UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 0-17626
Commission File Number 0-17853
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
and
FFCA INVESTOR SERVICES CORPORATION 88-B
---------------------------------------------------
(Exact Name of Co-Registrants as Specified in Their
Organizational Documents)
Delaware 86-0588512
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(Partnership State of (Partnership I.R.S. Employer
Organization) Identification No.)
Delaware 86-0588514
--------------------- ----------------------------
(Corporation State of (Corporation I.R.S. Employer
Incorporation) Identification No.)
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona 85255
- ---------------------------------------- --------
(Address of Principal Executive Offices) Zip Code
Co-Registrants' telephone number, including area code: (480) 585-4500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
-----------------------------
(Title of Class)
Assigned Limited Partnership Interests
--------------------------------------
(Title of Class)
Indicate by check mark whether the Co-Registrants (1) have 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
Co-Registrants were required to file such reports), and (2) have 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 the Co-Registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates
of the Co-Registrants: Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE
None
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PART I
ITEM 1. BUSINESS.
GENERAL. Scottsdale Land Trust Limited Partnership, a Delaware limited
partnership (the "Partnership"), was organized on August 12, 1987 under the
Delaware Revised Uniform Limited Partnership Act. The Partnership was organized
to (a) acquire approximately 261 gross acres of unimproved land (the "Property")
in Scottsdale, Arizona; (b) develop roads, water, sewer, drainage, utility and
similar on-site and off-site improvements (collectively, the "Infrastructure")
with respect to the Property; (c) sell the Property on a parcel-by-parcel basis
after construction of the Infrastructure; and (d) make a participating, first
mortgage loan to Franchise Finance Corporation of America, a Delaware
corporation ("FFCA"), which is an affiliate of the general partner of the
Partnership, so that FFCA may acquire a parcel of land within the Property and
construct an office building thereon. The general partner of the Partnership is
FFCA Management Company Limited Partnership, a Delaware limited partnership (the
"General Partner"). Perimeter Center Management Company, a Delaware corporation
("PCMC"), is the corporate general partner of the General Partner. The General
Partner and PCMC have common ownership.
FFCA Investor Services Corporation 88-B, a Delaware corporation and wholly
owned subsidiary of PCMC, was incorporated on August 11, 1987. It serves as the
initial limited partner of the Partnership and the owner of record of the
limited partner interests in the Partnership. FFCA Investor Services Corporation
88-B assigns the limited partner interests to investors in the Partnership. FFCA
Investor Services Corporation 88-B conducts no other business activity. The
Partnership and FFCA Investor Services Corporation 88-B are referred to
collectively as the "Co-Registrants."
As of December 31, 1999, there remained unsold approximately 47 acres of
the Property (representing 7 parcels). Three such parcels were sold subsequent
to December 31, 1999 and three additional parcels totaling 13 acres are
currently under contract for sale. A 7.3-acre parcel remains available for sale.
One of the contracts was entered into on February 7, 2000 with Franchise Finance
Corporation of America, an affiliate of the General Partner, to purchase a
parcel (approximately 4 acres) adjacent to its corporate headquarters. This sale
is subject to the approval, by vote, of the majority of the limited partner
interests of the Partnership. Once the remaining parcels are sold, the
Partnership will liquidate and distribute its assets in accordance with the
Partnership agreement.
THE OFFERING. On June 14, 1988, the Co-Registrants commenced a public
offering of $50 million in units of assigned limited partner interest (the
"Units") in the Partnership pursuant to a Registration Statement on Form S-11
under the Securities Act of 1933, as amended. The sale of the Units was
completed on November 23, 1988, with a total of 50,000 Units sold to investors
at $1,000 per Unit for a total of $50 million. Purchasers of the Units (the
"Holders") acquired such Units from FFCA Investor Services Corporation 88-B as
of that date. Subsequent to that date, no Holder has made any additional capital
contribution. The Holders share in the benefits of ownership of the
Partnership's assets, including its real property investments, according to the
number of Units held in substantially the same manner as limited partners of the
Partnership. After deducting organizational and offering expenses, including
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selling commissions, the financial advisory fee, property acquisition fee and
due diligence expense reimbursement payable to Shearson Lehman Hutton Inc., the
Partnership had $43.25 million in net offering proceeds following the conclusion
of the offering of the Units.
ACQUISITION OF THE PROPERTY. On June 7, 1988, the Partnership entered into
a Purchase Agreement for the Property with The Westcor Company II Limited
Partnership, an Arizona limited partnership ("Westcor II"). The Property was
purchased by the Partnership on December 1, 1988, with the Partnership paying
$23,059,027 to Westcor II, and $854,158 in capitalized closing costs, for a
total acquisition price of $23,913,185 (including certain reimbursements).
THE FFCA LOAN. On December 29, 1988, the Partnership entered into an
Acquisition, Construction and Term Loan Agreement (the "Loan Agreement") with
FFCA, under which the Partnership agreed to loan FFCA up to a maximum of $8.5
million for the acquisition of a 4.6-acre parcel of land within the Property
(the "FFCA Parcel") and the construction of an office building (the "FFCA Office
Building"). (The loan for the acquisition of the FFCA Parcel and the
construction of the FFCA Office Building is referred to as the "Acquisition and
Construction Loan.") On the same date, FFCA purchased the FFCA Parcel from the
Partnership at a purchase price of $704,214. This amount was advanced to FFCA
under the Acquisition and Construction Loan. The purchase price of the FFCA
Parcel was determined by independent appraisal to be the fair market value of
the parcel.
Construction of the FFCA Office Building was completed during April 1990
and the maximum $8.5 million was advanced to FFCA under the Acquisition and
Construction Loan. The FFCA Parcel purchase price of $704,214 did not include
the portion of the cost of the Infrastructure that was allocated to the FFCA
Parcel when the Infrastructure was completed. The construction of the
Infrastructure was substantially completed by the end of the second quarter in
1990; therefore, the allocable portion was added to the amount drawn by FFCA
under the Loan Agreement. The total amount allocated to FFCA was $197,371. In
accordance with generally accepted accounting principles, the sale of the parcel
to FFCA will be recognized in May 2000, when the amounts loaned to FFCA are
repaid to the Partnership.
In accordance with the terms of the Loan Agreement, when the Acquisition
and Construction Loan expired in April 1990, the outstanding principal balance
was converted into a long-term permanent loan (the "Permanent Loan"). The
Permanent Loan provides for payments of interest only, at an annual rate of ten
percent, until maturity (May 1, 2000), at which time the full principal amount
must be repaid to the Partnership. FFCA is obligated to pay this interest on a
monthly basis for interest accrued in the previous month. FFCA has made all
payments of interest on a timely basis. The payments were paid to, and monitored
by, an independent trustee on behalf of the Partnership. The Permanent Loan also
provides for the payment of additional interest upon maturity based upon the
increase, if any, in the value of the FFCA Office Building. The amount of
additional interest to be paid by FFCA to the Partnership under the Permanent
Loan will equal the greater of (a) 30% of the increase in the value of the FFCA
Office Building (including the FFCA Parcel) at the time of maturity of the
Permanent Loan or (b) $1,130,000. An appraisal of the FFCA Office Building
(including the FFCA Parcel) was performed as of February 18, 2000. Based on this
appraisal, the General Partner determined that the additional interest owed by
FFCA would be $1,130,000. The General Partner guarantees the obligations of FFCA
under the Loan Agreement.
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Currently, FFCA is obligated under the Loan Agreement for monthly interest
payments to the Partnership. The failure of FFCA to perform its obligations
under the Loan Agreement would have a material adverse effect on the Partnership
since the Partnership expects to use the payments under the Loan Agreement, in
addition to the reserve established from the net proceeds of the offering of the
Units and the interest earned on such reserve, to meet its operating expenses.
FFCA is a self-administered real estate investment trust that invests in chain
store real estate throughout the United States. FFCA's common stock is listed
and traded on the New York Stock Exchange under the symbol "FFA."
As of January 15, 2000, FFCA transferred the FFCA Office Building to FFCA
Funding Corporation, an affiliate of FFCA. The FFCA Office Building was
transferred subject to the Loan Agreement and continues to secure the Permanent
Loan. FFCA will remain obligated to the Partnership under the terms of the Loan
Agreement until its maturity, as described above. As of March 1, 2000, FFCA was
current on its payments under the Loan Agreement.
DEVELOPMENT OF THE PROPERTY. The Partnership's primary investment objective
is to achieve capital appreciation of the Property through the development of
the unimproved land and the subsequent sale of the improved land on a
parcel-by-parcel basis. Improvement of the Property was accomplished by
implementing a master plan for the development of the Property, developing the
Infrastructure and financing the acquisition of land and the construction of the
FFCA Office Building. As of March 1, 2000, all but four parcels have been sold.
Of the remaining four, three are in escrow.
A property owners' association, Perimeter Center Owners Association, Inc.
(the "Owners Association"), was formed to further enhance the development of the
Property. The Owners Association is an Arizona nonprofit corporation organized
to oversee the maintenance, preservation and architectural control of the
Property and to promote the health, safety and welfare of the property owners.
Each property owner, including the Partnership, is a member of the Owners
Association and a board of directors manages its affairs.
