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
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FOR QUARTER ENDED COMMISSION FILE
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June 30, 2000 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 (IRS 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 than 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
PART I. FINANCIAL INFORMATION PAGE REFERENCE
Balance Sheets at June 30, 2000 and
December 31, 1999 2
Statements of Operations for the three month
periods ended June 30, 2000 and 1999 3
Statements of Operations for the six month
periods ended June 30, 2000 and 1999 4
Statements of Cash Flows for the six month
periods ended June 30, 2000 and 1999 5
Notes to Financial Statements 6-12
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 13-14
PART II. OTHER INFORMATION 15
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
BALANCE SHEETS
June 30, December 31,
2000 1999
----------- -------------
(Unaudited)
ASSETS
Cash $ 58,000 $ 27,000
Accounts receivable 112,000 97,000
Tower Park Marina, net 2,575,000 2,542,000
Other assets, net 493,000 416,000
----------- -----------
$ 3,238,000 $ 3,082,000
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
Accounts payable and accrued expenses $ 304,000 $ 148,000
Interest payable 16,000 17,000
Payable to affiliates 3,535,000 3,162,000
Deferred rentals 133,000 160,000
Notes payable 2,079,000 2,100,000
Commitments and contingencies - -
----------- -----------
6,067,000 5,587,000
Partners' deficit:
Limited partners' deficit, $50,000 (1,940,000) (1,619,000)
per unit, 4,508 units authorized
issued and outstanding
Less deferred contributions (76,000) (76,000)
----------- -----------
(2,016,000) (1,695,000)
General partners' deficit (813,000) (810,000)
----------- -----------
Total partners' deficit (2,829,000) (2,505,000)
----------- -----------
$ 3,238,000 $ 3,082,000
=========== ===========
See accompanying notes.
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<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
STATEMENTS OF OPERATIONS
For the three month periods ended June 30, 2000 and 1999
(Unaudited)
2000 1999
REVENUES:
Slip rentals $ 178,000 $ 163,000
RV Park 220,000 193,000
Lease income 39,000 47,000
Restaurant 188,000 160,000
Retail 137,000 120,000
Other income 55,000 46,000
----------- -----------
817,000 729,000
----------- -----------
EXPENSES:
Cost of operations 732,000 573,000
Interest expense 137,000 255,000
Depreciation and amortization 50,000 35,000
Management fees paid to affiliates 40,000 36,000
----------- -----------
959,000 899,000
----------- -----------
Net loss $ (142,000) $ (170,000
=========== ===========
Allocation of net loss:
Limited Partners' $ (141,000) $ (168,000)
General Partners' (1,000) (2,000)
----------- -----------
$ (142,000) $ (170,000)
=========== ===========
Limited Partners net loss
per unit (31.28) $ (37.49)
=========== ===========
See accompanying notes.
-3-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
STATEMENTS OF OPERATIONS
For the six month periods ended June 30, 2000 and 1999
(Unaudited)
2000 1999
REVENUES:
Slip rentals $ 339,000 $ 315,000
RV Park 353,000 311,000
Lease income 77,000 92,000
Restaurant 266,000 199,000
Retail 175,000 151,000
Other income 77,000 72,000
----------- -----------
1,287,000 1,140,000
----------- -----------
EXPENSES:
Cost of operations 1,182,000 958,000
Interest expense 267,000 485,000
Depreciation and amortization 97,000 68,000
Management fees paid to affiliates 65,000 59,000
----------- -----------
1,611,000 1,570,000
----------- -----------
Net loss $ (324,000) $ (430,000)
=========== ===========
Allocation of net loss:
Limited Partners' $ (321,000) $ (426,000)
General Partners' (3,000) (4,000)
----------- -----------
$ (324,000) $ (430,000)
Limited Partners' net loss
per unit $ (71.21) $ (94.50)
=========== ===========
See accompanying notes.
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<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
STATEMENTS OF CASH FLOWS
For the six month periods ended June 30, 2000 and 1999
(Unaudited)
2000 1999
Cash flows from operating activities:
Net loss $ (324,000) $ (430,000)
Adjustments to reconcile net loss
to net cash used for
operating activities:
Depreciation and amortization 97,000 68,000
(Increase) decrease in accounts receivable (15,000) 9,000
Increase in inventory (71,000) (88,000)
Decrease (increase) in other assets 2,000 (24,000)
Increase (decrease) in accounts payable 156,000 (41,000)
and accrued expenses
(Decrease) increase in interest payable (1,000) 298,000
(Decrease) increase in deferred rentals (27,000) (3,000)
----------- -----------
Net cash used for operating activities (183,000) (211,000)
----------- -----------
Net cash used for investing activities:
Construction in progress and improvements
to Tower Park Marina (114,000) (80,000)
----------- -----------
Cash flows from financing activities:
Repayments of notes payable, net (21,000) (55,000)
Advances from affiliates, net 373,000 329,000
Increase in capitalized financing costs (24,000) -
----------- -----------
Net cash provided by financing activities 328,000 274,000
----------- -----------
Net increase (decrease) in cash 31,000 (17,000)
Cash at the beginning of period 27,000 25,000
----------- -----------
Cash at the end of period 58,000 8,000
=========== ===========
See accompanying notes.
