILIATES

Fees, commissions and other expenses paid by the Partnership to
affiliates of the General Partner for the years ended December 31, 1999,
1998 and 1997 are as follows:
1999 1998 1997
-------- ------- -------
Property management fees . . . . . . $ -- -- 68,600
Insurance commissions. . . . . . . . 249,654 231,451 315,585
Reimbursement (at cost) for
accounting services . . . . . . . . 122,841 89,872 39,003
Reimbursement (at cost) for
portfolio management services . . . 9,278 60,922 32,304
Reimbursement (at cost) for
treasury services . . . . . . . . . 54,043 65,897 --
Reimbursement (at cost) for
legal services. . . . . . . . . . . 77,006 39,707 234,631
-------- ------- -------
$512,822 487,849 690,123
======== ======= =======

<PAGE>

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 year ended December 31, 1999, the amount of
such costs incurred by the Partnership on behalf of these affiliates
totaled approximately $807,100. Approximately $96,800 was outstanding at
December 31, 1999, all of which was received as of February 11, 2000. For
the years ended December 31, 1998 and 1997, the Partnership was entitled to
receive reimbursements of approximately $1,855,000 and $1,532,500,
respectively.

Through December 31, 1997, Arvida Company ("Arvida"), pursuant to an
agreement with the Partnership, provided development and management
supervisory and advisory services and the personnel therefor to the
Partnership for all of its projects and operations. Pursuant to such
management agreement, the Partnership reimbursed Arvida for all of its
out-of-pocket expenditures (including salary and salary-related costs),
subject to certain limitations. The total of such costs for the year ended
December 31, 1997 was approximately $6,189,700.

In November 1997, The St. Joe Company completed its acquisition of a
majority interest in St. Joe/Arvida Company, L.P. ("St. Joe/Arvida"), which
acquired the major assets of Arvida. The transaction did not involve the
sale of any assets of the Partnership, nor the sale of the General
Partner's interest in the Partnership. In connection with this transaction,
Arvida entered into a sub-management agreement with St. Joe/Arvida,
effective January 1, 1998, whereby St. Joe/Arvida provides (and is
reimbursed for) a substantial portion of the development and management
supervisory and advisory services (and personnel with respect thereto) to
the Partnership that Arvida would otherwise provide pursuant to its
management agreement with the Partnership. Effective January 1, 1998, St.
Joe/Arvida employs most of the same personnel previously employed by
Arvida, and the services provided to the Partnership pursuant to this sub-
management agreement are provided by the same personnel. St. Joe/Arvida is
reimbursed for such services and personnel on the same basis as Arvida
under the management agreement, and such reimbursements are made directly
by the Partnership. Affiliates of JMB Realty Corporation own a minority
interest in St. Joe/Arvida.

For the years ended December 31, 1999 and 1998, the Partnership
reimbursed St. Joe/Arvida or its affiliates approximately $4,545,000 and
$4,376,000, respectively, for the services provided to the Partnership by
St. Joe/Arvida personnel pursuant to the sub-management agreement discussed
above. In addition, at December 31, 1999, the Partnership owed St.
Joe/Arvida approximately $166,000 for general and administrative costs
pursuant to the sub-management agreement including, and without limitation,
salary and salary-related costs relating to work performed by employees of
St. Joe/Arvida on behalf of the Partnership, all of which was paid as of
February 11, 2000. The Partnership also receives reimbursement from St.
Joe/Arvida for certain general and administrative costs including, and
without limitation, salary and salary-related costs relating to work
performed by employees of the Partnership on behalf of St. Joe/Arvida. For
the years ended December 31, 1999 and 1998, the Partnership received
approximately $1,942,000 and $911,700, respectively, from St. Joe/Arvida or
its affiliates. In addition, $196,400 was owed to the Partnership at
December 31, 1999, all of which was received as of February 11, 2000.

<PAGE>

The Partnership pays for certain general and administrative costs on
behalf of its clubs, homeowners associations and maintenance associations
(including salary and salary-related costs and legal fees). The
Partnership receives reimbursements from these entities for such costs.
For the year ended December 31, 1999, the Partnership was entitled to
receive approximately $1,260,700 from these entities. At December 31,
1999, approximately $44,100 was owed to the Partnership, of which
approximately $23,400 was received as of February 11, 2000. For the years
ended December 31, 1998 and 1997, the Partnership was entitled to
reimbursements of approximately $1,321,000 and $1,563,900, respectively,
from these entities.

The Partnership, pursuant to certain agreements, provides management
and other personnel and services to certain of its equity clubs and
homeowners associations. Pursuant to these agreements, the Partnership is
entitled to receive management fees for the services provided to these
entities. For the years ended December 31, 1999, 1998 and 1997, the
Partnership was entitled to receive approximately $988,200, $1,396,600 and
$1,315,500. At December 31, 1999, approximately $421,700 was owed to the
Partnership, none of which was received as of February 11, 2000.

The Partnership funds working capital advances and operating deficits
of its equity clubs, as well as operating deficits of its homeowners
associations as required or deemed necessary. The working capital advances
are non-interest bearing, short-term in nature, and are expected to be
reimbursed from future cash flows of the equity clubs. The funding of
operating deficits is expensed by the Partnership. The Partnership also
funds, at its option, certain capital expenditures of its equity clubs. At
December 31, 1999, the Partnership was entitled to receive approximately
$81,200. At December 31, 1999, approximately $57,100 was owed to the
Partnership, of which approximately $9,500 was received as of February 11,
2000.

The General Partner and the Associate Limited Partners, collectively,
received cash distributions in 1999 totaling $3,930,998. In connection
with the settlement of certain litigation, the General Partner and the
Associate Limited Partners deferred approximately $1,259,000 of their share
of the August 1997 distribution which was otherwise distributable to them,
and such deferred distribution amount was used by the Partnership to pay a
portion of the legal fees and expenses in such litigation. The General
Partner and Associate Limited Partners received such deferred amount, as
well as $6,305,844 of net cash flow distributions previously deferred
pursuant to the terms of the Partnership Agreement, in February 2000.
Pursuant to the terms of the Partnership Agreement, the remaining deferred
distributions payable to the General Partner and Associate Limited Partners
totaling $6,235,656 will be paid to them out of one-half of net cash flow
otherwise distributable to the Holders of Interest until all such deferred
amounts have been paid.

(10) COMMITMENTS AND CONTINGENCIES

As security for performance of certain development obligations, the
Partnership is contingently liable under standby letters of credit and
bonds for approximately $670,700 and $18,779,000, respectively, at
December 31, 1999. In addition, certain joint ventures in which the
Partnership holds an interest are also contingently liable under bonds for
approximately $1,020,000 at December 31, 1999.

The Partnership leases certain building space for its management
offices, sales offices and other facilities, as well as certain equipment.
The building and equipment leases expire over the next two to nine years.
Minimum future rental commitments under non-cancelable operating leases
having a remaining term in excess of one year as of December 31, 1999 are
as follows:

<PAGE>

2000. . . . . . . . . . . . . $1,095,395
2001. . . . . . . . . . . . . 1,024,035
2002. . . . . . . . . . . . . 497,625
2003. . . . . . . . . . . . . 131,513
2004. . . . . . . . . . . . . 33,199
Thereafter. . . . . . . . . . 7,965
----------
$2,789,732
==========

Rental expense of $1,698,529, $2,206,337 and $1,963,491 was incurred
for the years ended December 31, 1999, 1998 and 1997, respectively. The
decrease in rent expense for 1999 as compared to 1998 and 1997 is primarily
due to the sale of the River Hills Country Club in August 1999 and the
Partnership's resale brokerage operations in Weston, Sawgrass and Boca
Raton in June 1999.