Transportation improvements to the Pima Freeway are underway and nearing
completion to Princess Drive. In September 1998, the Pima Freeway construction
began between Shea Boulevard and Princess Drive (at the north end of The
Perimeter Center). This 4.4-mile segment of the Pima Freeway is scheduled to
open to traffic by summer 2001, improving access to the Perimeter Center. With
this development, two matters were raised. The Federal Emergency Management
Agency ("FEMA") worked with the City of Scottsdale on area drainage solutions
through the formation of the Reata Pass Wash Desert Greenbelt Improvement
District (the "District"). The Perimeter Center is included in the District.
Currently, the implementation of improvements within the District has been
placed on hold while the Army Corps of Engineers determines whether or not an
environmental impact study about the effects of the project is necessary.
Accordingly, the annual assessments to be levied against property owners in The
Perimeter Center will be delayed pending a final determination by the Army Corps
as to the future of the project, which may take several years to complete. In
the event the project is approved, the General Partner believes that it will not
have a significant impact on the Partnership since all but four of the remaining
parcels have been sold, and three of the remaining four parcels are currently
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under contract for sale. In addition, the Arizona Department of Transportation
("ADOT") notified the Partnership that it wished to obtain a temporary easement
over certain acreage on the eastern boundary of the Property in connection with
the construction of the Pima Freeway and the southbound frontage road. On
December 22, 1999, ADOT purchased the temporary construction easement from the
Partnership for $26,400 and ADOT agreed to pay the cost of the curb cuts and
related improvements at the intersection of Anderson Drive and the southbound
frontage road. The City of Scottsdale had previously stated that the Partnership
would be required to pay the cost of these improvements (approximately $25,000).
PARCEL SALES ACTIVITY IN 1999. During 1999 the Partnership sold eight land
parcels aggregating 37 acres to unaffiliated third parties. The following is a
description of Property sales that closed in 1999:
NASKO HOLDINGS, LLC. Nasko Holdings, LLC purchased 4.5 acres of land for
approximately $2,060,000 on July 16, 1999. Nasko Holdings, LLC plans to build a
new state-of-the-art facility for Maxwell Productions, LLC, a leading
manufacturer of digital variable disks (DVD's).
CORNWELL FINANCIAL GROUP. On October 29, 1999, Cornwell Financial Group
purchased a 4.8-acre parcel for approximately $1,870,000. Cornwell Financial
Group is building the Cornwell Technology Center and part of the building will
be leased to a computer company and a finance company.
PERIMETER OFFICE OWNERSHIP, LLLP. On December 15, 1999, Perimeter Office
Ownership, LLLP purchased 2 parcels totaling 10 acres for approximately
$4,570,000. Perimeter Office Ownership, LLLP plans on developing a condo office
building.
WALL STREET WEST, INC. Wall Street West, Inc. purchased 2 parcels totaling
10.6 acres for approximately $5,265,000 on December 16, 1999. One parcel will be
used to develop restaurants, a limited service hotel and other retail property.
The other parcel will be an office building, a part of which will be leased.
SCOTTSDALE PERIMETER I, LLC. On December 30, 1999, Scottsdale Perimeter I,
LLC purchased 2 parcels totaling 7 acres of land for approximately $3,355,000.
Scottsdale Perimeter I, LLC plans to build corporate offices for lease.
PARCEL SALES ACTIVITY IN 2000. At December 31, 1999, the Partnership had
three land parcels, totaling approximately 13 acres, under contract for sale.
These three parcels were sold for $6.6 million in the first quarter of 2000.
Subsequent to December 31, 1999, the Partnership placed under contract for sale
three additional parcels of land, totaling 26 acres, to be sold to three buyers.
One of the buyers is an affiliate of the General Partner; therefore, the sale of
this parcel is subject to the approval, by consent, of the majority of the
limited partner interests of the Partnership. A 7.3-acre parcel remains
available for sale.
COMPETITION AND REAL ESTATE ACTIVITIES NEAR THE PERIMETER CENTER. The
following is a general description of real estate activities near the Perimeter
Center.
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Kierland, a 235-acre mixed-use project located two miles southwest of the
Perimeter Center in the City of Phoenix is sold out. The retail component
continues to develop with retail shops and restaurants, such as P.F. Changs,
Mortons Steak House, The Cheese Cake Factory, Famous Door, Optical Shoppe of
Aspen, Tommy Bahama, Cutter Buck, Cold Stone and Z Gallery. The office component
is in development with the addition of three buildings totaling 270,000 square
feet and one building with 120,000 square feet, all to be completed during the
year 2000. The Weston Hotel has planned to build a ten-story, 500-room resort
hotel as part of the 27-hole Kierland Golf Club, which has been in existence for
four years.
Northsight business park, two miles to the south of the Perimeter Center
has completed five buildings for corporate users such as JDA Software and
Vanguard (now starting on its third phase). Sam's Club and Super Wal-Mart
recently opened at Northsight. Approximately 15 acres zoned for retail
development remains for sale.
Development continues on major residential developments to the north and
east of the Perimeter Center. DC Ranch is the largest, which still anticipates
over 8,000 homes when completed. McDowell Mountain Ranch with over 4,400 homes
is nearing completion in 2000. A resort hotel to complement the existing 36-hole
golf course is also planned for this area.
To the south, Scottsdale Links apartments have been converted into
time-share resort properties; the Marriott McDowell Mountain Hotel opened for
business in the summer of 1999; and more time-share projects are planned near
the Princess Hotel, west of the Perimeter Center. Seventeen acres near the
Marriott Hotel is for sale along with approximately ten acres on Bell Road,
zoned for retail use.
The expected completion of the Pima Freeway near the Perimeter Center in
2001 and lack of available property in the area has increased the values in the
Perimeter Center.
MANAGEMENT CONTRACT. In accordance with its partnership agreement, the
Partnership entered into an exclusive management contract (the "Management
Agreement") with Westcor II to develop the Infrastructure and to manage the
Property. The following paragraph summarizes certain provisions of the
Management Agreement, which is referenced in the Exhibit section to this Report.
The summary is not intended to be complete, and reference is made to the
Management Agreement for further detail.
Westcor II receives certain fees under the Management Agreement in
connection with the management of the Property. Westcor II provides these
property management services on an exclusive basis, based on the terms of the
Management Agreement. During 1999, 1998 and 1997, Westcor II received $36,000
each year in fees from the Partnership under the Management Agreement in
accordance with the 1994 amendment to the original Management Agreement. The
1994 amendment provided that the property management fee be reduced from
$125,000 per year to $36,000 per year. The Management Agreement is renewable
annually unless canceled at the discretion of the Partnership or Westcor II.
ADDITIONAL INFORMATION. Compliance with federal, state and local laws
regarding the discharge of materials into the environment or otherwise relating
to the protection of the environment has not had, and is not expected to have,
any adverse effect upon capital expenditures, earnings or the competitive
position of the Partnership. The Partnership is not presently a party to any
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litigation or administrative proceeding with respect to its compliance with such
environmental standards. In addition, the Partnership does not anticipate being
required to spend any funds in the near future for environmental protection in
connection with its operations.
The Partnership does not believe that any aspect of its business is
significantly seasonal in nature.
No portion of the Partnership's business is subject to renegotiation of
profits or termination of contracts or subcontracts at the election of the
United States Government. The Partnership does not manufacture any products and
therefore does not require any raw materials in order to conduct its business.
The Partnership and FFCA Investor Services Corporation 88-B (the initial
limited partner) have no employees.
The Partnership encountered no system or facility-related problems during
the rollover to the year 2000. No costs were incurred to date in addressing Year
2000 issues.
FACTORS AFFECTING FUTURE OPERATING RESULTS. A Proxy Statement is being
submitted to Investors for consent to sell a land parcel owned by the
Partnership to Franchise Finance Corporation of America, an affiliate of the
general partner, for consent to the liquidation of the Partnership after all
remaining parcels are sold and other related matters. There can be no assurance
as to the final terms of the proposed land sale transaction to FFCA, that the
conditions will be satisfied or that the proposed transaction will be
consummated.
ITEM 2. PROPERTIES.
Upon completion of the Partnership's public offering and acquisition of the
Property, the Partnership owned debt-free approximately 261 gross acres of
improved land located at the northwest corner of the intersection of Bell and
Pima Roads in Scottsdale, Arizona that is zoned for commercial development.
Approximately 75% of the Property's gross acres constitute net acres available
for sale or lease after the deduction of land dedicated for rights-of-way for
streets and other land not available for development. Infrastructure in place
includes gas, sewer, water, electricity, telephone, and all streets, curbs,
gutter and sidewalk work. At March 1, 2000, the Partnership had approximately 33
acres remaining to be sold, of which 26 acres comprise parcels in escrow. The
Property is located north of downtown Scottsdale, Arizona and approximately two
miles from the Scottsdale Airport, a business commuter terminal.
The following is a description of the Property sales that have been
consummated (excluding sales in escrow) as of March 1, 2000.
FFCA OFFICE BUILDING. On December 29, 1988, FFCA entered into an $8.5
million Acquisition, Construction and Term Loan Agreement for the acquisition of
a 4.6-acre parcel of land and the construction of an office building thereon
containing approximately 56,000 square feet of office space and approximately
10,000 square feet for display by the Fleischer Museum. The construction of the
Office Building was completed in April 1990. FFCA is a self-administered real
estate investment trust that invests in chain store real estate throughout the
United States.
