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, 1998
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 13-354500
(State or other 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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area (203) 869-0900
--------------
code:
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>
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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
Internal Revenue Code (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 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 The
Richman Group, Inc. ("Richman Group"), a Delaware corporation founded by
Richard Paul Richman in 1988.
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 and 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.
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, Uruguay Round Agreements Act and Taxpayer Relief
Act of 1997 (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.
<PAGE>
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. The relevant state tax credit agency
has allocated each of Registrant's Local Partnerships an amount of Low-income
Tax Credits, which are generally available for a ten year period from the year
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,
1997, 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:
<TABLE>
<CAPTION>
Registrant ATCP
II
<S> <C> <C>
Batesville Family, L.P. 61.75% 37.25%
Bruce Housing 61.75 37.25
Associates, L.P.
Carrington Limited
Dividend Housing 65.95 33.05
Association Limited
Partnership
Ivy Family, L.P. 61.75 37.25
Lawrence Road 61.75 37.25
Properties, Ltd.
Mirador del Toa Limited 59.06 39.94
Partnership
Purvis Heights 61.75 37.25
Properties, L.P.
Queen Lane Investors 48.50 50.50
</TABLE>
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. In October 1997, Congress passed the Multifamily
Assisted Housing and Reform and Affordability Act whereby the United States
Department of Housing and Urban Development ("HUD") has been given authority to
renew certain project based Section 8 contracts expiring during HUD's fiscal
year 1998, where requested by an owner, for an additional one year term
generally at or below current rent levels, subject to certain guidelines. HUD
has additional programs which, in general, provide 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 October 1998.
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
Capital contribution
obligation Mortgage
Name of Local Partnership Number Total Paid loans
as of through payable Subsidy
Name of apartment complex of March 30, March 30, as of (see
rental December 31, foot-
Apartment complex units 1998 1998 1997 notes)
- ------------------ --------------------- ------------------------------
location
- --------
<S> <C> <C> <C> <C> <C>
April Gardens Apartments
II
Limited Partnership
April Gardens Apartments 48 $485,581 $485,581 $ 2,004,455 (1b&d)
Las Piedras, Puerto Rico
Ashland Park Apartments,
L.P.
Ashland Park Apartments 24 235,732 235,732 1,042,772 (1b&d)
Ashland, Nebraska
Auburn Family, L.P.
Auburn Apartments
Louisville, Mississippi 16 95,412 95,412 472,356 (1b&d)
Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi 48 239,716(2) 239,716(2) 1,443,783 (1b)
Bay Springs Elderly, L.P.
Bay Springs Manor
Bay Springs, Mississippi 24 208,820 208,820 678,794 (1b&d)
Brisas del Mar Apartments
Limited Partnership
Brisas del Mar Apartments
Hatillo, Puerto Rico 66 668,172 668,172 2,664,848 (1b&d)
Bruce Housing Associates,
L.P.
Bruce Family Apartments 40 183,155(2) 183,155(2) 1,112,700 (1b&d)
Bruce, Mississippi
Carrington Limited
Dividend
Housing Association
Limited
Partnership 100 2,174,720(2) 2,174,720(2) 3,464,852 (1c)
Carrington Place
Farmington Hills, Michigan
Chestnut Park Associates,
L.P.
Chestnut Park Apartments 59 4,204,576 4,204,576 5,239,113 (1a)
East Orange, New Jersey
Chowan Senior Manor
Associates
Limited Partnership
Azalea Garden Senior Manor
Apartments 33 278,405 278,405 1,267,699 (1b&d)
Murfreesboro, North
Carolina
Christian Street Commons
Associates
Christian Street Commons
Apartments
Philadelphia, Pennsylvania 18 581,645 581,645 627,335 (1a&b)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
Capital contribution
obligation Mortgage
Name of Local Partnership Number Total as of Paid loans
through payable Subsidy
Name of apartment complex of March 30, March 30, December (see
rental 31, foot-
Apartment complex units 1998 1998 1997 notes)
- ------------------ --------------------- -----------------------------
location
- --------
<S> <C> <C> <C> <C> <C>
Country View Apartments
Country View Apartments
Pembroke, Maine 16 $ 279,183 $ 279,183 $ 941,880 (1b&d)
Desarrollos de Belen
Limited
Partnership
Vista de Jagueyes II 41 422,929 422,929 1,889,550 (1b&d)
Apartments
Aguas Buenas, Puerto Rico
Desarrollos de Emaus
Limited
Partnership
Hucares II Apartments 72 631,404 631,404 3,211,920 (1b&d)
Naguabo, Puerto Rico
Ellinwood Heights
Apartments, L.P.