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.

Over 80% of the Arvida-built homes in Country Walk were built prior to the
Partnership's ownership of the Community. The Partnership tendered 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 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.

<PAGE>

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 through December 31, 1999 by this carrier is
approximately $9.93 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 preventing 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 liabilities related to this matter.

<PAGE>

for Dade County, Florida. The original complaint was filed on or about
November 27, 1995 and an amended complaint, which purports to be a class
action, was filed on or about February 28, 1997. In the case, plaintiffs
seek damages, attorney fees and costs on behalf of the 460 building units
they allegedly represent for, among other things, alleged damages
discovered in the course of making Hurricane Andrew repairs. Plaintiffs
allege that Walt Disney World Company is responsible for liabilities that
may arise in connection with approximately 80% of the buildings at the
Lakes of the Meadow Village Homes and that the Partnership is potentially
liable for the approximately 20% remaining amount of the buildings. In the
three count amended complaint, plaintiffs allege breach of buildings codes
and breach of implied warranties. In addition, plaintiffs seek rescission
and cancellation of various general releases obtained by the Partnership in
the course of the turnover of the Community to the residents. Previously,
the trial court had granted the Partnership summary judgment against the
plaintiffs' claims, based on the releases obtained by the Partnership. The
ruling was reversed on appeal, the appellate court finding that there were
issues of material fact, which precluded the entry of judgment for the
Partnership, and the case was remanded to the trial court for further
proceedings. On or about April 9, 1999, plaintiffs supplied a budget
estimate for repairs of the alleged defects and damages based on a limited
survey of nine buildings only. Based on this limited survey and assuming
that the same alleged defects and damages show up with the same frequency
in the entire 460 buildings, plaintiffs estimate the total repairs to cost
approximately $7.0 million. Based on the allegations of the amended
complaint, it would appear plaintiffs would seek to hold the Partnership
responsible for approximately $1.4 million of this amount. Discovery in
this litigation is in its early stages. The Partnership has not had an
opportunity to examine all of the buildings nor fully assess the alleged
merits of the plaintiffs' report. The Partnership is currently being
defended by counsel for one of its insurance carriers. The Partnership
intends to vigorously defend itself by, among other things, pursuing its
defenses of release and otherwise.

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 or 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. Merrill Lynch may seek indemnification from the
Partnership against liabilities and expenses Merrill Lynch incurs in these
claims. 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. 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.

<PAGE>

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 "Council of Villages case"). 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 said facilities to the Broken Sound homeowners on a
timely basis. Plaintiffs seek, through various theories, including but not
limited to breach of ordinances, breach of fiduciary duty, individual
counts for fraudulent inducement, 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.

This action has been consolidated with the Council of Villages case. The
Partnership believes the lawsuit is without merit and intends to vigorously
defend itself.

<PAGE>

Subsequent to December 31, 1999, the Court denied Disney's motion for
summary judgment regarding its obligation to indemnify, the Court finding
that there are issues of material fact regarding the circumstances under
which Disney must indemnify the Partnership. The Court granted the
Partnership's motion for summary judgment against Disney finding that
Disney is under a duty to defend the Partnership in this action. The Court
has also issued an oral ruling denying plaintiffs' motion to amend the
complaint to obtain punitive damages. There are a number of motions still
pending before the Court. Among the other motions still pending for
written orders are the following: the Partnership's motion for summary
judgment regarding fiduciary duty; the Partnership's motion for summary
judgment regarding defendants' attorneys' fees; the Partnership's motion
directed to plaintiffs' attempt to obtain approximately $80 million in
damages and plaintiffs' motion for rehearing, reconsideration or
clarification with respect to the Court's rulings on the Boca Raton
ordinance regarding open space, fraudulent inducement, and civil theft
(treble damages). The Council of Villages case is set for trial on
April 3, 2000 on all issues remaining after ruling on all pending matters.

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.

(11) TAX INCREMENT FINANCING ENTITIES

In connection with the development of the Partnership's Weston
Community, bond financing is utilized to construct certain on-site and off-
site infrastructure improvements, including major roadways, lakes, other
waterways and pump stations, which the Partnership would otherwise be
obligated to finance and construct as a condition to obtain certain
approvals for the project. This bond financing is obtained by the
District, a local government district operating in accordance with Chapter
190 of the Florida Statutes. Under this program, the Partnership is not
obligated directly to repay the bonds. Rather, the bonds are expected to
be fully serviced by special assessment taxes levied on the property, which
effectively collateralizes the obligation to pay such assessments until
land parcels are sold. At such point, the liability for the assessments
related to parcels sold will be borne by the purchasers through a tax
assessment on their property. These special assessment taxes are designed
to cover debt service on the bonds, including principal and interest
payments, as well as the operating and maintenance budgets of the District.

The use of this type of bond financing is a common practice for major land
developers in South Florida.

Prior to July 1991, the District had issued variable rate bonds
totaling approximately $96 million which were to mature in various years
commencing in May 1991 through May 2011. During 1995, in order to reduce
the exposure of variable rate debt, the District pursued new bond
issuances. As a result, during March and December 1995, the District
issued approximately $99 million and $13.3 million of bonds, respectively,
at fixed rates ranging from 4.0% to 8.25% per annum with maturities
commencing in May 1995 through May 2011. The proceeds from these bond
offerings were used to refund the bonds issued prior to July 1991 described
above, as well as to fund the issuance costs incurred in connection with
the offerings and deposits to certain reserve accounts for future bond debt

<PAGE>

service requirements. In July 1997, the District issued another
approximate $41.6 million of fixed rate bonds. These bonds bear interest
ranging from 4.0% to 5.0% (payable in May and November each year until
maturity or prior redemption), with maturities commencing in May 1999
through May 2027 (the "Series 1997 Bonds"). The Series 1997 Bonds were
issued for the purpose of paying costs of certain improvements to the
District's water management system, as well as to fund certain issuance
costs incurred in connection with the offerings, deposit funds into certain
reserve accounts, and pay capitalized interest on these bonds. At
December 31, 1999, the amount of bonds issued and outstanding totaled
approximately $125.7 million. For the years ended December 31, 1999, 1998
and 1997, the Partnership paid special assessments related to the bonds of
approximately $1.9 million, $3.6 million and $1.6 million, respectively.
Reference is made to note 1 for further discussion regarding these
assessments.

(12) FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS #107 requires the disclosure of the fair values of all financial
assets and liabilities for which it is practicable to estimate such values.

Value is defined in SFAS #107 as the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than
in a forced or liquidation sale. The Partnership believes the carrying
amounts of its Cash and cash equivalents, Trade and other accounts
receivable, Investments in and advances to joint ventures and Notes and
mortgages payable approximates their fair values at December 31, 1999 and
1998.

(13) PARTNERSHIP AGREEMENT

Pursuant to the terms of the Partnership Agreement (and subject to
Section 4.2F which allocates Profits, as defined, to the General Partner
and Associate Limited Partners), profits or losses of the Partnership will
be allocated as follows: (i) profits will be allocated such that the
General Partner and the Associate Limited Partners will be allocated
profits equal to the amount of cash flow distributed to them for such
fiscal period with the remainder allocated to the Holders of Interests,
except that in all events, the General Partner shall be allocated at least
1% of profits and (ii) losses will be allocated 1% to the General Partner,
1% to the Associate Limited Partners and 98% to the Holders of Interests.