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PACESETTER, INC. The initial sale transaction with Pacesetter, Inc., a
subsidiary of St. Jude Medical, Inc. based in St. Paul, Minnesota, was completed
on January 17, 1996. It involved the sale of an 11.8-acre parcel for a price of
approximately $2.6 million. The transaction also gave Pacesetter, Inc. a right
of first refusal and option to purchase an additional 6 adjacent acres. On July
10, 1997, Pacesetter, Inc. exercised its option to purchase this acreage for a
sales price of approximately $1.3 million. The new site is part of St. Jude
Medical, Inc.'s plans to expand its pacemaker business. Construction of the new
facility was completed in February 1997.
USF BESTWAY (FORMERLY TNT BESTWAY TRANSPORTATION, INC.) The initial sale
transaction with USF Bestway was completed on February 6, 1996. It involved the
sale of a 4.8-acre parcel for a sales price of approximately $1 million. On
October 30, 1998, USF Bestway purchased approximately 1.76 acres, adjacent to
its original site, for approximately $460,000. The site is the freight
transportation company's regional office, covering California to Texas.
G & D PARTNERSHIP. The sale transaction with G & D Partnership was
completed on June 19, 1996. It involved the sale of a 1.64-acre parcel for a
sales price of approximately $440,000. G & D Partnership operates Linthicum
Constructors, a construction company in the Southwest, and built its
award-winning corporate headquarters on the site.
INTEGRATED CIRCUIT ENGINEERING CORPORATION. The sale transaction with
Integrated Circuit Engineering Corporation (ICE) was completed on December 23,
1996. It involved the sale of a 3.8-acre parcel for a sales price of
approximately $1 million. ICE serves the semiconductor industry through market
research, consulting, publications, seminars and semiconductor laboratory
services. The new site is the corporation's world headquarters.
COYOTE VIEW PLAZA, L.L.C. The sale transaction with Coyote View Plaza
L.L.C. was completed on January 15, 1997. It involved a 2.1-acre parcel that
sold for approximately $500,000. Construction was completed in 1997 on this
medical and dental facility.
PRIVATE INVESTOR TRANSACTION. The sale transaction with a private investor
was completed on February 20, 1997. It involved the sale of a 1.8-acre parcel
for a sales price of approximately $600,000. The site is the corporate
headquarters for Discover the World Marketing, which outsources marketing
activities for the airline industry throughout the world. An 18,000-square foot
facility was built, a portion of which is leased office space.
HELMHOLDT FAMILY TRUST/CORNWELL GROUP. The first sale transaction with
these entities was completed on February 28, 1997. It involved the sale of two
parcels of land totaling 6.2 acres for a sales price of approximately $1.8
million. The second sale transaction closed on May 30, 1997 and involved the
sale of a 4.6-acre parcel for approximately $1.3 million. The third sale
transaction was completed on September 16, 1997 and involved the sale of a
3.8-acre parcel for approximately $1.2 million. New office/warehouse buildings
were built and are fully leased.
ADDITIONAL PRIVATE INVESTORS TRANSACTION. The sale transaction with private
investors was completed on April 8, 1997 and involved the sale of a 2-acre
parcel for approximately $500,000. The completed facility is an interior design
center for Est Est, Inc.
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PERIMETER PROFESSIONAL OFFICES, LLC. On May 5, 1997, Perimeter Professional
Offices, LLC purchased a 3.6-acre parcel for approximately $1.3 million. Two
professional office facilities will be built on the site.
BILTMORE PERIMETER LLC. On August 27, 1997, Biltmore Perimeter LLC
purchased an 8.7-acre parcel for approximately $2.7 million. In 1999, Biltmore
Perimeter LLC sold the property to Scottsdale Perimeter I, LLC.
GREEN TREE FINANCIAL CORPORATION. The sale transaction with Green Tree
Financial Corporation was completed on September 10, 1997 and involved the sale
of eight parcels totaling 16.7 acres for an aggregate sale price of
approximately $5.4 million. A 140,000 square-foot office complex was constructed
and sold in 1999 to Metris Companies, Inc., to be used as their Western Regional
Headquarters.
CARLSON REAL ESTATE. The sale transaction with Carlson Real Estate was
completed on October 15, 1997. Carlson Real Estate purchased an 11.1-acre parcel
for approximately $2.8 million. Subsequent to this sale, Mont Aster LLC
purchased the parcel from Carlson Real Estate.
SEMY ENGINEERING. Semy Engineering purchased a 6.1-acre parcel for
approximately $1.8 million on October 27, 1997. In 1999, Hewson Properties
purchased the site and are constructing a 62,000 square-foot office building for
lease.
OLYMPIA LABS. Olympia Labs, a vitamin company, purchased 2.5 acres on March
20, 1998 for approximately $870,000. This site is the company's world
headquarters.
ISMART, LLC. On March 25, 1998, ISMart LLC, a computer software company,
purchased a 2.6-acre parcel for approximately $900,000 to be used for
construction of an office building, scheduled to be completed in 2000.
G.G. LLC. The sale transaction with G.G. LLC closed on June 30, 1998. G.G.
LLC purchased a 2.73-acre site for approximately $1 million to be used for the
construction of an insurance agency headquarters building. This is scheduled to
be completed in 2000.
WEISS INVESTMENTS. Weiss Investments purchased 2.13 acres of land for
approximately $870,000 on July 23, 1998. The parcel is currently under
construction for an office building and is expected to be completed in 2000.
ARIZONA DEPARTMENT OF TRANSPORTATION. On August 25, 1998, the Arizona
Department of Transportation purchased 3.73 acres of land for approximately
$1,625,000 for an additional right-of-way frontage along the Pima Freeway
currently under construction.
NASKO HOLDINGS, LLC. Nasko Holdings, LLC purchased 4.5 acres of land for
approximately $2,060,000 on July 16, 1999. Nasko Holdings, LLC plans to build a
new state-of-the-art facility for Maxwell Productions, LLC, which is a leading
manufacturer of digital variable disks (DVDs).
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CORNWELL FINANCIAL GROUP. On October 29, 1999, Cornwell Financial Group
purchased a 4.8-acre parcel for approximately $1,870,000. Cornwell Financial
Group is building the Cornwell Technology Center and part of the building will
be leased to a computer company and a finance company.
PERIMETER OFFICE OWNERSHIP, LLLP. On December 15, 1999, Perimeter Office
Ownership, LLLP purchased 2 parcels totaling 10 acres for approximately
$4,570,000. Perimeter Office Ownership, LLLP plans on developing an office
building on this site.
WALL STREET WEST, INC. Wall Street West, Inc. purchased 2 parcels totaling
10.6 acres for approximately $5,265,000 on December 16, 1999. One parcel will be
used to develop restaurants, a limited service hotel and other retail property.
The other parcel will be an office building, a part of which will be leased.
SCOTTSDALE PERIMETER I, LLC. On December 30, 1999, Scottsdale Perimeter I,
LLC purchased 2 parcels totaling 7 acres of land for approximately $3,355,000.
Scottsdale Perimeter I, LLC plans to build corporate offices for lease.
At December 31, 1999, the Partnership had 34 acres available for sale and
13 acres in escrow under contract for sale. The 13 acres in escrow at December
31, 1999 were closed during the first two months of 2000. As of March 1, 2000,
the Partnership had three parcels of land under contract for sale, totaling 26
acres, to be sold to three buyers. Two buyers expect to close escrow by the end
of the second quarter of 2000 and the other is a related party transaction that
is subject to the approval, by vote, of the majority of the limited partner
interests of the Partnership. One 7.3-acre parcel remains available for sale.
ITEM 3. LEGAL PROCEEDINGS.
Neither the Co-Registrants nor their properties are parties to, or subject
to, any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of the Holders through the solicitation
of proxies or otherwise during the fourth quarter of fiscal year 1999.
PART II
ITEM 5. MARKET FOR CO-REGISTRANTS' UNITS AND RELATED SECURITY HOLDER MATTERS.
MARKET INFORMATION. During 1999, there was no established public trading
market for the Units, and it is unlikely that an established public trading
market for the Units will develop.
HOLDERS. As of March 1, 2000, there were 3,036 record holders of the Units.
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DISTRIBUTIONS. For the two most recent fiscal years, the Partnership made
the following cash distributions to the Holders from proceeds received on the
sale of land parcels:
1999
----------------------------------------------------------------
Date of Number Per Unit Total
Distribution of Units Distributions Distributions
------------ -------- ------------- -------------
March 31 50,000 $ -- $ --
June 30 50,000 -- --
September 30 50,000 38.47 1,923,500
December 31 50,000 286.29 14,314,500
-------- -----------
$ 324.76 $16,238,000
======== ===========
1998
----------------------------------------------------------------
Date of Number Per Unit Total
Distribution of Units Distributions Distributions
------------ -------- ------------- -------------
March 31 50,000 $ 32.11 $ 1,605,500
June 30 50,000 19.97 998,500
September 30 50,000 48.85 2,442,500
December 31 50,000 8.82 441,000
-------- -----------
$ 109.75 $ 5,487,500
======== ===========
Adjusted Capital Contribution is defined in the Partnership Agreement as
the Holder's initial capital contribution reduced to not less than zero by cash
distributions to the Holders (a) from Parcel Revenues (as defined in the
Partnership Agreement); (b) from Sale or Refinancing Proceeds (as defined in the
Partnership Agreement); (c) from any principal payments received from the
Acquisition and Construction Loan and the Permanent Loan or any other loan by
the Partnership; or (d) classified as a return of capital under generally
accepted accounting principles. The Adjusted Capital Contribution of the Holders
was $362.62 per Unit as of December 31, 1999.
