UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 33-19811
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DIVERSIFIED HISTORIC INVESTORS VI
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2492210
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Suite 500, 1521 Locust Street, Philadelphia, PA 19102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 735-5001
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Securities registered pursuant to Section 12(b) of the Act: NONE
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Securities registered pursuant to section 12(g) of the Act: 25,461 Units
Units of Limited Partnership Interest
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(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 No X
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. [ ]
Aggregate market value of Units held by non-affiliates of the
Registrant: Not Applicable *
* Securities not quoted in any trading market to Registrant's
knowledge.
<PAGE>
PART I
Item 1. Business
a. General Development of Business
Diversified Historic Investors VI ("Registrant")
is a limited partnership formed in 1988 under the Pennsylvania Uniform
Limited Partnership Act. As of December 31, 1994, Registrant had
outstanding 25,461 units of limited partnership interest (the
"Units").
Registrant is presently in its operating stage.
It originally owned eight properties or interests therein. Interest
in one property has been lost through foreclosure and an interest in
one other has been reduced substantially. See Item 2. Properties, for
a description thereof.
The following is a summary of significant
transactions involving the Registrant's interests:
In order to forestall the lender's threatened
foreclosure, on January 28, 1993 Firehouse Square General Partnership,
a general partnership in which the Registrant owns a 90% interest,
filed a reorganization petition pursuant to Chapter 11 of the U.S.
Bankruptcy Code. In May 1993, the lender sold its note and mortgage
to another entity. On June 1, 1993, an agreement was entered into
with the new holder of the note and mortgage to restructure the note.
The bankruptcy was subsequently dismissed. See Item 2. Properties for
a description of the restructured note. On November 16, 1994, the
first mortgage holder foreclosed on its mortgage and subsequently sold
it to a newly formed partnership known as 901 King Street Associates
which is owned 90% by the Registrant. See Item 2. Properties for a
description of the foreclosure.
On September 9, 1993, St. James Limited
Partnership ("SJLP"), a limited partnership in which the Registrant
owns a 98% interest, filed a reorganization petition pursuant to
Chapter 11 of the U.S. Bankruptcy Code. After filing the petition,
it became apparent that there could not be a confirmable plan of
reorganization without either the Registrant making an additional
equity contribution to SJLP or an extremely favorable settlement of
the complaint against the Registrant's co-general partner in SJLP and
United National Bank. See Part II, Item 7 Management's Discussion and
Analysis of Financial Condition and Results of Operations. Since the
Registrant has no additional sources of equity and the outcome of the
co-general partner/bank suit is uncertain, the automatic stay was
lifted and the first mortgage holder foreclosed on the property on
October 21, 1994.
On January 21, 1994, a property owned by the
Registrant, Locke Mill Plaza, was transferred to Locke Mill Partners
("LMP") a limited partnership in which the Registrant owns a 99%
interest. The property was transferred so that it would be held by
the Registrant in a manner similar to all of the other properties held
by the Registrant. On February 14, 1994, LMP filed a reorganization
petition pursuant to Chapter 11 of the U.S. Bankruptcy Code. For a
description of the proceedings, see Item 2. Properties.
On June 1, 1993, an amended and restated joint
venture agreement was reached for Saunders Apartments Joint Venture
("SAJV"), a partnership in which the Registrant originally owned a 98%
general partnership interest. The agreement provided for, among other
things, the resolution of certain litigation and the reduction of the
Registrant's general partnership interest to a 30% interest.
b. Financial Information about Industry Segments
The Registrant operates in one industry segment.
c. Narrative Description of Business
Registrant is in the business of operating,
holding, selling, exchanging and otherwise dealing in and with real
properties containing improvements which are "Certified Historic
Structures," as such term is defined in the Internal Revenue Code (the
"Code"), or which are eligible for designation as such, for use as
apartments, offices, hotels and commercial spaces, or any combination
thereof, or low income housing eligible for the tax credit provided by
Section 42 of the Code, and such other uses as the Registrant's
general partner may deem appropriate.
Since the Registrant's inception, all the
properties acquired either by the Registrant, or the subsidiary
partnerships in which it has an interest, have been rehabilitated and
certified as Historic Structures and have received the related
Investment Tax Credit. In addition, four properties are low-income
housing structures which qualify for, have received, and will continue
to receive, the Low Income Tax Credits. Each of the seven properties
currently owned are held for rental operations. At this time it is
anticipated that all the properties will continue to be held for this
purpose. At such time as real property values begin to increase, the
Registrant will re-evaluate its investment strategy regarding the
properties.
As of December 31, 1994, Registrant owned
interests in seven properties, located in Nebraska (three), North
Carolina (one), Virginia (one), Pennsylvania (one), and Louisiana
(one). In total, the properties contain 178 apartment units, 149
condominium units used as rental units, and 50,815 square feet ("sf")
of commercial/retail space. As of December 31, 1994, 310 of the
apartment and condominium units were under lease at monthly rental
rates ranging from $275 to $1,075. In addition, 41,606 sf of
commercial/retail space was under lease at annual rates ranging from
$2.75 to $19.29 per sf. Rental of the apartments and commercial space
is not expected to be seasonal. For a further discussion of the
properties, see Item 2. Properties.
Due to the overbuilding that occurred in the
1980's, the competition for both residential and commercial tenants in
the local markets where the Registrant's properties are located is
generally strong. As a result, the Registrant is forced to keep its
rent levels competitively low in order to maintain moderate to high
occupancy levels. In each market, there are several similar
historically certified rehabilitated buildings. However, there is no
organization which holds a dominant position in the residential
housing or commercial leasing market in any of the geographic areas in
which the Registrant's properties are located.
Registrant has no employees. Registrant's
activities are overseen by Brandywine Construction & Management, Inc.,
("BCMI") a real estate management firm.
d. Financial Information About Foreign and Domestic
Operations and Export Sales
See Item 8. Financial Statements and Supplementary
Data.
Item 2. Properties
As of December 31, 1994, Registrant owned controlling
interests in six partnerships which each own one property and a
minority interest in an additional partnership which owns one
property. A summary description of each property is given below.
a. Locke Mill Plaza - consists of 78 residential
condominium units in a 169 condominium unit project and 6,700 sf of
commercial/retail space (of which 1,600 sf is used for in-house office
and maintenance services) located at Buffalo Avenue and Union Street
in North Concord, North Carolina. An affiliate of the Registrant owns
an additional 10 units. In December 1988, Registrant acquired the
units for $5,042,000, ($65.44 per sf) which was funded by Registrant's
equity contribution and two $1,250,000 notes payable. The principal
balances of the notes at December 31, 1994 are $1,231,623 and
$1,221,659. Both notes bear interest at prime plus 1% (9.5% and 7% at
December 31, 1994 and 1993, respectively, however the second note
provides for a minimum interest rate of 10%, therefore, the rate at
December 31, 1993 was 10%), payable in monthly installments of
principal and interest and are due in 1995 and 2019, respectively. In
February 1992, one lender advanced $50,217 to pay real estate taxes.
This amount was added to the then outstanding principal balance.
Subsequently, at the recommendation of the lender, the existing
property management contract was terminated and a new manager was
engaged. Since that time, occupancy and cash flow have improved.
However, the cash flow has still not been sufficient to cover
operating expenses (including real estate taxes) and debt service,
including principal amortization. In order to ease the debt service
payment burden on the property, the Registrant discussed with its two
lenders the possibility of restructuring its loan obligations. These
discussions were not successful. In January 1994, the property's ad
valorem property tax payments were in default and the taxing
authorities commenced proceedings to sell the property. Since the
property was unable to satisfy past due obligations and meet the
demands of its secured creditors, on February 14, 1994, Locke Mill
Partners ("LMP", the partnership to which the property was transferred
on January 21, 1994) filed a reorganization petition pursuant to
Chapter 11 of the U.S. Bankruptcy Code. LMP filed a Plan of
Reorganization and Disclosure Statement (the "Plan") on July 7, 1994.
The Plan was not approved, however the Registrant is in the process of
negotiating a settlement agreement with the note holders. The
property is managed by an independent property management firm. As of
December 31, 1994, 72 units were under lease (92%) with monthly rents
ranging from $370 to $680, and 3,100 sf of commercial space were
leased (46%) at an annual rent of $2.07 per sf. All residential
leases are renewable, one-year leases. The occupancy for the
residential units for the previous four years was 96% for 1993, 94%
for 1992, 91% for 1991 and 80% for 1990. The monthly rental range has
been approximately the same since 1990. The occupancy for the
commercial space was 46% for 1993, 41% for 1992, 24% for 1991 and 35%
for 1990. The average annual rent has been $5.10 to $6.75 per sf for
1993, $5.85 per sf for 1992, $3.24 per sf for 1991 and $8.52 per sf
for 1990. There are three tenants who each occupy ten percent or more
of the rentable square footage. They operate principally as a beauty
salon, leasing office and a maintenance shop. They each have a month
to month lease which requires sixty (60) days notice to vacate. For
tax purposes, this property has a federal tax basis of $5,756,314 and
is depreciated using the straight-line method with a useful life of
27.5 years. The annual real estate taxes are $39,997 which is based
on an assessed value of $3,703,390 taxed at a rate of $.46 per $100 by
the City of Concord and a rate of $.62 per $100 by the County of
Cabarrus. No one tenant occupies ten percent or more of the building.
It is the opinion of the management of the Registrant that the
property is adequately covered by insurance.
b. Firehouse Square - consists of 32,544 sf of
commercial space at 902-910 King Street in Alexandria, Virginia. In
December 1988, Registrant was admitted with a 90% general partner
interest, to Firehouse Square General Partnership ("FSGP"), a Virginia
general partnership, for a cash capital contribution of $1,750,000.
