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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 10-QSB/A
AMENDMENT NO. 1
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
Commission File Number 0-20273
1999 Broadway Associates Limited Partnership
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(Exact name of small business issuer as specified in its charter)
Delaware 04-6613783
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Item 2 to Registrant's Form 10-QSB for the quarterly period ended
September 30, 1996 is hereby amended as follows:
Item 2. Management's Discussion and Analysis or Plan of Operation
This Item should be read in conjunction with the financial statements
and other items contained elsewhere in the report.
Liquidity and Capital Resources
The Registrant, through its 99.9% ownership interest in the 1999
Broadway Partnership (the "Operating Partnership"), owns a 42-story
office tower located in Denver, Colorado together with a parking garage
located one and one-half blocks northeast of the office tower
(collectively, the "Property"). The Operating Partnership generates
rental revenue from the Property and is responsible for the Property's
operating expense as well as its administrative costs.
The Registrant's original business plan was to selectively contribute
its reserves to the Operating Partnership to enhance the Property's
value (through leasing the Property). The Registrant hoped that the
Denver market would improve so that the Property could generate cash
flow distributions and realize capital appreciation above the first
mortgage loan. The Denver market has not yet achieved the fundamental
rebound required for the Registrant to achieve its long term investment
objectives of generating cash flow distributions and realizing capital
appreciation.
The Registrant's level of liquidity based on cash and cash equivalents
increased by $1,612,000 during the nine months ended September 30, 1996
as compared to December 31, 1995. This increase is attributable to
$1,855,000 of cash from operating activities which was primarily the
result of non-payment of debt service and was partially offset by
$243,000 in capital improvements (investing activities). The Registrant
invests its working capital reserves in a money market account.
In November 1995, the Operating Partnership did not make its monthly
mortgage payment on the debt encumbering the Property. Thereafter,
First Interstate, the lender holding the mortgage encumbering the
Property, through its subsidiary DAG Management, Inc., obtained a court
order on November 14, 1995 to appoint a receiver to collect the rents
of the Property and take control of the management of the Property. The
receiver never took possession of the Property. On November 15, 1995,
the Operating Partnership commenced a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code. This action was
necessary to retain control of the Property and its rents and income,
and to maintain and preserve the value of the Property to the Operating
Partnership. Since the bankruptcy petition, the Operating Partnership
has continued in possession of the property and is operated and managed
its business as a debtor-in-possession. The Registrant and the holder
of the first mortgage on the Property reached an agreement pursuant to
which the Lender voted in favor of the Plan of Reorganization submitted
by the Operating Partnership, which was confirmed by the Bankruptcy
Court on November 13, 1996. The Plan, as approved by the Bankruptcy
Court, provides for the modification of the existing loan encumbering
the property as follows: (i) the maturity date is extended one year to
September 1999; and (ii) principal payments will be paid based on a 25
year amortization schedule (instead of 30 years), with a balloon
payment being due at maturity. The loan continues to bear interest at
9.5% per annum. In addition, the Registrant agreed to pay all costs and
expenses of the Bankruptcy litigation (approximately $1,000,000, of
which $750,000 has been accrued as reorganization costs at September
30, 1996), accrued interest on the loan (approximately $3,300,000) and
principal reductions of $4,000,000. The Registrant will also establish
a $1,000,000 reserve for debt service shortfall and provide funds to
lease-up the Property.
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Liquidity and Capital Resources (Continued)
The General Partner does not expect the Registrant to make any cash
distributions to the Limited Partners in the near future. The General
Partner believes it is in the best interest of the Registrant to
conserve any excess cash to be used for tenant improvements and leasing
costs.
At this time, it appears that the original investment objective of
capital growth from the inception of the Registrant will not be
attained and that Limited Partners will not receive a return of their
invested capital. The extent to which invested capital is refunded to
Limited Partners is dependent upon the performance of the Property and
the market in which it is located. Subsequent to 1999, the
ability to hold and operate the Property is dependent upon the
Operating Partnership's ability to restructure or refinance the
first mortgage loan or sell the Property.
Results of Operations
Operating results, before non-operating income (expenses), declined by
$1,768,000 for the nine months and $421,000 for the three months ended
September 30, 1996, as compared to 1995. The decline of $1,768,000 for
the nine months ended September 30, 1996 is due to decreases in
revenues of $1,942,000 and expenses of $174,000.
Revenues declined due to a decrease in rental income of $1,911,000 and
other income of $31,000. Rental revenues declined due to a decrease in
occupancy (from 85% in 1995 to 69% in 1996) as two major tenants
vacated their space during September/October of 1995.
Expenses declined by $174,000 for the nine months ended September 30,
1996, as compared to 1995, due to decreases in operating expenses
($138,000), management and other fees ($127,000), and utilities
($96,000). These decreases were partially offset by increases in real
estate taxes ($104,000), repairs and maintenance ($23,000), general and
administrative ($49,000) and insurance ($12,000). The decreases in
operating expenses, management and other fees and utilities are
directly related to the decline in occupancy. Real estate taxes
increased due to an increase in the assessed property value. These
taxes are currently under appeal. All other expenses remained
relatively constant.
Interest income increased by $45,000 for the nine months ended
September 30, 1996, as compared to 1995, due to an increase in average
working capital reserves available for investment.
Interest expense (which has been accrued but not paid since the
bankruptcy filing) remained relatively constant.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
BY: WINTHROP FINANCIAL ASSOCIATES, A LIMITED PARTNERSHIP
MANAGING GENERAL PARTNER
BY: /s/ Michael L. Ashner
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Michael L. Ashner
Chief Executive Officer
BY: /s/ Edward V. Williams
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Edward V. Williams
Chief Financial Officer
DATED: December 6, 1996
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