The primary source of cash distributions in the future is expected to be
from the sale of the remaining parcels of the Property. Generally, net proceeds
received from the sale of the parcels will be distributed 100% to the Holders to
the extent of the Adjusted Parcel Investment (as defined in the Partnership
Agreement) of each parcel, plus a preferred return on the Adjusted Parcel
Investment equal to a cumulative, non-compounded return of ten percent per
annum. Thereafter, approximately 50% of any remaining proceeds will be
distributed to the Holders. The Adjusted Parcel Investment, as defined in the
Partnership Agreement, is generally an amount that approximates the capital
contributions of the Holders invested in a parcel, including a proportionate
amount of allocable front-end fees paid in connection with the organization of
the Partnership, the offering and sale of the Units and the acquisition of the
Property. Distribution of the proceeds from the sale of parcels of the Property
are anticipated to be made at such times as the General Partner deems
appropriate and in the best interest of the Partnership. The General Partner may
withhold distributions if necessary or appropriate for the conduct of the
Partnership's business or for the construction of improvements on parcels in the
Property. For a complete description of the manner in which the disbursable cash
10
<PAGE>
of the Partnership and proceeds from the sale of the parcels comprising the
Property will be distributed and the manner in which the profits, gains, losses,
deductions and credits of the Partnership will be allocated, reference is made
to Article Four of the Partnership Agreement referenced as Exhibit 4 to this
Report. Any differences in the amounts of distributions set forth in the above
tables from the information contained in Item 6 below are due to rounding the
amount of distributions payable per Unit down to the nearest whole cent and
carrying any fractional cents forward from one period to the next.
As soon as practicable after the sale of the remaining parcels, the General
Partner will take all steps necessary to complete the liquidation of the
Partnership. Upon liquidation of the Partnership, the General Partner will apply
and distribute the assets of the Partnership to Investors and the General
Partner, in accordance with the provisions of the Partnership Agreement. Each
investor will receive a final Schedule K-1 of the Partnership as soon as
practicable after liquidation of the Partnership.
ITEM 6. SELECTED FINANCIAL DATA.
The following selected financial data should be read in conjunction with
the Financial Statements and the related notes attached as an exhibit to this
Report.
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $18,200,381 $ 6,871,901 $22,289,391 $ 5,981,588 $ 920,426
Net Income 9,357,292 3,124,531 8,797,901 1,974,758 46,044
Net Income Per
Limited Partnership Unit 187.07 62.44 175.90 39.49 .91
Total Assets 33,440,753 26,482,368 32,541,537 40,259,651 42,024,785
Distributions of Cash from
Operations to Holders 16,237,869 5,487,767 19,692,084 4,765,456 --
Distributions of Cash from
Operations Per Unit 324.76 109.76 393.84 95.31 --
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES. The partnership received $50,000,000 in
gross proceeds from its public offering of the Units on November 23, 1988. After
deducting organizational and offering expenses, including selling expenses, the
financial advisory fee, property acquisition fee and due diligence expense
reimbursement payable to Shearson Lehman Hutton Inc., the Partnership had
$43,250,000 in net proceeds available for investment. On December 1, 1988, the
Partnership used $23,913,185 to acquire the Property in Scottsdale, Arizona. The
remaining net offering proceeds were used to complete the construction of the
Infrastructure and to fully fund the loan to FFCA for the FFCA Office Building
and establish an initial reserve of approximately $2.8 million. The
Partnership's primary sources of revenue are land sales, interest payments
received from FFCA under the Loan Agreement and interest earned on the
Partnership's temporary investments. As land parcels are sold, distributions of
11
<PAGE>
the net cash sale proceeds are made in accordance with the partnership
agreement. Once all of The Perimeter Center parcels are sold, the Partnership
will liquidate all of its other assets and distribute them in accordance with
the partnership agreement. As of March 1, 2000, the Partnership had 7.3 acres
available for sale and 26 acres in escrow under contract for sale.
Funds pending distribution to the limited partners are temporarily invested
in U.S. Government Agency discount notes and bank repurchase agreements (which
are secured by United States Treasury and Government obligations). These
reserves may be used from time to time to pay amounts assessed by the city or
county taxing authorities for developmental or other costs. It is anticipated
that the Partnership's revenues along with remaining reserves of approximately
$2.3 million at December 31, 1999, to the extent required, will be sufficient to
pay the Partnership's operating expenses in 2000 and that cash proceeds from the
sale of parcels will be available for distribution to the Holders. At December
31, 1999, the Partnership had cash and marketable securities with a maturity of
three months or less aggregating $16,667,333 of which $14,314,500 was paid out
to the Holders in February 2000 as their fourth quarter 1999 distribution, and
the remainder of which will be held by the Partnership for reserves.
During the year ended December 31, 1999, the Partnership sold eight land
parcels aggregating approximately 37 acres to unaffiliated third parties. The
land sale transactions during the year provided aggregate cash sales proceeds of
$17.1 million. The parcels had a total original cost of $7.3 million and closing
and other costs of approximately $878,000. These parcel sales resulted in gains
totaling $8.9 million. Distributions declared from the parcel sale net proceeds
amounted to $16.2 million in 1999.
At December 31, 1999, the Partnership had 34 acres available for sale and
13 acres in escrow under contract for sale. The land in escrow represents three
parcels under contract for sale at a price of approximately $6.7 million to two
unaffiliated third parties. The aggregate original cost of the parcels is
approximately $3.1 million. These parcels in escrow have been sold since year
end.
As of March 1, 2000, the Partnership had remaining three parcels of land
under contract for sale, totaling 26 acres, and one 7.3-acre parcel that remains
available for sale. One of the contracts was entered into on February 7, 2000
with Franchise Finance Corporation of America, an affiliate of the General
Partner, to purchase a parcel (approximately 4 acres) adjacent to its corporate
headquarters. The sale is subject to the approval, by vote, of the majority of
the limited partner interests of the Partnership. A Proxy Statement will be
submitted to investors of the Partnership for consent to sell this parcel to
Franchise Finance Corporation of America. The Partnership cannot determine
which, if any, of the parcels under contract will result in the sale of a land
parcel and, therefore, cannot predict the timing or amount of any future cash
distributions.
In connection with the development in the Scottsdale, Arizona area, two
development matters were raised. The Federal Emergency Management Agency
("FEMA") worked with the City of Scottsdale on area drainage solutions through
the formation of the Reata Pass Wash Desert Greenbelt Improvement District (the
"District"). The Perimeter Center is included in the District. Currently, the
implementation of improvements within the District has been placed on hold while
the Army Corps of Engineers determines whether or not an environmental impact
study about the effects of the project is necessary. Accordingly, the annual
12
<PAGE>
assessments to be levied against property owners in The Perimeter Center will be
delayed pending a final determination by the Army Corps as to the future of the
project, which may take several years to complete. In the event the project is
approved, the General Partner believes that it will not have a significant
impact on the Partnership. In addition, the Arizona Department of Transportation
("ADOT") notified the Partnership that it wished to obtain a temporary easement
over certain acreage on the eastern boundary of the Property in connection with
the construction of the Pima Freeway and the southbound frontage road. On
December 22, 1999, ADOT purchased the temporary construction easement from the
Partnership for $26,400 and ADOT agreed to pay the cost of the curb cuts and
related improvements at the intersection of Anderson Drive and the southbound
frontage road. The City of Scottsdale had previously stated that the Partnership
would be required to pay the cost of these improvements (approximately $25,000).
As discussed previously, the Partnership will submit a Proxy Statement to
the Investors for consent to sell a land parcel owned by the Partnership to
Franchise Finance Corporation of America, an affiliate of the General Partner,
and for consent to the liquidation of the Partnership after all remaining
parcels are sold. Based on current parcel sales activity, it is anticipated that
the remaining parcels could be sold during 2000.
FFCA Investor Services Corporation 88-B serves as the initial limited
partner of the Partnership and the owner of record of the limited partner
interests in the Partnership, the rights and benefits of which are assigned by
FFCA Investor Services Corporation 88-B to investors in the Partnership. FFCA
Investor Services Corporation 88-B has no other business activity and has no
capital resources.
RESULTS OF OPERATIONS -- FISCAL YEAR ENDED DECEMBER 31, 1999 COMPARED TO
FISCAL YEAR ENDED DECEMBER 31, 1998. Land sales comprise the majority of the
revenues of the Partnership. Total revenues were $18.2 million for the year
ended December 31, 1999 as compared to $6.9 million for the year ended December
31, 1998. The difference in revenues between years is primarily due to an
increase in the number of acres sold in 1999 as compared to 1998. In 1999, the
Partnership sold 37 acres of land as compared to 15 acres sold in 1998. The
average sales price per acre of land sold during 1999 increased 20% to
approximately $455,000 per acre from approximately $378,000 per acre for land
sold in 1998. Gain on the sale of land, as a percentage of land sale revenues,
increased to 52% for the year ended December 31, 1999 as compared to 49% for the
year ended December 31, 1998. Land sale revenues have been, and will continue to
be, impacted by the number of land parcels sold, their relative size and the
sales price per acre achieved.
