UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended
March 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition period
from ______ to ____________
0-19217
(Commission File Number)
American Tax Credit Properties III L.P.
(Exact name of registrant as specified in its governing instruments)
Delaware 13-3545006
(State orother jurisdiction of organization)(I.R.S. Employer Identification No.)
Richman Tax Credit Properties III L.P.
599 West Putnam Avenue, 3rd floor
Greenwich, Connecticut 06830
- - ------------------------------------------------------ -----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
Securities registered pursuant to Section 12(b) of the Act:
None None
(Title of each Class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- - -------------------------------------------------------------------------------
(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
requirement for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in a definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
Registrant has no voting stock.
Documents incorporated by reference:
Part I - pages 20 through 31 and 44 through 66 of the prospectus dated
February 7, 1990, as supplemented by Supplement No. 1, Supplement No. 2,
Supplement No. 3, Supplement No. 4, Supplement No. 5 and Supplement No. 6
dated June 6, 1990, November 21, 1990, December 20, 1990, October 30, 1991,
December 26, 1991 and January 15, 1992, respectively, filed pursuant to Rule
424(b)(3) under the Securities Act of 1933.
<PAGE>
PART I
Item 1. Business
Formation
American Tax Credit Properties III L.P. ("Registrant"), a Delaware limited
partnership, was formed on September 21, 1989 to invest primarily in leveraged
low-income multifamily residential complexes (the "Property" or "Properties")
which qualify for the low-income tax credit established by Section 42 of the Tax
Reform Act of 1986 (the "Low-income Tax Credit"), through the acquisition of
limited partnership equity interests in partnerships (the "Local Partnership" or
"Local Partnerships") that are the owners of the Properties. Registrant
considers its activity to constitute a single industry segment.
Richman Tax Credit Properties III L.P. (the "General Partner"), a Delaware
limited partnership, was formed on September 21, 1989 to act as the sole general
partner of Registrant. The general partner of the General Partner is Richman
Housing Credits Inc. ("Richman Housing"), a Delaware corporation which is
wholly-owned by Richard Paul Richman. Richman Housing is an affiliate of both
The Richman Group, Inc. ("Richman Group"), a Delaware corporation founded by
Richard Paul Richman in 1988 and Wilder Richman Corporation ("WRC"), a New York
corporation co-founded by Richard Paul Richman in 1979.
The Amendment No. 2 to the Registration Statement on Form S-11 was filed with
the Securities and Exchange Commission (the "Commission") on February 1,
1990 pursuant to the Securities Act of 1933 under Registration Statement
File No. 33-31390, which was declared effective on February 2, 1990.Reference
is made to the prospectus dated February 7, 1990, as supplemented by
Supplement No. 1, Supplement No. 2, Supplement No. 3, Supplement No. 4,
Supplement No. 5 and Supplement No. 6 dated June 6, 1990, November 21, 1990,
December 20, 1990, October 30, 1991, December 26, 1991 and January 15, 1992,
respectively, filed with the Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933 (the "Prospectus"). Pursuant to Rule 12b-23 of the
Commission's General Rules and Regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),the description of
Registrant's business set forth under the heading "Investment Objectives and
Policies" at pages 44 through 66 of the Prospectus is incorporated herein by
reference.
On March 12, 1990, Registrant commenced, through Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), the offering of up to 150,000 units of
limited partnership interest ("Unit") at $1,000 per Unit. On June 13, 1990,
December 27, 1990, December 31, 1991 and January 23, 1992 the closings for
19,730, 9,622, 5,227 and 1,304 Units, respectively, took place, amounting to
aggregate limited partners' capital contributions of $35,883,000.
Competition
Pursuant to Rule 12b-23 of the Commission's General Rules and Regulations
promulgated under the Exchange Act, the description of Registrant's competition,
general risks, tax risks and partnership risks set forth under the heading "Risk
Factors" at pages 20 through 31 of the Prospectus is incorporated herein by
reference.
Employees
Registrant employs no personnel and incurs no payroll costs. All management
activities of Registrant are conducted by the General Partner. An affiliate of
the General Partner employs individuals who perform the management activities of
Registrant. This entity also performs similar services for other affiliates of
the General Partner.
<PAGE>
Item 1. Business (continued)
Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
Act of 1988, Omnibus Budget Reconciliation Act of 1989, Omnibus Budget
Reconciliation Act of 1990, Tax Extension Act of 1991, Omnibus Budget
Reconciliation Act of 1993 and Uruguay Round Agreements Act (collectively the
"Tax Acts")
Registrant is organized as a limited partnership and is a "pass through" tax
entity which does not, itself, pay Federal income tax. However, the partners of
Registrant who are subject to Federal income tax may be affected by the Tax
Acts. Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions regarding its investments. Registrant does
not anticipate that the Tax Acts will currently have a material adverse impact
on Registrant's business operations, capital resources and plans or liquidity.
Item 2. Properties
The executive offices of Registrant and the General Partner are located at 599
West Putnam Avenue, 3rd floor, Greenwich, Connecticut 06830. Registrant does not
own or lease any properties. Registrant pays no rent; all charges for leased
space are borne by an affiliate of the General Partner.
Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. Each of Registrant's Local
Partnerships has been allocated by the relevant state tax credit agency an
amount of Low-income Tax Credits for ten years from the date the Property is
placed in service. The required holding period of each Property, in order to
avoid Low-income Tax Credit recapture, is fifteen years from the year in which
the Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period"). In addition, certain of the Local Partnerships have
entered into agreements with the relevant state tax credit agencies whereby the
Local Partnerships must maintain the low-income nature of the Properties for a
period which exceeds the Compliance Period, regardless of any sale of the
Properties by the Local Partnerships after the Compliance Period. The Properties
must satisfy various requirements including rent restrictions and tenant income
limitations (the "Low-income Tax Credit Requirements") in order to maintain
eligibility for the recognition of the Low-income Tax Credit at all times during
the Compliance Period. Once a Local Partnership has become eligible for the
Low-income Tax Credit, it may lose such eligibility and suffer an event of
recapture if its Property fails to remain in compliance with the Low-income Tax
Credit Requirements. Through December 31, 1996, none of the Local Partnerships
have suffered an event of recapture of Low-income Tax Credits.
Although Registrant generally owns a 98.9%-99% limited partnership interest
("Local Partnership Interest") in the Local Partnerships, Registrant and
American Tax Credit Properties II L.P. ("ATCP II"), a Delaware limited
partnership and an affiliate of Registrant, together, in the aggregate, acquired
a 99% Local Partnership Interest in certain Local Partnerships as follows:
Registrant ATCP II
Batesville Family, L.P. 61.75% 37.25%
Bruce Housing Associates, L.P. 61.75 37.25
Carrington Limited Dividend Housing
Association Limited Partnership 65.95 33.05
Ivy Family, L.P. 61.75 37.25
Lawrence Road Properties, Ltd. 61.75 37.25
Mirador del Toa Limited Partnership 59.06 39.94
Purvis Heights Properties, L.P. 61.75 37.25
Queen Lane Investors 48.50 50.50
Many of the Local Partnerships receive rental subsidy payments, including
payments under Section 8 of Title II of the Housing and Community Development
Act of 1974 ("Section 8") (see descriptions of subsidies on page 7). The subsidy
agreements expire at various times during and after the Compliance Periods of
the Local Partnerships. The United States Department of Housing and Urban
Development ("HUD") has issued notices which implement provisions to renew
certain project based Section 8 contracts expiring during HUD's fiscal year
1997, where requested by an owner, for an additional one year term generally at
or below current rent levels, subject to certain guidelines. HUD has an
additional program which, in general, provides for restructuring rents and/or
mortgages where rents may be adjusted to market levels and mortgage terms may be
adjusted based on the reduction in rents, although there may be instances in
which only rents, but not mortgages, are restructured. Registrant cannot
reasonably predict legislative initiatives and governmental budget
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
negotiations, the outcome of which could result in a reduction in funds
available for the various federal and state administered housing programs
including the Section 8 program. Such changes could adversely affect the future
net operating income and debt structure of any or all Local Partnerships
currently receiving such subsidy or similar subsidies. One Local Partnership's
Section 8 contract, which covers certain rental units, is scheduled to expire in
1997.
Capital contribution Mortgage &
obligation construction
Name of Local Partnership Number Total as of Paid through loans payable as Subsidy
of
Name of apartment complex of March 30, March 30, December 31, (see
rental
Apartment complex location units 1997 1997 1996 footnotes)
- - -------------------------- --------- ------------ ---------------------------------- ----------
<S> <C> <C> <C> <C> <C>
April Gardens Apartments II
Limited Partnership
April Gardens Apartments
Las Piedras, Puerto Rico 48 $ 485,581 $ 485,581 $ 2,008,084 (1b&d)
Ashland Park Apartments, L.P.
Ashland Park Apartments
Ashland, Nebraska 24 235,732 235,732 1,044,903 (1b&d)
Auburn Family, L.P.
Louisville Apartments
Louisville, Mississippi 16 95,412 95,412 474,003 (1b&d)
Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi 48 239,7162 239,7162 1,446,124 (1b)
Bay Springs Elderly, L.P.
Bay Springs Manor
Bay Springs, Mississippi 24 208,820 208,820 680,053 (1b&d)
Brisas del Mar Apartments
Limited Partnership
Brisas del Mar Apartments
Hatillo, Puerto Rico 66 668,172 668,172 2,670,432 (1b&d)
Bruce Housing Associates, L.P.
Bruce Family Apartments
Bruce, Mississippi 40 183,1552 183,1552 1,115,155 (1b&d)
Carrington Limited Dividend
Housing Association Limited
Partnership
Carrington Place
Farmington Hills, Michigan 100 2,174,7202 2,174,7202 3,487,158 (1c)
Chestnut Park Associates, L.P.
Chestnut Park Apartments
East Orange, New Jersey 59 4,204,576 4,204,576 5,284,761 (1a)
Chowan Senior Manor Associates
Limited Partnership
Azalea Garden Senior Manor
Apartments
Murfreesboro, North Carolina 33 278,405 278,405 1,271,652 (1b&d)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
Capital contribution Mortgage &
obligation construction
Name of Local Partnership Number Total as of Paid through loans payable as Subsidy
of
Name of apartment complex of March 30, March 30, December 31, (see
rental
Apartment complex location units 1997 1997 1996 footnotes)
- - -------------------------- --------- ------------ ---------------------------------- ----------
<S> <C> <C> <C> <C> <C>
Christian Street Commons
Associates
Christian Street Commons
Apartments
Philadelphia, Pennsylvania 18 $ 581,645 $ 581,645 $ 633,184 (1a&b)
Country View Apartments
Country View Apartments
Pembroke, Maine 16 279,183 279,183 943,663 (1b&d)
Desarrollos de Belen Limited
Partnership
Vista de Jagueyes II Apartments
Aguas Buenas, Puerto Rico 41 422,929 422,929 1,892,733 (1b&d)
Desarrollos de Emaus Limited
Partnership
Hucares II Apartments
Naguabo, Puerto Rico 72 631,404 631,404 3,217,134 (1b&d)
Ellinwood Heights Apartments,
L.P.
Ellinwood Heights Apartments
Ellinwood, Kansas 24 156,261 156,261 692,502 (1b&d)
Fulton Street Houses Limited
Partnership
Fulton Street Townhouse
Apartments
New York, New York 35 1,948,081 1,948,081 3,869,930 (1a&b)
Hayes Run Limited Partnership
Mashburn Gap Apartments
Marshall, North Carolina 34 322,074 322,074 1,434,682 (1b&d)
Howard L. Miller Sallisaw
Apartments II, L.P.
Sallisaw II Apartments
Sallisaw, Oklahoma 24 130,158 130,158 619,235 (1b&d)
Hurlock Meadow Limited
Partnership
Hurlock Meadow Apartments
Hurlock, Maryland 30 284,218 199,785 1,279,669 (1b&d)
Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi 32 135,5282 135,5282 805,507 (1b&d)
Justin Associates
Locust Tower Apartments
Philadelphia, Pennsylvania 40 1,809,723 1,809,723 2,511,407 (1b&e)
LaBelle Commons, Ltd.
LaBelle Commons
LaBelle, Florida 32 253,580 253,580 1,020,357 (1b&d)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
Capital contribution Mortgage &
obligation construction
Name of Local Partnership Number Total as of Paid through loans payable as Subsidy
of
Name of apartment complex of March 30, March 30, December 31, (see
rental
Apartment complex location units 1997 1997 1996 footnotes)
- - -------------------------- --------- ------------ ---------------------------------- ----------
<S> <C> <C> <C> <C> <C>
Lawrence Road Properties, Ltd.
Hillcrest Apartments
Newton, Mississippi 24 $ 123,7992 $ 123,7992 $ 763,628 (1b&d)
Loma Del Norte Limited
Partnership
Loma Del Norte Apartments
Anthony, New Mexico 40 314,865 314,865 1,446,530 (1b&d)
Long Reach Associates Limited
Partnership
Oak Ridge Apartments
Bath, Maine 30 448,922 448,922 1,487,788 (1b&d)
Mirador del Toa Limited
Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico 48 284,8472 284,8472 1,896,098 (1b&d)
Moore Haven Commons, Ltd.
Moore Haven Commons
Moore Haven, Florida 28 213,402 213,402 934,175 (1b&d)
NP-89 Limited Dividend Housing
Association Limited Partnership
Newport Apartments
Clinton Township, Michigan 168 2,372,292 2,372,292 4,375,085 (1a&b)
Nash Hill Associates, Limited
Partnership
Nash Hill Place
Williamsburg, Massachusetts 28 302,575 302,575 1,478,728 (1b,d&f)
North Calhoun City, L.P.
Calhoun City Apartments
Calhoun City, Mississippi 18 146,565 146,565 498,050 (1b&d)
Orange City Plaza, Limited
Partnership
Orange City Plaza Apartments
Orange City, Iowa 32 456,090 456,090 549,795 (1a)
Puerta del Mar Limited
Partnership
Puerta del Mar Apartments 66 630,570 630,570 2,542,593 (1b&d)
Hatillo, Puerto Rico
Purvis Heights Properties, L.P.
Pineview Apartments
Purvis, Mississippi 40 191,5122 191,5122 1,156,152 (1b)
Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania 29 597,0502 597,0502 1,587,345 (1b&e)
Somerset Manor, Ltd.
Somerset Manor
Central City, Pennsylvania 24 208,465 208,465 903,396 (1b&d)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
Capital contribution Mortgage &
obligation construction
Name of Local Partnership Number Total as of Paid through loans payable as Subsidy
of
Name of apartment complex of March 30, March 30, December 31, (see
rental
Apartment complex location units 1997 1997 1996 footnotes)
- - -------------------------- --------- ------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C>
Sugar Cane Villas, Ltd.
Sugar Cane Villas
Pahokee, Florida 87 $ 751,560 $ 751,560 $ 3,329,461 (1b&d)
Summerfield Apartments Limited
Partnership
Summerfield Apartments
Charlotte, North Carolina 52 1,088,667 1,088,667 1,827,382 (1b)
Sydney Engel Associates L.P.
(formerly known as Sydney Engel
Associates)
The Castle
New York, New York 224 3,201,874 1,977,099 17,939,501 (1b)
Union Valley Associates Limited
Partnership
Union Valley Apartments
Union Township, Pennsylvania 36 371,589 371,589 1,456,431 (1b)
Walnut Grove Family, L.P.
Walnut Grove Apartments
Walnut Grove, Mississippi 24 191,695 191,695 851,857 (1b&d)
Waynesboro Apartments Limited
Partnership
Waynesboro Apartments
Waynesboro, Pennsylvania 36 360,859 360,859 1,493,131 (1b)
West Calhoun City, L.P.
West Calhoun City Apartments
Calhoun City, Mississippi 28 230,212 230,212 789,306 (1b&d)
Westminster Apartments Limited
Partnership
Westminster Apartments
Philadelphia, Pennsylvania 42 1,047,993 1,047,993 1,642,683 (1a&b)
------------- ------------- -------------
$ 29,264,476 $ 27,955,268 $ 87,351,443
============ ============ ============
</TABLE>
(1) Description of Subsidies:
(a)Section 8 of Title II of the Housing and Community Development Act of
1974 allows qualified low-income tenants to pay thirty percent of
their monthly income as rent with the balance paid by the federal
government.
(b) The Local Partnership's debt structure includes a
principal or interest payment subsidy.
(c)The Michigan State Housing Development Authority allows
tenants, who would otherwise pay more than 40% of their income for
rent and utilities, to receive rental subsidies.
(d)The Rural Housing Service (formerly the Farmers Home Administration)
of the United States Department of Agriculture Rental Assistance
Program allows qualified low-income tenants to receive rental
subsidies.
(e)The City of Philadelphia Housing Authority allows qualified
low-income tenants to receive rental certificates.
(f)The Commonwealth of Massachusetts participates in a rental assistance
program.
<PAGE>
Item 2. Properties (continued)
(2) The capital contribution obligation total as of March 30, 1997 and the
capital contribution obligation paid through March 30, 1997 reflect
Registrant's obligation only.