FSGP acquired and rehabilitated the property for $5,660,000 ($151.51
per sf), funded by the equity contribution and a mortgage note payable
of $4,207,000. The original note terms, as amended on December 28,
1988, provided for interest payable monthly at a rate of prime plus
1/2% in addition to monthly principal installments of $2,600. The
note matured in June 1993. Due to insufficient cash flow, FSGP ceased
making debt service payments in November 1992. On December 1, 1992,
FSGP was given notice of the existence of certain defaults under the
loan documents. After the cure period expired, the lender accelerated
the loan and declared it due and payable in full. In addition, the
lender exercised its rights pursuant to the Assignment of Lessor's
Interest in Leases and directed all tenants to commence making their
rent payments directly to the lender. In order to forestall the
lender's threatened foreclosure, on January 28, 1993, FSGP filed a
reorganization petition pursuant to Chapter 11 of the U.S. Bankruptcy
Code. In May 1993 the lender sold its note and mortgage to another
entity. On June 1, 1993, an agreement was entered into with the new
holder of the note and mortgage to restructure the loan and the
bankruptcy was subsequently dismissed. Accrued interest in the amount
of $218,728 was added to the principal balance of the note. The
lender also advanced $40,711 for real estate taxes and $33,627 for
tenant improvements. Monthly payments of interest to the new
noteholder were to be made in an amount equal to net operating income,
with a minimum of $22,916 per month. The note accrues interest at
prime plus 1/2% (9% and 6-1/2% at December 31, 1994 and 1993,
respectively). On November 16, 1994, the new first mortgage holder
foreclosed upon its mortgage. By "credit bidding" its mortgage, the
mortgage holder became the successful bidder at sale. The first
mortgage holder sold its successful bid to a partnership known as 901
King Street Associates ("KSA"). KSA is a general partnership owned
90% by DHI-VI. The selling price of the mortgage was the amount that
the mortgage had been immediately prior to foreclosure. The
obligation has terms materially the same as the original mortgage loan
and is secured by a new mortgage on the Property. Therefore, after
the sale, the Registrant's interest in the Property is unchanged. The
principal balance at December 31, 1994 was $4,725,356. The entire
principal balance is due October 1998. The property is managed by
BCMI. As of December 31, 1994, Firehouse Square has 28,615 sf of
space under lease (88%) at annual rates ranging from $6.50 to $19.29
per sf. The occupancy for the previous four years was 87% for 1993,
53% for 1992, 53% for 1991 and 81% for 1990. The average annual rent
has been $6.50 to $30.18 per sf for 1993, $19.78 per sf for 1992, $23
per sf for 1991 and $18.12 per sf for 1990. There are three tenants
who each occupy ten percent or more of the rentable square footage.
They operate principally as a civic association, a law firm and an
architectural firm.
The following is a table showing commercial lease
expirations at Firehouse Square for the next five years.
Number of Total sf of Total annual
leases expiring rental covered by % of gross
expiring leases expiring leases annual rental
1995 3 5,616 $80,160 18%
1996 2 691 2,938 1%
1997 1 1,344 25,536 5%
1998 2 3,436 51,635 12%
1999 5 17,528 274,079 64%
For tax purposes, this property has a federal tax
basis of $3,515,785 and is depreciated using the straight-line method
with a useful life of 39 years. The annual real estate taxes are
$36,911 which is based on an assessed value of $3,449,600 taxed at a
rate of $1.07 per $100. It is the opinion of the management of the
Registrant that the property is adequately covered by insurance.
c. Roseland - consists of 17 apartments and 3,100 sf
of retail space at 4932 South 24th Street in South Omaha, Nebraska.
In July 1988, Registrant was admitted with a 98% general partner
interest and a 1% limited partner interest, to Roseland Redevelopment
Partners ("RRP"), a Nebraska limited partnership, for a cash capital
contribution of $700,000. RRP acquired and rehabilitated the property
for $1,680,000 ($70.29 per sf), funded by the equity contribution and
three notes payable. The first note payable of $500,000 is non-
interest bearing, principal due upon sale of the property; the second
note payable of $63,313 bears interest at 9.73%, interest adjusting
every three years based on the three-year Treasury Bill rate plus 250
basis points, payable in semi-annual installments of principal and
interest of $5,188, due in November 2001 (principal balance at
December 31, 1994 of $49,604); the third note payable of $393,786
bears interest at 9.44%, payable in monthly installments of principal
and interest of $3,346, due in August 1996 (principal balance at
December 31, 1994 of $383,506). The property is managed by a property
management firm which is an affiliate of the Registrant's co-general
partner of RRP. On December 31, 1994, all 17 of the units were leased
(100%) at monthly rents of $275 to $425, and 2,400 sf of commercial
space (77%) was leased at an annual rent of $2.75 per sf. All
residential leases are renewable, one-year leases. The occupancy for
the residential units for the previous four years was 87% for 1993,
98% for 1992, 88% for 1991 and, 59% for 1990. The monthly rental
range has been approximately the same since 1990. The commercial
space was 100% occupied from the completion of the building in 1990 to
1993. The range for annual rents has been $2.75 to $5.14 per sf for
1993, $5.15 to $8.25 per sf for 1992, $5.15 to $8.25 per sf for 1991,
$2.50 to $7.50 per sf for 1990, and $2.50 to $7.50 per sf for 1989.
There is one tenant who occupies ten percent or more of the rentable
square footage. It principally functions as a counseling center.
The following is a table showing commercial lease
expirations at Roseland for the next five years:
Number of Total sf of Total annual
leases expiring rental covered by % of gross
expiring leases expiring leases annual rental
1995 -- -- -- --
1996 -- -- -- --
1997 -- -- -- --
1998 -- -- -- --
1999 -- -- -- --
Thereafter 1 2,400 $6,600 100%
For tax purposes, this property has a federal tax
basis of $1,659,151 and is depreciated using the straight-line method
with a useful life of 27.5 years. The annual real estate taxes are
$9,399 which is based on an assessed value of $333,300 taxed at a rate
of $2.81991 per $100. It is the opinion of the management of the
Registrant that the property is adequately covered by insurance.
d. Mater Dolorosa Apartments - consists of 68
apartments located at 1265 South Carrollton Avenue in New Orleans,
Louisiana. In July 1988, Registrant was admitted with a 90% general
partnership interest to Mater Dolorosa General Partnership ("MDGP") a
Pennsylvania general partnership, for a cash contribution of
$1,519,000. MDGP acquired and rehabilitated the property for
$3,149,000 ($59.39 per sf), funded by the equity contribution and a
note payable of $1,718,000 which bore interest at 10-3/4%, accruing to
the loan note amount, principal and interest due upon conversion to a
permanent loan. In March 1990, the note was converted to permanent
financing in the amount of $1,790,000, with interest at 8.5%, payable
monthly in principal and interest payments of $17,627, due in April
2005 (principal balance at December 31, 1994 of $1,451,382). The
property is managed by a property management firm which is an
affiliate of the Registrant's co-general partner of MDGP. At December
31, 1994, all 68 of the units were rented (100%) at monthly rents of
$478 to $563. All leases are renewable, one-year leases. The
occupancy for the previous four years was 99% for 1993, 99% for 1992,
94% for 1991 and 99% for 1990. The monthly rental range has been
approximately the same since 1990. For tax purposes, this property
has a federal tax basis of $3,178,476 and is depreciated using the
straight-line method with a useful life of 27.5 years. The annual
real estate taxes are $5,248 which is based on an assessed value of
$32,530 taxed at a rate of $16.1328 per $100. There is no one tenant
who occupies ten percent or more of the building. It is the opinion
of the management of the Registrant that the property is adequately
covered by insurance.
e. Strehlow Terrace Apartments - consists of 70
apartment units located at 2024 North 16th Street, Omaha, Nebraska.
In January 1989, Registrant was admitted with a 98% general partner
interest to Strehlow Terrace Apartments Limited Partnership ("STALP"),
a Nebraska limited partnership for a cash capital contribution of
$2,250,000. STALP acquired and rehabilitated the property for
$5,817,000 ($52.02 per sf) funded by the equity contribution and three
mortgage loans. The first loan, financed through the Governmental
National Mortgage Association ("GNMA") is for $1,789,000 (principal
balance at December 31, 1994 of $1,775,053), bears interest at 10-
1/4%, is payable in monthly installments of principal and interest of
$15,540, and is due in 2030. In August 1993, six units were damaged
by a fire at Strehlow Terrace. Due to the financial difficulties
caused by the fire, STALP fell behind on its monthly debt service by
several months. Although the property was able to reduce the
arrearage by 50% and commenced regular, monthly payments by May 1994,
the loan was declared in default and was assigned by GNMA to the
Federal Housing Administration/Housing and Urban Development
("FHA/HUD"), on June 24, 1994. Although this assignment subjects the
management and operation of this property to more intense scrutiny, it
does provide greater flexibility for structuring a workout. A workout
proposal, which provides for a reduced interest rate and repayment of
the loan arrearage over thirty-six months, was submitted to FHA/HUD in
August 1994. It is anticipated that an acceptable workout agreement
will be reached and the loan will be returned to a current status.