Total expenses (excluding the cost of land sales) decreased by
approximately $144,000 in 1999 as compared to 1998 due to decreases in property
taxes ($55,000), the general partner fee ($15,000) and other operating expenses
($75,000). Property taxes decreased due to the sale of land parcels during the
past twelve months and due to a protest filed on the 1998 property taxes that
resulted in a refund and a reduction in the 1999 assessed values used to
calculate the 1999 property taxes. The general partner fee decreased in 1999
because the fee is based on Assets Under Management (as defined in the
partnership agreement) and, as parcels are sold, the general partner fee is
reduced accordingly. The decrease in other operating expenses resulted primarily
from a decrease in property tax consulting fees that were related to the
property tax protest filed in 1998.
13
<PAGE>
RESULTS OF OPERATIONS -- FISCAL YEAR ENDED DECEMBER 31, 1998 COMPARED TO
FISCAL YEAR ENDED DECEMBER 31, 1997. Land sales comprised the majority of the
revenues of the Partnership. Total revenues were $6.9 million for the year ended
December 31, 1998 as compared to $22.3 million for the year ended December 31,
1997. The difference in revenues between years is primarily due to a decrease in
the number of acres sold in 1998 as compared to 1997. In 1998, the Partnership
sold 15 acres of land as compared to 73 acres sold in 1997. While the number of
acres sold decreased between years, the average sales price per acre of land
sold during 1998 increased 30% to approximately $378,000 per acre from
approximately $290,000 per acre for land sold in 1997. Gain on the sale of land,
as a percentage of land sale revenues, increased to 49% for the year ended
December 31, 1998 as compared to 40% for the year ended December 31, 1997.
Interest and other income for the year ended December 31, 1998 decreased by
approximately $136,000 from 1997 resulting from a lower average cash balance
invested during the year. Total expenses (excluding the cost of land sales)
decreased by approximately $98,000 in 1998 as compared to 1997 due to decreases
in the general partner fee ($59,000), marketing expenses ($8,000) and other
operating expenses ($36,000), and are partially offset by an increase in
property taxes. The general partner fee decreased in 1998 because the fee is
based on Assets Under Management (as defined in the partnership agreement) and,
as parcels are sold, the general partner fee is reduced accordingly. Marketing
expenses decreased because the level of sales activity that occurred during 1998
has generated sufficient interest in The Perimeter Center to allow the
Partnership to reduce certain general marketing activities. The decrease in
other operating expenses resulted primarily from a decrease in property
maintenance costs. These costs are primarily common area maintenance fees (based
on square footage owned) and are charged to all of the landowners within The
Perimeter Center (including the Partnership). Accordingly, as the Partnership
sells parcels, its share of the common area maintenance fees decreases. Property
taxes increased, despite the sale of land parcels during the past twelve months,
due to higher assessed land values.
INFLATION. Inflation in future periods may tend to cause capital
appreciation of land in general; however, the value of any particular land,
including the Property, may increase at a rate different from the inflation rate
or decrease based upon other factors, such as the demand for land in the area
where the Property is located and the availability of comparable land in the
same area. Inflation may, however, have an adverse impact on the profitability
of the Partnership because of increases in its operating expenses.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The financial instruments held by the Partnership at December 31, 1999
consist of cash equivalents and a loan receivable from an affiliate. The
Partnership intends to hold the investments to maturity; therefore, these
financial instruments do not subject the Partnership to a material exposure to
changes in interest rates.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements of the Co-Registrants required by Regulation S-X
are attached to this Report. Reference is made to Item 14 below for an index to
the financial statements and financial statement schedule.
14
<PAGE>
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.
The Partnership and the General Partner have no directors or executive
officers. PCMC is the corporate general partner and Morton H. Fleischer is an
individual general partner of the General Partner. The General Partner has
responsibility for all of the Partnership's operations. The directors and
executive officers of PCMC and FFCA Investor Services Corporation 88-B are as
follows:
PCMC
DIRECTOR
Name Position Held Since
---- -------------------
Morton H. Fleischer 1993
OFFICERS
Associated With
PCMC
Name Positions Held Since
---- --------------------
Morton H. Fleischer Chairman of the Board,
President and Chief Executive
Officer 1993
John R. Barravecchia Executive Vice President,
Chief Financial Officer,
Treasurer and Assistant
Secretary 1993
Christopher H. Volk Executive Vice President,
Chief Operating Officer,
Assistant Secretary and
Assistant Treasurer 1993
Dennis L. Ruben Executive Vice President,
General Counsel and Secretary 1994
Catherine F. Long Senior Vice President-Finance,
Principal Accounting Officer,
Assistant Secretary and
Assistant Treasurer 1993
15
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 88-B
DIRECTOR
Name Position Held Since
---- -------------------
Morton H. Fleischer, Chairman 1986
OFFICERS
Name Position Held Position Held Since
---- -------------- -------------------
Morton H. Fleischer Chairman of the Board
of Directors 1986
John R. Barravecchia President, Secretary and.
Treasurer 1990
Christopher H. Volk Vice President, Assistant
Secretary and
Assistant Treasurer 1994
All of the foregoing directors and executive officers have been elected to
serve a one-year term and until their successors are elected and qualified.
There are no arrangements or understandings between or among any of the officers
or directors and any other person pursuant to which any officer or director was
selected as such. There are no family relationships among any directors and
officers.
BUSINESS EXPERIENCE
The business experience during the past five years of each of the above
directors and executive officers is as follows:
MORTON H. FLEISCHER, age 63, served as a director, President and Chief
Executive Officer of PCMC since 1993, and as Chairman of the Board of FFCA
Investor Services Corporation 88-B since 1986. Mr. Fleischer also serves as
Chairman of the Board and Chief Executive Officer of Franchise Finance
Corporation of America, a Delaware corporation ("FFCA") having previously served
as a director, President and Chief Executive Officer of Franchise Finance
Corporation of America I ("FFCA I"), a predecessor of FFCA, from 1980 to 1994.
Mr. Fleischer is an individual general partner of the General Partner, and is a
general partner (or general partner of a general partner) of the following
public limited partnerships that were liquidated in 1999 and whose investments
were travel plazas: Participating Income Properties 1986, L.P.; Participating
Income Properties II, L.P. and Participating Income Properties III Limited
Partnership.
JOHN R. BARRAVECCHIA, age 44, served as President, Secretary and Treasurer
of FFCA Investor Services Corporation 88-B since 1990. He served as Chief
Financial Officer of PCMC since 1993 and as Senior Vice President and Treasurer
since 1994. In 1995, Mr. Barravecchia was named Executive Vice President of
PCMC. Mr. Barravecchia currently serves as Executive Vice President, Chief
Financial Officer, Treasurer and Assistant Secretary of FFCA and served in
16
<PAGE>
various capacities for FFCA I from 1984 to 1994. Prior to joining FFCA I, Mr.
Barravecchia was associated with the international public accounting firm of
Arthur Andersen LLP.
CHRISTOPHER H. VOLK, age 43, served as Vice President, Assistant Secretary
and Assistant Treasurer of FFCA Investor Services Corporation 88-B since 1994,
and served as Secretary of PCMC since 1993 and Senior Vice President - Research
and Underwriting since 1994. In 1995, Mr. Volk was named Executive Vice
President and Chief Operating Officer of PCMC. Mr. Volk currently serves as
President, Chief Operating Officer, Assistant Secretary and Assistant Treasurer
of FFCA. He joined FFCA I in 1986 and served in various capacities in FFCA prior
to being named Vice President-Research in October 1989.
DENNIS L. RUBEN, age 47, served as Senior Vice President and General
Counsel for PCMC since 1994. Mr. Ruben was named Executive Vice President,
General Counsel and Assistant Secretary of PCMC in February 1997. He currently
serves as Executive Vice President, General Counsel and Secretary for FFCA and
served as attorney and counsel for FFCA I from 1991 to 1994. Prior to joining
FFCA I, Mr. Ruben was a partner with the national law firm of Kutak Rock.
STEPHEN G. SCHMITZ, age 45, served as Senior Vice President - Corporate
Finance of PCMC since January 1996. He was named Executive Vice President, Chief
Investment Officer and Assistant Secretary of PCMC in February 1997. He
currently serves in the same capacity for FFCA. Mr. Schmitz served in various
positions as an officer of FFCA I from 1986 to June 1, 1994.
CATHERINE F. LONG, age 43, served as Vice President-Finance and Principal
Accounting Officer of PCMC since 1994, and Vice President from 1993 to 1994. In
February 1997 she was named Senior Vice President-Finance of PCMC. She currently
serves as Senior Vice President-Finance, Principal Accounting Officer, Assistant
Secretary and Assistant Treasurer of FFCA and served as Vice President-Finance
of FFCA I from 1990 to 1993. In December 1993, she was appointed Principal
Accounting Officer of FFCA I. From 1978 to May 1990, Ms. Long was associated
with the international public accounting firm of Arthur Andersen LLP.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Co-Registrants during fiscal year 1999 and Forms 5 and
amendments thereto furnished to the Co-Registrants with respect to fiscal year
ended December 31, 1999 (the "Forms"), and any written representations by the
directors and executive officers of FFCA Investor Services Corporation 88-B and
PCMC, the Co-Registrants have not identified herein any such person that failed
to file on a timely basis the Forms required by Section 16(a) of the Securities
Exchange Act of 1934 for fiscal year 1999.
