<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
_________________________________________
For Quarter Ended Commission File
- ----------------- ---------------
September 30, 1997 Number 0-17672
TOWER PARK MARINA INVESTORS, L.P.,
a California Limited Partnership
--------------------------------
(Exact name of registrant as specified in its charter)
California 95-4137996
----------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
16633 Ventura Boulevard, 6th Floor, Encino, California 91436
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's phone number, including area code: (818) 907-0400
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.
X
----- -----
Yes No
<PAGE>
INDEX
-----
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE REFERENCE
<S> <C>
Balance Sheets at September 30, 1997 and
December 31, 1996 2
Statements of Operations for the three month
periods ended September 30, 1997 and 1996 3
Statements of Operations for the nine month
periods ended September 30, 1997 and 1996 4
Statements of Cash Flows for the nine month
periods ended September 30, 1997 and 1996 5
Notes to Financial Statements 6-13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 14-15
PART II. OTHER INFORMATION 16
</TABLE>
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Cash $ 21,000 $ 20,000
Accounts receivable 171,000 135,000
Tower Park Marina, net 2,455,000 2,483,000
Other assets, net 220,000 236,000
----------- -----------
$ 2,867,000 $ 2,874,000
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
- ---------------------------------
Accounts payable and accrued expenses $ 604,000 $ 836,000
Accounts payable and other liabilities
related to marinas to be abandoned - 100,000
Interest payable 2,440,000 2,046,000
Advances from affiliates 1,954,000 1,390,000
Deferred rentals 228,000 226,000
Notes payable 6,731,000 6,736,000
Commitments and contingencies - -
----------- -----------
11,957,000 11,334,000
Partners' deficit:
Limited partners' deficit, $5,000
per unit, 4,508 units authorized, issued
and outstanding (8,139,000) (7,515,000)
Less deferred contributions (76,000) (76,000)
----------- -----------
(8,215,000) (7,591,000)
General partners' deficit (875,000) (869,000)
----------- -----------
Total partners' deficit (9,090,000) (8,460,000)
----------- -----------
$ 2,867,000 $ 2,874,000
=========== ===========
</TABLE>
See accompanying notes.
-2-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the three month periods ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Revenues:
Slip rentals $ 217,000 $ 347,000
RV Park 207,000 208,000
Lease income 45,000 70,000
Restaurant and retail 382,000 506,000
Other income 16,000 29,000
--------- ----------
867,000 1,160,000
--------- ----------
Expenses:
Cost of operations 681,000 924,000
Interest expense 218,000 208,000
Depreciation and amortization 32,000 88,000
Management fees paid to an affiliate 44,000 60,000
--------- ----------
975,000 1,280,000
--------- ----------
Net loss before net realizable
value adjustment (108,000) (120,000)
Net realizable value adjustment - 638,000
--------- ----------
Net (loss) income $(108,000) $ 518,000
========= ==========
Allocation of net loss:
Limited Partners' $(107,000) $ 513,000
General Partners' (1,000) 5,000
--------- ----------
$(108,000) $ 518,000
========= ==========
Limited Partners' net loss
per unit $ (23.74) $ 113.80
========= ==========
</TABLE>
See accompanying notes.
-3-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the nine month periods ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Revenues:
Slip rentals $ 574,000 $ 951,000
RV Park 497,000 498,000
Lease income 127,000 190,000
Restaurant and retail 805,000 1,048,000
Other income 65,000 82,000
---------- ----------
2,068,000 2,769,000
---------- ----------
Expenses:
Cost of operations 1,859,000 2,409,000
Interest expense 643,000 656,000
Depreciation and amortization 90,000 263,000
Management fees paid to an affiliate 106,000 146,000
---------- ----------
2,698,000 3,474,000
---------- ----------
Net loss before net realizable
value adjustment (630,000) (705,000)
Net realizable value adjustment - 638,000
---------- ----------
Net loss $ (630,000) $ (67,000)
========== ==========
Allocation of net loss:
Limited Partners' $ (624,000) $ (66,000)
General Partners' (6,000) (1,000)
---------- ----------
$ (630,000) $ (67,000)
========== ==========
Limited Partners' net loss
per unit $ (138.42) $ (14.64)
========== ==========
</TABLE>
See accompanying notes.