Item 3. Legal Proceedings
Registrant is not aware of any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the limited partners of Registrant
during the fourth quarter of the fiscal year covered by this report.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity
and Related Security Holder Matters
Market Information and Holders
There is no established public trading market for Registrant's Units. There are
provisions in the Amended and Restated Agreement of Limited Partnership of
Registrant which are intended to prevent the development of a public secondary
market. Accordingly, accurate information as to the market value of a Unit at
any given date is not available. Since November 1992, Merrill Lynch has provided
its clients who wish to buy or sell partnership units with a limited partnership
secondary service available through Merrill Lynch's Limited Partnership
Secondary Transaction Department. The number of owners of Units as of May 20,
1997 was 1,857, holding 35,883 Units.
Beginning with the December 1994 Merrill Lynch client account statements,
Merrill Lynch implemented new guidelines for providing estimated values of
limited partnerships and other direct investments reported on client account
statements. As a result, Merrill Lynch no longer reports general partner
estimates of limited partnership net asset value on its client account
statements, although Registrant may continue to provide its estimate of limited
partnership value to Unit holders. Pursuant to the guidelines, estimated values
for limited partnership interests originally sold by Merrill Lynch (such as
Registrant's Units) will be provided two times per year to Merrill Lynch by
independent valuation services. These estimated values will be based on
financial and other information available to the independent services (1) on the
prior August 15th for reporting on December year-end and subsequent client
account statements through the following May's month-end client account
statements and (2) on the prior March 31st for reporting on June through
November month-end client account statements of the same year. Merrill Lynch
clients may contact their Merrill Lynch Financial Consultants or telephone the
number provided to them on their account statements to obtain a general
description of the methodology used by the independent valuation services to
determine their estimates of value. In addition, Registrant may provide an
estimate of limited partnership value to Unit holders from time to time in
Registrant's reports to limited partners. The estimated values provided by the
independent services and Registrant, which may differ, are not market values and
Unit holders may not be able to sell their Units or realize either amount upon a
sale of their Units. In addition, Unit holders may not realize such estimated
values upon the liquidation of Registrant's assets over its remaining life.
Distributions
Registrant owns a limited partnership interest in Local Partnerships that are
the owners of Properties which are leveraged and receive government assistance
in various forms of rental and debt service subsidies. The distribution of any
cash flow generated by the Local Partnerships may be restricted, as determined
by each Local Partnership's financing and subsidy agreements. Accordingly,
Registrant does not anticipate that it will provide significant annual cash
distributions to its partners. There were no cash distributions to the partners
during the years ended March 30, 1997 and 1996.
Low-income Tax Credits, which are subject to various limitations, may be used by
investors to offset federal income tax liabilities. The Low-income Tax Credits
per Unit generated by Registrant and allocated to the limited partners for the
tax years ended December 31, 1996 and 1995 and the cumulative Low-income Tax
Credits allocated from inception through December 31, 1996 are as follows:
<TABLE>
<CAPTION>
Low-income
Tax Credits
<S> <C>
Tax year ended December 31, 1996 $ 152.73
Tax year ended December 31, 1995 153.64
Cumulative totals $ 837.28
</TABLE>
Notwithstanding future circumstances which may give rise to recapture or loss of
future benefits (see Part I, Item 2 - Properties, herein), Registrant expects to
generate total Low-income Tax Credits from investments in Local Partnerships of
approximately $1,500 per Unit through December 31, 2003.
<PAGE>
Item 6. Selected Financial Data
The information set forth below presents selected financial data of Registrant.
Additional detailed financial information is set forth in the audited financial
statements included under Part II, Item 8 herein.
<TABLE>
<CAPTION>
Years Ended March 30,
1997 1996 1995 1994 1993
------------ ------------------------------ --------------- -----------
<S> <C> <C> <C> <C> <C>
Interest revenue $ 317,065 $ 335,724 $ 326,184 $ 331,981 $ 364,553
============== ============== ============== ============== ==============
Equity in loss of
investment in local $ (2,509,806) $ (3,249,195) $ (3,396,272) $ (3,295,333) $ (3,177,723)
============ ============ ============ ============ ============
partnerships
Net loss $ (2,718,536) $ (3,443,977) $ (3,611,978) $ (3,522,497) $ (3,348,281)
============ ============ ============ ============ ============
Net loss per unit of
limited partnership
interest $ (75.00) $ (95.02)$ (99.65) $ (97.18) $ (92.38)
============== ============== ============== ============== ==============
As of March 30,
1997 1996 1995 1994 1993
-------------- ----------- ------------ -------------- -----------
Total assets $15,503,629 $17,832,235 $21,199,982 $23,379,674 $26,618,607
=========== =========== =========== =========== ===========
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Capital Resources and Liquidity
Registrant registered 150,000 units of limited partnership interest ("Units") at
$1,000 per Unit with the Securities and Exchange Commission (the "Commission")
and on February 2, 1990, the Commission declared effective Amendment No. 2 to
the Registration Statement on Form S-11. Registrant admitted limited partners
between June 13, 1990 and January 23, 1992 in four closings with aggregate
limited partners' capital contributions amounting to $35,883,000.
Registrant acquired forty-three limited partnership interests (the "Local
Partnership Interests") in partnerships (the "Local Partnership" or "Local
Partnerships") representing capital contributions in the amount of $29,264,476.
The Local Partnerships own low-income multifamily residential complexes (the
"Property" or "Properties") which qualify for the low-income tax credit
established by Section 42 of the Tax Reform Act of 1986 (the "Low-income Tax
Credit"). The required holding period of each Property, in order to avoid
Low-income Tax Credit recapture, is fifteen years from the year in which the
Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period"). The investments in Local Partnerships are highly illiquid.
As of March 30, 1997, Registrant has paid capital contributions of $27,955,268
to the Local Partnerships and $1,309,208 are outstanding. Restricted cash in the
balance sheet as of March 30, 1997 represents such outstanding capital
contributions (and is referred to herein as "Temporary Investments"). The
outstanding capital contributions are payable upon two Local Partnerships'
satisfaction of specified conditions related to operations (see discussion
pertaining to Sydney Engel Associates below).
From the closing of Units, Registrant established a working capital reserve.
Registrant is not expected to have access to any source of financing.
Accordingly, if unforeseen contingencies arise that cause a Local Partnership to
require additional capital, in addition to that contributed by Registrant, the
source of such capital needs may be obtained from (i) limited working capital
reserves of Registrant (which may include distributions received from Local
Partnerships), (ii) debt financing at the Local Partnership level (which may not
be available) or (iii) additional equity contributions of the general partner of
a Local Partnership (the "Local General Partner"). In addition, the Local
Partnerships are generally expected to maintain escrow reserves over time in
addition to the reserves maintained by Registrant. There can be no assurance
that any of these sources would be readily available to provide for possible
additional capital requirements or be sufficient to remedy any such unforeseen
contingencies.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
As of March 30, 1997, Registrant's working capital is comprised of cash and cash
equivalents of $409,413, investments in corporate bonds of $1,897,688,
investments in U.S. Treasury bonds of $847,896 and investments in U.S.
government agency bonds of $109,187. Registrant acquired such investments in
bonds with the intention of utilizing proceeds generated by such investments in
bonds to meet its annual obligations. Future sources of Registrant's funds are
expected primarily from interest earned on investments of working capital
reserves, retired investments in bonds and limited cash distributions from Local
Partnerships.
During the year ended March 30, 1997, Registrant received cash from interest
earnings and distributions from Local Partnerships and utilized cash for
operating expenses. In addition, Registrant received $200,000 from maturity of
investments in bonds. Cash and cash equivalents and investments in bonds
available-for-sale decreased, in the aggregate, by approximately $196,000 during
the year ended March 30, 1997, which decrease includes a net unrealized loss
recorded on investments in bonds of approximately $87,000, the amortization of
net premium on investments in bonds of approximately $17,000 and the accretion
of zero coupon bonds of approximately $88,000. In addition, Registrant
transferred approximately $207,000 to restricted cash due to an increase in the
capital contribution payable to Sydney Engel Associates (see discussion further
below). During the year ended March 30, 1997, the investment in Local
Partnerships decreased as a result of Registrant's equity in the Local
Partnerships' net loss for the year ended December 31, 1996 of $2,509,806 and
cash distributions received from Local Partnerships of $33,605, partially offset
by the increase in investment in Sydney Engel Associates.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. The rents of the Properties, many of which receive rental subsidy
payments, including payments under Section 8 of Title II of the Housing and
Community Development Act of 1974 ("Section 8"), are subject to specific laws,
regulations and agreements with federal and state agencies. The subsidy
agreements expire at various times during and after the Compliance Periods of
the Local Partnerships. The United States Department of Housing and Urban
Development ("HUD") has issued notices which implement provisions to renew
certain project based Section 8 contracts expiring during HUD's fiscal year
1997, where requested by an owner, for an additional one year term generally at
or below current rent levels, subject to certain guidelines. HUD has an
additional program which, in general, provides for restructuring rents and/or
mortgages where rents may be adjusted to market levels and mortgage terms may be
adjusted based on the reduction in rents, although there may be instances in
which only rents, but not mortgages, are restructured. Registrant cannot
reasonably predict legislative initiatives and governmental budget negotiations,
the outcome of which could result in a reduction in funds available for the
various federal and state administered housing programs including the Section 8
program. Such changes could adversely affect the future net operating income and
debt structure of any or all Local Partnerships currently receiving such subsidy
or similar subsidies. One Local Partnership's Section 8 contract, which covers
certain rental units, is scheduled to expire in 1997. In addition, the Local
Partnerships have various financing structures which include (i) required debt
service payments ("Mandatory Debt Service") and (ii) debt service payments which
are payable only from available cash flow subject to the terms and conditions of
the notes, which may be subject to specific laws, regulations and agreements
with appropriate federal and state agencies ("Non-Mandatory Debt Service or
Interest"). In the event rents are not sufficient to cover operating expenses,
Mandatory Debt Service requirements and other charges, certain Local General
Partners are obligated to provide advances to cover deficits for a certain
period of time up to certain amounts (the "Deficit Guarantee"). A Local General
Partner's funding of such Deficit Guarantee is dependent on its liquidity or
ability to borrow the required funds. During the year ended December 31, 1996,
revenue from operations, Local General Partner advances and reserves of the
Local Partnerships have generally been sufficient to cover the operating
expenses and Mandatory Debt Service. Substantially all of the Local Partnerships
are effectively operating at or near break even levels, although certain Local
Partnerships' accounting information reflects operating deficits that do not
represent cash deficits due to their mortgage and financing structure and the
required deferral of property management fees. However, as discussed below,
certain Local Partnerships' operating information indicates below break even
operations after taking into account their mortgage and financing structure and
the required deferral of property management fees.
The terms of the partnership agreement of Justin Associates (the "Justin Local
Partnership") require the Local General Partners of the Justin Local Partnership
to advance funds to cover operating deficits up to $266,000 through March 1997
and to cause the management agent to defer property management fees in order to
avoid a default under the mortgage. The Justin Local Partnership incurred an
operating deficit of approximately $30,000 for the year ended December 31, 1996,
which includes property management fees of approximately $17,000. Accordingly,
the net operating deficit was approximately $13,000. As of December 31, 1996,
the Local General Partners of the Justin Local Partnership have
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
advanced approximately $42,000 under their Deficit Guarantee obligation. Of
Registrant's total annual Low-income Tax Credits, approximately 6% is allocated
from the Justin Local Partnership.
The terms of the partnership agreement of Christian Street Commons Associates
(the "Christian Street Local Partnership") require the Local General Partners of
the Christian Street Local Partnership to advance funds to cover operating
deficits up to $150,000 through 2008 and to cause the management agent to defer
property management fees in order to avoid a default under the mortgage. The
Christian Street Local Partnership incurred an operating deficit of
approximately $22,000 for the year ended December 31, 1996, which includes
property management fees of approximately $3,000. Accordingly, the net operating
deficit was approximately $19,000. As of December 31, 1996, the Local General
Partners of the Christian Street Local Partnership have advanced approximately
$47,000 under their Deficit Guarantee obligation. Of Registrant's total annual
Low-income Tax Credits, approximately 2% is allocated from the Christian Street
Local Partnership.
On April 18, 1997 Sydney Engel Associates L.P. (formerly known as Sydney Engel
Associates) (the "Sydney Engel Local Partnership") closed on its permanent
mortgages with the City of New York. Upon closing, Registrant paid the Sydney
Engel Local Partnership its outstanding capital contribution of $1,224,775,
which includes an additional capital contribution of $206,881, which was paid
from reserves, resulting from the delay in closing the mortgages. Registrant has
continued to receive the full Low-income Tax Credits from the Sydney Engel Local
Partnership as generally anticipated. The Local General Partner and the special
limited partner (an affiliate of the General Partner) of the Sydney Engel Local
Partnership utilized the additional time to negotiate more favorable terms on
the permanent mortgages than those included in the original commitment.
Results of Operations
Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in Local Partnerships
in accordance with the equity method of accounting, under which the investment
is carried at cost which includes capital contributions payable, and is adjusted
for Registrant's share of the Local Partnership's results of operations and by
any cash distributions received. Equity in loss of each investment in Local
Partnership allocated to Registrant is recognized to the extent of Registrant's
investment balance in each Local Partnership. Any equity in loss in excess of
Registrant's investment balance in a Local Partnership is allocated to other
partners' capital in each such Local Partnership. As a result, the equity in
loss of investment in Local Partnerships is expected to decrease as Registrant's
investment balances in the respective Local Partnerships become zero. However,
the combined statements of operations of the Local Partnerships reflected in
Note 5 to Registrant's financial statements include the operating results of all
Local Partnerships, regardless of Registrant's investment balances.
Cumulative losses and cash distributions in excess of investment in Local
Partnerships may result from a variety of circumstances, including a Local
Partnership's accounting policies, subsidy structure, debt structure and
operating deficits, among other things. Accordingly, cumulative losses and cash
distributions in excess of the investment are not necessarily indicative of
adverse operating results of a Local Partnership. See discussion above under
Capital Resources and Liquidity regarding certain Local Partnerships currently
operating below economic break even levels.
Year Ended March 30, 1997
For the year ended March 30, 1997, Registrant had a net loss of approximately
$2,719,000, which included an equity in loss of investment in Local Partnerships
of approximately $2,510,000 for the year ended December 31, 1996. Nonrecognition
of losses in excess of Registrant's investment in certain Local Partnerships
during the year was approximately $534,000. Registrant's loss from operations
for the year ended March 30, 1997 of approximately $209,000 was attributable to
interest revenue of approximately $317,000, exceeded by operating expenses of
approximately $526,000. Interest revenue for future periods is expected to
decline as investments in bonds mature and are utilized for Registrant's
operating expenses and Temporary Investments are utilized to make payments of
capital contributions to Local Partnerships.
The Local Partnerships' net loss of approximately $3,260,000 for the year ended
December 31, 1996 was attributable to rental and other revenue of approximately
$10,764,000, exceeded by operating and interest expenses of approximately
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
$9,806,000 and approximately $4,218,000 of depreciation and amortization
expenses. The Local Partnerships' net loss for the year ended December 31, 1996
includes accrued Non-Mandatory Interest charges of approximately $299,000 and
does not include principal amortization on mortgage loans payable of
approximately $309,000.
Year Ended March 30, 1996
For the year ended March 30, 1996, Registrant had a net loss of approximately
$3,444,000, which included an equity in loss of investment in Local Partnerships
of approximately $3,249,000 for the year ended December 31, 1995. Nonrecognition
of losses in excess of Registrant's investment in certain Local Partnerships
during the year was approximately $175,000. Registrant's loss from operations
for the year ended March 30, 1996 of approximately $195,000 was attributable to
interest revenue of approximately $336,000, exceeded by operating expenses of
approximately $528,000 and amortization of organization costs of approximately
$3,000.
The Local Partnerships' net loss of approximately $3,678,000 for the year ended
December 31, 1995 was attributable to rental and other revenue of approximately
$10,623,000, exceeded by operating and interest expenses of approximately
$9,909,000 and approximately $4,392,000 of depreciation and amortization
expenses. The Local Partnerships' net loss for the year ended December 31, 1995
includes accrued Non-Mandatory Interest charges of approximately $278,000 and
does not include principal amortization on mortgage loans payable of
approximately $261,000.
Year Ended March 30, 1995
For the year ended March 30, 1995, Registrant had a net loss of approximately
$3,612,000, which included an equity in loss of investment in Local Partnerships
of approximately $3,396,000 for the year ended December 31, 1994. Nonrecognition
of losses in excess of Registrant's investment in certain Local Partnerships
during the year was approximately $6,000. Registrant's loss from operations for
the year ended March 30, 1995 of approximately $216,000 was attributable to
interest revenue of approximately $326,000, exceeded by operating expenses of
approximately $527,000 and amortization of organization costs of $15,000.
The Local Partnerships' net loss of approximately $3,666,000 for the year ended
December 31, 1994 was attributable to rental and other revenue of approximately
$10,254,000, exceeded by operating and interest expenses of approximately
$9,560,000 and approximately $4,360,000 of depreciation and amortization
expenses. The Local Partnerships' net loss for the year ended December 31, 1994
includes accrued Non-Mandatory Interest charges of approximately $276,000 and
does not include principal amortization on mortgage loans payable of
approximately $241,000.
Year Ended March 30, 1997 v. 1996
Registrant's operations for the year ended March 30, 1997 resulted in a net loss
of approximately $2,719,000 as compared to a net loss of approximately
$3,444,000 for the year ended March 30, 1996. The decrease in net loss is
primarily attributable to a decrease in the equity in loss of investment in
Local Partnerships of approximately $739,000, which is primarily the result of
(i) an increase in the nonrecognition of losses in excess of Registrant's
investment in Local Partnerships of approximately $359,000 in accordance with
the equity method of accounting and (ii) a general decrease in operating
expenses of the Local Partnerships.