ITEM 11. EXECUTIVE COMPENSATION.
Pursuant to provisions contained in the agreement of limited partnership
that governs the Partnership, the officers and directors of PCMC serve in such
capacities without remuneration from the Partnership.
17
<PAGE>
The Partnership is required to pay a partnership management fee and a
subordinated incentive share of sale or refinancing proceeds or parcel revenues
to the General Partner, and the General Partner is entitled to receive a share
of cash distributions, when and as made to the Holders and a share of profits
and losses. Reference is made to Note 7 of the Notes to the Financial Statements
of the Partnership, which are filed with this Report, for a description of the
fees paid to the General Partner. Upon liquidation, it is anticipated that the
General Partner will not receive any additional fees.
FFCA Investor Services Corporation 88-B serves as assignor and initial
limited partner without compensation from the Partnership. It is not entitled to
any share of the profits, losses or cash distributions of the Partnership. The
director and officers of FFCA Investor Services Corporation 88-B serve without
compensation from FFCA Investor Services Corporation 88-B or the Partnership.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
As of March 1, 2000, no person or group was known by the Partnership to own
directly or beneficially more than 5% of the outstanding Units of the
Partnership.
The General Partner of the Partnership and its general partners owned less
than 1% of the Units as of March 1, 2000. The directors and officers of the
General Partner's corporate general partner, PCMC, individually and as a group,
also owned less than 1% of the Units as of March 1, 2000. PCMC is owned by
Morton H. Fleischer.
FFCA Investor Services Corporation 88-B has an interest in the Partnership
as a limited partner and it serves as the owner of record of all of the limited
partner interests assigned by it to the Holders. However, FFCA Investor Services
Corporation 88-B has no right to vote its interest on any matter and it must
vote the assigned interests as directed by the Holders. FFCA Investor Services
Corporation 88-B is wholly owned by PCMC.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Since the beginning of the Co-Registrants' last fiscal year, there have
been no significant transactions or business relationships among the
Co-Registrants, the General Partner and PCMC or their affiliates or their
management other than those described in Items 1, 7, 10 and 11 above.
18
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
The following documents are filed as part of this Report:
1. FINANCIAL STATEMENTS
The Partnership
Report of independent public accountants
Balance Sheets as of December 31, 1999 and 1998
Statements of Operations for the years ended
December 31, 1999, 1998 and 1997
Statements of Changes In Partners' Capital for the
years ended December 31, 1999, 1998 and 1997
Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
Notes to Financial Statements
FFCA Investor Services Corporation 88-B
Report of independent public accountants
Balance Sheet as of December 31, 1999
Notes to Balance Sheet
2. FINANCIAL STATEMENT SCHEDULES
Schedule III-Schedule of Real Estate as of
December 31, 1999
All other schedules are omitted since they are not required, are
inapplicable, or the required information is included in the financial
statements or notes thereto.
3. EXHIBITS
The following is a complete list of exhibits filed as part of this
Form 10-K. For electronic filing purposes only, this report contains
Exhibit 27, the Financial Data Schedule. Exhibit numbers correspond to the
numbers in the Exhibit Table of Item 601 of Regulation S-K.
99. Annual Portfolio Valuation of Cushman & Wakefield as of December
31, 1999.
Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as
amended, the following documents, filed with the Securities and Exchange
Commission on March 31, 1994 as exhibits to the Co-Registrants' Form 10-K
for the fiscal year ended December 31, 1993, Commission File No. 0-17626,
are incorporated herein by this reference.
19
<PAGE>
Form 10-K
Exhibit No.
-----------
First Amendment to Exclusive Management Agreement by 10.1
and between the Partnership and The Westcor Company II
Limited Partnership, dated May 1, 1990.
Second Amendment to Exclusive Management Agreement by 10.2
and between the Partnership and The Westcor Company II
Limited Partnership, dated January 1, 1994.
Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as
amended, the following documents, filed with the Securities and Exchange
Commission on March 24, 1989 as exhibits to the Co-Registrants' Form 10-K
for the fiscal year ended December 31, 1988, Commission File No. 33-18041,
are incorporated herein by this reference.
Form 10-K
Exhibit No.
-----------
The Amended and Restated Certificate and Agreement of 4
Limited Partnership, which governs the Partnership, as
filed with the Secretary of State of Delaware on
November 23, 1988.
Acquisition, Construction and Term Loan Agreement by 10
and between the Partnership and Franchise Finance
Corporation of America, dated as of December 29, 1988.
Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as
amended, the following documents, filed with the Securities and Exchange
Commission on June 14, 1988 as exhibits to the Co-Registrants' Registration
Statement on Form S-11, Registration No. 33-18041, are incorporated herein
by this reference.
Exhibit No.
-----------
The Certificate of Incorporation, which governs the 4(b)
Corporation, as filed with the Secretary of State of
Delaware on August 11, 1987.
Bylaws of FFCA Investor Services Corporation 88-B. 4(c)
Exclusive Management Contract by and between the 10(c)
Partnership and The Westcor Company II Limited
Partnership, dated as of June 7, 1988.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Co-Registrants during the last
quarter of the fiscal year ended December 31, 1999.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Partnership has caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
By: FFCA MANAGEMENT COMPANY LIMITED
PARTNERSHIP, General Partner
Date: March 20, 2000 By /s/ Morton H. Fleischer
--------------------------------------
Morton H. Fleischer, General Partner
By: PERIMETER CENTER MANAGEMENT COMPANY,
Corporate General Partner
Date: March 20, 2000 By /s/ Morton H. Fleischer
--------------------------------------
Morton H. Fleischer, Chairman of
the Board, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Partnership and in the capacities and on the dates indicated.
SIGNATURES OF REQUIRED OFFICERS AND DIRECTORS OF PERIMETER CENTER
MANAGEMENT COMPANY, CORPORATE GENERAL PARTNER OF FFCA MANAGEMENT COMPANY
LIMITED PARTNERSHIP, GENERAL PARTNER OF SCOTTSDALE LAND TRUST LIMITED
PARTNERSHIP.
Date: March 20, 2000 By /s/ Morton H. Fleischer
--------------------------------------
Morton H. Fleischer, Chairman of the
Board, President, Chief Executive
Officer and Director
Date: March 20, 2000 By /s/ John Barravecchia
--------------------------------------
John Barravecchia, Executive Vice
President, Chief Financial Officer,
Treasurer and Assistant Secretary
21
<PAGE>
Date: March 20, 2000 By /s/ Catherine F. Long
--------------------------------------
Catherine F. Long, Senior Vice
President-Finance and Principal
Accounting Officer, Assistant
Secretary and Assistant Treasurer
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the co-registrant has caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
FFCA INVESTOR SERVICES CORPORATION 88-B
Date: March 20, 2000 By /s/ Morton H. Fleischer
--------------------------------------
Morton H. Fleischer, Sole Director
Date: March 20, 2000 By /s/ John Barravecchia
--------------------------------------
John Barravecchia, President,
Secretary, Principal Financial Officer
and Principal Accounting Officer
22
<PAGE>
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Scottsdale Land Trust Limited Partnership:
We have audited the accompanying balance sheets of SCOTTSDALE LAND TRUST LIMITED
PARTNERSHIP (a Delaware limited partnership) as of December 31, 1999 and 1998,
and the related statements of operations, changes in partners' capital 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 general
partner. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Scottsdale Land Trust Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1999, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of Real Estate is presented
for purposes of complying with the Securities and Exchange Commission's rules
and is not a required part of the basic financial statements. This schedule has
been subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, fairly states in all material respects
the financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.
/s/ Arthur Andersen LLP
Phoenix, Arizona,
January 25, 2000.
23
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
BALANCE SHEETS - DECEMBER 31, 1999 AND 1998
1999 1998
------------ -----------
ASSETS
LAND:
Held for sale $ 5,109,126 $12,486,444
Subject to sale agreements (Note 3) 3,118,364 3,062,371
Subject to sale agreement with affiliate
(Note 4) 788,287 788,287
------------ -----------
Total land 9,015,777 16,337,102
LOAN RECEIVABLE FROM AFFILIATE (Notes 1 and 4) 7,598,415 7,598,415
CASH AND CASH EQUIVALENTS 16,667,333 2,292,149
PREPAID EXPENSES AND OTHER 159,228 254,702
------------ -----------
Total assets $ 33,440,753 $26,482,368
============ ===========
LIABILITIES AND PARTNERS' CAPITAL
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 14,314,676 $ 441,307
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 163,786 198,193
------------ -----------
Total liabilities 14,478,462 639,500
------------ -----------
PARTNERS' CAPITAL (DEFICIT):
General partner (3,844) (7,527)
Limited partners 18,966,135 25,850,395
------------ -----------
Total partners' capital 18,962,291 25,842,868
------------ -----------
Total liabilities and partners' capital $ 33,440,753 $26,482,368
============ ===========
The accompanying notes are an integral part of these balance sheets.