Ellinwood Heights 24 156,261 156,261 691,142 (1b&d)
Apartments
Ellinwood, Kansas
Fulton Street Houses
Limited
Partnership
Fulton Street Townhouse
Apartments 35 1,948,081 1,948,081 3,869,930 (1a&b)
New York, New York
Hayes Run Limited
Partnership
Mashburn Gap Apartments 34 322,074 322,074 1,431,884 (1b&d)
Marshall, North Carolina
Howard L. Miller Sallisaw
Apartments II, L.P.
Sallisaw II Apartments
Sallisaw, Oklahoma 24 130,158 130,158 618,138 (1b&d)
Hurlock Meadow Limited
Partnership
Hurlock Meadow Apartments
Hurlock, Maryland 30 284,218 199,785 1,276,908 (1b&d)
Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi 32 135,528(2) 135,528(2) 801,919 (1b&d)
Justin Associates
Locust Tower Apartments
Philadelphia, Pennsylvania 40 1,809,723 1,809,723 2,483,842 (1b&e)
LaBelle Commons, Ltd.
LaBelle Commons
LaBelle, Florida 32 253,580 253,580 1,018,217 (1b&d)
Lawrence Road Properties,
Ltd.
Hillcrest Apartments 24 123,7992 123,7992 762,171 (1b&d)
Newton, Mississippi
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
Capital contribution
obligation Mortgage
Name of Local Partnership Number Total as of Paid through loans payable Sub-
as of sidy
Name of apartment complex of March 30, March 30, December 31, (see
rental
Apartment complex units 1998 1998 1997 footnotes)
- ------------------ --------------------- ------------------------------
location
<S> <C> <C> <C> <C> <C>
Loma Del Norte Limited
Partnership
Loma Del Norte Apartments
Anthony, New Mexico 40 $ 314,865 $ 314,865 $1,443,839 (1b&d)
Long Reach Associates
Limited
Partnership
Oak Ridge Apartments 30 448,922 448,922 1,485,035 (1b&d)
Bath, Maine
Mirador del Toa Limited
Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico 48 284,847(2) 284,847(2) 1,891,902 (1b&d)
Moore Haven Commons, Ltd.
Moore Haven Commons
Moore Haven, Florida 28 213,402 213,402 932,340 (1b&d)
NP-89 Limited Dividend
Housing
Association Limited
Partnership 168 2,372,292 2,372,292 4,306,098 (1a,b&g)
Newport Apartments
Clinton Township, Michigan
Nash Hill Associates,
Limited
Partnership
Nash Hill Place 28 302,575 302,575 1,475,786 (1b,d&f)
Williamsburg, Massachusetts
North Calhoun City, L.P.
North Calhoun City
Apartments 18 146,565 146,565 495,462 (1b&d)
Calhoun City, Mississippi
Orange City Plaza, Limited
Partnership
Orange City Plaza Apartments
Orange City, Iowa 32 456,090 456,090 529,837 (1a)
Puerta del Mar Limited
Partnership
Puerta del Mar Apartments 66 630,570 630,570 2,537,277 (1b&d)
Hatillo, Puerto Rico
Purvis Heights Properties,
L.P.
Pineview Apartments 40 191,512(2) 191,512(2) 1,153,999 (1b)
Purvis, Mississippi
Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania 29 597,050(2) 597,050(2) 1,580,073 (1b&e)
Somerset Manor, Ltd.
Somerset Manor
Central City, Pennsylvania 24 208,465 208,465 901,698 (1b&d)
Sugar Cane Villas, Ltd.
Sugar Cane Villas
Pahokee, Florida 87 751,560 751,560 3,322,803 (1b&d)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
Capital contribution
obligation Mortgage
Name of Local Partnership Number Total as of Paid through loans payable Sub-
as of sidy
Name of apartment complex of March 30, March 30, December 31, (see
rental
Apartment complex units 1998 1998 1997 footnotes)
- ------------------ -------------------------------------------------------------
location
<S> <C> <C> <C> <C> <C>
Summerfield Apartments
Limited
Partnership
Summerfield Apartments 52 $1,088,667 $1,088,667 $1,806,784 (1b)
Charlotte, North Carolina
Sydney Engel Associates L.P.