In the event profits to be allocated in any given year do not equal or
exceed cash distributed to the General Partner and the Associate Limited
Partners for such year, the allocation of profits will be as follows: The
General Partner and the Associate Limited Partners will be allocated
profits equal to the amount of cash flow distributed to them for such year.

The Holders of Interests will be allocated losses such that the sum of
amounts allocated to the General Partner, Associate Limited Partners, and
Holders of Interests equals the profits for the given year.

For the years ended December 31, 1999, 1998 and 1997, the Partnership
had net income for financial reporting and Federal income tax purposes.
The amount of net income allocated, collectively, to the General and
Associate Limited Partners for financial reporting and tax purposes for the
year ended December 31, 1999 was approximately $14,316,000 and $14,313,000,
respectively. The amount of net income allocated, collectively, to the
General and Associate Limited Partners for financial reporting and tax
purposes for the year ended December 31, 1998 was approximately $6,062,000
and $6,061,000, respectively. The amount of net income allocated,
collectively, to the General and Associated Limited Partners for financial
reporting and tax purposes for the year ended December 31, 1997 was
approximately $4,016,000 and $4,015,000, respectively. These allocations
are based on cash distributions to the General Partner and the Associate
Limited Partners with an allocation of at least 1% of profits to the
General Partner in accordance with Section 4.2A of the Partnership
Agreement.

<PAGE>

In general, and subject to certain limitations, the distribution of
Cash Flow (as defined) after the initial admission date is allocated 90% to
the Holders of Interests and 10% to the General Partner and the Associate
Limited Partners (collectively) until the Holders of Interests have
received cumulative distributions of Cash Flow equal to a 10% per annum
return (non-compounded) on their Adjusted Capital Investments (as defined)
plus the return of their Capital Investments; provided, however, that
4.7369% of the 10% amount otherwise distributable to the General Partner
and Associate Limited Partners (collectively) is deferred, and such amount
is paid to the Holders of Interests, until the Holders of Interests have
received Cash Flow distributions equal to their Capital Investments (i.e.,
$1,000 per Interest). Any deferred amounts owed to the General Partner and
Associate Limited Partners (collectively) are distributable to them out of
Cash Flow to the extent of one-half of Cash Flow otherwise distributable to
the Holders of Interests at such time as the Holders of Interests have
received total distributions of Cash Flow equal to their Capital
Investments. Thereafter, all distributions of Cash Flow will be made 85%
to the Holders of Interests and 15% to the General Partner and the
Associate Limited Partners (collectively); provided, however, that the
General Partner and the Associate Limited Partners (collectively) shall be
entitled to receive an additional share of Cash Flow otherwise
distributable to the Holders of Interests equal to the lesser of an amount
equal to 2% of the cumulative gross selling prices of any interests in real
property of the Partnership (subject to certain limitations) or 13% of the
aggregate distributions of Cash Flow to all parties pursuant to this
sentence. With the distribution made in February 2000, the Holders of
Interests have received total distributions of Cash Flow in excess of their
Capital Investments (i.e., $1,000 per Interest). Accordingly, the General
Partner and Associated Limited Partners (collectively) are entitled to
receive any remaining amount of their deferred distributions out of one-
half of Cash Flow otherwise distributable to the Holders of Interests until
the remaining deferred amount has been paid to the General Partner and
Associate Limited Partners.

Pursuant to the Partnership Agreement, the Partnership may continue in
existence until December 31, 2087; however, the General Partner was to
elect to pursue one of the following courses of action on or before
October 31, 1997: (i) to cause the Interests to be listed on a national
exchange or to be reported by the National Association of Securities
Dealers Automated Quotation System; (ii) to purchase, or cause JMB Realty
Corporation or its affiliates to purchase, all of the Interests at their
then appraised fair market value (as determined by an independent
nationally recognized investment banking firm or real estate advisory
company); or (iii) to commence a liquidation phase in which all of the
Partnership's remaining assets are sold or disposed of by the end of the
fifteenth year from the termination of the offering. On October 23, 1997,
the Board of Directors of the General Partner met and approved a resolution
selecting the option for the Partnership to commence an orderly liquidation
of its remaining assets that is to be completed by October 2002.

(14) IMPAIRMENT OF LONG-LIVED ASSETS

<PAGE>

In December 1997, the Partnership recorded an inventory impairment of
$4.5 million to the carrying value of its River Hills Community. This loss
was recorded based upon an analysis of estimated discounted cash flows used
to determine the fair value of the Community. This analysis estimated the
sell-out of the remaining houses, homesites and land and property in this
Community by the year 2001. As a result of this adjustment, River Hill's
carrying value is recorded at approximately $7.0 million and $9.0 million
at December 31, 1999 and 1998, respectively.

(15) SUBSEQUENT EVENTS

During February 2000, the Partnership made a distribution for 1999 of
$48,361,056 to its Holders of Interests ($119.71 per Interest) and
$13,638,944 to the General Partner and Associate Limited Partners,
collectively.

During March 2000, distributions totaling $18,864 (approximately $.05
per Interest) were deemed to be paid to the Holders of Interests, all of
which was remitted to North Carolina tax authorities on their behalf for
the 1999 non-resident withholding tax. Distributions totaling $6,681 were
also paid or deemed to be paid to the General Partner and Associate Limited
Partners, collectively, all of which was also remitted to the North
Carolina tax authorities on their behalf.

In March 2000, the Partnership closed on the sale of the remaining
lots at its Cullasaja Club Community, as well as its remaining equity
memberships in the Cullasaja Club (the "Club"), to the Cullasaja Club, Inc.
and Cullasaja Realty Development, Inc., for a total sales price of
approximately $3.0 million. In conjunction with this closing, control of
the Club was transferred to the Club members. As a result, effective
March 15, 2000, the Partnership is no longer involved in the ownership of
the Club and has no further obligation to fund the Club's operations. The
Partnership will, however, continue to provide accounting and certain other
management services to the Club for a period of approximately eight months,
pursuant to the terms of the purchase agreement, for an agreed upon fee
plus direct out of pocket expenses.

<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTOR AND EXECUTIVE OFFICERS OF THE REGISTRANT

The General Partner of the Partnership is Arvida/JMB Managers, Inc., a
Delaware corporation, all of the outstanding shares of stock of which are
owned by AF Investors, LLC, a Delaware limited liability company,
substantially all of the outstanding membership interests of which are
owned indirectly by Northbrook Corporation, a Delaware corporation.
Substantially all of the outstanding shares of stock of Northbrook
Corporation are owned by JMB Realty Corporation, a Delaware corporation
("JMB"), and certain of its officers, directors, members of their families
and their affiliates. Substantially all of the outstanding shares of stock
of JMB are owned by certain of its officers, directors, members of their
families and their affiliates. Arvida/JMB Managers, Inc. was substituted
as general partner of the Partnership as a result of a merger on March 30,
1990 of an affiliated corporation that was the then general partner of the
Partnership into Arvida/JMB Managers, Inc., which, as the surviving
corporation of such merger, continues as General Partner. All references
herein to "General Partner" include Arvida/JMB Managers, Inc. and its
predecessor, as appropriate. The General Partner has responsibility for
all aspects of the Partnership's operations. The Associate Limited
Partners of the Partnership are Arvida/JMB Associates, an Illinois general
partnership, of which JMB and certain of its current and former officers
and directors and their affiliates are, indirectly, partners, and
Arvida/JMB Limited Partnership, an Illinois limited partnership, of which
Arvida/JMB Associates is the general partner. An affiliate of Merrill
Lynch, Pierce, Fenner & Smith Incorporated is the limited partner of
Arvida/JMB Limited Partnership. Various relationships of the Partnership
to the General Partner and its affiliates are described under the caption
"Conflicts of Interest" at pages 21-24 of the Prospectus, which description
is hereby incorporated herein by reference to Exhibit 99.1 to this report.