24
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
1999 1998 1997
----------- ----------- -----------
REVENUES:
Land sales $17,188,342 $ 5,852,965 $21,134,951
Interest on loan to affiliate 850,000 850,000 850,000
Interest on investments and other 162,039 168,936 304,440
----------- ----------- -----------
18,200,381 6,871,901 22,289,391
----------- ----------- -----------
EXPENSES:
Cost of land sales 8,199,398 2,959,669 12,606,036
General partner fees (Note 7) 244,917 260,185 319,327
Property management fees (Note 5) 36,000 36,000 36,000
Marketing 10,671 10,071 18,335
Property taxes 93,277 147,988 142,633
Other operating 258,826 333,457 369,159
----------- ----------- -----------
8,843,089 3,747,370 13,491,490
----------- ----------- -----------
NET INCOME $ 9,357,292 $ 3,124,531 $ 8,797,901
=========== =========== ===========
NET INCOME ALLOCATED TO (Note 1):
General partner $ 3,683 $ 2,312 $ 2,690
Limited partners 9,353,609 3,122,219 8,795,211
----------- ----------- -----------
$ 9,357,292 $ 3,124,531 $ 8,797,901
=========== =========== ===========
NET INCOME PER LIMITED
PARTNERSHIP UNIT (based on 50,000
units held by limited partners) $ 187.07 $ 62.44 $ 175.90
=========== =========== ===========
The accompanying notes are an integral part of these statements.
25
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
-------- ------------ ------------
<S> <C> <C> <C>
BALANCE, December 31, 1996 $(12,529) $ 39,112,816 $ 39,100,287
Net income 2,690 8,795,211 8,797,901
Distributions to limited partners (Note 1) -- (19,692,084) (19,692,084)
-------- ------------ ------------
BALANCE, December 31, 1997 (9,839) 28,215,943 28,206,104
Net income 2,312 3,122,219 3,124,531
Distributions to limited partners (Note 1) -- (5,487,767) (5,487,767)
-------- ------------ ------------
BALANCE, December 31, 1998 (7,527) 25,850,395 25,842,868
Net income 3,683 9,353,609 9,357,292
Distributions to limited partners (Note 1) -- (16,237,869) (16,237,869)
-------- ------------ ------------
BALANCE, December 31, 1999 $ (3,844) $ 18,966,135 $ 18,962,291
======== ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
26
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ----------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 9,357,292 $ 3,124,531 $ 8,797,901
Adjustments to net income:
Change in assets and liabilities:
Decrease in land held for sale 7,377,318 4,745,658 9,094,187
Decrease (increase) in land subject to
sale agreements (55,993) (2,151,187) 2,068,982
Decrease (increase) in prepaid expenses
and other 95,474 (87,599) (18,810)
Decrease in payable to general partner -- -- (58,481)
Increase (decrease) in accounts payable
and accrued expenses (34,407) 91,300 (54,034)
------------ ----------- ------------
Net cash provided by operating activities 16,739,684 5,722,703 19,829,745
------------ ----------- ------------
CASH FLOWS FOR FINANCING ACTIVITIES:
Limited partner distributions declared (16,237,869) (5,487,767) (19,692,084)
Increase (decrease) in distribution payable 13,873,369 (3,787,233) 3,288,584
------------ ----------- ------------
Net cash used in financing activities (2,364,500) (9,275,000) (16,403,500)
------------ ----------- ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 14,375,184 (3,552,297) 3,426,245
CASH AND CASH EQUIVALENTS,
beginning of year 2,292,149 5,844,446 2,418,201
------------ ----------- ------------
CASH AND CASH EQUIVALENTS,
end of year $ 16,667,333 $ 2,292,149 $ 5,844,446
============ =========== ============
</TABLE>
The accompanying notes are an integral part of these statements.
27
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1999 and 1998
1) ORGANIZATION:
Scottsdale Land Trust Limited Partnership (the Partnership) was formed on
August 12, 1987 under the Delaware Revised Uniform Limited Partnership Act to
acquire and develop 261 acres of land (the Property) located in Scottsdale,
Arizona that is zoned for commercial use. In addition, the Partnership has
financed $8.5 million for the acquisition of five acres of the Property and
construction of an office building which is the corporate headquarters of
Franchise Finance Corporation of America (FFCA) (see Note 4). The Partnership's
primary investment objective is to achieve capital appreciation through the sale
of the improved land. The general partner of the Partnership is FFCA Management
Company Limited Partnership (the General Partner), an affiliate of FFCA. The
Partnership will expire December 31, 2047, or sooner, in accordance with the
terms of the Partnership agreement. As of December 31, 1999, there remained
approximately 47 acres unsold, representing 7 parcels. Three such parcels were
under contract for sale, totaling 13 acres. Once the remaining parcels are sold,
the Partnership will liquidate and distribute its assets in accordance with the
Partnership agreement.
Investors acquired units of assigned limited partnership interest (the
limited partnership units) in the Partnership from FFCA Investor Services
Corporation 88-B (the Initial Limited Partner), a Delaware corporation
wholly-owned by Perimeter Center Management Company, an affiliate of the General
Partner. Holders of the units have all of the economic benefits and
substantially the same rights and powers of limited partners; therefore, they
are referred to herein as "limited partners."
The Partnership agreement provides for allocation of profits and losses and
cash distributions among its partners as follows:
Profits and Losses: Profits and losses are allocated 99% to the limited
partners and 1% to the General Partner, except that gain from the land
sales will be allocated to the partners and The Westcor Company II Limited
Partnership (the Manager) as provided in the Partnership agreement.
Cash Distributions: Cash from operations, as defined in the Partnership
agreement, after payment of fees to the General Partner and the creation or
restoration of cash reserves, is allocated 99% to the limited partners and
1% to the General Partner. Cash proceeds from the sale of property are not
considered cash from operations but, when distributed, represent a partial
return of the limited partners' initial $1,000 per unit capital
contribution. Based on the amount of such distributions made as of December
31, 1999, the limited partner Adjusted Capital Contribution, as defined in
the Partnership agreement, is $362.62 per unit.
2) SIGNIFICANT ACCOUNTING POLICIES:
FINANCIAL STATEMENTS - The financial statements of the Partnership are
prepared on the accrual basis of accounting. The preparation of the financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Although
management believes its estimates are reasonable, actual results could differ
from those estimates.
CASH AND CASH EQUIVALENTS - Investment securities that are highly liquid
and have maturities of three months or less at the date of purchase are
classified as cash equivalents. Cash equivalents include United States Treasury
securities of $11,366,589 and $2,163,172 at December 31, 1999 and 1998,
respectively, and bank repurchase agreements (which are collateralized by United
States Treasury and Government obligations) of $4,900,381 at December 31, 1999.
Short-term investments are recorded at cost plus accrued interest, which
approximates market value.
28
<PAGE>
DEVELOPMENT COSTS AND LAND SALES - During the development phase, costs
directly related to the acquisition of the Property, such as appraisals, plans
and finders fees, were capitalized to the cost of the Property. The Partnership
also capitalized real estate taxes and other holding costs during the
development of the Property and the construction of the land improvements.
Common costs and improvements are allocated based on each parcel's relative fair
value and charged to an individual parcel where specifically identifiable. The
Property is carried at cost, which does not exceed estimated net realizable
value.
3) LAND SUBJECT TO SALE AGREEMENTS:
At December 31, 1999, the Partnership had three parcels of land
(approximately 13 acres total) under contract for sale at an aggregate price of
approximately $6.7 million to two unaffiliated third parties. The aggregate
original cost of the parcels is approximately $3.1 million.
4) LAND SUBJECT TO SALE AGREEMENT WITH AFFILIATE:
As provided in the Partnership agreement, the Partnership entered into an
agreement on December 29, 1988 to sell approximately five acres of the Property
(the Parcel) to FFCA at a purchase price determined by independent appraisal to
be the fair market value of the unimproved Parcel and related improvements. In
connection with the sale agreement, the Partnership also funded the construction
of an office building on the Parcel that is the corporate headquarters of FFCA.
This loan to FFCA for the acquisition of the Parcel, the office building and the
parcel improvements totaled $8.5 million.
FFCA is obligated to pay the Partnership monthly payments of interest at
the rate of 10% per year for ten years. In May 2000, the entire balance of the
loan is due. FFCA is obligated to pay the Partnership, upon the maturity of the
loan, by acceleration or otherwise, additional interest based upon the increase,
if any, in the value of the FFCA office building (Additional Interest). The
amount of Additional Interest, if any, will be calculated in accordance with the
related loan agreement as the greater of 30% of the increase in value of the
FFCA office building or $1.13 million. FFCA payment obligations to the
Partnership are secured by the Parcel, the FFCA office building, the parcel
improvements and the General Partner's guaranty.
The sale of the Parcel to FFCA will be recognized in the Partnership's
financial statements when the amounts loaned to FFCA are repaid to the
Partnership.
The fair value of the Partnership's loan receivable from FFCA is estimated
by discounting the future cash flows using the current rates at which similar
loans would be made to borrowers with similar credit ratings and for the same
remaining maturities. The fair value at December 31, 1999 exceeds the carrying
amount by $1.6 million; however, the fair value of the loan will not result in
the receipt of any additional cash above the face amount of the loan unless the
loan were to be sold.
5) MANAGEMENT CONTRACT:
The Partnership has entered into a management contract with the Manager to
develop and manage the Property. The management contract is renewable annually.
Under the management contract, the Manager is entitled to receive fees for
services performed in connection with managing the Property's development.
During 1999, 1998 and 1997, the planning and property management fees paid or
accrued to the Manager (payable in monthly installments) were $36,000 each year.