(formerly known as Sydney
Engel
Associates)
The Castle 224 3,201,874 3,201,874 17,831,381 (1b)
New York, New York
Union Valley Associates
Limited
Partnership
Union Valley Apartments 36 371,589 371,589 1,453,673 (1b)
Union Township, Pennsylvania
Walnut Grove Family, L.P.
Walnut Grove Apartments
Walnut Grove, Mississippi 24 191,695 191,695 850,407 (1b&d)
Waynesboro Apartments
Limited
Partnership
Waynesboro Apartments 36 360,859 360,859 1,490,153 (1b)
Waynesboro, Pennsylvania
West Calhoun City, L.P.
West Calhoun City Apartments
Calhoun City, Mississippi 28 230,212 230,212 783,367 (1b&d)
Westminster Apartments
Limited
Partnership
Westminster Apartments 42 1,047,993 1,047,993 1,631,651 (1a&b)
-------------------------- -------------
Philadelphia, Pennsylvania
$ 29,264,476 $ 29,180,043 $ 86,919,773
============ ============ ============
</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.
(g)One of the Local Partnership's Section 8 contracts, which covers
certain rental units, is scheduled to expire in October 1998.
(2)The capital contribution obligation total as of March 30, 1998 and the
capital contribution obligation paid through March 30, 1998 reflect
Registrant's obligation only.
<PAGE>
Item 3. Legal Proceedings
On July 16, 1997, Everest Properties, Inc. ("Everest") demanded certain
information with respect to the holders of Units. Everest stated that the
purpose of the demand was to assist Everest in making an offer to Unit holders
to purchase their Units and otherwise to communicate with them concerning such
an offer. On July 25, 1997, Registrant requested certain information from
Everest in order to assess the appropriateness of the demand. On July 28, 1997,
Everest filed a complaint in the Court of Chancery of the State of Delaware in
and for New Castle County against Registrant, the General Partner and its
general partner seeking, among other things, an order directing the defendants
to immediately furnish the requested information and awarding the plaintiff any
resulting damages. A one day trial was held on September 29, 1997. On December
5, 1997, the Court of Chancery issued a memorandum opinion and order, holding
that the plaintiff is entitled to the requested information regarding Unit
holders. On December 15, 1997, defendants filed a Notice of Appeal to the
Supreme Court of Delaware, which appeal was heard and denied. Registrant has
complied with the Court of Chancery's order.
Registrant is not aware of any other 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.
Accordingly, accurate information as to the market value of a Unit at any given
date is not available. The number of owners of Units as of May 20, 1998 was
1,778, holding 35,883 Units.
Merrill Lynch follows internal guidelines for providing estimated values of
limited partnerships and other direct investments reported on client account
statements. Pursuant to such guidelines, estimated values for limited
partnership interests reported on Merrill Lynch client account statements (such
as Registrant's Units) are provided to Merrill Lynch by independent valuation
services. These estimated values are 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 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 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 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, 1998 and 1997.
Low-income Tax Credits, which are subject to various limitations, may be used by
partners 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, 1997 and 1996 and the cumulative Low-income Tax
Credits allocated from inception through December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Low-income
Tax Credits
<S> <C>
Tax year ended December 31, $ 153.74
1997
Tax year ended December 31, 152.73
1996
Cumulative totals $ 991.02
</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,
1998 1997 1996 1995 1994
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest and other $ 257,645 $317,065 $335,724 $326,184 $331,981
========================================================
revenue
Equity in loss of
investment in local $ (2,358,431)$ (2,509,806)$ (3,249,195)$ (3,396,272) $ (3,295,333)
============ ============ ============ ============ ============
partnerships
Net loss $ (2,649,323)$ (2,718,536)$ (3,443,977)$ (3,611,978) $ (3,522,497)
============ ============ ============ ============ ============
Net loss per unit of
limited partnership $ (73.09) $ (75.00) $ (95.02) $ (99.65) $ (97.18)
===================================================================
interest
As of
March
30,
1996
1998 1997 1995 1994
---------------------------- -----------------------
Total assets $12,106,269 $15,503,629 $17,832,235 $21,199,982 $23,379,674
=========== =========== =========== =========== ===========
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Capital Resources and Liquidity
Registrant admitted limited partners in four closings with aggregate limited
partners' capital contributions of $35,883,000. In connection with the offering
of the sale of Units, Registrant incurred organization and offering costs of
approximately $4,419,000 and established a working capital reserve of
approximately $2,153,000. The remaining net proceeds of approximately
$29,311,000 (the "Net Proceeds") were available to be applied to the acquisition
of limited partnership interests in local partnerships (the "Local
Partnerships") which own low-income multifamily residential complexes (the
"Property" or "Properties") which qualify for the low-income tax credit under
Section 42 of the Internal Revenue Code (the "Low-income Tax Credit"). Any
adjustments to the capital contributions made by Registrant to the Local
Partnerships under the terms of the Local Partnerships' partnership agreements
have resulted in an adjustment to Registrant's working capital reserve.