The other two loans were made by the City of Omaha. One, in the
amount of $1,700,000, bears interest at 1%, and the other, in the
amount of $75,000, is non-interest bearing. The principal and
interest (if any) on both City of Omaha loans is due upon the sale of
the property or in the year 2030, whichever is earlier. The property
is managed by a property management firm which is an affiliate of the
Registrant's co-general partner of STALP. On December 31, 1994, 66 of
the apartments were leased (94%) at monthly rents ranging from $371 to
$529. All leases are renewable, one-year leases. The occupancy for
the previous four years was 95% for 1993, 96% for 1992, 93% for 1991
and 100% for 1990. The monthly rental range has been approximately
the same since 1990. For tax purposes, this property has a federal
tax basis of $5,866,213 and is depreciated using the straight-line
method with a useful life of 27.5 years. The annual real estate taxes
are $16,284 which is based on an assessed value of $575,500 taxed at a
rate of $2.81991 per $100. No one tenant occupies ten percent of more
of the building. It is the opinion of the management of the
Registrant that the property is adequately covered by insurance.
f. Canal House - consists of 71 residential
condominium units and 8,471 sf of commercial condominium space located
at 4250-4312 Main Street, Manayunk, Pennsylvania. In February 1989,
Registrant was admitted to Canal House Historic Associates ("CHHA"), a
Pennsylvania limited partnership with a 99% general partner interest
for a cash contribution of $6,000,000. During 1990, Registrant made
an additional cash contribution of $200,000. (The 1% limited
partnership interest is also controlled by Registrant; it is held by a
Pennsylvania corporation whose stock is owned by Registrant). CHHA
acquired and rehabilitated the property for $9,700,000 ($94.41 per sf)
which was funded by the equity contribution and a construction loan of
$4,000,000 which bore interest at prime plus 1% (7% at December 31,
1993). In order to extend the maturity date of the construction loan
until September 1993, the Registrant agreed to make monthly principal
payments of $7,500 in addition to the interest. CHHA ceased making
these principal payments in April 1993 due to cash shortfalls
resulting from expenditures for certain deferred maintenance items.
In September 1993, the loan was converted to a permanent loan
(principal balance at December 31, 1994 of $3,915,782) with a maturity
date of September 1998. Beginning in October 1993, principal payments
of $2,500 and interest at prime plus 1% were made for one year. In
October 1994, the interest became fixed at 7.75% and monthly principal
(based on a 30-year amortization) and interest payments commenced.
The property is managed by BCMI. At December 31, 1994, 69 of the
residential units were under lease (97%) at monthly rents of $525 to
$1,075, and 7,491 sf of the commercial space was under lease (88%) at
annual rents ranging from $17.00 to $19.00 per sf. All residential
leases are renewable, one-year leases. The occupancy for the
residential units for the previous four years was 99% for 1993, 92%
for 1992, 86% for 1991 and 90% for 1990. The monthly rental range has
been approximately the same since 1990. The occupancy for the
commercial units was 88% for 1993, 88% in 1992, 100% in 1991 and 52%
in 1990. The range for annual rents has been $11.59 to $18.51 per sf
in 1993, $11.52 to $15.96 per sf for 1992, $13.40 to $15.30 per sf for
1991 and $14.00 to $16.00 per s.f. for 1990. There are three tenants
who each occupy ten percent or more of the rentable square footage.
They function principally as a bank, a restaurant and a retail store.
The following is a table showing commercial lease
expirations at Canal House for the next five years.
Number of Total sf of Total annual
leases expiring rental covered by % of gross
expiring leases expiring leases annual rental
1995 1 2,426 $41,242 31%
1996 1 4,030 72,540 55%
1997 1 1,035 18,420 14%
1998 -- -- -- --
1999 -- -- -- --
Thereafter -- -- -- --
For tax purposes, this property has a federal tax
basis of $9,194,243 and is depreciated using the straight-line method
with a useful life of 27.5 years. The annual real estate taxes are
$52,890 which is based on an assessed value of $640,000 taxed at a
rate of $8.264 per $100. It is the opinion of the management of the
Registrant that the property is adequately covered by insurance.
g. Saunders Apartments - consists of 23 apartments at
415 North 41st Avenue in Omaha, Nebraska. Registrant acquired a 99%
joint venture interest in Saunders Apartments Joint Venture ("SAJV"),
a Nebraska Joint Venture, for a cash capital contribution of $875,000.
SAJV acquired and rehabilitated the property for $1,815,000 ($79.96
per sf), funded by the equity contribution and a mortgage payable of
$675,000. The note was retired with $285,000 advanced from
Registrant's co-general partner, and a mortgage note payable of
$395,000 (principal balance at December 31, 1994 of $384,730). The
mortgage note bears interest at 10.87%, is payable in monthly
installments of $3,723 and matures in May 1997. On June 1, 1993 an
amended and restated joint venture agreement was reached whereby the
Registrant's interest was reduced to a 30% interest. The property is
managed by an independent property management firm. As of December
31, 1994, 18 units were under lease (78%) with rents ranging from $340
to $400. All leases are renewable, one-year leases. The occupancy
for the previous four years was 83% for 1993, 100% for 1992, 96% for
1991 and 74% for 1990. The monthly rental range has been
approximately the same since 1990. For tax purposes, this property
has a federal tax basis of $1,990,022 and is depreciated using the
straight-line method with a useful life of 27.5 years. The annual
real estate taxes are $9,401 which is based on an assessed value of
$347,900 taxed at a rate of $27.0212 per $1,000. No one tenant
occupies ten percent or more of the building. It is the opinion of
the management of the Registrant that the property is adequately
covered by insurance.
Item 3. Legal Proceedings
a. On February 14, 1994, Locke Mill Partners, a limited
partnership in which the Registrant owns a 99% interest, filed a
reorganization petition pursuant to Chapter 11 of the U.S. Bankruptcy
Code. For a description of the proceedings, see Item 2. Properties.
b. On September 9, 1993, St. James Limited
Partnership, a limited partnership in which the Registrant owns a 98%
interest, filed a reorganization petition pursuant to Chapter 11 of
the U.S. Bankruptcy Code. After filing the petition, it became
apparent that there could not be a confirmable plan of reorganization
without either the Registrant making an additional equity contribution
to SJLP or an extremely favorable settlement of the complaint against
the Registrant's co-general partner in SJLP and United National Bank.
Since the Registrant has no additional sources of equity and the
outcome of the co-general partner/bank suit is uncertain, the
automatic stay was lifted and the first mortgage holder foreclosed on
the property on October 21, 1994.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fiscal years covered
by this report to a vote of security holders.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
a. There is no established public trading market for
the Units. Registrant does not anticipate any such market will
develop. Trading in the units occurs solely through private
transactions. The Registrant is not aware of the prices at which
trades occur. Registrant's records indicate that 176 units were sold
or exchanged of record in 1994.
b. As of December 31, 1994, there were 2,789 record
holders of Units.
c. Registrant has not declared any cash dividends in
1994 or 1993.
Item 6. Selected Financial Data
The following selected financial data are for the five
years ended December 31, 1994.
1994 1993 1992 1991 1990
(unaudited) (unaudited)
Rental income $ 2,976,153 $ 3,053,542 $2,872,735* $ 2,702,171 $ 2,164,554
Interest income 5,864 6,430 16,432* 41,314 136,026
Other income -0- -0- 311,536* -0-* -0-
Net loss 816,728 2,555,477 2,559,710* 2,816,063 3,096,710
Net loss per Unit 31.75 99.36 99.53* 109.50 120.4
Total assets
(net of depreciation
and amortization) 26,779,880 34,240,234 37,520,594 40,158,407 42,461,608
Debt obligations 17,026,650 22,292,519 22,548,622 22,711,295 22,779,740
* Unaudited
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(1) Liquidity
At December 31, 1994, Registrant had total
unrestricted cash of $59,176. Such funds are expected to be used to
pay liabilities and general and administrative expenses of the
Registrant, and to fund cash deficits of the properties. Cash
generated from operations is used primarily to fund operating expenses
and debt service. If cash flow proves to be insufficient, the
Registrant will attempt to negotiate loan modifications with the
various lenders in order to remain current on all obligations. The
Registrant is not aware of any additional sources of liquidity.
As of December 31, 1994, Registrant had restricted
cash of $291,540 consisting primarily of funds held as security
deposits, replacement reserves and escrows for taxes and insurance.
As a consequence of these restrictions as to use, Registrant does not
deem these funds to be a source of liquidity.
(2) Capital Resources
Due to the relatively recent rehabilitations of
the properties, any capital expenditures needed are generally
replacement items and are funded out of cash from operations or
replacement reserves, if any. The Registrant is not aware of any
factors which would cause historical capital expenditures levels not
to be indicative of capital requirements in the future and
accordingly, does not believe that it will have to commit material
resources to capital investments for the foreseeable future.
Results of Operations
During 1994, Registrant incurred a net loss of
$817,000 ($31.75 per limited partnership unit) compared to a net loss
of $2,555,000 ($99.36 per limited partnership unit), in 1993 and a net
loss of $2,560,000 ($99.53 per limited partnership unit), in 1992.
Included in the 1994 loss is $1,483,064 of extraordinary income
relating to the foreclosure of the St. James and the extinquishment of
debt at Firehouse Square.
Rental income increased from $2,872,735 in 1992 to
$3,053,542 in 1993 and decreased to $2,976,153 in 1994. The decrease
from 1993 to 1994 is mainly the result of the loss of one of the
properties due to foreclosure and the change in accounting method as a
result of the change in ownership used for one of the properties
(Saunders Apartments) partially offset by an increase in rental income
at several of the Registrant's properties (Locke Mill, Firehouse
Square and Canal House) due to higher average occupancy. The increase
from 1992 to 1993 results mainly from higher occupancy levels at four
of the Registrant's properties (Locke Mill, Firehouse Square, St.