Year Ended March 30, 1996 v. 1995
Registrant's operations for the year ended March 30, 1996 resulted in a net loss
of approximately $3,444,000 as compared to a net loss of approximately
$3,612,000 for the year ended March 30, 1995. The decrease in net loss is
primarily attributable to a decrease in the equity in loss of investment in
Local Partnerships of approximately $147,000, which is primarily the result of
an increase in the nonrecognition of losses in excess of Registrant's investment
in Local Partnerships of approximately $169,000 in accordance with the equity
method of accounting.
Inflation
Inflation is not expected to have a material adverse impact on Registrant's
operations during its period of ownership of the Local Partnership Interests.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Recent Accounting Statements Not Yet Adopted
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
per Share" and SFAS No. 129, "Disclosure of Information about Capital
Structure." SFAS No. 128 provides accounting and reporting standards for the
amount of earnings per share. SFAS No. 129 requires the disclosure in
summary form within the financial statements of the pertinent rights and
privileges of the various securities outstanding. SFAS No. 128 and SFAS No. 129
are effective for fiscal years ending after December 15, 1997 and earlier
application is not permitted.
The implementation of SFAS No. 128 and SFAS No. 129 is not expected to
materially impact Registrant's financial statements because Registrant's
earnings per share would not be significantly affected and the disclosures
regarding the capital structure in the financial statements would not be
significantly changed.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 8. Financial Statements and Supplementary Data
Table of Contents Page
Independent Auditors' Report.
Balance Sheets as of March 30, 1997 and 1996.
Statements of Operations for the years ended March 30, 1997, 1996 and 1995.
Statements of Changes in Partners' Equity (Deficit) for the years ended
March 30, 1997, 1996 and 1995.
Statements of Cash Flows for the years ended March 30, 1997, 1996 and 1995.
Notes to Financial Statements as of March 30, 1997, 1996 and 1995.
No financial statement schedules are included because of the absence of the
conditions under which they are required or because the information is included
in the financial statements or the notes thereto.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
American Tax Credit Properties III L.P.
We have audited the accompanying balance sheets of American Tax Credit
Properties III L.P. as of March 30, 1997 and 1996, and the related statements of
operations, changes in partners' equity (deficit) and cash flows for each of the
three years in the period ended March 30, 1997. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of American Tax Credit
Properties III L.P. as of March 30, 1997 and 1996, and the results of its
operations and its cash flows for each of the three years in the period ended
March 30, 1997, in conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
May 8, 1997
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
BALANCE SHEETS
MARCH 30, 1997 AND 1996
Notes 1997 1996
----- --------------------------
ASSETS
<S> <C> <C> <C>
Cash and cash equivalents 3,9 $ 409,413 $ 389,931
Restricted cash 3,5,9 1,309,208 1,102,327
Investments in bonds available-for-sale 4,9 2,854,771 3,070,375
Investment in local partnerships 5,8 10,905,064 13,241,594
Interest receivable 9 25,173 28,008
--------------- ---------------
$ 15,503,629 $ 17,832,235
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses 8,9 $ 862,114 $ 717,878
Payable to general partner 6,8,9 800,043 669,472
Capital contributions payable 5,9 1,309,208 1,102,327
Other 21,200 25,950
--------------- ---------------
2,992,565 2,515,627
Commitments and contingencies 5,8
Partners' equity (deficit) 2,4
General partner (188,365) (161,180)
Limited partners, $1,000 stated value per unit
(35,883 units of limited partnership interest 12,881,544 15,572,895
outstanding)
Unrealized loss on investments in bonds (182,115) (95,107)
-------------- ---------------
available-for-sale, net
12,511,064 15,316,608
$ 15,503,629 $ 17,832,235
============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 30, 1997, 1996 AND 1995
Notes 1997 1996 1995
----- ---------------- ---------------- ---------
<S> <C> <C> <C> <C>
REVENUE
Interest $ 317,065 $ 335,724 $ 326,184
-------------- -------------- --------------
TOTAL REVENUE 317,065 335,724 326,184
--------------- --------------- ---------------
EXPENSES
Administration fees 8 230,571 230,571 230,571
Management fees 6,8 230,571 230,571 230,571
Professional fees 45,849 50,757 52,841
Printing, postage and other 18,804 15,482 12,907
Amortization 3,125 15,000
---------------------------------- ---------------
TOTAL EXPENSES 525,795 530,506 541,890
-------------- -------------- --------------
Loss from operations (208,730) (194,782) (215,706)
Equity in loss of investment in local
partnerships 5 (2,509,806) (3,249,195) (3,396,272)
------------- ------------- -------------
NET LOSS $ (2,718,536) $ (3,443,977) $ (3,611,978)
============ ============ ============
NET LOSS ATTRIBUTABLE TO 2
General partner $ (27,185) $ (34,440) $ (36,120)
Limited partners (2,691,351) (3,409,537) (3,575,858)
------------- ------------- -------------
$ (2,718,536) $ (3,443,977) $ (3,611,978)
============ ============ ============
NET LOSS per unit of limited partnership
interest (35,883 units of limited
partnership interest) $ (75.00) $ (95.02) $ (99.65)
=============== =============== ===============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
YEARS ENDED MARCH 30, 1997, 1996 AND 1995
Unrealized
Gain (Loss) on
Investments in
General Limited Bonds Available-
Partner Partners For-Sale, Net Total
<S> <C> <C> <C> <C>
Partners' equity (deficit),
March 30, 1994 $ (90,620) $ 22,558,290 $ $ 22,467,670
Net loss (36,120) (3,575,858) (3,611,978)
Unrealized loss on investments in
bonds available-for-sale, net (202,799) (202,799)
--------------------------------------------- --------------
Partners' equity (deficit),
March 30, 1995 (126,740) 18,982,432 (202,799) 18,652,893
Net loss (34,440) (3,409,537) (3,443,977)
Change in unrealized loss on
investments in bonds
available-for-sale, net 107,692 107,692
--------------------------------------------- --------------
Partners' equity (deficit),
March 30, 1996 (161,180) 15,572,895 (95,107) 15,316,608
Net loss (27,185) (2,691,351) (2,718,536)
Change in unrealized loss on
investments in bonds (87,008) (87,008)
---------------------------------------------- ---------------
available-for-sale, net
Partners' equity (deficit),
March 30, 1997 $ (188,365) $ 12,881,544 $ (182,115) $ 12,511,064
========== ============ ============== ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 30, 1997, 1996 AND 1995
1997 1996 1995
------------- ------------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Interest received $ 248,496 $ 256,741 $ 268,584
Cash used for local partnerships for deferred expenses (4,750) (4,750) (4,750)
Cash paid for
administration fees (100,000) (100,000) (100,000)
management fees (100,000) (100,000) (125,000)
professional fees (40,999) (41,357) (49,091)
printing, postage and other expenses (9,989) (12,736) (15,291)
------------- ------------ -------------
Net cash used in operating activities (7,242) (2,102) (25,548)
------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Maturity/redemption of bonds 200,000 125,000
Cash distributions from local partnerships 33,605 29,682 55,570
Transfer from (to) restricted cash (206,881) 300,000 515,250
Investment in local partnerships (300,000) (488,197)
Investments in bonds (301,554)
---------------------------- ------------
Net cash provided by (used in) investing activities 26,724 (271,872) 207,623
------------ ----------- ------------
Net increase (decrease) in cash and cash equivalents 19,482 (273,974) 182,075
Cash and cash equivalents at beginning of year 389,931 663,905 481,830
----------- ----------- ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 409,413 $ 389,931 $ 663,905
=========== =========== ============
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds
available-for-sale, net $ (87,008) $ 107,692 $ (202,799)
=========== ========== ===========
Increase in capital contributions payable $ 206,881 $ 1,402,327
========== ===========
See reconciliation of net loss to net cash used in operating activities on page
21.
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS - (Continued)
YEARS ENDED MARCH 30, 1997, 1996 AND 1995
1997 1996 1995
------------------------------------------
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
ACTIVITIES
<S> <C> <C> <C>
Net loss $ (2,718,536) $ (3,443,977) $ (3,611,978)
Adjustments to reconcile net loss to net cash used in
operating activities
Equity in loss of investment in local partnerships 2,509,806 3,249,195 3,396,272
Amortization of organization costs 3,125 15,000
Amortization of net premium on investments in bonds 16,852 18,640 22,646
Accretion of zero coupon bonds (88,256) (86,046) (88,254)
Decrease (increase) in interest receivable 2,835 (11,577) 8,008
Increase in accounts payable and accrued expenses 144,236 142,717 131,937
Increase in payable to general partner 130,571 130,571 105,571
Decrease in other liabilities (4,750) (4,750) (4,750)
--------------- --------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES $ (7,242)$ (2,102)$ (25,548)
=============== =============== ==============
</TABLE>
See Notes to Financial Statements.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 30, 1997, 1996 AND 1995
1. Organization, Purpose and Summary of Significant Accounting Policies
American Tax Credit Properties III L.P. (the "Partnership") was formed on
September 21, 1989 and the Certificate of Limited Partnership of the
Partnership was filed under the Delaware Revised Uniform Limited
Partnership Act. There was no operating activity until admission of the
limited partners on June 13, 1990. The Partnership was formed to invest
primarily in leveraged low-income multifamily residential complexes (the
"Property" or "Properties") which qualify for the low-income tax credit
established by Section 42 of the Tax Reform Act of 1986 (the "Low-income
Tax Credit"), through the acquisition of limited partnership equity
interests (the "Local Partnership Interests") in partnerships (the "Local
Partnership" or "Local Partnerships") that are the owners of the
Properties. Richman Tax Credit Properties III L.P. (the "General Partner")
was formed on September 21, 1989 to act as the sole general partner of the
Partnership.
Basis of Accounting and Fiscal Year
The Partnership's records are maintained on the accrual basis of
accounting for both financial reporting and tax purposes. For financial
reporting purposes, the Partnership's fiscal year ends March 30 and its
quarterly periods end June 29, September 29 and December 30. The Local
Partnerships have a calendar year for financial reporting purposes. The
Partnership and the Local Partnerships each have a calendar year for
income tax purposes.
The Partnership accounts for its investment in Local Partnerships in
accordance with the equity method of accounting (see Note 5), under which
the investment is carried at cost which includes capital contributions
payable, and is adjusted for the Partnership's share of the Local
Partnership's results of operations and by any cash distributions
received. Equity in loss of each investment in Local Partnership allocated
to the Partnership is recognized to the extent of the Partnership's
investment balance in each Local Partnership. Any equity in loss in excess
of the Partnership's investment balance in a Local Partnership is
allocated to other partners' capital in each such Local Partnership.
Previously unrecognized equity in loss of any Local Partnership is
recognized in the fiscal year in which equity in income is earned by such
Local Partnership. Distributions received subsequent to the elimination of
an investment balance for any such Local Partnership are recorded as other
income from Local Partnerships.
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 reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
Adoption of Accounting Standard
On March 31, 1996, the Partnership adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of." SFAS No.
121 requires that long-lived assets and certain identifiable intangibles
held and used by an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. The adoption of SFAS No. 121 has not materially
affected the Partnership's reported earnings, financial condition or cash
flows.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Partnership considers
all highly liquid investments purchased with an original maturity of three
months or less at the date of acquisition to be cash equivalents. Cash and
cash equivalents are stated at cost which approximates market value.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
1. Organization, Purpose and Summary of Significant
Accounting Policies (continued)
Restricted Cash
Restricted cash is set aside to make the Partnership's required capital
contributions to Local Partnerships (see Notes 3 and 5).
Investments in Bonds Available-For-Sale
Investments in bonds classified as available-for-sale represent investments
in bonds that the Partnership intends to hold for an indefinite period of
time but not necessarily to maturity. Any decision to sell an investment
classified as available-for-sale would be based on various factors,
including significant movements in interest rates and liquidity needs.
Investments in bonds available-for-sale are carried at estimated fair value
and unrealized gains or losses are reported as a separate component of
partners' equity (deficit).
Premium/Discount on Investments
Premiums and discounts on investments in bonds available-for-sale are
amortized (accreted) using the straight-line method over the life of the
investment. Amortized premiums offset interest revenue, while the accretion
of discounts and zero coupon bonds are included in interest revenue.
Unamortized premiums and unaccreted discounts of investments redeemed prior
to maturity are offset against, or included in, interest revenue.
Gain (Loss) on Redemption or Sale of Investments
Realized gain (loss) on redemption or sale of investments in bonds
available-for-sale are included in, or offset against, interest revenue on
the basis of the adjusted cost of each specific investment redeemed or sold.
Organization Costs
Organization costs were amortized on a straight-line basis over five (5)
years; such costs became fully amortized during the year ended March 30,
1996.
Income Taxes
No provision for income taxes has been made because all income, losses and
tax credits are allocated to the partners for inclusion in their respective
tax returns. In accordance with SFAS No. 109, "Accounting for Income Taxes,"
the Partnership has included in Note 7 certain disclosures related to
differences in the book and tax bases of accounting.
Reclassifications
Certain reclassifications of amounts have been made to conform to the
current year presentation.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
2. Capital Contributions
On March 12, 1990, the Partnership commenced the offering of units (the
"Units") through Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Selling Agent"). On June 13, 1990, December 27, 1990, December 31, 1991
and January 23, 1992, under the terms of the Amended and Restated
Agreement of Limited Partnership of the Partnership (the "Partnership
Agreement"), the General Partner admitted limited partners to the
Partnership in four closings. At these closings, subscriptions for a total
of 35,883 Units representing $35,883,000 in limited partners' capital
contributions were accepted. In connection with the offering of Units, the
Partnership incurred registration costs of $4,418,530, of which $75,000
was capitalized as organization costs and $4,343,530 was charged to the
limited partners' equity. The Partnership received a capital contribution
of $100 from the General Partner.
Net loss is allocated 99% to the limited partners and 1% to the General
Partner in accordance with the Partnership Agreement.
3. Cash and Cash Equivalents and Restricted Cash
As of March 30, 1997, the Partnership has $1,718,621 in cash and cash
equivalents and restricted cash which are deposited in interest-bearing
accounts with an institution which is not insured by the Federal Deposit
Insurance Corporation.
4. Investments in Bonds Available-For-Sale
The Partnership carries its investments in bonds as available-for-sale
because such investments are used to facilitate and provide flexibility
for the Partnership's obligations, including resolving unforeseen
contingencies which may arise in connection with the Local Partnerships.
Investments in bonds available-for-sale are reflected in the accompanying
balance sheets at estimated fair value.
As of March 30, 1997, certain information concerning investments in bonds
available-for-sale is as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized fair
Description and maturity cost gains losses value
------------------------ ----------------------------- -------------- ---------
<S> <C> <C> <C> <C>
Corporate debt securities
Within one year $ 76,647 $ -- $ (873) $ 75,774
After one year through five
years 486,202 77 (4,059) 82,220
After five years through ten
years 401,902 -- (18,362) 383,540
After ten years 1,009,978 -- (53,824) 956,154
------------ ---------------------------- ------------
1,974,729 77 (77,118) 1,897,688
------------ ---------------------------- ------------
U.S. Treasury debt securities
After ten years 936,323 -- (88,427) 847,896
------------- ---------------------------- -------------
U.S. government and agency
securities
After ten years 125,834 -- (16,647) 109,187
------------- ---------------------------- -------------
$ 3,036,886 $ 77 $ (182,192) $ 2,854,771
=========== ============== ============ ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
4. Investments in Bonds Available-For-Sale (continued)
As of March 30, 1996, certain information on investments in bonds
available-for-sale is as follows:
Gross Gross Estimated
Amortized unrealized unrealized fair
Description and maturity cost gains losses value
<S> <C> <C> <C> <C>
Corporate debt securities
Within one year $ 201,946 $ -- $ (478) $ 201,468
After one year through fiveyears 466,485 2,542 (336) 468,691
After five years through ten years 507,639 -- (16,252) 491,387
After ten years 1,010,603 5,126 (45,239) 970,490
------------ ---------- ------------ -----------
2,186,673 7,668 (62,305) 2,132,036
------------ ------------- ------------ ----------
U.S. Treasury debt securities
After ten years 852,871 -- (25,990) 826,881
------------ --------------------------- -----------
U.S. government and agency
securities
After ten years 125,938 -- (14,480) 111,458
------------ --------------------------- ------------
$ 3,165,482 $ 7,668 $ (102,775) $ 3,070,375
=========== ============ =========== ===========
</TABLE>
5. Investment in Local Partnerships
As of March 30, 1997, the Partnership owns a limited partnership interest
in the following Local Partnerships:
<TABLE>
<CAPTION>
<S> <C>
1. April Gardens Apartments II Limited Partnership;
2. Ashland Park Apartments, L.P.;
3. Auburn Family, L.P.;
4. Batesville Family, L.P.;
5. Bay Springs Elderly, L.P.;
6. Brisas del Mar Apartments Limited Partnership;
7. Bruce Housing Associates, L.P.;
8. Carrington Limited Dividend Housing Association Limited
Partnership;
9. Chestnut Park Associates, L.P.;
10. Chowan Senior Manor Associates Limited Partnership;
11. Christian Street Commons Associates;
12. Country View Apartments;
13. Desarrollos de Belen Limited Partnership;
14. Desarrollos de Emaus Limited Partnership;
15. Ellinwood Heights Apartments, L.P.;
16. Fulton Street Houses Limited Partnership;
17. Hayes Run Limited Partnership;
18. Howard L. Miller Sallisaw Apartments II, L.P.;
19. Hurlock Meadow Limited Partnership;
20. Ivy Family, L.P.;
21. Justin Associates;
22. LaBelle Commons, Ltd.;
23. Lawrence Road Properties, Ltd.;
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
6.