-5-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
FEDERAL INCOME TAX BASIS
June 30, 2000
(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., 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 June 30, 2000 the Partnership owns Tower Park Marina. 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 net realizable value. No addition to this reserve has been
considered necessary since the Partnership has determined that, based
on current cash flows, estimated future cash flows will be 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
June 30, 2000
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
(CONTINUED)
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.
Inventory
Inventory is stated at the lower of cost or market. Cost is determined
principally under the average cost method.
Cash Distributions
The General Partners have an interest in Cash Flow from Operations (as
defined) and Cash from Sales or Refinancings (as defined). No
distributions have been made since 1991.
Allocations of Net Income or Loss
As set forth in the Partnership Agreement, net loss shall be allocated
99t to the Limited Partners and 1% to the General Partners. Net income
shall generally be allocated to Partners in proportion to their cash
distributions.
Earnings Per Unit
Per unit data is based on the weighted average number of the Limited
Partnership units outstanding during the period; 4,508.
-7-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
(CONTINUED)
TOWER PARK MARINA
Tower Park Marina is stated at cost to the Partnership less net
realizable value reserve. 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
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
June 30, 2000
(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 Tower Park Marina were development fees paid
to Westrec of $7,000 and $15,000 for the six months ended June 30, 2000
and for the year ended December 31, 1999, respectively. At June 30,
2000 and December 31, 1999 the investment in Tower Park Marina was
comprised of the following:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Land $ 1,040,000 $ 1,040,000
Buildings 2,111,000 2,111,000
Improvements 2,230,000 2,230,000
Floating docks 2,831,000 2,831,000
Furniture, fixtures and equipment 1,220,000 1,220,000
Leasehold interest 941,000 941,000
Construction in progress 114,000 -
----------- -----------
10,487,000 10,373,000
Less accumulated depreciation and
amortization (5,719,000) (5,638,000)
----------- -----------
4,768,000 4,735,000
Net realizable value reserve (2,193,000) (2,193,000)
----------- -----------
$ 2,575,000 $ 2,542,000
=========== ===========
</TABLE>
-9-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
3. OTHER ASSETS
Other assets at June 30, 2000 and December 31, 1999 are composed of the
following:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Inventory $ 246,000 $ 175,000
Capitalized financing costs 154,000 130,000
Other 123,000 125,000
----------- -----------
523,000 430,000
Accumulated amortization (30,000) (14,000)
----------- -----------
$ 493,000 $ 416,000
=========== ===========
</TABLE>
Capitalized financing costs were incurred during 2000 in connection
with the refinancing of Tower Park Marina. These costs are amortized
over the loan term, five years. Amortization for the six months ended
June 30, 2000 totaled $16,000.
4. NOTES PAYABLE
Notes payable at June 30, 2000 and December 31, 1999 consist of the
following:
2000 1999
----------- -----------
Note payable secured by a deed
of trust on Tower Park Marina $ 2,067,000 $ 2,085,000
Other 12,000 15,000
----------- -----------
$ 2,079,000 $ 2,100,000
=========== ===========
At June 30, 2000 future principal payments are as follows:
<TABLE>
<CAPTION>
YEAR
----
<S> <C> <C>
2000 $ 24,000
2001 49,000
2002 50,000
2003 52,000
2004 1,904,000
------------
$ 2,079,000
</TABLE>
-10-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
4. NOTES PAYABLE (CONTINUED)
Between September 1991 and June 1999, no payments had been made on the
note secured by Tower Park Marina. 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. 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 its current holder for its cost
($1,700,000) plus carrying costs which expired on April 10, 1996. In
connection with the substitution of Tower Park Marina Operating
Corporation for Mr. Hughes as General Partner, the affiliate of Mr.
Hughes which holds the note, entered into a new option agreement with
the Partnership, which allows the Partnership to purchase the note
secured by Tower Park Marina, for the affiliate's cost, $1,700,000,
plus $68,000 of accrued unpaid interest.