James and Canal House) offset by a decrease in rental income
recognized by the Registrant at Saunders Apartments, due to the
reduction of the Registrant's ownership interest in SAJV.
As a result of a decrease in both the amount of
cash and the level of interest rates during 1994 and 1993, interest
income declined from $6,430 in 1993 and to $5,864 in 1993.
Rental operations expense increased from
$1,538,413 in 1992 to $1,642,902 in 1993 and decreased to $1,495,727
in 1994. The decrease from 1993 to 1994 is the result of the
combination of the loss of one property (St. James) due to foreclosure
and the change in accounting method as a result of a change in
ownership at one of the properties (Saunders Apartments) partially
offset by an increase in legal fees incurred in connection with the
Locke Mill bankruptcy. The increase from 1992 to 1993 is primarily
due to the legal fees incurred in connection with the St. James and
Firehouse Square bankruptcies and secondarily due to an increase in
certain variable expenses (i.e. utilities, repairs and maintenance and
cleaning) as a result of higher occupancy at several of the
properties.
General and administrative expenses increased from
$279,839 in 1992 to $365,462 in 1993 and decreased to $342,785 in
1994. The decrease from 1993 to 1994 and the increase from 1992 to
1993 resulted from legal fees incurred in connection with the
litigation and ensuing settlement agreement involving the Saunders
Apartments Joint Venture.
Interest expense increased from $1,687,000 in 1992
to $1,730,507 in 1993 and decreased to $1,719,645 in 1994. The
decrease from 1993 to 1994 is primarily the result of the combination
of the loss of one property (St. James) due to foreclosure and the
change in accounting method as a result of a change in ownership at
one of the properties (Saunders Apartment). The increase from 1992 to
1993 is due to the restructuring of several notes payable which
resulted in higher principal balances upon which interest is charged.
Depreciation and amortization expense increased
from $1,943,618 in 1992 and decreased to $1,856,327 in 1993 to
$1,703,576 in 1994. The decrease from 1993 to 1994 is primarily the
result of the combination of the loss of one property (St. James) due
to foreclosure and the change in accounting method as a result of a
change in ownership at one of the properties (Saunders Apartments).
The decrease is secondarily the result of the fact that the personal
property at several of the properties (Locke Mill, Roseland, and Mater
Dolorosa) because fully depreciated early in 1994. The decrease from
1992 to 1993 results primarily from the decrease in depreciation
expense recognized by the Registrant for Saunders Apartments due to
the reduction of the Registrant's ownership interest in SAJV.
In 1994, income of $31,000 was recognized at
Registrant's Properties compared to losses of $2,093,000 in 1993 and
$2,178,000 in 1992. A discussion of property operations/activities
follows:
In 1994, Registrant sustained a loss of $327,000
at Locke Mill Plaza including $227,000 of depreciation and
amortization expense, compared to a loss of $256,000 including
$278,000 of depreciation and amortization expense in 1993 and a loss
of $340,000 including $273,000 of depreciation and amortization
expense in 1992. The increase in the loss from 1993 to 1994 is the
result of an increase in legal and administrative fees incurred in
connection with the bankruptcy partially offset by an increase in
rental income.
In 1994, Registrant recognized income of $129,000
at The St. James, including $223,000 of depreciation and amortization
charges, compared to a loss of $420,000 including $258,000 of
depreciation and amortization expense in 1993, and a loss of $375,000
including $265,000 of depreciation and amortization expense in 1992.
Included in operations for 1994 is an extraordinary gain of $409,000
relating to the foreclosure of the property. Excluding such income,
the loss in 1994 would have been $280,000. The decrease from 1993 to
1994 is the result of a decrease in rental income of $131,000 and a
decrease in operating expenses of $271,000. These decreases result
from the foreclosure of the property during the year. In July 1991,
SJLP filed a reorganization petition pursuant to Chapter 11 of the
U.S. Bankruptcy Code. In March 1992, a settlement agreement was
reached with the first mortgage holder. The settlement agreement
provided for modification of one loan and the use of certain escrowed
funds to pay delinquencies on another loan. In addition, Registrant
has filed a complaint against its co-general partner and United
National Bank which claims misappropriation of monies from the deficit
cash reserve account. Throughout the rest of 1992 and 1993 the
operating losses continued as occupancy did not increase significantly
in the commercial space. In addition, certain commercial leases were
scheduled to expire in 1994 and were not expected to be renewed. As a
result, it became increasingly difficult to pay the operating expenses
of the property and the monthly debt service and SJLP anticipated that
its operating income was going to decrease, rather then increase, in
the near future. Thus, on September 9, 1993, SJLP filed a
reorganization petition pursuant to Chapter 11 of the U.S. Bankruptcy
Code. After filing the petition, it became apparent that there could
not be a confirmable plan of reorganization without either the
Registrant making an additional equity contribution to SJLP or an
extremely favorable settlement of the complaint against the
Registrant's co-general partner in SJLP and United National Bank.
Since the Registrant has no additional sources of equity and the
outcome of the co-general partner/bank suit is uncertain, the
automatic stay was lifted and the first mortgage holder foreclosed on
the property on October 21, 1994.
In 1994, Registrant incurred losses of $74,000 at
Roseland including $73,000 of depreciation expense compared to a loss
of $82,000 including $79,000 of depreciation expense in 1993 and a
loss of $90,000 including $71,000 of depreciation expense in 1992.
Since Roseland is a low income housing property, rents are fixed in
relation to specified income levels. As a result, the property
experiences high occupancy but rental income remains low. The
decrease in loss from 1992 to 1993 and 1993 to 1994 results from a
decrease in operating expenses while rental income remained stable.
Registrant expects the property to generate break-even cash flow in
1995.
In 1994, Registrant recognized income of $944,000
at Firehouse Square including $257,000 of depreciation and
amortization expense compared to a loss of $588,000 including $273,000
of depreciation and amortization expense in 1993 and a loss of
$563,000 including $275,000 of depreciation and amortization expense
in 1992. Included in operations for 1994 is an extraordinary gain of
$1,470,000 relating to the extinquishment of debt in connection with
the foreclosure (See Item 2. Properties for a discussion of the
foreclosure). Excluding such income, the loss in 1994 would have been
$526,000. The decrease in the loss from 1993 to 1994 is the result of
an increase in rental income partially offset by an increase in
interest expense. The increase in loss from 1992 to 1993 is due to
the restructuring of the mortgage note which resulted in a higher
principal balance upon which interest is charged (see Item 2.
Properties for a discussion of the loan default, bankruptcy, sale of
the note, and note restructuring). The Registrant expects to achieve
in 1995 results comparable to those experienced in 1994.
In 1994, Registrant incurred a loss of $50,000 at
Mater Dolorosa including depreciation expense of $130,000 compared to
a loss of $129,000 including depreciation expense of $166,000 in 1993
and a loss of $93,000 including depreciation expense of $163,000 in
1992. The decrease in the loss from 1993 to 1994 is mainly the result
of a decrease in depreciation due to the fact that all personal
property became fully depreciated early in 1995. Included in the 1993
loss is a one-time expense adjustment of $39,000 which resulted from
the audit of 1993 by independent Certified Public Accountants relating
to a prior year. While the charges increased the loss by $39,000,
they had no effect on cash flow. Revenues have been sufficient to meet
operating expenses and debt service and the Registrant expects these
favorable results to continue in 1995.
In 1994, Registrant incurred a loss of $314,000 at
Strehlow Terrace Apartments, including $255,000 of depreciation
expense compared to a loss of $208,000 including $215,000 of
depreciation expense in 1993 and a loss of $285,000 including $256,000
of depreciation expense in 1992. The increase in the loss from 1993
to 1994 is the result of the combination of a decrease in rental
income and an increase in certain operating expenses (ie utilities,
repairs and maintenance) partially offset by a decrease in tax expense
and bad debt expense.
In 1994, Registrant incurred losses of $339,000 at
Canal House, including $443,000 of depreciation expense compared to a
loss of $277,000 including depreciation and amortization expense of
$450,000 in 1993 and a loss of $334,000 including depreciation and
amortization expense of $439,000 in 1992. The increase in the loss
from 1993 to 1994 is the result of an increase in certain operating
expenses such as repairs and maintenance, commissions, and insurance
partially offset by an increase in rental income as a result of higher
average rental rates. Repairs and maintenance expense increased due
expenditures for certain deferred maintenance items. The decrease in
the loss from 1992 to 1993 results from an increase in rental revenue
due to a higher average occupancy (99% vs 92%). The property
generated positive cash flow in 1994; however, it is expected that the
property will experience only break-even cash flow during 1995 due to
the restructured debt (see Item 2. Properties), and increased real
estate taxes.
Summary of Minority Interest Investments
In 1994, Registrant incurred losses of $20,000 at
Saunders Apartments compared to a loss of $133,000 including $39,000
of depreciation and amortization expense in 1993 and a loss of $98,000
including $93,000 of depreciation and amortization expense in 1992.
For the first five months of 1993 and prior years, Saunders Apartments
was treated as a consolidated subsidiary. This resulted in a loss of
$113,000 for the first five months ended May 31, 1993. Pursuant to
the June 1, 1993 settlement agreement the Registrant's ownership
interest was reduced to 30%. From that time forward, the investment
is accounted for by the equity method. The Registrant recognized a
loss on the investment of $20,000 from June through December 1993.
The Registrant expects to achieve in 1995 results comparable to those
experienced in 1994.
Item 8. Financial Statements and Supplementary Data
Registrant is not required to furnish the supplementary
financial information referred to in Item 302 of Regulations S-K.