<TABLE>
<CAPTION>
<S> <C>
24. Loma Del Norte Limited Partnership;
25. Long Reach Associates Limited Partnership;
26. Mirador del Toa Limited Partnership;
27. Moore Haven Commons, Ltd.;
28. NP-89 Limited Dividend Housing Association Limited Partnership;
29. Nash Hill Associates, Limited Partnership;
30. North Calhoun City, L.P.;
31. Orange City Plaza, Limited Partnership;
32. Puerta del Mar Limited Partnership;
33. Purvis Heights Properties, L.P.;
34. Queen Lane Investors;
35. Somerset Manor, Ltd.;
36. Sugar Cane Villas, Ltd.;
37. Summerfield Apartments Limited Partnership;
38. Sydney Engel Associates L.P.(formerly known as Sydney Engel
Associates);
39. Union Valley Associates Limited Partnership;
40. Walnut Grove Family, L.P.;
41. Waynesboro Apartments Limited Partnership;
42. West Calhoun City, L.P.; and
43. Westminster Apartments Limited Partnership.
</TABLE>
Although the Partnership generally owns a 98.9%-99% limited partnership
interest in the Local Partnerships, the Partnership and American Tax
Credit Properties II L.P. ("ATCP II"), a Delaware limited partnership and
an affiliate of the Partnership, together, in the aggregate, acquired a
99% Local Partnership Interest in certain Local Partnerships, as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
The
Partnership ATCP II
Batesville Family, L.P. 61.75% 37.25%
Bruce Housing Associates, L.P. 61.75 37.25
Carrington Limited Dividend
Housing Association Limited
Partnership 65.95 33.05
Ivy Family, L.P. 61.75 37.25
Lawrence Road Properties, Ltd. 61.75 37.25
Mirador del Toa Limited
Partnership 59.06 39.94
Purvis Heights Properties, L.P. 61.75 37.25
Queen Lane Investors 48.50 50.50
</TABLE>
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. The required holding period of each Property, in order to avoid
Low-income Tax Credit recapture, is fifteen years from the year in which the
Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period"). The rents of the Properties are controlled by federal and
state agencies pursuant to applicable laws and regulations (see Note 8). Under
the terms of each of the forty-three Local Partnership's partnership agreements,
the Partnership has committed to make capital contribution payments in the
aggregate amount of $29,264,476, of which the Partnership has paid $27,955,268
and $1,309,208 are outstanding. Restricted cash in the accompanying balance
sheet as of March 30, 1997 represents such outstanding capital contributions.
The outstanding capital contributions are payable upon two Local Partnerships'
satisfaction of specified conditions related
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
to operations. As of December 31, 1996, the Local Partnerships have
outstanding mortgage and construction loans payable totaling approximately
$87,351,000 and accrued interest payable on such loans totaling
approximately $1,783,000, which are secured by security interests and liens
common to mortgage and construction loans on the Local Partnerships' real
property and other assets.
Equity in loss of investment in Local Partnerships is limited to the
Partnership's investment balance in each Local Partnership; any such excess
is applied to other partners' capital in any such Local Partnership (see
Note 1). The amount of such excess losses applied to other partners' capital
was $534,104, $175,282 and $6,396 for the years ended December 31, 1996,
1995 and 1994, respectively, as reflected in the combined statements of
operations of the Local Partnerships reflected herein Note 5.
The combined balance sheets of the Local Partnerships as of December 31,
1996 and 1995 and the combined statements of operations of the Local
Partnerships for the years ended December 31, 1996, 1995 and 1994 are
reflected on pages 28 and 29, respectively.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of December 31,
1996 and 1995 are as follows:
1996 1995
-----------------------------
ASSETS
<S> <C> <C>
Cash and other investments $ 1,340,942 $ 1,392,146
Rental receivable 354,108 310,169
Capital contributions receivable 1,309,208 1,102,327
Escrow deposits and reserves 3,763,306 3,403,860
Land 3,964,692 3,964,692
Buildings and improvements (net of accumulated
depreciation of $23,212,364 and $19,100,770) 92,443,378 96,409,439
Intangible assets (net of accumulated amortization
of $1,039,889 and $948,812) 748,879 854,837
Other 772,465 747,972
----------------- -----------------
$ 104,696,978 $ 108,185,442
============= =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 512,801 $ 608,574
Due to related parties 5,127,931 5,363,967
Mortgage and construction loans 87,351,443 87,656,301
Notes payable 70,804 38,848
Accrued interest 1,782,695 1,524,375
Other 557,856 584,408
----------------- -----------------
95,403,530 95,776,473
Partners' equity (deficit)
American Tax Credit Properties III L.P.
Capital contributions, net of distributions
(includes receivable of $1,309,208 and
$1,102,327) 29,079,605 28,908,501
Cumulative loss (18,164,445) (15,654,639)
-------------- --------------
10,915,160 13,253,862
General partners and other limited partners,
including ATCP II
Capital contributions, net of distributions 764,757 791,395
Cumulative loss (2,386,469) (1,636,288)
--------------- ---------------
(1,621,712) (844,893)
--------------- ----------------
9,293,448 12,408,969
$ 104,696,978 $ 108,185,442
============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the
years ended December 31, 1996, 1995 and 1994 are as follows:
1996 1995 1994
--------------- --------------- ---------
REVENUE
<S> <C> <C> <C>
Rental $ 10,325,782 $ 10,245,866 $ 9,928,011
Interest and other 437,813 377,903 326,102
-------------- -------------- --------------
TOTAL REVENUE 10,763,595 10,623,769 10,254,113
------------ ------------ ------------
EXPENSES
Administrative 2,121,842 2,158,197 2,069,886
Utilities 1,018,174 966,013 1,020,047
Operating, maintenance and other 1,987,209 2,150,242 1,824,693
Taxes and insurance 1,249,956 1,149,897 1,136,319
Interest (including amortization of
$105,969, $192,541 and $201,351) 3,534,807 3,677,468 3,711,332
Depreciation 4,111,594 4,199,670 4,158,262
-------------- -------------- --------------
TOTAL EXPENSES 14,023,582 14,301,487 13,920,539
------------- ------------- -------------
NET LOSS $ (3,259,987) $ (3,677,718) $ (3,666,426)
============= ============= ============
NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties $ (2,509,806) $ (3,249,195) $ (3,396,272)
III L.P.
General partners and other
limited partners, including
ATCP II, which includes specially
allocated items of net income to
certain general partners of $2,128,
$17,411 and $23,771, and $534,104,
$175,282 and $6,396 of American Tax (750,181) (428,523) (270,154)
------------- ------------- -------------
Credit Properties III L.P. loss
in excess of investment
$ (3,259,987) $ (3,677,718) $ (3,666,426)
============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
Investment and capital contribution activity with respect to each Local
Partnership for the year ended March 30, 1997 is as follows:
Cash
Investment distribution Investment
in Local Investment Partnership's received in Local Capital
Partnership during equity in during the Partnership contributions
balance the year loss for the year balance payable as
as of ended year ended ended as of of
Name of Local Partnership March 30, March December 31, March 30, March 30, March 30,
1996 30, 1997 1996 1997 1997 1997
--------------------------------- ----------- ---------- -------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
April Gardens Apartments II
Limited Partnership 12,149 $-- $ (12,149) $ -- $ -- $ --
Ashland Park Apartments, L.P. 78,159 -- (22,138) -- 56,021 --
Auburn Family, L.P. 64,880 -- (14,339) -- 50,541 --
Batesville Family, L.P. 30,768 -- (30,768) (1) -- -- --
Bay Springs Elderly, L.P. 116,684 -- (23,229) -- 93,455 --
Brisas del Mar Apartments
Limited Partnership 88,088 -- (88,088) (1) -- -- --
Bruce Housing Associates, L.P. 69,671 -- (23,153) -- 46,518 --
Carrington Limited Dividend
Housing Association Limited
Partnership 1,292,293 -- (166,243) -- 1,126,050 --
Chestnut Park Associates, L.P. 1,820,198 -- (473,949) -- 1,346,249 --
Chowan Senior Manor Associates
Limited Partnership 122,700 -- (58,785) (1,596) 62,319 --
Christian Street Commons
Associates 452,959 -- (52,726) -- 400,233 --
Country View Apartments 212,279 -- (26,668) -- 185,611 --
Desarrollos de Belen Limited
Partnership 219,370 -- (58,397) -- 160,973 --
Desarrollos de Emaus Limited
Partnership 326,694 -- (84,054) -- 242,640 --
Ellinwood Heights Apartments,L.P. 64,847 -- (24,830) -- 40,017 --
Fulton Street Houses Limited
Partnership 1,068,793 -- (218,233) -- 850,560 --
Hayes Run Limited Partnership -- -- -- (2) -- -- --
Howard L. Miller Sallisaw
Apartments II, L.P. 56,318 -- (20,055) -- 36,263 --
Hurlock Meadow Limited Partnership 44,006 -- (33,759) (1,500) 8,747 84,433
Ivy Family, L.P. 50,887 -- (16,414) -- 34,473 --
Justin Associates 1,276,798 -- (145,782) -- 1,131,016 --
LaBelle Commons, Ltd. 131,459 -- (26,654) -- 104,805 --
Lawrence Road Properties, Ltd. 11,618 -- (8,291) -- 3,327 --
Loma Del Norte Limited Partnership 187,621 -- (34,564) (4,000) 149,057 --
Long Reach Associates Limited
Partnership 257,434 -- (37,287) -- 220,147 --
Mirador del Toa Limited Partnership 36,843 -- (36,843) (1) -- -- --
Moore Haven Commons, Ltd. -- -- -- (2) -- -- --
NP-89 Limited Dividend Housing
Association Limited Partnership 1,752,636 -- (97,949) (10,000) 1,644,687 --
Nash Hill Associates, Limited
Partnership 217,456 -- (24,790) -- 192,666 --
North Calhoun City, L.P. 96,558 -- (14,396) -- 82,162 --
Orange City Plaza, Limited
Partnership 400,715 -- (7,036) (2,574) 391,105 --
Puerta del Mar Limited Partnership 75,079 -- (75,079) (1) -- -- --
Purvis Heights Properties, L.P. 77,168 -- (5,806) -- 71,362 --
Queen Lane Investors 327,426 -- (53,661) (5,648) 268,117 --
Somerset Manor, Ltd. 25,927 -- (25,927) (1) -- -- --
Sugar Cane Villas, Ltd. 81,185 -- (77,898) (1) (3,287) -- --
Summerfield Apartments Limited
Partnership 776,800 -- (55,412) (5,000) 716,388 --
Sydney Engel Associates L.P. -- 206,881 (206,881) (1) -- -- 1,224,775
Union Valley Associates Limited
Partnership 145,809 -- (27,239) -- 118,570 --
Walnut Grove Family, L.P. 65,309 -- (25,741) -- 39,568 --
Waynesboro Apartments Limited
Partnership 114,774 -- (17,797) -- 96,977 --
West Calhoun City, L.P. 142,592 -- (22,649) -- 119,943 --
Westminster Apartments Limited
Partnership 848,644 - (34,147) -- 814,4 --
------------------------------------- ---------------------------------------
$ 13,241,594$ 206,881 $ (2,509,806) $ (33,605)$ 10,905,064$ 1,309,208
====================== ============ =========== =======================
</TABLE>
(1) The Partnership's equity in loss of an investment in a Local Partnership is
limited to the remaining investment balance.
(2) Additional equity in loss of investment is not allocated to the Partnership
until equity in income is earned.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
Investment and capital contribution activity with respect to each Local
Partnership for the year ended March 30, 1996 is as follows:
Investment Partnership's Cash Investment
in Local equity in distributions in Local Capital
Partnership income (loss) received Partnership contributions
balance as for the during the balance as payable as
of year ended year ended of of
March 30, December 31, March 30, March 30, March 30,
Name of Local Partnership 1995 1995 1996 1996 1996
------------------------------------ ------------- --------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
April Gardens Apartments II
Limited Partnership $ 94,893 $ (81,784) $ (960) $ 12,149 $ --
Ashland Park Apartments, L.P. 90,769 (12,610) -- 78,159 --
Auburn Family, L.P. 64,934 (54) -- 64,880 --
Batesville Family, L.P. 75,902 (45,134) -- 30,768 --
Bay Springs Elderly, L.P. 131,619 (14,935) -- 116,684 --
Brisas del Mar Apartments Limited
Partnership 204,786 (115,378) (1,320) 88,088 --
Bruce Housing Associates, L.P. 88,553 (18,388) (494) 69,671 --
Carrington Limited Dividend
Housing Association Limited
Partnership 1,437,903 (145,610) -- 1,292,293 --
Chestnut Park Associates, L.P. 2,275,680 (455,482) -- 1,820,198 --
Chowan Senior Manor Associates
Limited Partnership 158,212 (32,320) (3,192) 122,700 --
Christian Street Commons Associates 495,654 (42,695) -- 452,959 --
Country View Apartments 237,968 (25,689) -- 212,279 --
Desarrollos de Belen Limited
Partnership 280,598 (61,228) -- 219,370 --
Desarrollos de Emaus Limited
Partnership 409,544 (82,850) -- 326,694 --
Ellinwood Heights Apartments, L.P. 91,892 (27,045) -- 64,847 --
Fulton Street Houses Limited
Partnership 1,309,739 (240,946) -- 1,068,793 --
Hayes Run Limited Partnership 787 (787) (1) -- -- --
Howard L. Miller Sallisaw
Apartments II, L.P. 80,166 (23,848) -- 56,318 --
Hurlock Meadow Limited Partnership 82,243 (36,737) (1,500) 44,006 84,433
Ivy Family, L.P. 64,924 (13,642) (395) 50,887 --
Justin Associates 1,406,098 (129,300) -- 1,276,798 --
LaBelle Commons, Ltd. 164,057 (30,098) (2,500) 131,459 --
Lawrence Road Properties, Ltd. 42,826 (31,208) -- 11,618 --
Loma Del Norte Limited Partnership 208,564 (20,943) -- 187,621 --
Long Reach Associates Limited
Partnership 309,437 (52,003) -- 257,434 --
Mirador del Toa Limited Partnership 82,874 (45,459) (572) 36,843 --
Moore Haven Commons, Ltd. -- -- (2) -- -- --
NP-89 Limited Dividend Housing
Association Limited Partnership 1,918,484 (165,848) -- 1,752,636 --
Nash Hill Associates, Limited
Partnership 244,677 (27,221) -- 217,456 --
North Calhoun City, L.P. 102,770 (6,212) -- 96,558 --
Orange City Plaza, Limited Partnership 411,967 (8,777) (2,475) 400,715 --
Puerta del Mar Limited Partnership 246,717 (170,318) (1,320) 75,079 --
Purvis Heights Properties, L.P. 98,771 (21,603) -- 77,168 --
Queen Lane Investors 379,427 (49,547) (2,454) 327,426 --
Somerset Manor, Ltd. 56,116 (30,189) -- 25,927 --
Sugar Cane Villas, Ltd. 192,018 (110,833) -- 81,185 --
Summerfield Apartments Limited
Partnership 839,752 (52,952) (10,000) 776,800 --
Sydney Engel Associates L.P. 686,429 (683,929) (1) (2,500) -- 1,017,894
Union Valley Associates Limited
Partnership 182,431 (36,622) -- 145,809 --
Walnut Grove Family, L.P. 102,516 (37,207) -- 65,309 --
Waynesboro Apartments Limited
Partnership 156,758 (41,984) -- 114,774 --
West Calhoun City, L.P. 162,903 (20,311) -- 142,592 --
Westminster Apartments Limited
Partnership 848,113 531 -- 848,644 --
------------------------------------------------------------------------
$ 16,520,471 $ (3,249,195) $ (29,682) $ 13,241,594 $ 1,102,327
============ ============ ========== ============ ===========
</TABLE>
(1) The Partnership's equity in loss of an investment in a Local
Partnership is limited to the remaining investment balance.