As of December 31, 1998, the note was reflected on the Partnership's
balance sheet at its face value of $6,665,000 with an additional
$3,199,000 being shown as accrued unpaid interest. The option was
initially for a one-year period expiring on February 28, 1998. The
Partnership extended the option agreement for one year in February 1998
by paying the affiliate $50,000, which was applied as a reduction in
the principal amount due. The Partnership extended the option agreement
for one additional year by making an additional $50,000 principal
payment in February 1999. On July 1, 1999 the Partnership completed the
refinancing of Tower Park and exercised its option to repay the note
payable for $1,600,000. As a result, the Partnership recognized a gain
of $8,515,000 from the forgiveness of debt.
The new note payable was for an initial amount of $2,000,000, with an
additional $500,000 available to make improvements to the property. As
of June 30, 2000, $100,000 had been borrowed for capital improvements.
The loan accrues interest at 9.34% and requires monthly principal and
interest payments of $23,000. The loan is due on July 1, 2004.
Interest paid on these notes for the six months ended June 30, 2000 and
1999 was $99,000, and $66,000, respectively.
In connection with the refinancing of the Partnership's note payable
during 1999 the General Partner was paid $25,000 of loan brokerage fees
in accordance with the Partnership agreement.
Based on the market rate of the mortgage note, the fair value at June
30, 2000 and December 31, 1999 is deemed to be the carrying value.
-11-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
5. 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 marinas monthly gross revenues (as
defined). Management fees for the six months ended June 30, 2000 and
1999, were $65,000 and $59,000, respectively.
In connection with funding the Partnership's operating deficits funds
have been borrowed from Westrec. These borrowings accrue interest at
the prime rate plus lg (10.5% at June 30, 2000). Total interest paid or
accrued to Westrec for the six months ended June 30, 2000 and 1999 was
$169,000 and $104,000, respectively.
6. COMMITMENTS AND CONTINGENCIES
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 operations at Tower Park Marina are influenced by factors that
affect the boating industry both locally and nationally, with activity
at Tower Park Marina increasing seasonally during the period April
through October of each year.
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"). Effective January
1, 1999, the Partnership entered into a new lease with the CSLC for a
term of 25 years. The CSLC Lease provides for an annual rental based on
gross receipts, with a minimum annual rental of $40,000 payable in
advance. Rent expense associated with the CSLC Lease is included in
cost of operations and was $20,000 for each of the six months ended
June 30, 2000 and 1999.
-12-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
June 30, 2000
(Unaudited)
The revenues and expenses of the Partnership for the six months ended
June 30, 2000 are generated solely from the operations of Tower Park
Marina in the Sacramento - San Joaquin Delta near Sacramento,
California. As of June 30, 2000, Tower Park Marina had the following
occupancies:
<TABLE>
<CAPTION>
Spaces %
Available Occupied
--------- --------
<S> <C> <C>
Wet slips 238 (1) 83.6%
Dry storage 147 85.7%
RV Park 136 (1) 86.0%
</TABLE>
(1) non-transient spaces only
For the six months ended June 30, 2000, revenues for Tower Park Marina
increased $147,000 to $1,287,000. The increase was primarily due to a
$67,000 increase in restaurant revenues, a $42,000 increase in RV
parking a $24,000 increase in retail sales, and a $24,000 increase in
slip rentals. The increase in restaurant revenues is due to extended
hours of operation and an increased level of activity at the property.
Overall the property's net operating income declined $76,000 to $44,000
for the six months ended June 30, 2000. The decline in operating income
is due to increased insurance and administrative costs.
The Partnership's net loss of $325,000 for the six months ended June
30, 2000 includes $97,000 of depreciation and amortization, a non-cash
item, an improvement of $134,000 in cash flow over the same period a
year ago. This improvement is primarily the result of successfully
refinancing the debt on the property which reduced interest charges on
the property debt for the period by $267,000. This reduction was
partially offset by a $65,000 increase in interest payable to
affiliates, which is the result of higher interest rates and higher
outstanding balances and the $76,000 decline in operating results
discussed above.
-13-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.,
California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
June 30, 2000
(Unaudited)
Liquidity and capital resources
Since its inception, the Partnership has received advances from
affiliates of the General Partners to acquire properties, make capital
improvements to the properties, cover operating deficits, and to a
lesser extent, make distributions to the partners.
From 1991 to 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 was exercised on July 1, 1999 and with the additional capital
provided by the refinancing, the Partnership's financial uncertainty
has been stabilized.
The Partnership's ability to continue to operate through 2000 and
beyond is contingent on among other factors, the improvement in Tower
Park Marina operations and continued advances from the General
Partners. Management's plans include the expenditure of approximately
$400,000 in additional repairs and capital improvements during 2000,
which management believes will continue to improve the operating
results of the property.
-14-
<PAGE>
TOWER PARK MARINA INVESTORS, L.P.
a California Limited Partnership
PART II. OTHER INFORMATION
June 30, 2000
(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: August 9, 2000
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
-15-