<PAGE>
Independent Auditor's Report
To the Partners of
Diversified Historic Investors VI
We have audited the accompanying consolidated balance sheets of
Diversified Historic Investors VI (a Pennsylvania Limited Partnership)
and its subsidiaries as of December 31, 1994 and 1993 and the related
consolidated statements of operations, changes in partners' equity and
cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We did not audit the
financial statements of Strehlow Terrace Apartments Limited
Partnership, which reflect total assets of $4,569,715 and $4,861,821
as of December 31, 1994 and 1993 and total revenues of $298,163 and
$360,955, respectively for the years then ended. In addition, we did
not audit the financial statements of Mater Dolorosa General
Partnership which reflect assets of $2,368,217 and $2,495,686 as of
December 31, 1994 and 1993 and total revenues of $391,681 and
$386,219, respectively for the years then ended. Those statements were
audited by other auditors whose reports have been furnished to us, and
our opinion, insofar as it relates to the amounts included Strehlow
Terrace Apartments Limited Partnership and Mater Dolorosa General
Partnership, is based solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated 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 and the
reports of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors,
the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of
Diversified Historic Investors VI and subsidiaries as of December 31,
1994 and 1993, and the results of their operations and their cash
flows for the years then ended 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 and Accumulated Depreciation on page 33 is presented for the
purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
Gross, Kreger & Passio
Philadelphia, Pennsylvania
May 11, 1995
<PAGE>
Independent Auditor's Report
To the Partners of
Strehlow Terrace Apartments Limited Partnership
We have audited the financial statements of Strehlow Terrace
Apartments Limited Partnership, FHA (Project No. 103-94006), listed in
the accompanying table of contents, that you are filing as your Annual
Financial Report to the U.S. Department of Housing and Urban
Development (HUD) for the years ended December 31, 1994 and 1993.
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 audit.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of 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 consolidated 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 accompanying financial statements present fairly,
in all material respects, the financial position of Strehlow Terrace
Apartments Limited Partnership (Project No 103-94006) at December 31,
1994 and 1993, and the results of its operations and its cash flows
for the years then ended, 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 supplemental
schedules listed in the table of contents are presented for the
purposes of additional analysis and are not a required part of the
financial statements. These schedules are the responsibility of the
Partnerships' management. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
Blackman & Associates, P.C.
Omaha, Nebraska
July 13, 1995
<PAGE>
Independent Auditor's Report
To the Partners of
Mater Dolorosa General Partnership
We have audited the accompanying balance sheets of Mater Dolorosa
General Partnership, for December 31, 1994 and 1993 and the related
statements of operations, partners' equity and cash flows for the
years then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an
opinion on these consolidated financial statements 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 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 audit provides 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 Mater
Dolorosa General Partnership as of December 31, 1994 and 1993, and the
results of its operations and its cash flows for the years then ended
in conformity with generally accepted accounting principles.
Pailet, Meunier and LeBlanc, L.L.P.
Metairie, Louisiana
February 6, 1995
<PAGE>
DIVERSIFIED HISTORIC INVESTORS VI
(a limited partnership)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
Consolidated financial statements: Page
Consolidated Balance Sheets at December 31, 1994 and 1993 20
Consolidated Statements of Operations for the Years Ended
December 31, 1994, 1993 and 1992 (unaudited) 21
Consolidated Statements of Changes in Partners' Equity for
the Years Ended December 31, 1994, 1993, and 1992 (unaudited) 22
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994, 1993, and 1992 (unaudited) 23
Notes to consolidated financial statements 24-32
Financial statement schedules:
Schedule XI - Real Estate and Accumulated Depreciation 34
Notes to Schedule XI 35
All other schedules are omitted because they are not applicable or the
required information is shown in the consolidated financial statements
or notes thereto.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS VI
(a limited partnership)
CONSOLIDATED BALANCE SHEETS
December 31, 1994 and 1993
Assets
1994 1993
Rental properties at cost:
Land $ 1,081,164 $ 1,289,681
Buildings and improvements 32,357,276 38,918,583
Furniture and fixtures 1,068,784 1,252,522
---------- ----------
34,507,224 41,460,786
Less - accumulated depreciation (8,277,323) (8,185,818)
---------- ----------
26,229,901 33,274,968
Cash and cash equivalents 59,176 177,647
Restricted cash 291,540 438,696
Investment in affiliate 65,601 85,677
Other assets (net of accumulated
amortization of $318,378 and $432,299) 133,662 263,246
---------- ----------
Total $26,779,880 $34,240,234
========== ==========
Liabilities and Partners' Equity
Liabilities:
Debt obligations $17,026,650 $22,292,519
Accounts payable:
Trade 459,552 293,745
Taxes 67,722 195,782
Related parties 268,811 1,309,571
Related party developers -0- 125,626
Other 42,643 9,917
Interest payable 510,149 744,764
Tenant security deposits 136,924 184,153
---------- ----------
Total liabilities 18,512,451 25,156,077
Partners' equity 8,267,429 9,084,157
---------- ----------
Total $26,779,880 $34,240,234
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS VI
(a limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1994, 1993 and 1992
1994 1993 1992
(Unaudited)
Revenues:
Rental income $2,976,153 $3,053,542 $2,872,735
Interest income 5,864 6,430 16,432
--------- --------- ---------
Total revenues 2,982,017 3,059,972 2,889,167
--------- --------- ---------
Costs and expenses:
Rental operations 1,495,727 1,642,902 1,538,413
General and administrative 342,785 365,462 279,839
Interest 1,719,645 1,730,507 1,687,007
Depreciation and amortization 1,703,576 1,856,327 1,943,618
--------- --------- ---------
Total costs and expenses 5,261,733 5,595,198 5,448,877
--------- --------- ---------
Loss before minority interests and
equity in affiliate (2,279,716) (2,535,226) (2,559,710)
Equity in net loss of affiliate (20,076) (20,251) -0-
--------- --------- ---------
Loss before extraordinary item (2,299,792) (2,555,477) (2,559,710)
Extraordinary income 1,483,064 -0- -0-
--------- --------- ---------
Net loss ($ 816,728) ($2,555,477) ($2,559,710)
========= ========= =========
Net loss per limited partnership unit:
Loss before minority interests and
equity in affiliate ($ 88.64) ($ 98.57) ($ 99.53)
Equity in net loss of affiliate (.78) (.79) -0-
--------- --------- ---------
Loss before extraordinary item (89.42) (99.36) (99.53)
Extraordinary item 57.67 -0- -0-
--------- --------- ---------
($ 31.75) ($ 99.36) ($ 99.53)
========= ========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS VI
(a limited partnership)
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY
For the Years Ended December 31, 1994, 1993 and 1992
Dover
Historic
Advisors Limited
VI (1) Partners (2) Total
Percentage participation in profit or loss 1% 99% 100%
Balance at December 31, 1991 (unaudited) ($ 68,666) $14,268,010 $14,199,344
Net loss (unaudited) (25,597) (2,534,113) (2,559,710)
------- ---------- ----------
Balance at December 31, 1992 (94,263) 11,733,897 11,639,634
Net loss (25,555) (2,529,922) (2,555,477)
------- ---------- ----------
Balance at December 31, 1993 (119,818) 9,203,975 9,084,157
Net loss (8,167) (808,561) (816,728)
------- ---------- ----------
Balance at December 31, 1994 ($127,985) $ 8,395,414 $ 8,267,429
======= ========== ==========
(1) General Partner.
(2) 25,461 limited partnership units outstanding at December 31,
1994, 1993, and 1992.
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS VI
(a limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1994, 1993 and 1992
1994 1993 1992
(Unaudited)
Cash flows from operating activities:
Net loss ($ 816,728) ($2,555,477) ($2,559,710)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,703,576 1,856,327 1,943,618
Extraordinary income (1,483,064) -0- -0-
Equity in loss of affiliate 20,076 20,251 -0-
Changes in assets and liabilities:
Decrease (increase) in restricted cash 147,156 (34,135) 176,351
(Increase) decrease in other assets (3,477) 91,167 48,923
Increase (decrease) in accounts payable - 224,274 202,648 (153,805)
trade
Increase in accounts payable - taxes 11,138 72,256 188,109
Increase (decrease) in accounts payable - 52,726 (18,024) 9,628
other
Increase (decrease) in interest payable 150,678 325,564 (133,699)
Increase in tenant security deposits 6,123 16,889 9,354
Net cash provided by (used in) -------- -------- --------
operating activities 12,478 (22,534) (471,231)
-------- -------- --------
Cash flows from investing activities:
Purchase of rental property and
improvements (17,167) (165,374) (148,137)
Disposals of rental property and
improvements -0- -0- 99,784
Increase in other assets -0- (11,874) (35,896)
Investment in affiliate -0- 115,345 -0-
Net cash used in -------- -------- --------
investing activities (17,167) (61,903) (84,249)
-------- -------- --------
Cash flows from financing activities
Proceeds from debt financing 31,222 293,066 34,361
Principal payments (139,022) (159,328) (197,034)
(Decrease) increase in accounts payable -
related party (5,982) 26,206 164,983
Net cash (used in) provided by -------- -------- --------
financing activities (113,782) 159,944 2,310
-------- -------- --------
(Decrease) increase in cash and cash
equivalents (118,471) 75,507 (553,170)
Cash and cash equivalents at beginning
of year 177,647 102,140 655,310
-------- -------- --------
Cash and cash equivalents at end of year $ 59,176 $ 177,647 $ 102,140
======== ======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS VI
(a limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Diversified Historic Investors VI (the "Partnership"), a limited
partnership, was formed in January 1988 to acquire, rehabilitate,
renovate, manage, operate, hold, sell, exchange, and otherwise deal in
and with real properties containing improvements which are "certified
historic structures" as defined in the Internal Revenue Code of 1986
(the "Code"), or which are eligible for the tax credit provided by
Section 42 of the Code, and such other uses as Dover Historic Advisors
VI (the "General Partner") deems appropriate, and to engage in any and
all activities related or incidental thereto. Any rehabilitations
undertaken by the Partnership will be done with a view to obtaining
certification of expenditures therefor as "qualified rehabilitation
expenditures" as defined in the Code.