-4-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the nine month periods ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $(630,000) $ (67,000)
Adjustments to reconcile net loss to net cash
(used for) provided by operating activities:
Depreciation and amortization 90,000 263,000
Change in net realizable value reserve and
other assets to be abandoned, net - (741,000)
Increase in accounts receivable (36,000) (73,000)
Decrease (increase) in other assets 16,000 (139,000)
(Decrease) increase in accounts payable
and accrued expenses (332,000) 187,000
Increase in interest payable, net 394,000 548,000
Increase in deferred rentals 2,000 107,000
--------- ---------
Net cash (used for) provided by operating activities (496,000) 85,000
--------- ---------
Net cash flow used for investing activities:
Construction in progress and improvements
to marina facilities (62,000) (45,000)
--------- ---------
Cash flows from financing activities:
(Payments) borrowings on notes payable (5,000) 6,000
Advances from (repayments to) affiliates, net 564,000 (15,000)
--------- ---------
Net cash provided by financing activities 559,000 (9,000)
--------- ---------
Net increase in cash 1,000 31,000
Cash at the beginning of period 20,000 26,000
--------- ---------
Cash at the end of period $ 21,000 $ 57,000
========= =========
</TABLE>
See accompanying notes.
-5-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
------------------------------------------------------------------
Description of the Partnership
------------------------------
Tower Park Marina Investors, L.P. (formerly PS Marina Investors I), a
California Limited Partnership (the "Partnership"), was organized under the
California Revised Limited Partnership Act, pursuant to a Certificate of
Limited Partnership filed on January 6, 1988 to acquire, own, and operate
and to a lesser extent, develop marina facilities.
The General Partners in the Partnership are Westrec Investors, Inc.
(formerly PS Marina Investors, Inc.), a wholly-owned subsidiary of Westrec
Properties, Inc. ("Westrec"), and B. Wayne Hughes, a shareholder of Westrec
until September 1990. Effective March 1, 1997, the limited partners
approved the substitution of Tower Park Marina Operating Corporation, a
wholly owned subsidiary of Westrec Financial, Inc., for Mr. Hughes.
The Partnership was formed to sell a maximum of 12,000 units of limited
partnership interest at $5,000 per unit ($60,000,000). The General
Partners have contributed a total of $1,000. On November 27, 1989, the
Partnership's offering was terminated with 4,508 units issued, resulting in
$22,540,000 of limited partner funds being raised (before commission
discount of $3,000 granted to an investor). Half of each Limited Partner's
total capital contribution was deferred. The final installment was due on
August 1, 1990, and $76,000 of such deferrals remain outstanding.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from these estimates.
Net Realizable Value Reserve
----------------------------
As of September 30, 1997 the Partnership owns Tower Park Marina. Because
of continued operating cash flow deficits the Partnership allowed the
Chandlers Landing Yacht Club to be sold at a trustee foreclosure sale on
February 6, 1996, and allowed the lender to foreclose on the ThunderBoat
and Banyan Bay Marinas on September 30, 1996.
A net realizable value reserve of $2,193,000 was established at December
31, 1995 to reduce the carrying value of Tower Park Marina to its then
estimated realizable value. No addition to this reserve was considered
necessary at September 30, 1997 or December 31, 1996 since the Partnership
believes current cash flows are sufficient to recover the carrying value of
the marina.
-6-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
------------------------------------------------------------------
(continued)
-----------
Net Realizable Value Reserve (continued)
----------------------------------------
In March 1995, the FASB issued Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of" which requires impairment losses to be recorded on long-lived assets
used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less
than the assets' carrying amount. Statement 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. The
Company adopted Statement 121 effective January 1, 1996. The adoption of
Statement 121 had no significant impact on the Partnership's financial
statements.