The directors and executive officers of the General Partner of the
Partnership are as follows:

SERVED IN
NAME OFFICE OFFICE SINCE
---- ------ ------------

Judd D. Malkin Chairman 04/08/87
and Director 05/31/96
Neil G. Bluhm President 04/08/87
and Director 05/31/96
H. Rigel Barber Vice President 04/08/87
Gailen J. Hull Vice President 04/09/87
Gary Nickele Vice President 04/08/87
Burton E. Glazov Director 05/31/96
Stuart C. Nathan Director 05/31/96
A. Lee Sacks Director 05/31/96
John G. Schreiber Director 05/31/96
James D. Motta Vice President 04/09/87

Effective May 31, 1996, the Board of Directors of the General Partner
was expanded to provide for six directors. Judd D. Malkin, Neil G. Bluhm,
Burton E. Glazov, Stuart C. Nathan, A. Lee Sacks and John G. Schreiber were
elected to the Board of Directors of the General Partner, and Gary Nickele,
who had been the sole director of the General Partner since December 1990,
resigned as Director. In addition, the Board of Directors of the General
Partner established a special committee, consisting of Messrs. Malkin,
Glazov, Nathan, Sacks and Schreiber, to deal with all matters relating to
tender offers for Interests as well as certain other matters.

<PAGE>

There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve a one-year
term until the annual meeting of the General Partner to be held on
August 8, 2000. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the General Partner to be held on August 8, 2000.
There are no arrangements or understandings between or among any of said
directors or officers and any other person pursuant to which any director
or officer was selected as such.

The foregoing directors and certain of the officers are also officers
and/or directors of various affiliated companies, including JMB, which is
the corporate general partner of Carlyle Real Estate Limited Partnership-XI
("Carlyle-XI"), Carlyle Real Estate Limited Partnership-XIII
("Carlyle-XIII"), Carlyle Real Estate Limited Partnership-XIV
("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV ("Carlyle-XV")
and Carlyle Income Plus, L.P.-II ("Carlyle Income Plus-II") and the
managing general partner of JMB Income Properties, Ltd.-V ("JMB Income-V"),
JMB Income Properties, Ltd.-VII ("JMB Income-VII") and JMB Income
Properties, Ltd.-XI ("JMB Income-XI"). JMB is also the sole general
partner of the associate general partner of most of the foregoing
partnerships. Most of the foregoing directors and officers are also
officers and/or directors of various affiliated companies of JMB. The
directors and certain of such officers are also partners, directly or
indirectly, of certain partnerships (the "Associate Partnerships") which
are associate general partners in the following real estate limited
partnerships: Carlyle-XI, Carlyle-XIII, Carlyle-XIV, Carlyle-XV, JMB-VII,
JMB Income-XI, and Carlyle Income Plus-II. Most of the foregoing directors
and officers are partners, indirectly through other partnerships, of the
Associate Limited Partners of the Partnership.

The business experience during the past five years of such directors
and officers of the General Partner of the Partnership includes the
following:

Judd D. Malkin (age 62) is Chief Financial Officer, Chairman and a
director of JMB and an officer and/or director of various JMB affiliates.
He is also an individual general partner of JMB Income-V. Mr. Malkin has
been associated with JMB since October, 1969. Mr. Malkin is also a
director of Urban Shopping Centers, Inc., an affiliate of JMB that is a
real estate investment trust in the business of owning, managing and
developing shopping centers. He is also a director of Chisox Corporation,
which is the general partner of a limited partnership that owns the Chicago
White Sox, a Major League Baseball team, and CBLS, Inc., which is the
general partner of the general partner of a limited partnership that owns
the Chicago Bulls, a National Basketball Association team. He is a
Certified Public Accountant.

Neil G. Bluhm (age 62) is President and a director of JMB and an
officer and/or director of various JMB affiliates. He is also an
individual general partner of JMB Income-V. Mr. Bluhm has been associated
with JMB since August, 1970. Mr. Bluhm is also a principal of Walton
Street Capital, L.L.C., which sponsors real estate investment funds, and a
director of Urban Shopping Centers, Inc. He is a member of the Bar of the
State of Illinois and a Certified Public Accountant.

Burton E. Glazov (age 61) is a director of JMB. He has been
associated with JMB since June, 1971 and served as an Executive Vice
President of JMB until December 1990. Mr. Glazov is currently retired. He
is a member of the Bar of the State of Illinois.

Stuart C. Nathan (age 58) is Executive Vice President and a director
of JMB and an officer and/or director of various JMB affiliates. He has
been associated with JMB since July, 1972. He is a member of the Bar of
the State of Illinois.

<PAGE>

A. Lee Sacks (age 66) is a director of JMB. He has been associated
with JMB since December, 1972. He is also President and a director of JMB
Insurance Agency, Inc.

John G. Schreiber (age 53) is a director of JMB. He has been
associated with JMB since December, 1970 and served as an Executive Vice
President of JMB until December 1990. Mr. Schreiber is President of
Schreiber Investments, Inc., a company engaged in the real estate
investing. He is also a senior advisor and partner of Blackstone Real
Estate Advisors L.P., an affiliate of the Blackstone Group, L.P.
Mr. Schreiber is also a director of Urban Shopping Centers, Inc., Host
Marriott Corporation, The Brickman Group, Ltd., which is engaged in the
landscape maintenance business, and a number of investment companies
advised by T. Rowe Price, Inc. and its affiliates, and a trustee of Amli
Residential Properties Trust. He holds a Masters degree in Business
Administration from Harvard University Graduate School of Business.

H. Rigel Barber (age 51) is Chief Executive Officer and Executive Vice
President of JMB and an officer of various JMB affiliates. Mr. Barber has
been associated with JMB since March, 1982. He received a J.D. degree from
the Northwestern Law School and is a member of the Bar of the State of
Illinois.

Gailen J. Hull (age 51) is a Senior Vice President of JMB and an
officer of various JMB affiliates. Mr. Hull has been associated with JMB
since March, 1982. He holds a Masters degree in Business Administration
from Northern Illinois University and is a Certified Public Accountant.

Gary Nickele (age 47) is an Executive Vice President and General
Counsel of JMB and an officer and/or director of various JMB affiliates.
Mr. Nickele has been associated with JMB since February, 1984. He holds a
J.D. degree from the University of Michigan Law School and is a member of
the Bar of the State of Illinois.

James D. Motta (age 44) has been President and Chief Executive Officer
of Arvida since April 1995, and President and Chief Executive Officer of
St. Joe/Arvida Company, L.P. ("St. Joe/Arvida"), a joint venture among
affiliates of The St. Joe Company and JMB for real estate development,
ownership and management, since November 1997. Previously, Mr. Motta was
Executive Vice President and Chief Operating Officer of Arvida (May, 1994
to March, 1995).

Neil G. Bluhm is an Executive Vice President, a director and Vice
Chairman of the Board of Directors of Liberty House, Inc., and Judd D.
Malkin is Executive Vice President, a director and Chairman of the Board of
Directors of Liberty House, Inc. On March 19, 1998, Liberty House, Inc.
filed a voluntary petition under Chapter 11 of the United States Bankruptcy
Code. Liberty House, Inc., which owns and operates department stores in
Hawaii and Guam, filed the Chapter 11 proceeding in part to enable it to
achieve an orderly reorganization of its debt to serviceable levels.