Registrant has utilized Net Proceeds, after making any necessary adjustments, in
acquiring an interest in forty-three Local Partnerships. Restricted cash in the
balance sheet as of March 30, 1998 represents an outstanding capital
contribution payable upon one Local Partnership's satisfaction of specified
conditions related to operations.
As of March 30, 1998, Registrant has unrestricted cash and cash equivalents and
investments in bonds totaling $3,484,813, which is available for operating
expenses of Registrant and circumstances which may arise in connection with the
Local Partnerships. As of March 30, 1998, Registrant's investments in bonds
represent corporate bonds of $1,916,994, U.S. Treasury bonds of $1,026,069 and
U.S. government agency bonds of $122,378 with various maturity dates ranging
from 1999 to 2023. Registrant acquired such investments in bonds with the
intention of utilizing proceeds generated by such investments to meet its annual
obligations. Future sources of Registrant funds are expected primarily from
interest earned on working capital and limited cash distributions from Local
Partnerships.
During the year ended March 30, 1998, Registrant received cash from interest
revenue, maturity of a bond and distributions from Local Partnerships and
utilized cash for operating expenses and making a capital contribution to a
Local Partnership. Cash and cash equivalents and investments in bonds
available-for-sale increased, in the aggregate, by approximately $221,000 during
the year ended March 30, 1998 (which included a net unrealized gain on
investments in bonds of approximately $215,000, the amortization of net premium
on investments in bonds of approximately $15,000 and the accretion of zero
coupon bonds of approximately $85,000) and restricted cash decreased by
approximately $1,225,000 as a result of a capital contribution payment made to a
Local Partnership. Notwithstanding circumstances that may arise in connection
with the Properties, Registrant does not expect to realize significant gains or
losses on its investments in bonds, if any.
During the year ended March 30, 1998, 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, 1997 of $2,358,431 and cash distributions
received from Local Partnerships of $31,519 (exclusive of distributions from
Local Partnerships of $6,672 classified as other income). Payable to general
partner in the accompanying balance sheet as of March 30, 1998 represents
accrued management fees.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
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 each Local Partnership's results of operations and by
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. Equity in loss in excess of
Registrant's investment balance in a Local Partnership is allocated to other
partners' capital in any such Local Partnership. As a result, the reported
equity in loss of investment in Local Partnerships is expected to decrease as
Registrant's investment balances in the respective Local Partnerships become
zero. 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, irrespective 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 below under
Local Partnership Matters regarding certain Local Partnerships currently
operating below economic break even levels.
Registrant's operations for the years ended March 30, 1998, 1997 and 1996
resulted in net losses of $2,649,323, $2,718,536 and $3,443,977, respectively.
The decrease in net loss from 1997 to 1998 is primarily attributable to a
decrease in equity in loss of investment in Local Partnerships of approximately
$151,000, partially offset by a decrease in interest revenue of approximately
$66,000 and an increase in professional fees of approximately $21,000. The
decrease in equity in loss of investment in Local Partnerships is primarily the
result of an increase in the nonrecognition of losses in excess of Registrant's
investment in Local Partnerships of approximately $1,131,000 in accordance with
the equity method of accounting, partially offset by Registrant's share of the
increase in net loss of the Local Partnerships of approximately $1,009,000
resulting primarily from the recorded impairment in connection with Christian
Street Commons Associates (the "Christian Street Local Partnership") of
$1,032,653 (see Local Partnership Matters below). The decrease in interest
revenue is primarily due to the payment of a capital contribution which reduced
the amount of available investments. The increase in professional fees is
primarily the result of costs incurred in connection with an outside party's
desire to purchase Units. The decrease in net loss from 1996 to 1997 is
primarily attributable to a decrease in equity in loss of investment in Local
Partnerships of approximately $739,000, which is primarily attributable to (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 decrease in the net operating losses of certain
Local Partnerships.