Offering and Organization Costs
-------------------------------
Costs incurred in preparing Partnership documents, prospectuses and any
other sales literature, costs incurred in qualifying the units for sale
under federal and state securities laws and costs incurred in marketing the
units have been charged to the limited partners' equity to the extent the
total does not exceed 5% of the gross proceeds of the offering. The amount
by which these organization and registration costs exceeded 5% of the gross
proceeds of the offering were borne by Westrec Investors, Inc. (formerly PS
Marina Investors, Inc.).
Cash Distributions
------------------
Prior to December 1994, the General Partners had an interest in Cash Flow
from Operations (as defined) and Cash from Sales or Refinancings (as
defined) based on the timing and amount of prior distributions. No
distributions have been made since 1991.
In December 1994, in connection with the settlement of a lawsuit brought by
33 limited partners of the Partnership, the General Partners agreed to
reduce their interest in all future cash distributions from any source to
1%.
Allocations of Net Income or Loss
---------------------------------
As set forth in the Partnership Agreement, net loss shall be allocated 99%
to the Limited Partners and 1% to the General Partners. Net income shall
generally be allocated to Partners in proportion to their cash
distributions.
-7-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
------------------------------------------------------------------
(continued)
-----------
Earnings Per Unit
-----------------
Per unit data is based on the weighted average number of the Limited
Partnership units outstanding during the period; 4,508.
Marina Facilities
-----------------
Marina facilities are stated at cost to the Partnership less net realizable
value reserves. Depreciation is calculated on a straight-line basis.
Depreciable lives for the major asset categories are as follows:
<TABLE>
<CAPTION>
Asset Category Depreciable Life
-------------- ----------------
<S> <C>
Buildings 20 years
Improvements 20 years
Floating docks 7 years
Fixed docks 20 years
Dry storage racks 7 years
Furniture, fixtures and equipment 7 years
Leasehold interest life of lease
</TABLE>
Taxes Based on Income
---------------------
Taxes based on income are the responsibility of the individual partners and
accordingly, are not reflected in the accompanying financial statements.
-8-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
2. TOWER PARK MARINA
-----------------
Tower Park Marina includes the purchase price of the property and related
acquisition and closing costs. The Partnership paid an acquisition fee of
6% of the contract purchase price of the property, plus a development fee
of 6% of the cost of improvements made. Capitalized as a cost of the
property were development fees paid to Westrec of $3,000 and $2,000 for the
nine months ended September 30, 1997 and 1996, respectively. At September
30, 1997 and December 31, 1996, the investment in Tower Park Marina was
comprised of the following:
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Land $ 1,040,000 $ 1,040,000
Buildings 2,078,000 2,078,000
Improvements 1,999,000 1,999,000
Floating docks 2,755,000 2,755,000
Furniture, fixtures and equipment 1,120,000 1,120,000
Leasehold interest 941,000 941,000
Construction in progress 62,000 -
----------- -----------
9,995,000 9,933,000
Less accumulated depreciation
and amortization (5,347,000) (5,257,000)
----------- -----------
4,648,000 4,676,000
Net realizable value reserve (2,193,000) (2,193,000)
----------- -----------
$ 2,455,000 $ 2,483,000
=========== ===========
</TABLE>
Tower Park Marina is not generating satisfactory levels of cash flows and
cash flow projections do not indicate significant improvement in the near
term. These matters raise substantial doubt about the Partnership's
ability to recover the carrying value of its assets (not withstanding the
writedown of the marina facility to its net realizable value) and to
continue as a going concern. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability
and classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the Partnership
to continue as a going concern.