The General Partner, whose partners are DHP, Inc., ( a Pennsylvania
corporation, formerly Dover Historic Properties, Inc.), and Gerald
Katzoff, has the exclusive responsibility for all aspects of the
Partnership's operations.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied
in the preparation of the accompanying consolidated financial
statements follows:
1. Principles of Consolidation
The accompanying financial statements include the accounts of the
Partnership and six subsidiary partnerships ("Ventures") in which the
Partnership has controlling interest, with appropriate elimination of
inter-partnership transactions and balances. In addition, the
Partnership owns a minority interest of 30% in one partnership, which
it accounts for on the equity method. The financial statements for
the year ended December 31, 1992 are unaudited, with the exception of
the balance sheet which is audited. These financial statements
reflect all adjustments (consisting only of normal recurring
adjustments) which, in the opinion of the Partnership's General
partner, are necessary for a fair statement of the results for those
years.
2. Depreciation
Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. Buildings and improvements are
depreciated over 25 years and furniture and fixtures over five years.
3. Net Loss Per Partnership Unit
The net loss per limited partnership unit is based on the weighted
average number of limited partnership units outstanding (25,461 in
1994, 1993 and 1992).
4. Income Taxes
Income taxes or credits resulting from earnings or losses are payable
by or accrue to the benefits of the partners; accordingly, no
provision has been made for income taxes in these financial
statements.
NOTE C - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
The Partnership paid cash for interest in the amounts of $1,164,477,
$1,404,943, and $1,820,706 in 1994, 1993 and 1992, respectively.
During 1993, the Partnership reached a settlement agreement with one
of its joint venture partners (see Note H - COMMITMENTS AND
CONTINGENCIES). Pursuant to this agreement, the Partnership changed
its method of accounting for one affiliate from consolidation to the
equity method. The effect of this transaction, which is excluded from
the statement of cash flows, follows:
Decrease in assets $1,705,433
Decrease in liabilities (1,484,160)
Increase in investment in affiliate $ 221,273
NOTE D - PARTNERSHIP AGREEMENT
The significant terms of the amended and restated Agreement of Limited
Partnership (the "Agreement"), as they relate to the financial
statements, follow:
1. Capital Contributions
The partnership offered investors limited partnership units at $1,000
per unit; the minimum purchase per investor was three units. A total
of 25,461 limited partnership units was sold. After payment of costs
of issuance as provided for in the Agreement and the withdrawal of the
initial limited partner, initial partnership capital net of costs of
issuance was $22,181,070 from limited partners and $9,900 from the
General Partner.
2. Distributions from Operations
The Agreement provides that, beginning with the date of the admission
of subscribers as limited partners, all distributable cash from
operations (as defined) will be distributed 99% to the limited
partners and 1% to the General Partner. After cash flows from
operations are positive, the General Partner shall also receive 4% of
such cash flows exclusive of interest earned on investments.
All distributable cash from sales or dispositions will be distributed
to the limited partners up to their adjusted invested capital plus an
amount equal to the sum of the greater of an 8.5% cumulative, non-
compounded annual return on the average after-credit invested capital
or a 6% cumulative, non-compounded annual return on the average
adjusted invested capital, plus an early investor incentive, less
amounts previously distributed; thereafter, after receipt by the
General Partner or its affiliates of any accrued but unpaid real
estate brokerage commissions, the balance will be distributed 85% to
the limited partners and 15% to the General Partner. Terms used
throughout this paragraph are as defined under the Agreement.
3. Allocation of Net Income and Net Losses from Operations
Net income and net loss (as defined) will be allocated 99% to the
limited partners and 1% to the General Partner with certain exceptions
as defined in the Agreement.
The Agreement provides that the fiscal year of the Partnership will be
the calendar year and that the Partnership shall continue until
December 31, 2038, unless sooner terminated upon the occurrence of
certain events.
NOTE E - ACQUISITIONS
The Partnership acquired one property and five general or limited
partnership interests in Ventures during the period from January 7,
1988, to December 1988, and one general and one limited partnership
interest in Ventures in 1989, as discussed below.
In July 1988, the Partnership was admitted, with a 98% general partner
and a 1% limited partner interest, to a Nebraska limited partnership
which owns a building located in Omaha, Nebraska, consisting of 17
apartment units, for a cash capital contribution of $700,000. In
addition, $128,284 in acquisition costs relating to the investment
have been capitalized as part of buildings and improvements.
In July 1988, the Partnership was admitted, with a 90% general partner
interest, to a Louisiana general partnership which owns a building
located in New Orleans, Louisiana, consisting of 68 apartment units,
for a cash capital contribution of $1,519,000. In addition, $241,173
of acquisition costs relating to the investment have been capitalized
as part of buildings and improvements. During 1990, as permanent
financing was obtained, $60,000 of the capital contribution was
returned to the Partnership.
In December 1988, the Partnership acquired a 99% joint venture
interest in a Nebraska joint venture which owns a building located in
Omaha, Nebraska, consisting of 23 apartment units, for a cash capital
contribution of $875,000. In addition, $153,940 in acquisition costs
relating to the investment have been capitalized as part of buildings
and improvements. These capitalized costs have been removed from the
balance sheet (see NOTE C - SUPPLE-MENTAL DISCLOSURE OF CASH FLOW
INFORMATION). Pursuant to the June 1993 Amended and Restated Joint
Venture Agreement, the Partnership's interest was reduced to 30%.
In December 1988, the Partnership was admitted, with a 97% general
partner and a 1% limited partner interest, to a West Virginia limited
partnership which owns a building located in Huntington, West
Virginia, consisting of 53 apartment units and 41,590 square feet of
commercial space, for a general partner cash capital contribution of
$1,470,000 and limited partner cash capital contribution of $10,000.
In addition, $492,609 of acquisition costs relating to the investment
have been capitalized as part of building and improvements. The
lender foreclosed on the property in October 1994.
In December 1988, the Partnership was admitted, with a 90% general
partner interest, to a Virginia general partnership which owns a
building located in Alexandria, Virginia, consisting of 32,544 square
feet of commercial space, for a cash capital contribution of
$1,750,000. In addition, $436,164 in acquisition costs relating to
the investment have been capitalized as part of buildings and
improvements. In 1990, the Partnership made an additional cash
contribution of $196,621 pursuant to an agreement with the co-general
partner.
In December 1988, the Partnership purchased 78 condominium units and
6,700 square feet of commercial space located in North Carolina for
$5,042,000. In addition, $774,258 of acquisition costs relating to
the property have been capitalized as part of buildings and
improvements. On January 21, 1994, the property was transferred to a
Pennsylvania limited partnership in which the partnership owns a 99%
interest.
In January 1989, the Partnership was admitted, with a 98% general
partner interest, to a Nebraska general partnership which owns a
building located in Omaha, Nebraska, consisting of 70 apartments
units, for a cash capital contribution of $2,250,000. In addition,
$448,993 of acquisition costs relating to the investment have been
capitalized as part of buildings and improvements.
In February 1989, the Partnership was admitted, with a 99% general
partner interest, to a Pennsylvania limited partnership which owns a
building located in Manayunk, Pennsylvania, consisting of 73 apartment
units and 8,471 square feet of commercial space, for a total cash
capital contribution of $6,000,000, less funds advanced prior to
admittance ($2,431,552 at December 31, 1988). In addition, $664,509
of acquisition costs relating to the investment have been capitalized
as part of buildings and improvements. The building was subsequently
converted to a condominium, with the Partnership retaining title to
all property. During 1990, the Partnership made additional cash
contributions of $220,000.
<TABLE>
NOTE F - DEBT OBLIGATIONS
Debt obligations were as follows:
<CAPTION>
December 31,
1994 1993
<S> <C> <C>
Note payable, non-interest bearing; principal due upon sale $ 500,000 $ 500,000
of property; collateralized by related rental property.
Note payable, interest at 9.73% at December 31, 1994 and 49,605 54,552
1993, adjusted every three years, based upon the three-year
Treasury Bill rate plus 250 basis points, payable in semi-
annual installments of principal and interest of $5,188
(payment adjusted in accordance with interest rate changes),
with maturity in November 2001; collateralized by related
rental property.
Note payable, interest at 9.44% at December 31, 1994 and 383,506 387,260
1993, payable in monthly installments of principal and
interest of $3,346, with maturity in August 1996;
collateralized by related rental property.
Note payable, interest at 8.5%, payable in monthly 1,451,382 1,535,603
installments of principal and interest of $17,627, commencing
May 1, 1990, and maturing April 1, 2005; collateralized by a
mortgage and assignment of rents and security deposits on the
related rental property.
Mortgage loan, interest at 6.75%, payable in monthly -0- 4,724,108
installments of principal and interest of $29,516, with
maturity in July 2027, collateralized by related rental
property.
Note payable, non-interest bearing; principal due upon sale -0- 250,000
of property; collateralized by related rental property.