<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires, among others, persons who beneficially own more than 10% of the
Interests to file initial statements of their beneficial ownership and
statements of changes in their beneficial ownership of the Interests on
Form 3, Form 4 and Form 5 with the Securities and Exchange Commission
("SEC"). Such persons are also required by SEC rules to furnish the
Partnership a copy of such statements filed with the SEC. Based on a
statement filed on Form 5, the Partnership believes that during 1999 Swamp
Hall Properties, L.P. failed to file a statement on Form 3 (involving one
transaction) to report a disposition of its indirect beneficial ownership
of 106,200.4399 Interests held directly by St. Joe Capital II, Inc. in
connection with a liquidation of Swamp Hall Properties, L.P.

ITEM 11. EXECUTIVE COMPENSATION

The officers and directors of the General Partner receive no direct
remuneration in such capacities from the Partnership. The General Partner
and the Associate Limited Partners are entitled to receive a share of cash
distributions, when and as cash distributions are made to the Holders of
Interests, and a share of profits or losses as described under the caption
"Cash Distributions and Allocations of Profit and Losses" at pages 61 to 64
of the Prospectus and at pages A-9 to A-16 of the Partnership Agreement,
which descriptions are incorporated herein by reference to Exhibit 99.1, to
this report. Reference is also made to Notes 1 and 13 for a description of
such distributions and allocations. The General Partner and the Associate
Limited Partners, collectively, received cash distributions in 1999
totaling $3,930,998 and in February 2000 totaling $13,638,944. In
connection with the settlement of certain litigation, the General Partner
and the Associate Limited Partners deferred approximately $1,259,000 of
their share of the August 1997 distribution, which was otherwise
distributable to them, and such deferred distribution amount was used by
the Partnership to pay a portion of the legal fees and expenses in such
litigation. The General Partner and Associate Limited Partners, as part of
the distribution made to them in February 2000, received such deferred
amount. In addition, as part of the distribution made to them in February
2000, the General Partner and Associate Limited Partners received
$6,305,844 of the total $12,541,500 which had been deferred through
December 31, 1999, pursuant to the terms of the Partnership Agreement.
Pursuant to the terms of the Partnership Agreement, the remaining deferred
distributions payable to the General Partner and Associate Limited Partners
totaling $6,235,656 will be paid to them out of one-half of net cash flow
otherwise distributable to the Holders of Interests until all such deferred
amounts have been paid. Pursuant to the Partnership Agreement, the General
Partner and Associate Limited Partners were allocated profits for tax
purposes for 1999 of approximately $14,316,000. Reference is made to
Note 13 for further discussion of this allocation.

The Partnership is permitted to engage in various transactions
involving the General Partner and its affiliates, as described under the
captions "Management of the Partnership" at pages 56 to 59, "Conflicts of
Interest" at pages 21-24 of the Prospectus and "Rights, Powers and Duties
of the General Partner" at pages A-16 to A-28 of the Partnership Agreement,
which descriptions are hereby incorporated herein by reference to Exhibit
99.1 to this report. Such transactions may involve conflicts of interest
for the General Partner or its affiliates. The relationships of the
General Partner (and its directors and executive officers) and its
affiliates to the Partnership are set forth above in Item 10.

At December 31, 1999, the Partnership was owed approximately $30,400
from Arvida for services performed by employees of the Partnership on
behalf of Arvida, all of which was received by the Partnership as of
February 11, 2000.

<PAGE>

The Partnership and Arvida entered into an information systems sharing
agreement that sets forth (i) the Partnership's and Arvida's mutual
ownership rights with respect to certain proprietary computer software
jointly developed by the Partnership and Arvida, and (ii) the arrangement
for the sharing by Arvida of certain computer hardware and software owned,
leased or licensed by the Partnership and its affiliates and various
related information systems services (collectively, the "Information
Resources"), provided that Arvida pays its allocable share of the costs of
using such Information Resources.

In November 1997, St. Joe/Arvida acquired the major assets of Arvida,
including the Arvida name and service marks with respect to the Arvida
name. Pursuant to a license agreement with Arvida, the Partnership has a
non-exclusive right to use the Arvida name and service marks with respect
to the Arvida name. In connection with the acquisition of Arvida's assets,
St. Joe/Arvida was assigned Arvida's rights and obligations under the
license agreement with the Partnership. In addition, St. Joe/Arvida was
assigned Arvida's rights and obligations under the information systems
sharing agreement discussed above.

St. Joe/Arvida also entered into a sub-management agreement with
Arvida, effective January 1, 1998, whereby St. Joe/Arvida provides a
substantial portion of the development and management supervisory and
advisory services (and the personnel therefor) to the Partnership that
Arvida would otherwise provide pursuant to its management agreement with
the Partnership. Effective January 1, 1998, St. Joe/Arvida employs most of
the personnel previously employed by Arvida, and the services provided to
the Partnership pursuant to the sub-management agreement are provided by
the same personnel. St. Joe/Arvida is reimbursed for such services and
personnel on the same basis as Arvida under its management agreement, and
such reimbursements are made directly to St. Joe/Arvida by the Partnership.

The total of such costs for the year ended December 31, 1999, was
approximately $4,545,000. In addition, approximately $166,000 was
outstanding at December 31, 1999 pursuant to the sub-management agreement,
all of which was paid as of February 11, 2000. The Partnership also
receives reimbursement from St. Joe/Arvida for certain general and
administrative costs including, and without limitation, salary and salary-
related costs relating to work performed by employees of the Partnership on
behalf of St. Joe/Arvida. For the year ended December 31, 1999, the
Partnership received approximately $1,942,000 from St. Joe/Arvida or its
affiliates. In addition, $196,400 was owed to the Partnership at
December 31, 1999, all of which was received as of February 11, 2000. The
St. Joe Company owns a majority interest in St. Joe/Arvida, and affiliates
of JMB own a minority interest in St. Joe/Arvida.

JMB Insurance Agency, Inc., an affiliate of the General Partner,
earned and received insurance brokerage commissions in 1999 of
approximately $249,700 in connection with providing insurance coverage for
certain of the properties of the Partnership, all of which was paid as of
December 31, 1999. Such commissions are at rates set by insurance
companies for the classes of coverage provided.

The General Partner of the Partnership or its affiliates are entitled
to reimbursement for their direct expenses or out-of-pocket expenses
relating to the administration of the Partnership and the acquisition,
development, ownership, supervision, and operation of the Partnership
assets. In 1999, the General Partner and its affiliates were entitled to
reimbursements for legal, accounting, portfolio management and treasury
services. Such costs for 1999 were approximately $263,200, all of which
was paid as of December 31, 1999.

<PAGE>

The Partnership was also entitled to receive reimbursements from
affiliates of the General Partner for certain general and administrative
expenses including, and without limitation, salary and salary-related
expenses relating to work performed by employees of the Partnership and
certain out-of-pocket expenditures incurred on behalf of such affiliates.
For the year ended December 31, 1999, the total of such costs was
approximately $807,100. Approximately $96,800 was outstanding as of
December 31, 1999, all of which was received as of February 29, 2000.

Amounts payable to or by the General Partner or its affiliates do not
bear interest.

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

(a) The following have reported beneficial ownership of more than 5%
of the outstanding Interests of the Partnership.

NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------

Limited Partnership St. Joe Capital II, Inc. 106,200.4399 26.3%
Interests and c/o Griffin Corporate Interests
Assignee Interests Services directly (1)
therein 300 Delaware Avenue,
9th floor
Wilmington, Delaware 19801

Limited Partnership The St. Joe Company 106,200.4399 26.3%
Interests and 1650 Prudential Drive, Interests
Assignee Interests Suite 400 indirectly (2)
therein Jacksonville, Florida 32207

Limited Partnership Alfred I. duPont 106,200.4399 26.3%
Interests and Testamentary Trust Interests
Assignee Interests indirectly (3)
therein

Limited Partnership The Nemours 106,200.4399 26.3%
Interests and Foundation Interests
Assignee Interests indirectly (3)
therein

Limited Partnership Winfred L. Thornton 106,200.4399 26.3%
Interests and Interests
Assignee Interests indirectly (3)
therein

Limited Partnership Jacob C. Belin 106,200.4399 26.3%
Interests and Interests
Assignee Interests indirectly (3)
therein

Limited Partnership William T. 106,200.4399 26.3%
Interests and Thompson III Interests
Assignee Interests indirectly (3)
therein

Limited Partnership Hugh M. Durden 106,200.4399 26.3%
Interests and Interests
Assignee Interests indirectly (3)
therein

Limited Partnership John F. Porter III 106,200.4399 26.3%
Interests and Interests
Assignee Interests indirectly (3)
therein

Limited Partnership Herbert H. Peyton 106,200.4399 26.3%
Interests and Interests
Assignee Interests indirectly (3)
therein

(1) Reflects beneficial ownership of Interests held directly by St. Joe
Capital-II, Inc. ("St. Joe Capital") for which St. Joe Capital has shared
voting and dispositive power.

<PAGE>

(2) Reflects beneficial ownership of Interests held by St. Joe Capital
for which The St. Joe Company has shared voting and dispositive power. St.
Joe Capital is a wholly owned subsidiary of The St. Joe Company.

(3) Reflects indirect beneficial ownership of Interests held directly by
St. Joe Capital. Messrs. Thorton, Belin, Thompson, Durden, Porter and
Peyton are the trustees and directors of the Alfred I. duPont Testamentary
Trust (the "Trust") and The Nemours Foundation (the "Foundation"),
respectively. As a result of the Trust's direct and beneficial ownership
of approximately 58% of the outstanding shares of common stock of The St.
Joe Company (based on the reported number of such shares outstanding on
January 31, 2000), the Trust, Foundation and Messrs. Thorton, Belin,
Thompson, Durden, Porter and Peyton are or may be deemed to be indirect
beneficial owners of 106,200.4399 Interests for which they each have shared
voting and dispositive power. See notes (1) and (2) above. The address
for each of the Trust, Foundation and Messrs. Thorton, Belin, Thompson,
Durden, Porter and Peyton is 1650 Prudential Drive, Suite 300,
Jacksonville, Florida 32207.

(b) The General Partner and its executive officers and directors
beneficially own the following Interests of the Partnership:

NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------

Limited Partnership General Partner None --
Interests and and its executive
Assignee Interests officers and
therein directors as
a group
- ---------------

No executive officer or director of the General Partner of the
Partnership possesses a right to acquire beneficial ownership of Interests
of the Partnership.

(c) There exists no arrangement, known to the Partnership, the
operation of which may at a subsequent date result in a change in control
of the Partnership.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There were no significant transactions or business relationships with
the General Partner, affiliates or their management other than those
described in Items 10, 11 and 12 above.

<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report:

1. Financial Statements. (See Index to Financial
Statements filed with this annual report on Form 10-K).

2. 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. 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 the Partnership's Report on
Form 10Q (File number 0-16976) dated November 11, 1992.

4.2. 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.
***

4.3. 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. ***

4.4. 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. ***

4.5. 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. ***

<PAGE>

4.6. 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.

4.7. 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 incorporated by reference to Exhibit 4.15
to the Partnership's Form 10-K (File No. 0-16976) dated March 25, 1996.

4.8. Letter Agreement dated March 1, 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 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 by reference to Exhibit 4.16 to
the Partnership's Form 10-K (File No. 0-16976) dated March 25, 1996.

4.9. Commitment for a Term Loan by and between
Arvida/JMB Partners, L.P. and Starwood/Florida Funding, L.L.C. dated
September 12, 1996 is incorporated by reference to Exhibit 4.1 to the
Partnership's Form 8-K (Form No. 0-16976) dated September 12, 1996.

4.10. Commitment Letter dated March 12, 1997, from
Barnett Bank of Broward County, N.A. is hereby incorporated herein by
reference to Exhibit 4.10 to the Partnership's Report on Form 10-K (File
No. 0-16976) dated March 21, 1997 (as amended).

4.11 Credit Agreement dated July 31, 1997 between
Barnett Bank, N.A. and The Other Lenders and Arvida/JMB Partners, L.P. is
hereby incorporated by reference to the Partnership's Report for June 30,
1997 on Form 10-Q (File No. 0-16976) dated August 8, 1997, as amended.

4.12 Amendment to Credit Agreement dated September
1, 1998 is hereby incorporated herein by reference to Exhibit 4.1 to the
Partnership's Report for September 30, 1998 on Form 10-Q (File No. 0-16976)
dated November 11, 1998.

<PAGE>

Absolute Assignment of Mortgages and Other
Documents for $11,250,000 Term Loan Promissory Note, $3,000,000 Line of
Credit Promissory Note, and $750,000 Demand Note Letter of Credit
Promissory Note.

Absolute Assignment of Mortgages and Other
Documents for $28,125,000 Term Loan Promissory Note, $7,500,000 Line of
Credit Promissory Note, and $1,875,000 Demand Note Letter of Credit
Promissory Note.

Absolute Assignment of Deed to Secure Debt and
Other Documents.

4.13 Consolidated and Restated Term Loan Promissory
Note of the Certain Term Loan Promissory Note dated July 31, 1997 in favor
of Barnett Bank, N.A., First Union National Bank, BankBoston, N.A., and
Bank United is hereby incorporated herein by reference to Exhibit 4.2 to
the Partnership's Report for September 30, 1998 on Form 10-Q (File No. 0-
16976) dated November 11, 1998.

Term Loan Promissory Note dated September 1,
1998 Payable to the Order of First Union National Bank.

Consolidated and Restated Line of Credit
Promissory Note of the Certain Line of Credit Promissory Notes dated July
31, 1997 in Favor of Barnett Bank, N.A., First Union National Bank,
BankBoston, N.A., and Bank United.

Line of Credit Promissory Note dated
September 1, 1998 Payable to the Order of First Union National Bank.

Consolidated and Restated Demand Note Letter
of Credit Line Promissory Note of the Certain Consolidated and Restated
Demand Note Letter of Credit Line Promissory Note dated July 31, 1997 in
favor of Barnett Bank, N.A., First Union National Bank, BankBoston, and
Bank United.

Letter of Credit Line Demand Note dated
September 1, 1998 Payable to the Order of First Union National Bank.

4.14 Bifurcation of Note Agreement of that Certain
Consolidated and Restated Term Loan Promissory Note dated September 1, 1998
is hereby incorporated herein by reference to Exhibit 4.3 to the
Partnership's Report for September 30, 1998 on From 10-Q (File No. 0-16976)
dated November 11, 1998.

Exhibit A to Bifurcation of Note Agreement -
Term Loan Promissory Note dated September 1, 1998 Payable to the Order of
First Union National Bank

Exhibit B to Bifurcation of Note Agreement -
Term Loan Promissory Note dated September 1, 1998 Payable to the Order of
First Union National Bank.

<PAGE>

Bifurcation of Note Agreement of that Certain
Consolidated and Restate Line of Credit Promissory Note dated September 1,
1998.

Exhibit A to Bifurcation of Note Agreement -
Line of Credit Promissory Note dated September 1, 1998 Payable to the Order
of First Union National Bank.