-9-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
3. NOTES PAYABLE
-------------
Notes payable at September 30, 1997 and December 31, 1996 consist of the
following:
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Note payable to an individual, bearing
interest at 11% per annum, secured by
deed of trust on Tower Park Marina, due
on February 28, 1998. $6,715,000 $6,715,000
Other 16,000 21,000
---------- -----------
$6,731,000 $6,736,000
========== ===========
</TABLE>
At September 30, 1997 future principal payments are as follows:
<TABLE>
<CAPTION>
Year
----
<S> <C>
1997 $ 5,000
1998 6,719,000
1999 4,000
2000 3,000
----------
$6,731,000
==========
</TABLE>
Throughout 1991, 1992, 1993 and 1994, the Partnership was involved in
various negotiations with the lender, a financial institution, and its
successor, Resolution Trust Corporation ("RTC"), to restructure or
otherwise settle the note secured by Tower Park Marina. In January 1995,
the RTC sold the note as part of a sales initiative to a third party. The
note was immediately sold to an affiliate of the individual general
partner. The Partnership entered into an option agreement (which expired
on April 10, 1996) to purchase the note from its current holder for its
cost ($1,700,000) plus carrying costs. In connection with the substitution
of Tower Park Marina Operating Corporation for Mr. Hughes as General
Partner, Mr. Hughes entered into a new option agreement with the
Partnership, which allows the Partnership to purchase the note secured by
Tower Park Marina, for Mr. Hughes' cost, $1,700,000, plus $68,000 of
accrued unpaid interest. As of September 30, 1997, the note was reflected
on the Partnership's balance sheet at its face value of $6,715,000 with an
additional $2,322,000 being shown as accrued unpaid interest. The option
is initially for a one year period expiring on February 28, 1998. The
Partnership may extend the option agreement for two additional one year
periods by paying Mr. Hughes $50,000 for each one year extension. The
extension payment will be applied as a reduction in the principal amount
due. For the nine months ended September 30, 1997 the Partnership paid
$159,000 in interest on this note.
-10-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
3. NOTES PAYABLE (continued)
-------------------------
In October 1993, the Partnership discontinued making payments on its
$2,000,000 note payable secured by ThunderBoat Marina and Banyan Bay
Marina. In September 1994, the lender initiated an action seeking to
foreclose on the marinas. In January 1995, the Partnership entered into a
forbearance agreement in which the lender agreed to forbear action to
foreclose until July 15, 1995 as long as the Partnership made monthly
payments to the lender of $4,000. As part of the forbearance agreement,
the Partnership agreed that if the note was not paid in full or otherwise
acceptably restructured prior to July 15, 1995, the lender would be
entitled to a judgment of foreclosure. In July 1995, the Partnership and
the lender agreed to extend the forbearance period until February 15, 1996.
The extension required an initial fee of $30,000 and monthly payments,
beginning in September 1995, of $25,000, which were applied to accrued
unpaid interest. In February 1996, the lender offered to extend the
forbearance period if the monthly payments were increased to $40,000. Due
to the continued operating cash flow deficits of the properties and the
inability to sell the Banyan Bay Marina, the Partnership allowed the Lender
to foreclose on the properties on September 30, 1996.
On October 5, 1995, the loan secured by Chandlers Landing Yacht Club was
sold to President's Square Limited Partnership. On October 13, 1995,
President's Square Limited Partnership notified the Partnership that it was
in default of several provisions of the loan, and demanded that the
defaults be corrected within 30 days or the note would be accelerated and
due immediately. As all the conditions of default could not be corrected,
and after evaluating the current value of the property, the Partnership
allowed the property to be sold at a trustee foreclosure sale on February
6, 1996.
The Partnership's ability to continue as a going concern is dependent upon
their ability to exercise their option on the note secured by Tower Park
Marina and improved operational cash flow. The financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and
classification of liabilities that may result from the possible inability
of the Partnership to continue as a going concern.
4. RELATED PARTY TRANSACTIONS
--------------------------
The Partnership has an agreement with Westrec Marina Management, Inc., an
affiliate of Westrec, to manage the day-to-day operations of the marina for
a fee equal to 6% of the marina's monthly gross revenues (as defined).