After the limited partners have received specified returns in accordance
with the Partnership agreement, a subordinated contingent interest of 25% of all
remaining sale or refinancing proceeds or parcel revenues will be payable to the
Manager.
29
<PAGE>
6) INCOME TAXES:
The Partnership is not directly subject to income taxes; rather, each
partner is subject to income taxes on his distributable share of taxable income.
The Partnership tax returns and the amount of distributable partnership profits
or losses are subject to examination by Federal and state taxing authorities. If
examinations by taxing authorities result in changes to distributable
partnership profits or losses, the tax liabilities of the partners could be
changed accordingly.
The following is a reconciliation of net income for financial reporting
purposes to income reported for Federal income tax purposes for the years ended
December 31, 1999, 1998 and 1997:
1999 1998 1997
----------- ----------- -----------
Net income for financial
reporting purposes $ 9,357,292 $ 3,124,531 $ 8,797,901
Differences for tax purposes in:
Capitalized land inventory costs 139,585 259,006 212,788
Additional Interest on FFCA loan 165,234 149,690 135,612
Gain on sale of land 479,353 (122,383) (1,707,897)
Deferred Income 96,777 -- --
Other 633 1,609 1,449
----------- ----------- -----------
Taxable income to partners $10,238,874 $ 3,412,453 $ 7,439,853
=========== =========== ===========
For Federal income tax reporting purposes, taxable income to partners is
reported on the accrual basis of accounting and is classified as ordinary
income.
At December 31, 1999, the tax bases of the Partnership's assets and
liabilities exceed the amounts recorded for financial reporting purposes by
$1,693,886. This difference results primarily from differences in the treatment
of capitalized land inventory costs, the Additional Interest on the FFCA loan
and the gain recognized on the sale of the land parcels for financial reporting
and tax reporting purposes.
7) TRANSACTIONS WITH RELATED PARTIES:
Under the terms of the Partnership agreement, the General Partner is
entitled to compensation for services performed in connection with managing the
affairs of the Partnership. During 1999, 1998 and 1997, fees paid or accrued to
the General Partner were as follows:
1999 1998 1997
-------- -------- --------
Partnership management fee (3/4 of 1% of the
Assets Under Management, payable monthly) $244,917 $260,185 $319,327
======== ======== ========
FFCA incurs expenses on behalf of the Partnership for maintenance of the
books and records and for computer, investor and legal services performed for
the Partnership. These expenses are reimbursable in accordance with the
Partnership agreement and are less than the amount that the Partnership would
have paid to independent parties for comparable services. The Partnership
reimbursed FFCA $28,762 in 1999, $31,490 in 1998 and $25,981 in 1997 for such
expenses.
8) SUBSEQUENT EVENT - RELATED PARTY TRANSACTION (UNAUDITED):
On February 7, 2000, the Partnership entered into a contract with FFCA to
sell a parcel of land (3.6 acres) for approximately $1.9 million. The sale is
subject to the approval, by vote, of the majority of the limited partner
interests of the Partnership. There can be no assurances as to the final terms
of the proposed transaction, that the conditions will be satisfied or that the
proposed transaction will be consummated.
30
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
SCHEDULE OF REAL ESTATE
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Cost Gross Amount
Capitalized At Which
Initial Cost Subsequent to Carried At Date
Description Location Encumbrances to Partnership Acquisition December 31, 1999 Acquired
- ----------- -------- ------------ -------------- ----------- ----------------- --------
<S> <C> <C> <C> <C> <C> <C>
Improved land, 261 acres
initially, 47 acres at Subject to
December 31, 1999 Scottsdale, Arizona sales agreements (3) $23,913,185 $8,979,480 $9,015,777 Nov. 1988
=========== ========== ==========
</TABLE>
Notes:
(1) The aggregate cost for Federal income tax purposes is $8,738,433.
(2) There are no prior liens.
(3) In 1988, the Partnership entered into a sales agreement to sell five acres
of land, with a cost to the Partnership of approximately $788,000, to an
affiliate for an amount determined by independent appraisal to be the fair
market value of the parcel. In 1999, the Partnership entered into two sales
agreements to sell approximately 13 acres of land, with an aggregate cost
to the Partnership of approximately $3.1 million to unaffiliated third
parties.
(4) Transactions in real estate during 1997, 1998 and 1999 are summarized as
follows:
Cost
------------
Balance, December 31, 1996 $ 30,094,742
Cost of land sold (11,163,169)
------------
Balance, December 31, 1997 18,931,573
Cost of land sold (2,594,471)
------------
Balance, December 31, 1998 16,337,102
Cost of land sold (7,321,325)
------------
Balance, December 31, 1999 $ 9,015,777
============
31
<PAGE>
[LETTERHEAD OF ARTHUR ANDERSEN]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To FFCA Investor Services Corporation 88-B:
We have audited the accompanying balance sheet of FFCA INVESTOR SERVICES
CORPORATION 88-B (a Delaware corporation) as of December 31, 1999. This
financial statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. 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
audit provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of FFCA Investor Services Corporation
88-B as of December 31, 1999, in conformity with generally accepted accounting
principles.
/s/ Arthur Andersen LLP
Phoenix, Arizona,
January 25, 2000.
32
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 88-B
BALANCE SHEET - DECEMBER 31, 1999
ASSETS
Cash $100
Investment in Scottsdale Land Trust
Limited Partnership, at cost 100
----
Total Assets $200
====
LIABILITY
Payable to Parent (Note 2) $100
----
STOCKHOLDER'S EQUITY
Common Stock; $l par value; 100 shares authorized,
issued and outstanding 100
----
Liability and Stockholder's Equity $200
====
The accompanying notes are an integral part of this balance sheet.
33
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 88-B
NOTES TO BALANCE SHEET
DECEMBER 3l, l999
(l) Operations:
FFCA Investor Services Corporation 88-B (a Delaware corporation) (88-B) was
organized on August 11, 1987 to act as the assignor limited partner in
Scottsdale Land Trust Limited Partnership (SLT).
The assignor limited partner is the owner of record of the limited
partnership units of SLT. All rights and powers of 88-B have been assigned to
the holders, who are the registered and beneficial owners of the units. Other
than to serve as assignor limited partner, 88-B has no other business purpose
and will not engage in any other activity or incur any debt.
(2) Related Parties:
Perimeter Center Management Company (a Delaware corporation) (PCMC) is the
sole stockholder of 88-B. The general partner of SLT is an affiliate of PCMC.
34
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
AND
FFCA INVESTOR SERVICES CORPORATION 88-B
EXHIBIT INDEX
The following is a complete list of exhibits filed as part of this Form 10-K.
For electronic filing purposes only, this report contains Exhibit 27, the
Financial Data Schedule. Exhibit numbers correspond to the numbers in the
Exhibit Table of Item 601 of Regulation S-K.
Sequentially
Exhibit Numbered Page
------- -------------
99. Annual Portfolio Valuation of Cushman & Wakefield as of December
31, 1999.
Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as
amended, the following documents, filed with the Securities and Exchange
Commission on March 31, 1994 as exhibits to the Co-Registrants' Form 10-K
for the fiscal year ended December 31, 1993, Commission File No. 0-17626,
are incorporated herein by this reference.
Form 10-K
Exhibit No.
-----------
First Amendment to Exclusive Management Agreement by 10.1
and between the Partnership and The Westcor Company II
Limited Partnership, dated May 1, 1990.
Second Amendment to Exclusive Management Agreement by 10.2
and between the Partnership and The Westcor Company II
Limited Partnership, dated January 1, 1994.
Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as
amended, the following documents, filed with the Securities and Exchange
Commission on March 24, 1989 as exhibits to the Co-Registrants' Form 10-K
for the fiscal year ended December 31, 1988, Commission File No. 33-18041,
are incorporated herein by this reference.
Form 10-K
Exhibit No.
-----------
The Amended and Restated Certificate and Agreement of 4
Limited Partnership, which governs the Partnership, as
filed with the Secretary of State of Delaware on
November 23, 1988.
Acquisition, Construction and Term Loan Agreement by 10
and between the Partnership and Franchise Finance
Corporation of America, dated as of December 29, 1988.
35
<PAGE>
Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as
amended, the following documents, filed with the Securities and Exchange
Commission on June 14, 1988 as exhibits to the Co-Registrants' Registration
Statement on Form S-11, Registration No. 33-18041, are incorporated herein
by this reference.
Exhibit No.
-----------
The Certificate of Incorporation, which governs the 4(b)
Corporation, as filed with the Secretary of State of
Delaware on August 11, 1987.
Bylaws of FFCA Investor Services Corporation 88-B. 4(c)
Exclusive Management Contract by and between the 10(c)
Partnership and The Westcor Company II Limited
Partnership, dated as of June 7, 1988.
36
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF DECEMBER 31, 1999 AND THE STATEMENT OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 824098
<NAME> SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 16,667,333
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 9,015,777
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 33,440,753
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18,962,291
<TOTAL-LIABILITY-AND-EQUITY> 33,440,753
<SALES> 17,188,342
<TOTAL-REVENUES> 18,200,381
<CGS> 8,199,398
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,357,292
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,357,292
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,357,292
<EPS-BASIC> 187.07
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH BALANCE SHEET.
</LEGEND>
<CIK> 824134
<NAME> FFCA INVESTOR SERVICES CORPORATION 88-B
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 100
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 200
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 200
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