(2) Additional equity in loss of investment is not allocated to the
Partnership until equity in income is earned.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
Investment and capital contribution activity with respect to each Local
Partnership for the year ended March 30, 1995 is as follows:
Capital Investment
Investment contributions Cash in Local
in Local paid Partnership's distribution Partnership
balance the year contributions loss for the during the balance
as of ended payable as year ended year ended as of
March 30, March 30, of March 30, December March 30, March 30,
Name of Local Partnership 1994 1995 1995 31, 1994 1995 1995
- - ---------------------------------- ---------- ----------- -------------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
April Gardens Apartments II
Limited Partnership $206,359 $ -- $ -- $ (109,546)$ (1,920)$ 94,893
Ashland Park Apartments, L.P. 137,112 -- -- (44,903) (1,440) 90,769
Auburn Family, L.P. 78,132 -- -- (13,198) -- 64,934
Batesville Family, L.P. 118,397 -- -- (42,061) (434) 75,902
Bay Springs Elderly, L.P. 146,391 -- -- (14,292) (480) 131,619
Brisas del Mar Apartments
Limited Partnership 310,154 -- -- (102,728) (2,640) 204,786
Bruce Housing Associates, L.P. 118,275 -- -- (29,322) (400) 88,553
Carrington Limited Dividend
Housing Association Limited
Partnership 1,583,809 -- -- (145,906) -- 1,437,903
Chestnut Park Associates, L.P. 2,433,244 -- 300,000 (457,564) -- 2,275,680
Chowan Senior Manor Associates
Limited Partnership 195,096 -- -- (36,884) -- 158,212
Christian Street Commons
Associates 539,898 -- -- (44,244) -- 495,654
Country View Apartments 258,281 -- -- (20,313) -- 237,968
Desarrollos de Belen Limited
Partnership 200,854 125,439 -- (45,695) -- 280,598
Desarrollos de Emaus Limited
Partnership 139,548 362,758 -- (92,762) -- 409,544
Ellinwood Heights Apartments,L.P. 111,009 -- -- (18,157) (960) 91,892
Fulton Street Houses Limited
Partnership 1,520,074 -- -- (210,335) -- 1,309,739
Hayes Run Limited Partnership 64,221 -- -- (63,434) -- 787
Howard L. Miller Sallisaw
Apartments II, L.P. 91,805 -- -- (11,159) (480) 80,166
Hurlock Meadow Limited Partnership 34,695 -- 84,433 (35,385) (1,500) 82,243
Ivy Family, L.P. 81,247 -- -- (16,003) (320) 64,924
Justin Associates 1,534,352 -- -- (128,254) -- 1,406,098
LaBelle Commons, Ltd. 196,646 -- -- (30,089) (2,500) 164,057
Lawrence Road Properties, Ltd. 65,530 -- -- (22,487) (217) 42,826
Loma Del Norte Limited
Partnership 240,942 -- -- (28,378) (4,000) 208,564
Long Reach Associates Limited
Partnership 334,477 -- -- (25,040) -- 309,437
Mirador del Toa Limited Partnership 134,731 -- -- (50,713) (1,144) 82,874
Moore Haven Commons, Ltd. 44,720 -- -- (44,720) (1) -- --
NP-89 Limited Dividend Housing
Association Limited Partnership 1,964,431 -- -- (35,947) (10,000) 1,918,484
Nash Hill Associates, Limited
Partnership 269,465 -- -- (24,788) -- 244,677
North Calhoun City, L.P. 116,370 -- -- (13,240) (360) 102,770
Orange City Plaza, Limited
Partnership 424,677 -- -- (10,185) (2,525) 411,967
Puerta del Mar LimitedPartnership 333,689 -- -- (84,332) (2,640) 246,717
Purvis Heights Properties, L.P. 129,483 -- -- (30,350) (362) 98,771
Queen Lane Investors 435,742 -- -- (56,315) -- 379,427
Somerset Manor, Ltd. 90,330 -- -- (34,214) -- 56,116
Sugar Cane Villas, Ltd. 298,348 -- -- (93,622) (12,708) 192,018
Summerfield Apartments Limited
Partnership 897,111 -- -- (52,359) (5,000) 839,752
Sydney Engel Associates L.P. 473,258 -- 1,017,894 (802,223) (2,500) 686,429
Union Valley Associates Limited
Partnership 232,808 -- -- (50,377) -- 182,431
Walnut Grove Family, L.P. 126,360 -- -- (23,364) (480) 102,516
Waynesboro Apartments Limited
Partnership 213,649 -- -- (56,891) -- 156,758
West Calhoun City, L.P. 184,334 -- -- (20,871) (560) 162,903
Westminster Apartments Limited
Partnership 971,735 -- -- (123,622) 848,113
-------------------------------------------------------------------------------
$ 18,081,789 $ 488,197 $ 1,402,327 $ (3,396,272) $ (55,570) $ 16,520,471
====================== =========== ============ =========== ============
</TABLE>
(1) The Partnership's equity in loss of an investment in a Local Partnership
is limited to the remaining investment balance.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1996 is
as follows:
Mortgage &
construction Buildings Accumulated
loans Land and depreciation
Name of Local Partnership payable improvements
-------------------------------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
April Gardens Apartments II Limited
Partnership $2,008,084 $39,984 $2,469,537 $(603,482)
Ashland Park Apartments, L.P. 1,044,903 50,160 1,247,739 (275,608)
Auburn Family, L.P. 474,003 20,000 557,595 (114,723)
Batesville Family, L.P. 1,446,124 52,000 1,792,091 (430,084)
Bay Springs Elderly, L.P. 680,053 38,000 841,698 (168,886)
Brisas del Mar Apartments Limited
Partnership 2,670,432 100,280 3,227,091 (809,838)
Bruce Housing Associates, L.P. 1,115,155 16,000 1,418,598 (354,315)
Carrington Limited Dividend Housing
Association Limited Partnership 3,487,158 200,000 6,359,188 (1,571,765)
Chestnut Park Associates, L.P. 5,284,761 781,700 8,654,778 (1,806,605)
Chowan Senior Manor Associates
Limited Partnership 1,271,652 86,101 1,495,884 (312,327)
Christian Street Commons Associates 633,184 54,477 1,159,293 (181,117)
Country View Apartments 943,663 35,698 1,213,947 (148,618)
Desarrollos de Belen Limited Partnership 1,892,733 96,190 2,494,877 (349,038)
Desarrollos de Emaus LimitedPartnership 3,217,134 214,000 4,030,443 (498,543)
Ellinwood Heights Apartments, L.P. 692,502 10,000 848,072 (183,547)
Fulton Street Houses Limited Partnership 3,869,930 2 5,945,597 (1,040,785)
Hayes Run Limited Partnership 1,434,682 85,060 1,474,537 (235,260)
Howard L. Miller Sallisaw Apartments
II, L.P. 619,235 39,000 719,572 (162,101)
Hurlock Meadow Limited Partnership 1,279,669 49,525 1,559,298 (321,304)
Ivy Family, L.P. 805,507 11,000 1,034,698 (264,504)
Justin Associates 2,511,407 27,472 4,342,929 (784,957)
LaBelle Commons, Ltd. 1,020,357 98,947 1,184,937 (200,178)
Lawrence Road Properties, Ltd. 763,628 50,000 928,273 (214,369)
Loma Del Norte Limited Partnership 1,446,530 84,874 1,757,151 (259,644)
Long Reach Associates Limited
Partnership 1,487,788 118,446 1,868,040 (308,488)
Mirador del Toa Limited Partnership 1,896,098 105,000 2,327,341 (586,192)
Moore Haven Commons, Ltd. 934,175 73,645 1,197,000 (281,595)
NP-89 Limited Dividend Housing
Association Limited Partnership 4,375,085 150,000 7,303,939 (1,458,692)
Nash Hill Associates, Limited
Partnership 1,478,728 123,876 1,676,137 (263,530)
North Calhoun City, L.P. 498,050 12,000 624,675 (128,202)
Orange City Plaza, Limited Partnership 549,795 53,904 1,039,150 (172,506)
Puerta del Mar Limited Partnership 2,542,593 115,000 3,046,045 (775,703)
Purvis Heights Properties, L.P. 1,156,152 47,000 1,439,927 (329,168)
Queen Lane Investors 1,587,345 60,301 2,731,943 (570,265)
Somerset Manor, Ltd. 903,396 53,383 1,085,401 (240,659)
Sugar Cane Villas, Ltd. 3,329,461 58,500 4,059,461 (930,713)
Summerfield Apartments Limited
Partnership 1,827,382 195,411 2,683,173 (345,735)
Sydney Engel Associates L.P. 17,939,501 284,305 19,436,525 (4,281,622)
Union Valley Associates Limited
Partnership 1,456,431 97,800 1,745,528 (272,610)
Walnut Grove Family, L.P. 851,857 30,000 1,006,847 (204,670)
Waynesboro Apartments Limited
Partnership 1,493,131 76,000 1,785,244 (304,922)
West Calhoun City, L.P. 789,306 18,000 1,012,925 (198,963)
Westminster Apartments Limited
Partnership 1,642,683 51,651 2,828,618 (266,531)
--------------------------------------------------------
$ 87,351,443 $ 3,964,692 $115,655,742 $(23,212,364)
============ =========== ==========================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1995 is
as follows:
Mortgage &
construction Buildings
loans and Accumulated
Name of Local Partnership payable Land improvements depreciation
-------------------------------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
April Gardens Apartments II Limited
Partnership $ 2,011,696 $ 39,984 $ 2,469,537$ (500,030)
Ashland Park Apartments, L.P. 1,046,857 50,160 1,247,733 (230,040)
Auburn Family, L.P. 475,510 20,000 554,165 (93,769)
Batesville Family, L.P. 1,448,254 52,000 1,792,091 (363,175)
Bay Springs Elderly, L.P. 681,207 38,000 841,698 (137,141)
Brisas del Mar Apartments Limited
Partnership 2,675,534 100,280 3,227,091 (673,675)
Bruce Housing Associates, L.P. 1,117,405 16,000 1,409,439 (300,301)
Carrington Limited Dividend Housing
Association Limited Partnership 3,507,348 200,000 6,357,704 (1,340,249)
Chestnut Park Associates, L.P. 5,326,466 781,700 8,654,778 (1,491,425)
Chowan Senior Manor Associates
Limited Partnership 1,275,291 86,101 1,495,884 (249,386)
Christian Street Commons Associates 638,632 54,477 1,159,293 (138,813)
Country View Apartments 945,462 35,698 1,213,947 (114,719)
Desarrollos de Belen Limited
Partnership 1,894,869 96,190 2,494,877 (263,979)
Desarrollos de Emaus Limited
Partnership 3,225,618 214,000 4,029,937 (362,161)
Ellinwood Heights Apartments, L.P. 693,749 10,000 842,926 (152,145)
Fulton Street Houses Limited
Partnership 3,869,930 2 5,930,917 (824,592)
Hayes Run Limited Partnership 1,437,247 85,060 1,469,712 (197,842)
Howard L. Miller Sallisaw
Apartments II, L.P. 620,236 39,000 716,694 (135,647)
Hurlock Meadow Limited Partnership 1,282,212 49,525 1,559,298 (261,281)
Ivy Family, L.P. 808,796 11,000 1,027,124 (224,639)
Justin Associates 2,537,085 27,472 4,341,812 (625,475)
LaBelle Commons, Ltd. 1,022,423 98,947 1,184,937 (156,911)
Lawrence Road Properties, Ltd. 764,960 50,000 925,919 (188,714)
Loma Del Norte Limited Partnership 1,448,996 84,874 1,753,927 (209,162)
Long Reach Associates Limited
Partnership 1,490,305 118,446 1,827,653 (257,337)
Mirador del Toa Limited Partnership 1,900,249 105,000 2,325,318 (488,000)
Moore Haven Commons, Ltd. 935,631 73,645 1,197,000 (235,632)
NP-89 Limited Dividend Housing
Association Limited Partnership 4,438,053 150,000 7,303,939 (1,193,094)
Nash Hill Associates, Limited
Partnership 1,481,372 123,876 1,676,137 (216,503)
North Calhoun City, L.P. 500,448 12,000 623,327 (104,664)
Orange City Plaza, Limited Partnership 567,879 53,904 1,039,150 (139,491)
Puerta del Mar Limited Partnership 2,547,500 115,000 3,046,045 (646,193)
Purvis Heights Properties, L.P. 1,158,111 47,000 1,437,402 (286,677)
Queen Lane Investors 1,593,985 60,301 2,731,343 (470,548)
Somerset Manor, Ltd. 904,953 53,383 1,073,491 (198,974)
Sugar Cane Villas, Ltd. 3,334,953 58,500 4,059,461 (777,074)
Summerfield Apartments Limited
Partnership 1,846,496 195,411 2,683,173 (274,204)
Sydney Engel Associates L.P. 17,939,501 284,305 19,429,689 (3,572,025)
Union Valley Associates Limited
Partnership 1,458,958 97,800 1,745,528 (225,582)
Walnut Grove Family, L.P. 853,182 30,000 1,004,476 (166,513)
Waynesboro Apartments Limited
Partnership 1,495,860 76,000 1,785,244 (256,318)
West Calhoun City, L.P. 794,783 18,000 991,775 (160,867)
Westminster Apartments Limited
Partnership 1,658,299 51,651 2,828,618 (195,803)
--------------------------------------------------------
$ 87,656,301 $ 3,964,692 $ 115,510,209 $(19,100,770)
============ =========== ==========================
</TABLE>
The summary of property activity during the year ended December 31, 1996
is as follows:
<TABLE>
<CAPTION>
Net change during
the year ended
Balance as of December Balance as of
December 31, 1995 31, 1996 December 31, 1996
----------------- --------------------- -----------------
<S> <C> <C> <C>
Land $ 3,964,692 $ - $ 3,964,692
Buildings and 115,510,209 145,533 115,655,742
------------------ -------------------- ------------------
improvements 119,474,901 145,533 119,620,434
Accumulated (19,100,770) (4,111,594) (23,212,364)
------------------- ------------------- -------------------
depreciation
$ 100,374,131 $ (3,966,061) $ 96,408,070
================== ================== ==================
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
5. Investment in Local Partnerships (continued)
On April 18, 1997 Sydney Engel Associates L.P. (formerly known as Sydney
Engel Associates) (the "Sydney Engel Local Partnership") closed on its
permanent mortgages with the City of New York. Upon closing, Registrant paid
the Sydney Engel Local Partnership its outstanding capital contribution of
$1,224,775, which includes an additional capital contribution of $206,881,
which was paid from reserves, resulting from the delay in closing the
mortgages.
6. Transactions with General Partner and Affiliates
For the years ended March 30, 1997, 1996 and 1995, the Partnership paid
and/or incurred the following amounts to the General Partner and/or
affiliates in connection with services provided to the Partnership:
<TABLE>
<CAPTION>
Years Ended March 30,
1997 1996 1995
-------------- -------------- ---------
Paid/ Paid/ Paid/
incurred incurred incurred
<S> <C> <C> <C>
Management fees (see Note 8) $100,000/ $100,000/ $125,000/
230,571 230,571 230,571
</TABLE>
For the years ended December 31, 1996, 1995 and 1994, the Local Partnerships
paid and/or incurred the following amounts to the General Partner and/or
affiliates in connection with services provided to the Local Partnerships:
<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
-------------- -------------- ---------
Paid/ Paid/ Paid/
incurred incurred incurred
<S> <C> <C> <C>
Property development $ -- / $150,000/ $ -- /
fees
-- -- --
Property management fees 3,599/ 35,817/ 35,132/
35,785 35,884 33,958
Insurance 35,943/ 37,140/ 24,242/
34,316 34,779 24,242
</TABLE>
The property development fees were capitalized by the Local Partnerships.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
7. Taxable Loss
A reconciliation of the financial statement net loss of the Partnership
for the years ended March 30, 1997, 1996 and 1995 to the tax return net
loss for the years ended December 31, 1996, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------------ ------------------ -----------
<S> <C> <C> <C>
Financial statement net loss for the
years ended March 30, 1997, 1996 and
1995 $ (2,718,536) $ (3,443,977) $ (3,611,978)
Add (less) net transactions occurring between:
January 1, 1994 and March 30, 1994 -- -- (54,554)
January 1, 1995 and March 30, 1995 -- (52,556) 52,556
January 1, 1996 and March 30, 1996 (49,819) 49,819 --
January 1, 1997 and March 30, 1997 58,090 -- --
--------------- ------------------- ---------------
Adjusted financial statement net loss for
the years ended December 31, 1996, 1995
and 1994 (2,710,265) (3,446,714) (3,613,976)
Adjustment to management fee
pursuant to Internal Revenue Code
Section 267 130,571 130,571 130,571
Differences arising from equity in
loss of investment in Local
Partnerships (514,969) (200,215) (87,585)
Other differences (107) (14,250) 3,683
--------------- -------------- ---------------
Tax return net loss for the years
ended December 31, 1996, 1995 and 1994 $ (3,094,770) $ (3,530,608) $ (3,567,307)
============ ============ ============
</TABLE>
The differences between the equity in the investment in Local Partnerships
for tax return and financial reporting purposes as of December 31, 1996
and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
---------------- ----------
<S> <C> <C>
Investment in Local Partnerships - financial
reporting $ 10,915,160 $ 13,253,862
Investment in Local Partnerships - tax 10,581,161 13,641,713
------------- -------------
$ 333,999 $ (387,851)
============== =============
</TABLE>
<PAGE>
8. Commitments and Contingencies
Pursuant to the Partnership Agreement, the Partnership is required to pay
the General Partner an annual management fee ("Management Fee") and an
annual additional management fee ("Additional Management Fee") for its
services in connection with the management of the affairs of the
Partnership, subject to certain provisions of the Partnership Agreement.
The annual Management Fee is equal to .14% of all proceeds as of December
31 of any year, invested or committed for investment in Local Partnerships
plus all debts of the Local Partnerships related to the Properties
("Invested Assets"). The Partnership incurred a Management Fee of $161,400
for each of the three years ended March 30, 1997. The annual Additional
Management Fee is equal to .06% of Invested Assets. The Partnership
incurred an Additional Management Fee of $69,171 for each of the three
years ended March 30, 1997. Such amounts are aggregated and reflected
under the caption management fees in the accompanying financial
statements. Unpaid Management Fees in the amount of $800,043 and $669,472
are recorded as payable to general partner in the accompanying balance
sheets as of March 30, 1997 and 1996, respectively.