Exhibit B to Bifurcation of Note Agreement -
Line of Credit Promissory Note dated September 1, 1998 Payable to the Order
of First Union National Bank.

Bifurcation of Note Agreement of that Certain
Consolidated and Restated Demand Note Letter of Credit dated September 1,
1998.

Exhibit A to Bifurcation of Note Agreement -
Letter of Credit Line Demand Note dated September 1, 1998 Payable to the
Order of First Union National Bank.

Exhibit B to Bifurcation of Note Agreement -
Letter of Credit Line Demand Note dated September 1, 1998 Payable to the
Order of First Union National Bank.

4.15 Renewal Term Loan Promissory Note dated
September 1, 1998 is hereby incorporated herein by reference to Exhibit 4.4
to the Partnership's Report for September 30, 1998 on Form 10-Q (File No.
0-16976) dated November 11, 1998.

Renewal Line of Credit Promissory Note dated
September 1, 1998.

Renewal Demand Note Letter of Credit Line
dated September 1, 1998.

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
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. Stipulation of Settlement dated April 1, 1997,
filed in the Circuit Court of Cook County, Illinois, Chancery Department.

<PAGE>

10.6. Agreement for Sale and Purchase of Real
Property dated July 25, 1997 by and between Center Retail Partners, Center
Office Partners, Center Hotel Limited Partnership, and Arvida/JMB Partners,
L.P. and Stanford Hotels Corporation for the sale of Arvida Parkway Center
is incorporated herein by reference to Exhibit 2.1 to the Partnership's
report on Form 8-K (File No. 0-16976) dated July 25, 1997.

10.7 Agreement for Purchase and Sale dated
August 22, 1997 by and between Arvida/Lakes Plaza L.P. and Principal Mutual
Life Insurance Company with respect to Weston Lakes Plaza.****

10.8 Agreement for Purchase and Sale dated
August 22, 1997 by and between Country Isles Associates and Principal
Mutual Life Insurance Company with respect to Country Isles Plaza.****

10.9 Amendment dated August 22, 1997 to Agreement
for Sale and Purchase by and between Center Retail Partners, Center Hotel
Limited Partnership, Center Office Partners and Arvida/JMB Partners, L.P.
and Stanford Hotels Corporation.****

10.10 Second Amendment dated October 17, 1997 to
Agreement for Sale and Purchase by and between Center Retail Partners,
Center Hotel Limited Partnership, Center Office Partners and Arvida/JMB
Partners, L.P. and Stanford Hotels Corporation.****

10.11 First Amendment dated September 29, 1997 to
Agreement for Purchase and Sale by and between Country Isles Associates and
Principal Mutual Life Insurance Company is hereby incorporated herein by
reference to Exhibit 10.13 to the Partnership's Report for December 31,
1997 on From 10-K (File No. 0-16976) dated March 25, 1998.

10.12 Second Amendment dated October 2, 1997 to
Agreement for Purchase and Sale by and between Country Isles Associates and
Principal Mutual Life Insurance Company is hereby incorporated herein by
reference to Exhibit 10.14 to the Partnership's Report for December 31,
1997 on form 10-K (File No. 0-16976) dated March 25, 1998.

10.13 Information Systems Sharing Agreement dated
November 6, 1997 between Arvida/JMB Partners, L.P. and Arvida Company is
hereby incorporated herein by reference to Exhibit 10.15 to the
Partnership's Report for December 31, 1997 on Form 10-K (File No. 0-16976)
dated March 25, 1998.

<PAGE>

10.14 Asset Purchase Agreement by and between Gulf
and Pacific Communications Limited Partnership and Schurz Communications,
Inc. dated as of July 15, 1998 is incorporated by reference toExhibit 10.1
to the Partnership's Form 10-Q Report (File No. 0-16976) filed on
November 11, 1998.

21. Subsidiaries of the Registrant.

27. Financial Data Schedule.

99.1. Pages 21-24, 56-59, 61-64, A-9 to A-28, A-31
to A-33, and B-2 of the Partnership's Prospectus dated September 16, 1987
are filed herewith.

* 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 3 and 4, respectively, to the Partnership's Form 10-
K Report (File No. 0-16976) filed on March 27, 1990 and hereby 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) under the Securities Act
of 1993 filed on March 27, 1995 and incorporated herein by reference.

**** Previously filed with the Securities and Exchange
Commission as Exhibits 10.7, 10.8, 10.11 and 10.12, respectively, to the
Partnership's Report on Form 10-Q (File No. 0-16976) filed on November 12,
1997 and incorporated herein by reference.

The Partnership agrees to furnish to the Securities and
Exchange Commission upon request a copy of each instrument with respect to
long-term indebtedness of the Partnership and its consolidated
subsidiaries, the authorized principal amount of which is 10% or less than
the total assets of the Partnership and its subsidiaries on a consolidated
basis.

(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.

No annual report or proxy material for the fiscal year 1999 has been
sent to the Partners of the Partnership. An annual report will be sent to
the Partners subsequent to this filing.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership 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)

GAILEN J. HULL
By: Gailen J. Hull
Vice President
Date: March 24, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

JUDD D. MALKIN
By: Judd D. Malkin, Chairman, Chief
Financial Officer and Director
Date: March 24, 2000

BURTON E. GLAZOV
By: Burton E. Glazov, Director
Date: March 24, 2000

GAILEN J. HULL
By: Gailen J. Hull, Vice President
(Principal Accounting Officer)
Date: March 24, 2000

A. LEE SACKS
By: A. Lee Sacks, Director
Date: March 24, 2000

STUART C. NATHAN
By: Stuart C. Nathan, Director
Date: March 24, 2000

<PAGE>

<TABLE>
ARVIDA/JMB PARTNERS, L.P.

EXHIBIT INDEX

DOCUMENT
INCORPORATED SEQUENTIALLY
EXHIBIT NO. EXHIBIT BY REFERENCE NUMBERED PAGE
- ----------- ------- ------------ -------------
<S> <C> <C> <C>
3.1. Amended and Restated Agree-
ment of Limited Partnership
of the Partnership. Yes

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

4.1. 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. Yes

4.2. 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. Yes

4.3. 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. Yes

4.4. 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. Yes

<PAGE>

DOCUMENT
INCORPORATED SEQUENTIALLY
EXHIBIT NO. EXHIBIT BY REFERENCE NUMBERED PAGE
- ----------- ------- ------------ -------------
4.5. 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. Yes

4.6. 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. Yes

4.7. 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. Yes

4.8. Letter Agreement dated March 1, 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 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. Yes

4.9. Commitments for a Term Loan by and between
Arvida/JMB Partners, L.P. and Starwood/Florida
Funding, L.L.C. dated September 12, 1996. Yes

4.10. Commitment Letter dated March 12, 1997, from
Barnett Bank of Broward County N.A. Yes

4.11. Credit Agreement dated July 31, 1997
between Barnett Bank, N.A. and The Other
Lenders and Arvida/JMB Partners, L.P. Yes

<PAGE>

DOCUMENT
INCORPORATED SEQUENTIALLY
EXHIBIT NO. EXHIBIT BY REFERENCE NUMBERED PAGE
- ----------- ------- ------------ -------------
4.12. Amendment to Credit Agreement dated
September 1, 1998 Yes

Absolute Assignment of Mortgages and Other
Documents for $11,250,000 Term Loan Promissory
Note, $3,000,000 Line of Credit Promissory Note,
and $750,000 Demand Note Letter of Credit
Promissory Note.