Management fees for the nine months ended September 30, 1997 and 1996, were
$106,000 and $146,000, respectively.
In connection with funding operating deficits and with the acquisition of
marina facilities, funds have been borrowed from Westrec. These borrowings
accrue interest at the prime rate plus 1% (9.50% at September 30, 1997).
Total interest paid or accrued to Westrec for the nine months ended
September 30, 1997 and 1996 was $89,000 and $71,000, respectively.
-11-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
5. COMMITMENTS AND CONTINGENCIES
-----------------------------
In September 1994, Mr. Leaman, the prior owner of ThunderBoat and Banyan
Bay Marinas, filed suit alleging that the Partnership had failed to pay him
$1,100,000 of additional compensation relating to the Partnership's
purchase of ThunderBoat and Banyan Bay Marinas. In connection with the
purchase of these properties from Mr. Leaman in 1989, the Partnership
entered into an employment agreement that provided that Mr. Leaman would be
entitled to earn a bonus, payable over three years. The maximum bonus that
Mr. Leaman could have earned was $1,100,000. Mr. Leaman resigned from his
employment in less than one year. Mr. Leaman has alleged that the bonus is
actually just deferred consideration due from his sale of the properties to
the Partnership. The Partnership intends to defend the case vigorously.
In October 1992, thirty-three of the Partnership's Limited Partners,
representing 130 of the Partnership's 4,508 Limited Partner units, filed a
complaint against the Partnership, its General Partners and others. The
suit alleged securities fraud, negligent misrepresentation and breach of
fiduciary duty. This matter was settled in December 1994. The terms of
the settlement required: (1) the General Partners to forgive advances
totalling $577,000 previously made to the Partnership, (2) the General
Partners to bear all costs of administering the Partnership for three
years, (3) the General Partners to reduce their interest in future cash
distributions of the Partnership to one percent, and (4) the General
Partners to pay $120,000 to the plaintiff's attorneys in reimbursement of
fees.
In November 1991, contamination was discovered in the area surrounding a
fuel storage tank at Tower Park Marina. Environmental consultants have
been engaged to perform sampling to determine the extent of the
contamination. Presently, sufficient data has not been obtained to
estimate the cost of remediation, consequently no loss accrual has been
made in the financial statements.
The Partnership operates a portion of Tower Park Marina on approximately 14
acres of waterfront property under a lease with the California State Land
Commission (the "CSLC Lease"). The CSLC Lease expires on December 31,
1998, and provides that it may be renewed for two successive periods for 10
years each. The CSLC Lease provides for an annual rental based on gross
receipts, with a minimum annual rental of $5,000 payable in advance. Rent
expense associated with the CSLC Lease is included in cost of operations
and was $31,000 for each of the nine month periods ended September 30, 1997
and 1996.
Annual minimum lease payments are as follows:
<TABLE>
<CAPTION>
Year
----
<S> <C>
1997 $ 1,000
1998 5,000
---------
$ 6,000
=========
</TABLE>
-12-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
6. PROFORMA INFORMATION
--------------------
As discussed in Notes 2 and 3, the Partnership's ThunderBoat Marina and
Banyan Bay Marina were foreclosed on effective September 30, 1996 and
Chandlers Landing Yacht Club was sold at a trustee foreclosure sale on
February 6, 1996. Below is proforma information for the Partnership,
excluding the operations of ThunderBoat Marina, Banyan Bay Marina,
Chandlers Landing Yacht Club for the nine months ended September 30, 1996.