In addition, pursuant to the Partnership Agreement, the Partnership is
required to pay ML Fund Administrators Inc., an affiliate of the Selling
Agent, an annual administration fee ("Administration Fee") and an annual
additional administration fee ("Additional Administration Fee") for its
administrative services provided to the Partnership. The annual
Administration Fee is equal to .14% of Invested Assets. The Partnership
incurred an Administration Fee of $161,400 for each of the three years
ended March 30, 1997. The annual Additional Administration Fee is subject
to certain provisions of the Partnership Agreement and is equal to .06% of
Invested Assets. The Partnership incurred an Additional Administration Fee
of $69,171 for each of the three years ended March 30, 1997. Such amounts
are aggregated and reflected under the caption administration fees in the
accompanying financial statements. Unpaid Administration Fees in the
amount of $800,054 and $669,483 are included in accounts payable and
accrued expenses in the accompanying balance sheets as of March 30, 1997
and 1996, respectively.
The rents of the Properties, many of which receive rental subsidy
payments, including payments under Section 8 of Title II of the Housing
and Community Development Act of 1974 ("Section 8"), are subject to
specific laws, regulations and agreements with federal and state agencies.
The subsidy agreements expire at various times during and after the
Compliance Periods of the Local Partnerships. The United States Department
of Housing and Urban Development ("HUD") has issued notices which
implement provisions to renew certain project based Section 8 contracts
expiring during HUD's fiscal year 1997, where requested by an owner, for
an additional one year term generally at or below current rent levels,
subject to certain guidelines. HUD has an additional program which, in
general, provides for restructuring rents and/or mortgages where rents may
be adjusted to market levels and mortgage terms may be adjusted based on
the reduction in rents, although there may be instances in which only
rents, but not mortgages, are restructured. The Partnership cannot
reasonably predict legislative initiatives and governmental budget
negotiations, the outcome of which could result in a reduction in funds
available for the various federal and state administered housing programs
including the Section 8 program. Such changes could adversely affect the
future net operating income and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar subsidies. One
Local Partnership's Section 8 contract, which covers certain rental units,
is scheduled to expire in 1997.
9. Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments." The estimated
fair value amounts have been determined using available market
information, assumptions, estimates and valuation methodologies.
<PAGE>
Cash and Cash Equivalents and Restricted Cash
The carrying amounts approximate fair value.
Investments in Bonds Available-For-Sale
Fair value is estimated based on market quotes provided by an independent
service as of the balance sheet dates.
Interest Receivable
The carrying amount approximates fair value due to the terms of the
underlying investments.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1997, 1996 AND 1995
9. Fair Value of Financial Instruments (continued)
Capital Contributions Payable
The carrying amount approximates fair value in accordance with the Local
Partnerships' partnership agreements.
Accounts Payable and Accrued Expenses and Payable to General Partner
The carrying amounts approximate fair value due to the payment terms
in connection with the obligations.
The estimated fair values of the Partnership's financial instruments
as of March 30, 1997 and 1996 are disclosed elsewhere in the financial
statements.
<PAGE>
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
Registrant has no officers or directors. The General Partner manages
Registrant's affairs and has general responsibility and authority in all matters
affecting its business. The responsibilities of the General Partner are
currently carried out by Richman Housing. The executive officers and directors
of Richman Housing are:
Served in present
Name capacity since 1 Position held
Richard Paul Richman September 21, 1989 President and
Director
Eric P. Richelson September 21, 1989 Vice President
Neal Ludeke September 21, 1989 Vice President
and Treasurer
David A. Salzman September 21, 1989 Vice President
Gina S. Scotti September 21, 1989 Secretary
- - ---------------------------------------------------
1Director holds office until his successor is elected and qualified. All
officers serve at the pleasure of the Director.
Richard Paul Richman, age 49, is the sole Director and President of Richman
Housing. Mr. Richman is the President and sole stockholder of Richman
Group. Mr. Richman is the Director, President, and principal shareholder of
WRC. Mr. Richman is involved in the syndication and management of
residential property. Mr. Richman is also a director of Wilder Richman
Resources Corp., an affiliate of Richman Housing and the general partner of
Secured Income L.P., a director of Wilder Richman Historic Corporation, an
affiliate of Richman Housing and the general partner of Wilder Richman
Historic Properties II, L.P., a director of Richman Tax Credit Properties
Inc., an affiliate of Richman Housing and the general partner of the general
partner of American Tax Credit Properties L.P., a director of Richman Tax
Credits Inc., an affiliate of Richman Housing and the general partner of
the general partner of American Tax Credit Properties II L.P.and a director
of Richman American Credit Corp., an affiliate of Richman Housing and
the manager of American Tax Credit Trust, a Delaware statutory business trust.
Eric P. Richelson, age 45, is a Vice President of Richman Housing. Mr.
Richelson is President of Wilder Richman Management Corporation ("WRMC")
with responsibility for all of WRMC's operating activities. In addition,
Mr. Richelson is a Vice President of R.G. Housing Advisors Inc.
("RGHA"), an affiliate of Richman Group. Mr. Richelson's responsibilities in
connection with RGHA include advisory services provided to a small business
investment company.
Neal Ludeke, age 39, is a Vice President and the Treasurer of Richman
Housing. Mr. Ludeke, a Vice President and Treasurer of Richman Group,
is engaged primarily in the syndication, asset management and finance
operations of Richman Group. In addition, Mr. Ludeke is a Vice President
and Treasurer of RGHA. Mr. Ludeke's responsibilities in connection with
RGHA include advisory services provided to a small business investment
company and various partnership management functions.
David A. Salzman, age 36, is a Vice President of Richman Housing. Mr.
Salzman is responsible for the acquisition and development of residential
real estate for syndication as a Vice President of acquisitions of Richman
Group.
Gina S. Scotti, age 41, is the Secretary of Richman Housing. Ms. Scotti is
the Secretary of WRC and a Vice President and the Secretary of Richman
Group. As the Director of Investor Services, Ms. Scotti is responsible
for all communications with investors .
<PAGE>
Item 11. Executive Compensation
Registrant has no officers or directors. Registrant does not pay the officers or
director of Richman Housing any remuneration. During the year ended March 30,
1997, Richman Housing did not pay any remuneration to any of its officers of
director.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of May 20, 1997, no person or entity was known by Registrant to be the
beneficial owner of more than five percent of the Units.
Richman Housing is wholly-owned by Richard Paul Richman.
Item 13. Certain Relationships and Related Transactions
The General Partner and certain of its affiliates are entitled to receive
certain compensation, fees, and reimbursement of expenses and have
received/earned fees for services provided to Registrant as described in Notes 6
and 8 to the audited financial statements included in Item 8 - "Financial
Statements and Supplementary Data" herein.
Transactions with General Partner and Affiliates
The tax losses and Low-income Tax Credits generated by Registrant during the
year ended December 31, 1996 allocated to the General Partner were $30,948 and
$55,414, respectively. The tax losses and Low-income Tax Credits generated by
the General Partner during the year ended December 31, 1996 (from the allocation
of Registrant discussed above) and allocated to Richman Housing were $25,099 and
$44,601, respectively.
Indebtedness of Management.
No officer or director of the General Partner or any affiliate of the foregoing
was indebted to Registrant at any time during the year ended March 30, 1997.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements, Financial Statement Schedules and Exhibits
(1) Financial Statements
See Item 8 - "Financial Statements and Supplementary Data."
(2) Financial Statement Schedules
No financial statement schedules are included because of the absence
of the conditions under which they are required or because the
information is included in the financial statements or the notes
thereto.
(3) Exhibits
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
<S> <C> <C>
10.1 April Gardens Apartments II Limited Exhibit 10.1 to Form
Partnership (A Delaware Limited 10-Q Report dated
Partnership) Amended and Restated December 30, 1990
Agreement of Limited Partnership (File No. 33-31390)
10.2 Ashland Park Apartments, L.P. Second Exhibit 10.2 to Form
Amended and Restated Agreement of 10-K Report dated
Limited Partnership March 30, 1991
(File No. 33-31390)
10.3 Auburn Family, L.P. Amended and Exhibit 10.1 to Form
Restated Limited Partnership Agreement 10-Q Report dated
and Certificate of Limited Partnership December 31, 1991
(File No. 0-19217)
10.4 Amended No. 2 to the Batesville Family, Exhibit 10.2 to Form
L.P. Amended and Restated Agreement of 10-Q Report
Limited Partnership dated December 30, 1990
(File No. 33-31390)
10.5 Batesville Family, L.P. Amendment No. 3 Exhibit 10.2 to Form
to the Amended and Restated Agreement 10-Q Report
of Limited Partnership dated December 31, 1991
(File No. 0-19217)
10.6 Bay Springs Elderly, L.P. (A Exhibit 10.1 to Form
Mississippi Limited Partnership) 10-Q Report
Amended and Restated Limited dated September 29,1991
Partnership Agreement and Certificate (File No. 0-19217)
of Limited Partnership
10.7 Brisas del Mar Apartments Limited Exhibit 10.3 to Form
10-Q Report
Partnership (A Delaware Limited dated December 30, 1990
Partnership) Amended and Restated (File No. 33-31390)
Agreement of Limited Partnership
10.8 Amendment No. 1 to the Bruce Housing Exhibit 10.8 to Form
10-K Report
Associates, L.P. Amended and Restated dated March 30, 1992
Agreement of Limited Partnership (File No. 33-31390)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
------- ------------
<S> <C> <C>
10.9 Amendment No. 2 to the Bruce Housing Exhibit 10.4 to Form
10-Q Report
Associates, L.P. Amended and Restated dated December 30, 1990
Agreement of Limited Partnership (File No. 33-31390)
10.10 Bruce Housing Associates, L.P. Exhibit 10.3 to Form
10-Q Report
Amendment No. 3 to the Amended and dated December 31, 1991
Restated Agreement of Limited (File No. 0-19217)
Partnership
10.11 Carrington Limited Dividend Housing Exhibit 10.1 to Form
10-Q Report
Association Limited Partnership Amended dated September 29,1990
and Restated Agreement of Limited (File No. 33-31390)
Partnership
10.12 Carrington Limited Dividend Housing Exhibit 10.2 to Form
10-Q Report
Association Limited Partnership Second dated September 29,1990
Amended and Restated Agreement of (File No. 33-31390)
Limited Partnership
10.13 Carrington Limited Dividend Housing Exhibit 10.5 to Form
10-Q Report
Association Limited Partnership dated December 30, 1990
Amendment No. 1 to the Second Amended (File No. 33-31390)
and Restated Agreement of Limited
Partnership
10.14 Chestnut Park Associates, L.P. Amended Exhibit 10.3 to Form
10-Q Report
and Restated Agreement of Limited dated September 29,1990
Partnership (File No. 33-31390)
10.15 Chowan Senior Manor Associates Limited Exhibit 10.15 to Form
10-K Report
Partnership Amended and Restated dated March 30, 1992
Agreement of Limited Partnership (File No. 33-31390)
10.16 Christian Street Commons Associates Exhibit 10.16 to Form
10-K Report
Amended and Restated Limited dated March 30, 1992
Partnership Agreement and Certificate (File No. 33-31390)
of Limited Partnership
10.17 Country View Apartments Second Amended Exhibit 10.17 to Form
10-K Report
and Restated Limited Partnership dated March 30, 1992
Agreement and Certificate of Limited (File No. 33-31390)
Partnership
10.18 Desarrollos de Belen Limited Exhibit 10.18 to Form
10-K Report
Partnership Amended and Restated dated March 30, 1992
Agreement of Limited Partnership (File No. 33-31390)
10.19 Desarrollos de Emaus Limited Exhibit 10.19 to Form
10-K Report
Partnership Amended and Restated dated March 30, 1992
Agreement of Limited Partnership (File No. 33-31390)
10.20 Ellinwood Heights Apartments, L.P. Exhibit 10.1 to Form
10-Q Report
Amended and Restated Agreement of dated June 29, 1991
Limited Partnership (File No. 0-19217)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
<S> <C> <C>
10.21 Fulton Street Houses Limited Exhibit 10.21 to Form
10-K Report
Partnership Amended and Restated dated March 30, 1992
Agreement of Limited Partnership (File No. 33-31390)
10.22 Hayes Run Limited Partnership Amended Exhibit 10.2 to Form
10-Q Report
and Restated Agreement of Limited dated June 29, 1991
Partnership (File No. 0-19217)
10.23 Howard L. Miller Sallisaw Apartments Exhibit 10.10 to Form
10-K Report
II, L.P. Third Amended and Restated dated March 30, 1991
Agreement and Certificate of Limited (File No. 33-31390)
Partnership
10.24 Hurlock Meadow Limited Partnership Exhibit 10.24 to Form
10-K Report
Amended and Restated Limited dated March 30, 1992
Partnership Agreement (File No. 33-31390)
10.25 Amendment No. 1 to the Ivy Family, L.P. Exhibit 10.6 to Form
10-Q Report
Amended and Restated Agreement of dated December 30, 1990
Limited Partnership (File No. 33-31390)
10.26 Ivy Family, L.P. Amendment No. 3 to the Exhibit 10.4 to Form
10-Q Report
Amended and Restated Agreement of dated December 31, 1991
Limited Partnership (File No. 0-19217)
10.27 Justin Associates Amended and Restated Exhibit 10.7 to Form
10-Q Report
Agreement and Certificate of Limited dated December 30, 1990
Partnership (File No. 33-31390)
10.28 LaBelle Commons, Ltd. Amended and Exhibit 10.13 to Form
10-K Report
Restated Agreement of Limited dated March 30, 1991
Partnership (File No. 33-31390)
10.29 LaBelle Commons, Ltd. Amendment No. 1 Exhibit 10.29 to Form
10-K Report
to Amended and Restated Agreement of dated March 30, 1992
Limited Partnership (File No. 33-31390)
10.30 Amendment No. 2 to the Lawrence Road Exhibit 10.8 to Form
10-Q Report
Properties, Ltd. Amended and Restated dated December 30, 1990
Agreement of Limited Partnership (File No. 33-31390)
10.31 Lawrence Road Properties, Ltd. Exhibit 10.5 to Form
10-Q Report
Amendment No. 3 to the Amended and dated December 31, 1991
Restated Agreement of Limited (File No. 0-19217)
Partnership
10.32 Loma Del Norte Limited Partnership Exhibit 10.2 to Form
10-Q Report
Amended and Restated Limited dated September 29,1991
Partnership Agreement (File No. 0-19217)
10.33 Long Reach Associates Limited Exhibit 10.15 to Form
10-K Report
Partnership Sixth Amended and Restated dated March 30, 1991
Agreement of Limited Partnership (File No. 33-31390)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
<S> <C> <C>
10.34 Mirador del Toa Limited Partnership Exhibit 10.16 to Form
10-K Report
Amended and Restated Agreement of dated March 30, 1991
Limited Partnership (File No. 33-31390)
10.35 Amendment No. 1 to the Mirador del Toa Exhibit 10.17 to Form
10-K Report
Limited Partnership Amended and dated March 30, 1991
Restated Agreement of Limited (File No. 33-31390)
Partnership
10.36 Moore Haven Commons, Ltd. Amended and Exhibit 10.9 to Form
10-Q Report
Restated Agreement of Limited dated December 30, 1990
Partnership (File No. 33-31390)
10.37 NP-89 Limited Dividend Housing Exhibit 10.3 to Form
10-Q Report
Association Limited Partnership Second dated June 29, 1991
Restated and Amended Agreement of (File No. 0-19217)
Limited Partnership
10.38 Nash Hill Associates, Limited Exhibit 10.37 to Form
10-K Report
Partnership Amended and Restated dated March 30, 1992
Agreement of Limited Partnership (File No. 33-31390)
10.39 North Calhoun City, L.P. (A Mississippi Exhibit 10.3 to Form
10-Q Report
Limited Partnership) Amended and dated September 29,1991
Restated Limited Partnership Agreement (File No. 0-19217)
and Certificate of Limited Partnership
10.40 Orange City Plaza, Limited Partnership Exhibit 10.40 to Form
10-K Report
Amended and Restated Partnership dated March 30, 1992
Agreement (File No. 33-31390)
10.41 Puerta del Mar Limited Partnership (A Exhibit 10.10 to Form
10-Q Report
Delaware Limited Partnership) Amended dated December 30, 1990
and Restated Agreement of Limited (File No. 33-31390)
Partnership
10.42 Amendment No. 2 to the Purvis Heights Exhibit 10.11 to Form
10-Q Report
Properties, L.P. Amended and Restated dated December 30, 1990
Agreement of Limited Partnership (File No. 33-31390)
10.43 Purvis Heights Properties, L.P. Exhibit 10.6 to Form
10-Q Report
Amendment No. 3 to the Amended and dated December 31, 1991
Restated Agreement of Limited (File No. 0-19217)
Partnership
10.44 Queen Lane Investors Amendment No. 1 to Exhibit 10.12 to Form
10-Q Report
Amended and Restated Agreement and dated December 30, 1990
Certificate of Limited Partnership (File No. 33-31390)
10.45 Somerset Manor, Ltd. Amended and Exhibit 10.13 to Form
10-Q Report
Restated Agreement and Certificate of dated December 30, 1990
Limited Partnership (File No. 33-31390)
10.46 Sugar Cane Villas, Ltd. Amended and Exhibit 10.23 to Form
10-K Report
Restated Agreement of Limited dated March 30, 1991
Partnership (File No. 33-31390)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
<S> <C> <C>
10.47 Summerfield Apartments Limited Exhibit 10.47 to Form
10-K Report
Partnership Amended and Restated dated March 30, 1992
Agreement of Limited Partnership (File No. 33-31390)
10.48 Sydney Engel Associates Second Amended Exhibit 10.4 to Form
10-Q Report
and Restated Agreement of Limited dated September 29,1990
Partnership (File No. 33-31390)
10.49 First Amendment to Second Amended and
Restated Agreement of Limited
Partnership of Sydney Engel Associates
10.50 Second Amendment to Second Amended and
Restated Agreement of Limited
Partnership of Sydney Engel Associates
L.P.