The Local Partnerships' net loss of approximately $4,269,000 for the year ended
December 31, 1997 includes depreciation and amortization expense of
approximately $4,066,000, interest on non-mandatory debt of approximately
$331,000 and a loss from impairment of long-lived assets of approximately
$1,033,000, and does not include principal payments on permanent mortgages of
approximately $432,000. The Local Partnerships' net loss of approximately
$3,260,000 for the year ended December 31, 1996 includes depreciation and
amortization expense of approximately $4,218,000 and interest on non-mandatory
debt of approximately $299,000, and does not include principal payments on
permanent mortgages of approximately $309,000. The Local Partnerships' net loss
of approximately $3,678,000 for the year ended December 31, 1995 includes
depreciation and amortization expense of approximately $4,392,000 and interest
on non-mandatory debt of approximately $278,000, and does not include principal
payments on permanent mortgages of approximately $261,000. The results of
operations of the Local Partnerships for the year ended December 31, 1997 are
not necessarily indicative of the results that may be expected in future
periods.
Local Partnership Matters
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 pursuant to subsidy agreements ("HAP Contracts") are subject to
specific laws, regulations and agreements with federal and state agencies. One
Local Partnership's HAP Contract, which covers certain rental units, is
scheduled to expire in October 1998. 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 general partners of a local
partnership (the "Local
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
General Partner") 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, 1997, 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' operating 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 any required deferral of property management fees.
The terms of the partnership agreement of the Christian Street Local Partnership
require the Local General Partners 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 $26,000
for the year ended December 31, 1997, which includes property management fees of
approximately $4,000. Accordingly, the net operating deficit was approximately
$22,000. As of December 31, 1997, the Local General Partners have advanced
approximately $74,000 under their Deficit Guarantee obligation. However, due to
ongoing operating deficits and the uncertainty of future operating income, the
Christian Street Local Partnership has determined the underlying rental
property to be permanently impaired in accordance with applicable accounting
practices. Accordingly, the Christian Street Local Partnership recognized
an impairment loss of $1,032,653 as of December 31, 1997. As a result,
Registrant recognized additional equity in loss of its investment in the
Christian Street Local Partnership of approximately $386,000 in connection
with the aforementioned impairment and Registrant's investment balance in
the Christian Street Local Partnership, after the cumulative equity losses,
became zero during the year ended March 30, 1998. Notwithstanding the
accounting treatment concerning the impairment loss,Registrant has not
experienced an interruption in the allocation of Low-income Tax Credits from
the Christian Street Local Partnership. Of Registrant's total annual
Low-income Tax Credits, approximately 2% is allocated from the Christian
Street Local Partnership.
Waynesboro Apartments Limited Partnership (the "Waynesboro Local Partnership")
incurred an operating deficit of approximately $6,000 for the year ended
December 31, 1997. In addition, although principal and interest payments on its
mortgage are current, the property's replacement reserve is underfunded by
approximately $14,000 as of December 31, 1997. The Local General Partners have
reported that they have submitted a workout plan to the lender, but that the
lender has yet to reply. No default has been declared as a result of the
underfunding of the replacement reserve. Of Registrant's total annual Low-income
Tax Credits, approximately 3% is allocated from the Waynesboro Local
Partnership.
The terms of the partnership agreement of Westminster Apartments Limited
Partnership (the "Westminster Local Partnership") require the Local General
Partner to advance funds to cover operating deficits through 2009 and to cause
the management agent to defer property management fees in order to avoid a
default under the mortgage. The Westminster Local Partnership incurred an
operating deficit of approximately $13,000 for the year ended December 31, 1997,
which includes property management fees of approximately $9,000. Accordingly,
the net operating deficit was approximately $4,000. As of January 1998 the
Westminster Local Partnership had fallen four months in arrears on its mortgage,
replacement reserve and escrow requirements, at which time the lender drew on
available collateral of approximately $26,000 provided by the Local General
Partner. As of June 15, 1998, the Local General Partner reports that the
mortgage is current and no default has been declared by the lender as a result
of the drawdown on the collateral although resolution of the lender's
application of the collateral previously drawn is pending. In addition, the
Local General Partner has reported that it was successful in its real estate tax
appeal, resulting in a reduction in annual real estate tax expense of
approximately $5,000 compared to the expense incurred in 1997. Of Registrant's
total annual Low-income Tax Credits, approximately 4% is allocated from the
Westminster Local Partnership.