<TABLE>
<CAPTION>
1996
-----------
<S> <C>
Revenues $ 2,342,000
Expenses 3,031,000
-----------
Net loss $( 689,000)
===========
</TABLE>
-13-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
September 30, 1997
(Unaudited)
The Partnership's operations for the nine months ended September 30, 1997
consist of Tower Park Marina in the Sacramento - San Joaquin Delta near
Sacramento, California. As of September 30, 1997, the marina had the
following occupancies:
<TABLE>
<CAPTION>
Tower Park Marina
-----------------
Spaces %
Available Occupied
--------- --------
<S> <C> <C>
Wet slips 235(1) 95.3%
Dry storage 184 61.4%
RV Park 130 80.0%
</TABLE>
(1) non-transient spaces only
For the nine months ended September 30, 1997, revenues for Tower Park
Marina declined $273,000 to $2,068,000. The decline was primarily due to a
$212,000 decrease in restaurant revenues and a $28,000 decline in slip
rental revenues. The reduction in restaurant revenues is due to a decline
in activity at the property and a reduction in the hours of operation.
Overall the property's net operating income declined $69,000 to $163,000
for the nine months ended September 30, 1997.
Construction of a pool and jacuzzi were completed in August and should
attract new customers to the property and encourage existing customers to
utilize the facilities more frequently.
The Partnership's net loss of $630,000 for the nine months ended September
30, 1997 includes $90,000 of depreciation and amortization, a non-cash
item, a decline of $98,000 in cash flow over the same period of a year ago.
Liquidity and capital resources
-------------------------------
Since its inception in 1988 the Partnership has operated at a deficit.
These deficits have been partially covered by advances from the General
Partners and cash reserves. In addition, the Partnership had discontinued
making debt service payments on substantially all of its notes. As a
result, all of the Partnership's properties were lost to foreclosure, with
the exception of Tower Park Marina.
-14-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
September 30, 1997
(Unaudited)
Throughout 1991, 1992, 1993 and 1994, the Partnership was involved in
various negotiations with the lender, a financial institution, and its
successor, Resolution Trust Corporation ("the RTC"), to restructure or
otherwise settle the note secured by Tower Park Marina. In January 1995,
the RTC sold the note as part of a sales initiative to a third party. The
note was immediately sold to an affiliate of the individual general
partner. The Partnership entered into an option agreement to purchase the
note from the affiliate at its cost ($1,700,000) plus carrying costs. The
option agreement originally expired on April 10, 1996, and has been
extended until February 28, 1998.
The Partnership's ability to continue as a going concern is dependent upon
their ability to exercise their option on the note secured by Tower Park
Marina and improved operating results at Tower Park Marina.
Between 1988 and 1997, the Partnership received advances from affiliates of
the General Partners. These advances were utilized to acquire properties,
make capital improvements to the properties, cover operating deficits, and
to a lesser extent, make distributions to the partners.
-15-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
PART II. OTHER INFORMATION
September 30, 1997
(Unaudited)
ITEMS 1 through 6 are inapplicable.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: November 5, 1997
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
BY: Westrec Investors, Inc.
General Partner
BY: /s/ Jeffrey K. Ellis
--------------------
Jeffrey K. Ellis
Vice President
-16-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 21,000
<SECURITIES> 0
<RECEIVABLES> 171,000
<ALLOWANCES> 0
<INVENTORY> 112,000
<CURRENT-ASSETS> 0
<PP&E> 7,802,000
<DEPRECIATION> (5,347,000)
<TOTAL-ASSETS> 2,867,000
<CURRENT-LIABILITIES> 5,226,000
<BONDS> 6,731,000
0
0
<COMMON> 0
<OTHER-SE> (9,090,000)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 2,867,000
<SALES> 0
<TOTAL-REVENUES> 867,000
<CGS> 0
<TOTAL-COSTS> 681,000
<OTHER-EXPENSES> 76,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 218,000
<INCOME-PRETAX> (108,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (108,000)
<EPS-PRIMARY> (23.74)<F2>
<EPS-DILUTED> (23.74)<F2>
<FN>
<F1>TOTAL PARTNERS' DEFICIT
<F2>LIMITED PARTNERS' NET LOSS PER UNIT
</FN>
</TABLE>