10.51 Third Amendment to Second Amended and
Restated Agreement of Limited
Partnership of Sydney Engel Associates
L.P.
10.52 Fourth Amendment to Second Amended and
Restated Agreement of Limited
Partnership of Sydney Engel Associates
L.P.
10.53 Union Valley Associates Limited Exhibit 10.14 to Form
10-Q Report
Partnership Amended and Restated dated December 30, 1990
Agreement and Certificate of Limited (File No. 33-31390)
Partnership
10.54 Walnut Grove Family, L.P. (A Exhibit 10.4 to Form
10-Q Report
Mississippi Limited Partnership) dated September 29, 1991
Amended and Restated Limited (File No. 0-19217)
Partnership Agreement and Certificate
of Limited Partnership
10.55 Waynesboro Apartments Limited Exhibit 10.15 to Form
10-Q Report
Partnership Amended and Restated dated December 30, 1990
Agreement and Certificate of Limited (File No. 33-31390)
Partnership
10.56 West Calhoun City, L.P. (A Mississippi Exhibit 10.5 to Form
10-Q Report
Limited Partnership) Amended and dated September 29,1991
Restated Limited Partnership Agreement (File No. 0-19217)
and Certificate of Limited Partnership
10.57 Westminster Apartments Limited Exhibit 10.53 to Form
10-K Report
Partnership Second Amended and Restated dated March 30, 1992
Agreement of Limited Partnership (File No. 33-31390)
27 Financial Data Schedule
28.0 Pages 20 through 31, 44 through 71 and Exhibit 28.0 to Form
10-K Report
78 through 80 of Prospectus filed dated March 30, 1990
pursuant to Rule 424(b)(3) under (File No. 33-31390)
Securities Act of 1933
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to
<S> <C> <C>
28.1 Pages 14 through 19 of Prospectus filed Exhibit 28.1 to Form
10-K Report
pursuant to Rule 424(b)(3) under dated March 30, 1991
Securities Act of 1933 (File No. 33-31390)
28.2 Supplement No. 1 dated June 6, 1990 to Exhibit 28.2 to Form
10-K Report
Prospectus dated March 30, 1991
(File No. 33-31390)
28.3 Supplement No. 2 dated November 21, Exhibit 28.3 to Form
10-K Report
1990 to Prospectus dated March 30, 1991
(File No. 33-31390)
28.4 Supplement No. 3 dated December 20, Exhibit 28.4 to Form
10-K Report
1990 to Prospectus dated March 30, 1991
(File No. 33-31390)
28.5 Supplement No. 4 dated October 30, 1991 Exhibit 28.5 to Form
10-K Report
to Prospectus dated March 30, 1992
(File No. 33-31390)
28.6 Supplement No. 5 dated December 26, Exhibit 28.6 to Form
10-K Report
1991 to Prospectus dated March 30, 1992
(File No. 33-31390)
28.7 Supplement No. 6 dated January 15, 1992 Exhibit 28.7 to Form
10-K Report
to Prospectus dated March 30, 1990
(File No. 33-31390)
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed by Registrant during the last quarter of
the period covered by this report.
(c) Exhibits
See (a)(3) above.
(d) Financial Statement Schedules
See (a)(2) above.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
AMERICAN TAX CREDIT PROPERTIES III L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties III L.P.,
General Partner
by: Richman Housing Credits Inc.,
general partner
Dated: June 30, 1997 /s/ Richard Paul Richman
------------- ---------------------------
by: Richard Paul Richman
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.
Signature Title Date
/s/ Richard Paul Richman President,
Chief Executive June 30, 1997
------------------------ Officer ---------
and Director of the general
partner of the
General Partner
/s/ Neal Ludeke Vice President and June 30, 1997
- - ------------------------ Treasurer of -------------
the general partner of the
General Partner
(Principal Financial
and Accounting Officer of
Registrant)
- - -----------------------------------------------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from the
quarter ended March 30, 1997 Form 10K Balance Sheets and Statements of
Operations and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000856135
<NAME> American Tax Credit Properties, III L.P.
<MULTIPLIER> 1000
<CURRENCY> 0
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-30-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> MAR-30-1997
<EXCHANGE-RATE> 1.00
<CASH> 409
<SECURITIES> 2,855
<RECEIVABLES> 25
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 15,504
<CURRENT-LIABILITIES> 2,993
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,504
<SALES> 0
<TOTAL-REVENUES> 317
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 526
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,719)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,719)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,719)
<EPS-PRIMARY> (75.00)
<EPS-DILUTED> 0
</TABLE>
FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
SYDNEY ENGEL ASSOCIATES
This First Amendment to the Second Amended and Restated Agreement of
Limited Partnership ("First Amendment") of SYDNEY ENGEL ASSOCIATES is made and
entered into as of the 24th day of March, 1997, by and among the undersigned
parties.
WHEREAS, as of June 1, 1990, THE ENGEL GROUP, INC., a New York
corporation with an office at 124 Atlantic Avenue, Lynbrook, New York 11563
("Engel"), THE RICHMAN GROUP, INC., a Delaware corporation with an office at 599
West Putnam Avenue, Greenwich, Connecticut 06830 ("Richman") and TWIN CASTLE
GROUP INC., a New York corporation with an office at 550 Brush Avenue, Bronx,
New York 10465 ("Twin Castle") (Engel, Richman and Twin Castle sometimes
hereinafter being referred to collectively as the "General Partners" or
individually as a "General Partner") and AMERICAN TAX CREDIT PROPERTIES III
L.P., a Delaware limited partnership with an office c/o Richman ("Limited
Partner") entered into the Second Amended and Restated Agreement of Limited
Partnership (the "Agreement") of Sydney Engel Associates (the "Partnership");
and
WHEREAS, the parties now desire to enter into this First Amendment to
(i) continue the Partnership, (ii) amend the address of the Principal Executive
Offices and the Agent for Service of Process and (iii) authorize the filing of a
Certificate of Adoption and Certificate of Amendment with the New York State
Department of State in accordance with Article 8-A of the Partnership Law of the
State of New York (the "Revised Act").
NOW, THEREFORE, in consideration of the foregoing, of mutual promises of
the parties hereto and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to continue the
Partnership pursuant to the Revised Act, as set forth in this First Amendment,
as follows:
1. All initially capitalized terms shall have the meanings ascribed to
them in the Agreement, unless otherwise provided herein. This Agreement may be
signed in counterparts.
2. The undersigned hereby continue the Partnership as a limited
partnership under the Revised Act.
3. Upon the execution of the First Amendment by the parties hereto, the
Managing General Partner shall take all actions necessary and appropriate to
assure the prompt filing of a Certificate of Adoption and a Certificate of
Amendment pursuant, respectively, to Sections 121-1202 and 121-202 of the
Revised Act in the form annexed hereto as Exhibit "A", together with such other
documents as may be required by the Revised Act. All fees for the filing shall
be paid out of the Partnership's assets.
4. Section 1.02 of the Agreement is amended to read as follows:
"Name. The name of the Partnership is SYDNEY ENGEL ASSOCIATES L.P."
5. Section 1.03 of the Agreement is amended to provide that the
principal executive office of the Partnership shall remain c/o
The Engel Group, Inc., but at the following address: 124 Atlantic Avenue,
Lynbrook, New York 11563.
6. The execution of this First Amendment by the Limited Partner
constitutes its consent to the amendment of the Agreement pursuant to Article
XIV thereof.
<PAGE>
<TABLE>
<CAPTION>
IN WITNESS WHEREOF, the parties have affixed their signatures to this
First Amendment to the Second Amended and Restated Agreement of Limited
Partnership of Sydney Engel Associates L.P. as of the date first above written.
GENERAL PARTNERS:
<S> <C>
ATTEST/WITNESS: THE ENGEL GROUP, INC.
/s/ Michael S. Weiss By: /s/ Sydney Engel
Sydney Engel, President
ATTEST/WITNESS: THE RICHMAN GROUP, INC.
/s/ Ann H. McGuire By: /s/ Richard P. Richman
Richard P. Richman, President
ATTEST/WITNESS: TWIN CASTLE GROUP, INC.
/s/ Vincent Anzalone By: /s/ Michael Contillo
Michael Contillo, President
LIMITED PARTNER:
AMERICAN TAX CREDIT PROPERTIES III L.P.
By: Richman Tax Credit Properties III L.P., its
general partner
ATTEST/WITNESS: By: Richman Housing Credits Inc., its general partner
/s/ Mary K. Holzer By: /s/ David Salzman
David Salzman, Vice President
</TABLE>
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NASSAU )
On this 15th day of April, 1997, before me personally came Sydney Engel,
to me known, who being by me duly sworn, did depose and say that he resides at
206 Albon Road, Hewlett, New York ; that he is the President of THE ENGEL GROUP,
INC., the corporation described in and which executed the foregoing instrument;
and that he signed his name thereto by order of the board of directors of said
corporation.
/s/ Michael S. Weiss
Notary Public
STATE OF CONNECTICUT )
) SS.: Greenwich
COUNTY OF Fairfield)
On this 18th day of April, 1997, before me personally came Richard P.
Richman to me known, who being by me duly sworn, did depose and say that he
resides at 7 Dwight Lane, Greenwich, Ct., 06831; that he is the President of THE
RICHMAN GROUP, INC., the corporation described in and which executed the
foregoing instrument; and that he signed his name thereto by order of the board
of directors of said corporation.
/s/ Mary K. Holzer
Notary Public
STATE OF NEW YORK )
) SS.:
COUNTY OF BRONX )
On this 14th day of March, 1997, before me personally came MICHAEL
CONTILLO, to me known, who being by me duly sworn, did depose and say that he
resides at 550 Brush Avenue, Bronx, New York; that he is the President of TWIN
CASTLE GROUP, INC., the corporation described in and which executed the
foregoing instrument; and that he signed his name thereto by order of the board
of directors of said corporation.
/s/ Vincent Anzalone
Notary Public
<PAGE>
STATE OF CONN.)
) SS.: Greenwich
COUNTY OF FAIRFIELD)
On this 18th day of April, 1997, before me personally came DAVID
SALZMAN, to me known, who being by me duly sworn, did depose and say that he
resides at 12 Varian Lane, Scarsdale, New York, 10583; that he is the
Vice-President of RICHMAN HOUSING CREDITS INC., the corporation described in and
which executed the foregoing instrument; which corporation is the general
partner of Richman Tax Credit Properties III L.P., the general partner of
AMERICAN TAX CREDIT PROPERTIES III L.P., the limited partnership which executed
the foregoing instrument; that the execution of the instrument by AMERICAN TAX
CREDIT PROPERTIES III L.P. was duly authorized according to the Limited
Partnership Agreement; that RICHMAN HOUSING CREDITS INC., the general partner of
its general partner, executed the instrument on behalf of the limited
partnership pursuant to said authorization and that he signed his name thereto
by order of the board of directors of said corporation.
/s/ Ann H. McGuire
Notary Public
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
SYDNEY ENGEL ASSOCIATES L.P.
This Second Amendment to the Second Amended and Restated Agreement of
Limited Partnership ("Second Amendment") of SYDNEY ENGEL ASSOCIATES L.P. is made
and entered into as of the 21st day of April, 1997, by and among the undersigned
parties.
WHEREAS, as of June 1, 1990, THE ENGEL GROUP, INC., a New York
corporation with an office at 124 Atlantic Avenue, Lynbrook, New York 11563
("Engel"), THE RICHMAN GROUP, INC., a Delaware corporation with an office at 599
West Putnam Avenue, Greenwich, Connecticut 06830 ("Richman") and TWIN CASTLE
GROUP INC., a New York corporation with an office at 550 Brush Avenue, Bronx,
New York 10465 ("Twin Castle") (Engel, Richman and Twin Castle sometimes
hereinafter being referred to collectively as the "General Partners" or
individually as a "General Partner") and AMERICAN TAX CREDIT PROPERTIES III
L.P., a Delaware limited partnership with an office c/o Richman (the "Limited
Partner") entered into the Second Amended and Restated Agreement of Limited
Partnership (the "Agreement") of Sydney Engel Associates L.P. (the
"Partnership"); and
WHEREAS, as of March 24, 1997, the General Partners and the Limited
Partner entered into a First Amendment of the Agreement, which inter alia,
authorized the execution of a Certificate of Adoption of the Revised Limited
Partnership Act (Article 8-A of the Partnership Law of the State of New York)
(the "Revised Act") and an Amendment thereto changing the name of the
Partnership to Sydney Engel Associates L.P.
WHEREAS, the parties now desire to enter into this Second Amendment to
(i) continue the Partnership, (ii) effect the withdrawal of Twin Castle as a
General Partner and the transfer of its interest to the Partnership, (iii)
reassign the interests of the Partners, and (iv) authorize the filing of a
Certificate reflecting the withdrawal with the New York State Department of
State.
NOW, THEREFORE, in consideration of the foregoing, of mutual promises of
the parties hereto and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to continue the
Partnership pursuant to the Revised Act, as set forth in this Second Amendment,
as follows:
1. All initially capitalized terms shall have the meanings ascribed to
them in the Agreement, unless otherwise provided herein. This Agreement may be
signed in counterparts.
2. Upon the execution of the Second Amendment by the parties hereto, the
Managing General Partner shall take all actions necessary and appropriate to
assure compliance with Section 121-202 of the Revised Act reflecting the
withdrawal of Twin Castle. All fees for the filing shall be paid out of the
Partnership's assets.
3. Article II of the Agreement is amended to delete "TWIN CASTLE GROUP,
INC." from the definition of "General Partners".
4. (a) Schedule A of the Agreement is amended to reflect the
withdrawal of Twin Castle as a General Partner and the transfer of its
interest to the Partnership. Upon such withdrawal and transfer, the interests
of Engel and Richman in the Partnership shall be:
Engel 2/3%
Richman 1/3%
<PAGE>
The Interest of the Limited Partner shall remain 99%.
(b) The parties confirm that the withdrawal of Twin Castle and
the transfer of its Interest have been accomplished in accordance with the
provisions of Section 6.01 of the Agreement. The parties further confirm and
ratify Section 6.01(b) of the Agreement, which provides that:
"In the event that a General Partner withdraws from the
Partnership or sells transfers of assigns his or its entire Interest in
compliance with Section 6.01(a), he or it shall be and shall remain liable for
all obligations and liabilities incurred by him or it as General Partner before
such withdrawal, sale, transfer or assignment shall have become effective, but
shall be free of any obligation or liability incurred on account of the
activities of the Partnership from and after the time such withdrawal, sale,
transfer or assignment shall have become effective."
(c) The execution of this Second Amendment by the Limited Partner
constitutes its consent to the withdrawal described herein and to the amendment
of the Agreement pursuant to Article XIV thereof.
5. The withdrawal of Twin Castle from the Partnership also constitutes
its disclaimer and renunciation of any further fees, profits or other payments
arising out of or pertaining to the Partnership and/or the Project, including
but not limited to, the Partnership Administration Services Agreement by and
among Engel, Richman and Twin Castle and the Development Agreement by and among
Sydney Engel, Richard P.
Richman and Michael Contillo, both dated June 1, 1990.
IN WITNESS WHEREOF, the parties have affixed their signatures to this
Second Amendment to the Second Amended and Restated Agreement of Limited
Partnership of Sydney Engel Associates L.P. as of the date first above written.
<TABLE>
<CAPTION>
GENERAL PARTNERS:
<S> <C>
ATTEST/WITNESS: THE ENGEL GROUP, INC.
/s/ Michael S. Weiss By: /s/ Sydney Engel
Sydney EngelPresident
ATTEST/WITNESS: THE RICHMAN GROUP, INC.
/s/ Ann H. McGuire By: /s/ Richard P. Richman
Richard P. Richman, President
WITHDRAWING GENERAL PARTNER:
ATTEST/WITNESS: TWIN CASTLE GROUP, INC.
/s/ Vincent Anzalone By: /s/ Michael Contillo
Michael Contillo, President
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIMITED PARTNER:
<S> <C>
AMERICAN TAX CREDIT PROPERTIES III L.P.
By: Richman Tax Credit Properties III L.P., its
general partner
ATTEST/WITNESS: By: Richman Housing Credits Inc., its general partner
/s/ Mary K. Holzer By: /s/ David Salzman
David Salzman, Vice President
</TABLE>
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NASSAU )
On this 15th day of April, 1997, before me personally came Sydney Engel,
to me known, who being by me duly sworn, did depose and say that he resides at
206 Albon Road, Hewlett, New York; that he is the President of THE ENGEL GROUP,
INC., the corporation described in and which executed the foregoing instrument;
and that he signed his name thereto by order of the board of directors of said
corporation.