Note payable, no interest accrual or payments until September -0- 196,027
1993, at which time monthly installments of principal and
interest of $1,254 commence; maturity in June 2003;
collateralized by related rental property.
Mortgage loan, interest accrues at prime plus .5% (effective 4,725,356 4,694,134
rate of 9% and 6.5% at December 31, 1994, and 1993,
respectively), interest only payable monthly to the extent of
net operating income with a minimum of $22,916; principal due
October 1998; collateralized by related rental property.
Note payable, interest at prime plus 1%, but not less than 1,231,623 1,231,623
10% (effective rate of 10% at December 31, 1994, and 1993,
respectively), payable in monthly installments of $11,824
(payment adjusted annually based on interest rate changes);
with unpaid principal and interest due in April 1995;
collateralized by related rental property.
Note payable, interest at prime plus 1% (effective rate of 1,221,659 1,221,659
9.5% and 7% at December 31, 1994, and 1993 respectively),
payable in monthly installments of principal and interest of
$8,537 (payment adjusted based on interest rate changes);
with maturity in January 2019 (at lender's option, note may
be called on January 1, 1995, with sixty days notice);
collateralized by related rental property.
Note payable, non-interest bearing; principal due upon sale 75,000 75,000
of property; collateralized by related rental property.
Note payable, non-interest bearing; principal due upon sale 1,772,737 1,775,053
of property; collateralized by related rental property.
Note payable, interest at 1%, accruing to principal; unpaid 1,700,000 1,700,000
principal and interest are due upon sale or in January 2030;
collateralized by related rental property.
Note payable, interest at 1% over prime until October 1994,
when the rate changed to 7.75% (effective rate of 7.75% and
7% at December 31, 1994, and 1993 respectively); monthly
principal payments of $2,500 until October 1994, when
principal payments based on a 30-year amortization commence;
collateralized by related rental property, due September
1998. 3,915,782 3,947,500
---------- ----------
$17,026,650 $22,292,519
========== ==========
</TABLE>
Maturities of debt obligation at December 31, 1994, were as follows:
Year Ending December 31,
1995 $ 1,393,956
1996 194,984
1997 243,171
1998 8,609,217
1999 173,680
Thereafter 6,411,642
----------
$17,026,650
==========
NOTE G - RESTRICTED CASH
In connection with admission into various partnerships, the
Partnership has established various reserve accounts to fund tenant
security deposits, replacement reserves and escrows for taxes and
insurance.
NOTE H - COMMITMENTS AND CONTINGENCIES
In July 1991, one Venture filed a reorganization petition pursuant to
Chapter 11 of the U.S. Bankruptcy Code. In March 1992, the
bankruptcy was settled. The settlement agreement provided for
modification of one loan and the use of certain escrowed funds to pay
delinquencies on another loan. Due to cash flow shortfalls, in
September 1993, this Venture again filed a reorganization petition
pursuant to Chapter 11 of the U.S. Bankruptcy Code. In October 1994,
the lender foreclosed on the property. The partnership recognized an
extraordinary loss on its investment in the partnership.
On August 14, 1992, Commercial Federal Realty Investors Corporation
("CFRIC"), the owner of a 1% interest in the Saunders Apartment Joint
Venture ("SAJV") filed an action seeking damages of $275,000 plus
interest alleged to be due under the terms of various agreements
between parties which were executed in connection with the
establishment of the Joint Venture. The Partnership denied liability
and filed a counterclaim seeking declaratory judgment and money
damages for breach of contract and breach of fiduciary duty. On June
1, 1993, a settlement agreement was reached and an Amended and
Restated Joint Venture Agreement was signed whereby the Partnership
was entitled to retain all funds held in escrow ($275,000) pursuant to
the original joint venture agreement. In return, CFRIC agreed to
convert $1,155,000 in amounts owed to it by SAJV to a capital
contribution, (increasing its ownership in SAJV to 70%) and will
receive 100% of future income, losses, and tax credits until such time
as CFRIC recovers $430,000 of the capital contribution, any advances
it must make on behalf of the property in the form of loan reduction
and cash flow shortfalls (with interest at 10%), and any amounts
resulting from any recapture of tax credits. Thereafter, future
income and losses will be allocated 70% to CFRIC and 30% to the
Partnership. This change in ownership also results in a change in the
method in which the investment is accounted for. For the first five
months of 1993 and prior years, SAJV is treated as a consolidated
subsidiary. As of June 1, 1993, the Partnership's interest in SAJV is
treated as an equity investment.
In February 1994, one Venture filed a reorganization petition pursuant
to Chapter 11 of the U.S. Bankruptcy Code.
NOTE I - RELATED PARTY TRANSACTIONS
The following is a summary of transactions with related parties of the
Partnership and the General Partner:
In 1992 the Partnership maintained cash in a bank who has as a
director a person who at that time was an affiliate of the General
Partner. Cash deposited with this institution at December 31, 1992,
was $178,133. Interest of $10,155 was earned in 1992.
In 1992, the Partnership incurred fees of $21,510 for accounting
services performed by a company whose Chairman of the Board was at
that time an affiliate of the General Partner.
NOTE J - EXTRAORDINARY GAINS/LOSSES
In order to forestall the lender's threatened foreclosure, on January
28, 1993 Firehouse Square General Partnership, a general partnership
in which the Registrant owns a 90% interest, filed a reorganization
petition pursuant to Chapter 11 of the U.S. Bankruptcy Code. In May
1993, the lender sold its note and mortgage to another entity. On
June 1, 1993, an agreement was entered into with the new holder of the
note and mortgage to restructure the note. The bankruptcy was
subsequently dismissed. On November 16, 1994, the first mortgage
holder foreclosed on its mortgage and subsequently sold it to a
partnership known as 901 King Street Associates which is owned 90% by
DHI-VI. The Partnership recognized extraordinary income in 1994
relating to the extinguishment of debt in connection with the
foreclosure.
On September 9, 1993, St. James Limited Partnership, a limited
partnership in which the Registrant owns a 98% interest, filed a
reorganization petition pursuant to Chapter 11 of the U.S. Bankruptcy
Code. After filing the petition, it became apparent that there could
not be a confirmable plan of reorganization without either the
Registrant making an additional equity contribution to SJLP or an
extremely favorable settlement of the complaint against the
Registrant's co-general partner in SJLP and United National Bank.
Since the Registrant has no additional sources of equity and the
outcome of the co-general partner/bank suit is uncertain, the
automatic stay was lifted and the first mortgage holder foreclosed on
the property on October 21, 1994. The Partnership recognized an
extraordinary gain in 1994 for the difference between the book value
of the property (which approximated fair value) and the extinguished
debt.
NOTE K - INCOME TAX BASIS RECONCILIATION
Certain items enter into the determination of the results of
operations in different time periods for financial reporting ("book")
purposes and for income tax ("tax") purposes. Reconciliations of net
loss and partners' equity follow:
For the Years Ended December 31,
1994 1993 1992
Net loss - book ($ 816,728) ($ 2,555,477) ($ 2,559,710)
Excess of tax under book depreciation 339,058 406,905 436,034
Timing differences (692,902) 119,829 136,730
Minority interest - tax only 74,156 168,360 53,834
---------- ---------- ----------
Net loss - tax ($ 1,096,416) ($ 1,860,383) ($ 1,933,112)
========== ========== ==========
Partners' equity - book $ 8,267,429 $ 9,084,157 $11,639,634
Costs of issuance 3,279,930 3,279,930 3,279,930
Cumulative tax under book loss 2,519,112 2,798,800 2,103,706
Investment credit recapture 9,900 9,900 9,900
Rehabilitation credit (251,117) (251,117) (191,644)
---------- ---------- ----------
Partner's equity - tax $13,825,254 $14,921,670 $16,841,526
========== ========== ==========
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
<TABLE>
DIVERSIFIED HISTORIC INVESTORS VI
(a limited partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<CAPTION> Costs Capitalized
Initial Cost Subsequent to Acquisition
to Partnership
(b)
Buildings and
Description (a) Encumbrances (e) Land (b) Improvements Improvements Land
<S> <C> <C> <C> <C> <C>
17 unit apartments and
3,100 square feet of
retail space in Omaha, NE $923,677 $10,000 $1,774,986 $15,454 $10,000
68 unit apartments in
New Orleans, LA 1,359,710 - 2,948,634 469,298 -
32,500 square feet of
commercial space in
Alexandria, VA 5,097,850 540,238 5,014,827 1,157,332 540,238
78 unit condominiums
and 6,700 square feet
of commerical space
in Concord, NC 3,583,625 130,926 5,748,914 10,830 130,926
70 apartment units in
Omaha, NE 3,550,053 - 448,993 5,792,699 -
73 unit apartments and
8,500 sqaure feet of
commercial space in
Manayunk, PA 4,627,000 400,000 664,508 9,364,897 400,000
---------- --------- ---------- ---------- ---------
$19,141,915 $1,081,164 $16,600,862 $16,810,510 $1,081,164
========== ========= ========== ========== =========
</TABLE>
Gross Amount at which Carried
at
December 31, 1995
Buildings
and Accumulated Date of Date
Improvements Total (c) (d) Depr. (d) (f) Constr. Acquired
(a)
$1,790,440 $1,800,440 $541,884 1988 7/88
3,419,649 3,419,649 1,084,110 1988 7/88
6,243,145 6,783,383 1,667,248 1988 12/88
6,689,652 6,820,578 1,796,576 1988 12/88
6,292,047 6,292,047 1,612,141 1989 1/89
10,095,982 10,495,982 2,903,760 1989 2/89
---------- ---------- ---------
$34,530,915 $35,612,079 $9,605,719
========== ========== =========
<PAGE>
DIVERSIFIED HISTORIC INVESTORS VI
(a limited partnership)
NOTES TO SCHEDULE XI
DECEMBER 31, 1994
(A) All properties are certified historic structures as defined in
the Internal Revenue Code of 1986, or are eligible for
designation as such. The "date of construction" refers to the
period in which such properties were rehabilitated.