Absolute Assignment of Mortgages and Other
Documents for $28,125,000 Term Loan Promissory
Note, $7,500,000 Line of Credit Promissory Note,
and $1,875,000 Demand Note Letter of Credit
Promissory Note.

Absolute Assignment of Deed to Secure Debt and
Other Documents.

4.13. Consolidated and Restated Term Loan Promissory Note
of the Certain Term Loan Promissory Note dated
July 31, 1997 Yes

Term Loan Promissory Note dated September 1, 1998
Payable to the Order of First Union National bank.

Consolidated and Restated Line of Credit Promissory
Note of the Certain Line of Credit Promissory Notes
dated July 31, 1997

Line of Credit Promissory Note dated September 1, 1998
Payable to the Order of First Union National Bank.

Consolidated and Restated Demand Note Letter of Credit
Line Promissory Note of the Certain Consolidated and
Restated Demand Note Letter of Credit Line Promissory
Note dated July 31, 1997

Letter of Credit Line Demand Note dated September 1,
1998 Payable to the Order of First Union National Bank.

<PAGE>

DOCUMENT
INCORPORATED SEQUENTIALLY
EXHIBIT NO. EXHIBIT BY REFERENCE NUMBERED PAGE
- ----------- ------- ------------ -------------
4.14. Bifurcation of Note Agreement of that Certain
Consolidated and Restated Term Loan Promissory Note
dated September 1, 1998 Yes

Exhibit A to Bifurcation of Note Agreement - Term Loan
Promissory Note dated September 1, 1998 Payable to the
Order of First Union National Bank

Exhibit B to Bifurcation of Note Agreement - Term Loan
Promissory Note dated September 1, 1998 Payable to the
Order of First Union National Bank.

Bifurcation of Note Agreement of that Certain
Consolidated and Restate Line of Credit Promissory
Note dated September 1, 1998.

Exhibit A to Bifurcation of Note Agreement - Line of
Credit Promissory Note dated September 1, 1998
Payable to the Order of First Union National Bank.

Exhibit B to Bifurcation of Note Agreement - Line of
Credit Promissory Note dated September 1, 1998
Payable to the Order of First Union National Bank

Bifurcation of Note Agreement of that Certain
Consolidated and Restated Demand Note Letter of Credit
dated September 1, 1998.

Exhibit A to Bifurcation of Note Agreement - Letter of
Credit Line Demand Note dated September 1, 1998
Payable to the Order of First Union National Bank.

Exhibit B to Bifurcation of Note Agreement - Letter of
Credit Line Demand Note dated September 1, 1998
Payable to the Order of First Union National Bank.

4.15. Renewal Term Loan Promissory Note dated September 1,
1998. Yes

Renewal Line of credit Promissory Note dated
September 1, 1998.

Renewal Demand Note Letter of Credit Line
dated September 1, 1998.

10.1. Agreement between the Partnership and
The Walt Disney Company dated January 29, 1987. Yes

<PAGE>

DOCUMENT
INCORPORATED SEQUENTIALLY
EXHIBIT NO. EXHIBIT BY REFERENCE NUMBERED PAGE
- ----------- ------- ------------ -------------
10.2. Management, Advisory and
Supervisory Agreement. Yes

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

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

10.5. Stipulation of Settlement dated
April 1, 1997, filed in the Circuit
Court of Cook County, Illinois,
Chancery Department Yes

10.7. Agreement for Purchase and Sale dated
August 22, 1997 by and between Arvida/Lakes
Plaza L.P. and Principal Mutual Life
Insurance Company with respect
to Weston Lakes Plaza Yes

10.8. Agreement for Purchase and Sale dated
August 22, 1997 by and between Country Isles
Associates and Principal Mutual Life Insurance
Company with respect to Country Isles Plaza Yes

<PAGE>

DOCUMENT
INCORPORATED SEQUENTIALLY
EXHIBIT NO. EXHIBIT BY REFERENCE NUMBERED PAGE
- ----------- ------- ------------ -------------
10.9. Amendment dated August 22, 1997 to
Agreement for Sale and Purchase by and
between Center Retail Partners, Center Hotel
Limited Partnership, Center Office Partners
and Arvida/JMB Partners, L.P. and
Stanford Hotels Corporation Yes

10.10. Second Amendment dated October 17, 1997 to
Agreement for Sale and Purchase by and
between Center Retail Partners, Center Hotel
Limited Partnership, Center Office Partners
and Arvida/JMB Partners, L.P. and Stanford
Hotels Corporation Yes

10.11. First Amendment dated September 29, 1997
to Agreement for Purchase and Sale by and
between Country Isles Associates and
Principal Mutual Life Insurance Company Yes

10.12. Second Amendment dated October 2, 1997
to Agreement for Purchase and Sale by
and between Country Isles Associates
and Principal Mutual Life Insurance
Company Yes

10.13. Information Systems Sharing Agreement dated
November 6, 1997 between Arvida/JMB Partners,
L.P. and Arvida Company Yes

10.14. Asset Purchase Agreement by and between Gulf
and Pacific Communications Limited Partnership
and Schurz Communications, Inc. dated as of
July 15, 1998 is incorporated by reference to
Exhibit 10.1 to the Partnership's Form 10-Q Report
(File No. 0-16976) filed on November 11, 1998. Yes

21. Subsidiaries of the Registrant No

27. Financial Data Schedule No

99.1. Pages 21-24, 56-59, 61-64 and
A-9 to A-28, A-31 to A-33, and B-2 of
the Partnership's Prospectus
dated September 16, 1987 filed
pursuant to Rules 424(b) and
424(c) are filed herewith. No

</TABLE>

EXHIBIT 21

LIST OF SUBSIDIARIES

The Partnership is a general partner in Arvida/JMB Partners, Center Office
Partners and Center Retail Partners, all of which are Florida general
partnerships. The Partnership is the owner of Southeast Florida Holdings,
Inc., an Illinois corporation. The Partnership is a limited partner in
Arvida Management Limited Partnership, Arvida Contractors Limited
Partnership, Gulf and Pacific Communications Limited Partnership, Boca
Raton Communications Limited Partnership, Center Hotel Limited Partnership,
Weston Hills Country Club Limited Partnership, Arvida Realty Sales Limited
Partnership, Weston Realty Sales Limited Partnership, Arvida Grand Bay
Limited Partnerships I through VI, each of which is a Delaware limited
partnership, Cullasaja Joint Venture, and AOK Group. The Partnership is
also a partner in the following partnerships with third parties: A&D
Title, L.P., Arvida Corporate Park Associates, Arvida Pompano Associates
Joint Venture, Country Isles Associates Joint Venture, Mizner Court
Associates Joint Venture, Mizner Tower Associates Joint Venture, Ocala 202
Joint Venture and Tampa 301 Associates Joint Venture.

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999

<CASH> 85,765,256
<SECURITIES> 0
<RECEIVABLES> 27,595,771
<ALLOWANCES> 189,983
<INVENTORY> 160,011,715
<CURRENT-ASSETS> 0
<PP&E> 54,322,964
<DEPRECIATION> 26,016,753
<TOTAL-ASSETS> 310,502,805
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 209,107,325
<TOTAL-LIABILITY-AND-EQUITY> 310,502,805
<SALES> 373,650,257
<TOTAL-REVENUES> 373,650,257
<CGS> 290,835,006
<TOTAL-COSTS> 290,835,006
<OTHER-EXPENSES> 8,816,809
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 73,998,442
<INCOME-TAX> 0
<INCOME-CONTINUING> 73,998,442
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,998,442
<EPS-BASIC> 147.73
<EPS-DILUTED> 147.73

</TABLE>