/s/ Michael S. Weiss
Notary Public
STATE OF CONNECTICUT )
) SS.: Greenwich
COUNTY OF Fairfield )
On this 18th day of April, 1997, before me personally came Richard P.
Richman to me known, who being by me duly sworn, did depose and say that he
resides at 7 Dwight Lane, Greenwich, CT, 06831; that he is the President of THE
RICHMAN GROUP, INC., the corporation described in and which executed the
foregoing instrument; and that he signed his name thereto by order of the board
of directors of said corporation.
/s/ Mary K. Holzer
Notary Public
STATE OF NEW YORK )
) SS.:
COUNTY OF BRONX )
On this day of April, 1997, before me personally came MICHAEL CONTILLO,
to me known, who being by me duly sworn, did depose and say that he resides at
New York; that he is the President of TWIN CASTLE GROUP, INC., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the board of directors of said corporation.
Notary Public
<PAGE>
STATE OF Conn.)
) SS.: Greenwich
COUNTY OF Fairfield)
On this 18th day of April, 1997, before me personally came DAVID
SALZMAN, to me known, who being by me duly sworn, did depose and say that he
resides at 12 Varian Lane, Scarsdale, NY, 10583; that he is the Vice-President
of RICHMAN HOUSING CREDITS INC., the corporation described in and which executed
the foregoing instrument; which corporation is the general partner of Richman
Tax Credit Properties III L.P., the general partner of AMERICAN TAX CREDIT
PROPERTIES III L.P., the limited partnership which executed the foregoing
instrument; that the execution of the instrument by AMERICAN TAX CREDIT
PROPERTIES III L.P. was duly authorized according to the Limited Partnership
Agreement; that RICHMAN HOUSING CREDITS INC., the general partner of its general
partner, executed the instrument on behalf of the limited partnership pursuant
to said authorization and that he signed his name thereto by order of the board
of directors of said corporation.
/s/ Ann H. McGuire
Notary Public
THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
SYDNEY ENGEL ASSOCIATES L.P.
This Third Amendment to the Second Amended and Restated Agreement of
Limited Partnership ("Second Amendment") of SYDNEY ENGEL ASSOCIATES L.P. is made
and entered into as of the 18th day of April, 1997, by and among the undersigned
parties.
WHEREAS, as of June 1, 1990, THE ENGEL GROUP, INC., a New York
corporation with an office at 124 Atlantic Avenue, Lynbrook, New York 11563
("Engel"), THE RICHMAN GROUP, INC., a Delaware corporation with an office at 599
West Putnam Avenue, Greenwich, Connecticut 06830 ("Richman") and TWIN CASTLE
GROUP INC., a New York corporation with an office at 550 Brush Avenue, Bronx,
New York 10465 ("Twin Castle") (Engel, Richman and Twin Castle sometimes
hereinafter being referred to collectively as the "Original General Partners")
and AMERICAN TAX CREDIT PROPERTIES III L.P., a Delaware limited partnership with
an office c/o Richman (the "Limited Partner") entered into the Second Amended
and Restated Agreement of Limited Partnership (the "Agreement") of Sydney Engel
Associates L.P. (the "Partnership"); and
WHEREAS, as of March 24, 1997, the Original General Partners and the
Limited Partner entered into a First Amendment of the Agreement, which inter
alia, authorized the execution of a Certificate of Adoption of the Revised
Limited Partnership Act (Article 8-A of the Partnership Law of the State of New
York) (the "Revised Act") and an Amendment thereto changing the name of the
Partnership to Sydney Engel Associates L.P.
WHEREAS, as of today's date, and immediately prior to the execution of
this Agreement, the Original General Partners and the Limited Partner entered
into a Second Amendment of the Agreement, which, inter alia, effectuated the
withdrawal of Twin Castle as a General Partner and the acquisition of its
interest by the Partnership ;
WHEREAS, the parties now desire to enter into this Third Amendment to
(i) continue the Partnership, (ii) effect the withdrawal of Twin Castle as a
General Partner and the transfer of its interest to the Partnership, (iii)
reassign the interests of the Partners, and (iv) authorize the filing of a
Certificate with the New York State Department of State reflecting the interest
of Engel as the sole General Partner.
NOW, THEREFORE, in consideration of the foregoing, of mutual promises of
the parties hereto and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to continue the
Partnership pursuant to the Revised Act, as set forth in this Third Amendment,
as follows:
1. All initially capitalized terms shall have the meanings ascribed to
them in the Agreement, unless otherwise provided herein. This Agreement may be
signed in counterparts.
2. Upon the execution of the Third Amendment by the parties hereto, the
Managing General Partner (i.e., Engel) shall take all actions necessary and
appropriate to assure the prompt filing of a Certificate of Amendment pursuant
to Section 121-202 of the Revised Act reflecting the withdrawal of Twin Castle
and Richman as General Partners. (This obviates the need for filing the
Certificate contemplated in the Second Amendment.) All fees for the filing shall
be paid out of the Partnership's assets.
3. Selected definitions in Article II ("DEFINED TERMS") of the
Agreement are hereby amended,
as follows:
<PAGE>
"Act" means the Uniform Limited Partnership Act of the State, except
that, as of March 27, 1997, with the filing of the Certificate of Adoption with
the New York State Department of State, the Revised Limited Partnership Act
shall control.
"Final Closing" means the occurrence of the following: (i)
Substantial Completion and (ii) the
conversion of the Construction Loans to Mortgage Loans as of the date hereof.
"General Partners" or "General Partner" means The Engel Group, Inc. and
any other Person admitted as a general partner pursuant to this Agreement, and
their respective successors pursuant to this Agreement, including the provisions
of Sections 6.03, 8.01 and 8.13.
"Partnership" means Sydney Engel Associates L.P.
"Special Limited Partner" [new] means "The Richman Group, Inc."
formerly, a General Partner), which may be considered to be a Limited Partner,
except as may be specifically provided in the Agreement.
4. (a) Schedule A of the Agreement as referred to in Section 5.01
thereof, is amended to reflect the withdrawal of Twin Castle and Richman as
General Partners and the addition of Richman as Special Limited Partner:
<TABLE>
<CAPTION>
General Partner Partnership Interest
<S> <C>
The Engel Group, Inc. 2/3%
Limited Partner
American Tax Credit Properties III L.P. 99%
Special Limited Partner
The Richman Group 1/3%
</TABLE>
(b) The execution of this Third Amendment by the Limited Partner
constitutes its consent to the conversion described herein and to the amendment
of the Agreement pursuant to Article XIV thereof.
5. The withdrawal of Richman as a General Partner from the Partnership
does not constitute its disclaimer and renunciation of any further fees, profits
or other payments arising out of or pertaining to the Partnership and/or the
Project, including but not limited to fees, profits or other payments arising
out of the Partnership Administration Services Agreement by and among Engel,
Richman and Twin Castle and the Development Agreement by and among Sydney Engel,
Richard P. Richman and Michael Contillo, both dated June 1, 1990. The parties
hereto acknowledge and agree that Richman shall continue to enjoy the benefits
and assume the burdens under such Agreements, as if it were still a General
Partner. Similarly, Richman may not obtain any of the aforesaid payments
otherwise due to General Partners if fees are withheld pursuant to Section 8.12.
6. Section 11.01(a) provides that , "to the extent that the Partnership
does not distribute at least $5,000 to the Investment Partnership (from Net Cash
Flow or otherwise) in any year, the General Partners... hereby covenant that
they (sic) will pay to the Investment Partnership in any year an amount equal to
such shortfall..." It is agreed between the Engel and Richman, that if Engel is
obligated to make such payment that Richman will pay one-third of such amount
due.
<PAGE>
7 Section 11.03(a)(iii) is amended to read: "... third, gain
in excess of the amount allocated under (i) and (ii) shall be allocated
50.50% to the General Partner and the Special Limited Partner in accordance
with their respective Partnership Interests and 49.50% to the Investment
Partnership."
8 (a) Section 11.04(e) is amended to reflect that the sum remaining from
the sale and liquidation of Partnership Property shall be distributed to the
General Partners and the Special Limited Partner (in accordance with their
respective Partnership Interests) until they have received an amount equal to
their Capital Contributions, reduced by all cash previously distributed to them
pursuant to Section 11.04.
8 (b) Section 11.04(g) is amended and clarified to provide that the
residual proceeds from the sale and liquidation of Partnership Property and the
net proceeds from the sale of Partnership Property or refinancing of the
Apartment Complex or a Capital Transaction shall be made 50.50% to the General
Partner and the Special Limited Partner in accordance with their respective
Partnership Interests and 49.50% to the Investment Partnership.
9 Section 16.08 of the Agreement is amended to provide for notices to be
sent to Engel, Richman and the Investment Partnership to the addresses set forth
on the first page of this Agreement.
Copies of Notices to the Limited Partners shall be sent to:
Peabody & Brown
1255 23rd Street, NW
Washington, D.C. 20037-1170
Attention: Herbert F. Stevens, Esq.
Copies of Notices to Engel shall be sent to:
Hirschen & Singer
36 West 44th Street, Suite 712
New York, N.Y. 10036
Attention: Richard C. Singer, Esq.
<PAGE>
<TABLE>
<CAPTION>
IN WITNESS WHEREOF, the parties have affixed their signatures to this
Third Amendment to the Second Amended and Restated Agreement of Limited
Partnership of Sydney Engel Associates L.P. as of the date first above written.
GENERAL PARTNER:
<S> <C>
ATTEST/WITNESS: THE ENGEL GROUP, INC.
By: /s/ Sydney Engel
Sydney Engel, President
WITHDRAWING GENERAL PARTNER &
SPECIAL LIMITED PARTNER:
ATTEST/WITNESS: THE RICHMAN GROUP, INC.
/s/ Ann H. McGuire By: /s/ Richard P. Richman
Richard P. Richman, President
LIMITED PARTNER:
AMERICAN TAX CREDIT PROPERTIES III L.P.
By: Richman Tax Credit Properties III L.P., its
general partner
ATTEST/WITNESS: By: Richman Housing Credits Inc., its general partner
/s/ Mary K. Holzer By: /s/ David Salzman
David Salzman, Vice President
</TABLE>
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On this day of April, 1997, before me personally came Sydney Engel, to
me known, who being by me duly sworn, did depose and say that he resides at ,
New York; that he is the President of THE ENGEL GROUP, INC., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the board of directors of said corporation.
Notary Public
STATE OF CONNECTICUT )
) SS.: Greenwich
COUNTY OF FAIRFIELD )
On this 18th day of April, 1997, before me personally came Richard P.
Richman to me known, who being by me duly sworn, did depose and say that he
resides at 7 Dwight Lane, Greenwich, CT, 06831, that he is the President of THE
RICHMAN GROUP, INC., the corporation described in and which executed the
foregoing instrument; and that he signed his name thereto by order of the board
of directors of said corporation.
/s/ Mary K. Holzer
Notary Public
STATE OF CONN. )
) SS.: Greenwich
COUNTY OF FAIRFIELD )
On this 18th day of April, 1997, before me personally came DAVID
SALZMAN, to me known, who being by me duly sworn, did depose and say that he
resides at 12 Varian Lane, Scarsdale, NY, 10583; that he is the Vice-President
of RICHMAN HOUSING CREDITS INC., the corporation described in and which executed
the foregoing instrument; which corporation is the general partner of Richman
Tax Credit Properties III L.P., the general partner of AMERICAN TAX CREDIT
PROPERTIES III L.P., the limited partnership which executed the foregoing
instrument; that the execution of the instrument by AMERICAN TAX CREDIT
PROPERTIES III L.P. was duly authorized according to the Limited Partnership
Agreement; that RICHMAN HOUSING CREDITS INC., the general partner of its general
partner, executed the instrument on behalf of the limited partnership pursuant
to said authorization and that he signed his name thereto by order of the board
of directors of said corporation.
/s/ Ann H. McGuire
Notary Public
FOURTH AMENDMENT TO
SECOND AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
SYDNEY ENGEL ASSOCIATES L.P.
This Fourth Amendment to the Second Amended and Restated Agreement of
Limited Partnership ("Second Amendment") of SYDNEY ENGEL ASSOCIATES L.P. is made
and entered into as of the 18th day of April, 1997, by and among the undersigned
parties.
WHEREAS, as of June 1, 1990, THE ENGEL GROUP, INC., a New York
corporation with an office at 124 Atlantic Avenue, Lynbrook, New York 11563
("Engel"), THE RICHMAN GROUP, INC., a Delaware corporation with an office at 599
West Putnam Avenue, Greenwich, Connecticut 06830 ("Richman") and TWIN CASTLE
GROUP INC., a New York corporation with an office at 550 Brush Avenue, Bronx,
New York 10465 ("Twin Castle") (Engel, Richman and Twin Castle sometimes
hereinafter being referred to collectively as the "Original General Partners")
and AMERICAN TAX CREDIT PROPERTIES III L.P., a Delaware limited partnership with
an office c/o Richman (the "Limited Partner") entered into the Second Amended
and Restated Agreement of Limited Partnership (the "Agreement") of Sydney Engel
Associates L.P. (the "Partnership");
WHEREAS, as of March 24, 1997, the Original General Partners and the
Limited Partner entered into a First Amendment of the Agreement, which inter
alia, authorized the execution of a Certificate of Adoption of the Revised
Limited Partnership Act (Article 8-A of the Partnership Law of the State of New
York) (the "Revised Act") and an Amendment thereto changing the name of the
Partnership to Sydney Engel Associates L.P.;
WHEREAS, as of today's date, and immediately prior to the execution of
this Agreement, the Original General Partners and the Limited Partner entered
into (i) a Second Amendment of the Agreement, which, inter alia, effectuated the
withdrawal of Twin Castle as a General Partner and the acquisition of its
interest by the Partnership, and (ii) a Third Amendment of the Agreement, which,
inter, alia, reassigned the interests of the Partners and authorized the filing
of a Certificate with the New York State Department of State reflecting the
interest of Engel as the sole General Partner;
WHEREAS, in order to achieve Final Closing, the Lenders required the
Partnership to purchase a guaranteed investment contract;
WHEREAS, although the completion of the Apartment Complex and the
delivery of economic benefits was timely, due to technical circumstances, the
Partnership experienced a significant delay in achieving Final Closing;
WHEREAS, the Investment Partnership received a benefit as a result of
the delay in paying the Fourth Installment while continuing to receive the
economic benefits from the Partnership, and as a result, the Investment
Partnership has agreed to increase the amount of the Fourth Installment by
$206,881; and
WHEREAS, the parties now desire to enter into this Fourth Amendment to
(i) continue the Partnership and (ii) increase the amount of the Fourth
Installment from $1,017,894 to $1,224,775.
NOW, THEREFORE, in consideration of the foregoing, of mutual promises of
the parties hereto and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to continue the
Partnership pursuant to the Revised Act, as set forth in this Fourth Amendment,
as follows:
<PAGE>
1. All initially capitalized terms shall have the meanings ascribed to
them in the Agreement, unless otherwise provided herein. This Agreement may be
signed in counterparts.
2. Section 5.01(c) and Schedule A of the Agreement are each amended by
deleting "$2,994,993" wherever it appears and substituting "$3,201,874"
therefor.
3. Section 5.01(c)(iii) of the Agreement is amended by
deleting "$1,017,894" and substituting "$1,224,775" therefor.
4. Except as set forth herein, the Partnership Agreement remains
unmodified and in full force and effect.
IN WITNESS WHEREOF, the parties have affixed their signatures to
this Fourth Amendment to the Second Amended and Restated Agreement of Limited
Partnership of Sydney Engel Associates L.P. as of the date first above written.
GENERAL PARTNERS:
ATTEST/WITNESS: THE ENGEL GROUP, INC.
/s/ Joan Hartstein By: /s/ Sydney Engel
Sydney Engel, President
LIMITED PARTNER:
AMERICAN TAX CREDIT PROPERTIES III L.P.
By: Richman Tax Credit Properties III L.P., its
general partner
ATTEST/WITNESS: By: Richman Housing Credits Inc., its general
partner
/s/ Chip Krafnick By: /s/ Neal Ludeke
Neal Ludeke, Vice President
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NASSAU )
On this 26th day of June, 1997, before me personally came Sydney Engel,
to me known, who being by me duly sworn, did depose and say that he resides at
206 Albon Road, Hewlett, New York; that he is the President of THE ENGEL GROUP,
INC., the corporation described in and which executed the foregoing instrument;
and that he signed his name thereto by order of the board of directors of said
corporation.
Michael S. Weiss
Notary Public
STATE OF )
) SS.: GREENWICH
COUNTY OF )
On this 27th day of June, 1997, before me personally came NEAL LUDEKE,
to me known, who being by me duly sworn, did depose and say that he resides at
26 Rising Rock Road, Stamford, CT 06903; that he is the Vice-President of
RICHMAN HOUSING CREDITS INC., the corporation described in and which executed
the foregoing instrument; which corporation is the general partner of RICHMAN
TAX CREDIT PROPERTIES III L.P., the general partner of AMERICAN TAX CREDIT
PROPERTIES III L.P., the limited partnership which executed the foregoing
instrument; that the execution of the instrument by AMERICAN TAX CREDIT
PROPERTIES III L.P. was duly authorized according to the Limited Partnership
Agreement; that RICHMAN HOUSING CREDITS INC., the general partner of its general
partner, executed the instrument on behalf of the limited partnership pursuant
to said authorization and that he signed his name thereto by order of the board
of directors of said corporation.
/s/ Mary K. Holzer
Notary Public