(B) Represents costs of a parcel of land with historic building
located thereon. Amounts do not include any
development/rehabilitation costs incurred pursuant to a turnkey
development agreement entered into when the property was
purchased.
(C) The cost of real estate owned at December 31, 1994, for Federal
income tax purposes was approximately $29,170,182. The
depreciable basis of the building and improvements of the
properties has been reduced for Federal income tax purposes by
the historic rehabilitation credit.
(D) Reconciliation of real estate:
1994 1993 1992
Balance at beginning of year $41,460,786 $43,447,874 $24,464,636
Additions during this year:
Improvements 17,167 165,374 148,137
---------- ---------- ----------
Deductions during the year:
Retirements (6,970,729) -0- (99,784)
Deconsolidated subsidiary -0- (2,152,462) -0-
---------- ---------- ----------
Balance at end of year $34,507,224 $41,460,786 $43,447,874
========== ========== ==========
Reconciliation of accumulated depreciation:
1994 1993 1992
Balance at beginning of year $ 8,185,818 $ 6,857,667 $ 5,004,153
Depreciation expense for the year 1,703,576 1,779,315 1,853,514
Retirements (1,612,071) -0- -0-
Deconsolidated subsidiary -0- (451,164) -0-
---------- ---------- ----------
Balance at end of year $ 8,277,323 $ 8,185,818 $ 6,857,667
========== ========== ==========
(D) See Note E to the consolidated financial statements for further
information.
(E) See Note B to the consolidated financial statements for
depreciation method and lives.
Item 9. Changes in and disagreements with Accountants on
Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of Registrant
a. Identification of Directors - Registrant has no
directors.
b. Identification of Executive Officers
The General Partner of the Registrant is Dover
Historic Advisors VI (DoHA-VI), a Pennsylvania general partnership.
The partners of DoHA-VI are as follows:
Name Age Position Term of Office Period Served
Gerald Katzoff 47 Partner in DoHA- No fixed term Since January 1988
VI
DHP, Inc. -- Partner in DoHA- No fixed term Since January 1988
(Formerly Dover VI
Historic Properties,
Inc.)
For further description of DHP, Inc., see
paragraph e. of this Item. There is no arrangement or understanding
between either person named above and any other person pursuant to
which any person was or is to be selected as an officer.
c. Identification of Certain Significant Employees.
Registrant has no employees. Its administrative and operational
functions are carried out by property management and partnership
administration firm engaged by the Registrant.
d. Family Relationships. There is no family
relationship between or among the executive officers and/or any person
nominated or chosen by Registrant to become an executive officer.
e. Business Experience. DoHA-VI is a general
partnership formed in January, 1988. The partners of DoHA-VI are DHP,
Inc. and Gerald Katzoff. The general partner is responsible for the
management and control of Registrant's affairs and will have general
responsibility and authority in conducting its operations.
Gerald Katzoff (age 47) has been involved in
various aspects of the real estate industry since 1974. Mr. Katzoff
is the owner of Katzoff Resorts, which controls various hotel and spa
resorts in the United States. Mr. Katzoff is a principal in an entity
which is the owner of a property in Avalon, New Jersey which has filed
a petition pursuant to Chapter 11 of the U.S. Bankruptcy Code. Mr.
Katzoff is a former President and director of D,Ltd., (formerly The
Dover Group, the corporate parent of DHP, Inc.)
Dover Historic Properties, Inc., was incorporated
in Pennsylvania in December 1984 for the purpose of sponsoring
investments in, rehabilitating, developing and managing historic (and
other) properties. In February 1992, Dover Historic Properties,
Inc.'s name was changed to DHP, Inc. DHP, Inc. is a subsidiary of The
Dover Group Ltd., an entity formed in 1985 to act as the holding
company for DHP, Inc. and certain other companies involved in the
development and operation of both historic properties and conventional
real estate as well as in financial (non-banking) services.
The executive officers, directors, and key
employees of DHP, Inc. are described below.
Michael J. Tuszka (age 48) was appointed Chairman
and Director of both D,Ltd and DHP, Inc. on January 27, 1993. Mr.
Tuszka has been associated with DHP, Inc. and its affiliates since
1984.
Donna M. Zanghi (age 38) was appointed
Secretary/Treasurer of DHP, Inc. on June 15, 1993. She is also a
Director, Secretary/Treasurer of D,Ltd. She has been associated with
DHP, Inc. and its affiliates since 1984 except for the period from
December 1986 to June 1989 and the period from November 1, 1992 to
June 14, 1993.
Michele F. Rudoi, (age 31) was appointed on
January 27, 1993 as Assistant Secretary of both D,Ltd and DHP, Inc.
and Director of D,Ltd.
Item 11. Executive Compensation
a. Cash Compensation - During 1994, Registrant paid
no cash compensation to DoHA-VI, any partner therein or any person
named in paragraph c. of Item 10.
b. Compensation Pursuant to Plans - Registrant has no
plan pursuant to which compensation was paid or distributed during
1994, or is proposed to be paid or distributed in the future, to DoHA-
VI, any partner therein, or any person named in paragraph c. of Item
10 of this report.
c. Other Compensation - No compensation not referred
to in paragraph a. or paragraph b. of this Item was paid or
distributed during 1994 to DoHA-VI, any partner therein, or any person
named in paragraph c. of Item 10.
d. Compensation of Directors - Registrant has no
directors.
e. Termination of Employment and Change of Control
Arrangement -
Registrant has no compensatory plan or arrangement, with respect to
any individual, which results or will result from the resignation or
retirement of any individual, or any termination of such individual's
employment with Registrant or from a change in control of Registrant
or a change in such individual's responsibilities following such a
change in control.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
a. Security Ownership of Certain Beneficial Owners -
No person is known to Registrant to be the beneficial owner of more
than five percent of the issued and outstanding Units.
b. Security Ownership of Management - No equity
securities of Registrant are beneficially owned by any person named in
paragraph c. of Item 10.
c. Changes in Control - Registrant does not know of
any arrangement, the operation of which may at a subsequent date
result in a change in control of Registrant.
Item 13. Certain Relationships and Related Transactions
a. Pursuant to Registrant's Amended and Restated
Agreement of Limited Partnership, DoHA-VI is entitled to 10% of
Registrant's distributable cash from operations in each year. There
was no such share allocable to DoHA-VI for fiscal years 1992 through
1994.
b. Certain Business Relationships - Registrant has no
directors. For a description of business relationships between
Registrant and certain affiliated persons, see paragraph a. of this
Item.
c. Indebtedness of Management - No executive officer
or significant employee of Registrant, Registrant's general partner
(or any employee thereof), or any affiliate of any such person, is or
has at any time been indebted to Registrant.
PART IV
Item 14. (A) Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
1. Financial Statements:
a. Consolidated Balance Sheets at December 31, 1994
and 1993.
b. Consolidated Statements of Operations for the Years
Ended December 31, 1994, 1993 (unaudited) and 1992
(unaudited).
c. Consolidated Statements of Changes in Partners'
Equity for the Years Ended December 31, 1994, 1993
and 1992.
d. Consolidated Statements of Cash Flows for the Years
Ended December 31, 1994, 1993 and 1992 (unaudited).
e. Notes to consolidated financial statements.
2. Financial statement schedules:
a. Schedule XI - Real Estate and Accumulated Depreciation.
b. Notes to Schedule XI.
3. Exhibits:
(a)
Exhibit
Number Document
3 Registrant's Amended and Restated
Certificate of Limited Partnership and
Agreement of Limited Partnership,
previously filed as part of Amendment No.
2 of Registrant's Registration Statement
on Form S-11, are incorporated herein by
reference.
21 Subsidiaries of the Registrant are listed
in Item 2. Properties of this Form 10-K.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the
quarter ended December 31, 1994.
(c) Exhibits:
See Item 14 (A) (3) above.
<PAGE>
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DIVERSIFIED HISTORIC INVESTORS VI
Date: August 4, 1995 By: Dover Historic Advisors VI, General Partner
By: DHP, Inc., Partner
By: /s/ Michael J. Tuszka
MICHAEL J. TUSZKA,
Chairman
By: /s/ Donna M. Zanghi
DONNA M. ZANGHI,
Secretary and Treasurer
By: /s/ Michele F. Rudoi
MICHELE F. RUDOI,
Assistant Secretary
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of Registrant and in the capacities and on the dates indicated.
Signature Capacity Date
DOVER HISTORIC ADVISORS VI General Partner
By: DHP, Inc., Partner
By: /s/ Michael J. Tuszka August 3, 1995
MICHAEL J. TUSZKA,
Chairman
By: /s/ Donna M. Zanghi August 3, 1995
DONNA M. ZANGHI,
Secretary and Treasurer
By: /s/ Michele F. Rudoi August 3, 1995
MICHELE F. RUDOI,
Assistant Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 59,176
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 34,507,224
<DEPRECIATION> 8,277,323
<TOTAL-ASSETS> 26,779,880
<CURRENT-LIABILITIES> 838,728
<BONDS> 17,026,650
0
0
<COMMON> 0
<OTHER-SE> 8,267,429
<TOTAL-LIABILITY-AND-EQUITY> 26,779,880
<SALES> 0
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</TABLE>