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.
Adoption of Accounting Standard
Registrant has adopted Statement of Financial Accounting Standard ("SFAS") No.
128, "Earnings Per Share" and SFAS No. 129, "Disclosure of Information
About Capital Structure." SFAS No. 128 establishes standards for
computing and presenting 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. The adoption of
SFAS Nos. 128 and 129 has not materially impacted Registrant's reported
earnings, financial condition, cash flows or presentation of the financial
statements.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Accounting Standard not yet Adopted
On March 31, 1998, Registrant adopted SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. The adoption of SFAS No.
130 is not expected to have a material impact on Registrant's financial position
and results of operations.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 8. Financial Statements and Supplementary Data
Table of Contents Page
Independent Auditors' Report...............................................15
Balance Sheets as of March 30, 1998 and 1997................................16
Statements of Operations for the years ended March 30, 1998, 1997 and 1996...17
Statements of Changes in Partners' Equity (Deficit) for the years ended
March 30, 1998, 1997 and 1996.............................................18
Statements of Cash Flows for the years ended March 30, 1998, 1997 and 1996..19
Notes to Financial Statements as of March 30, 1998, 1997 and 1996.........21
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, 1998 and 1997, 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, 1998. 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, 1998 and 1997, and the results of its
operations and its cash flows for each of the three years in the period ended
March 30, 1998, in conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
May 11, 1998
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
BALANCE SHEETS
MARCH 30, 1998 AND 1997
<S> <C> <C>
Notes 1998 1997
----- -----------------------
ASSETS
Cash and cash equivalents 3,9 $ 419,372 $409,413
Restricted cash 3,5,9 84,433 1,309,208
Investments in bonds available-for-sale 4,9 3,065,441 2,854,771
Investment in local partnerships 5,8 8,515,114 10,905,064
Interest receivable 9 21,909 25,173
-----------------------------
$ 12,106,269 $ 15,503,629
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses 8 $ 997,634 $ 862,114
Payable to general partner 6,8 930,614 800,043
Capital contributions payable 5,9 84,433 1,309,208
Other 16,450 21,200
----------------------------
2,029,131 2,992,565
Commitments and contingencies 5,8
Partners' equity (deficit) 2,4
General partner (214,858) (188,365)
Limited partners (35,883 units of limited
partnership interest outstanding) 10,258,714 12,881,544
Unrealized gain (loss) on investments in
bonds available-for-sale, net 33,282 (182,115)
---------- ---------
10,077,138 12,511,064
$ 12,106,269 $ 15,503,629
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 30, 1998, 1997 AND 1996
Notes 1998 1997 1996
----- -----------------------------------------
<S> <C> <C> <C> <C>
REVENUE
Interest $ 250,973 $ 317,065 $335,724
Other income from local partnerships 6,672
-------------- ---------- --------
TOTAL REVENUE 257,645 317,065 335,724
---------------- ----------- ---------
EXPENSES
Administration fees 8 230,571 230,571 230,571
Management fees 6,8 230,571 230,571 230,571
Professional fees 67,118 45,849 50,757
Printing, postage and other 20,277 18,804 15,482
Amortization 3,125
--------------------------------------------
TOTAL EXPENSES 548,537 525,795 530,506
------------------------------------------
Loss from operations (290,892) (208,730) (194,782)
Equity in loss of investment in 5 (2,358,431) (2,509,806) (3,249,195)
------------- ------------- -------------
local partnerships
NET LOSS $ (2,649,323) $ (2,718,536) $ (3,443,977)
============ ============ ============
NET LOSS ATTRIBUTABLE TO 2
General partner $ (26,493) $ (27,185) $ (34,440)
Limited partners (2,622,830) (2,691,351) (3,409,537)
------------- ------------- -------------
$ (2,649,323) $ (2,718,536) $ (3,443,977)
NET LOSS per unit of limited
partnership
interest (35,883 units of limited
partnership interest) $ (73.09) $ (75.00) $ (95.02)
===========================================
</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, 1998, 1997 AND 1996
Unrealized
Gain (Loss) on
Investments in
General Limited Bonds Available-
Partner Partners For-Sale, Total
Net
<S> <C> <C> <C> <C>
Partners' equity (deficit), $ (126,740) $ 18,982,432 $ (202,799) $ 18,652,893
March 30, 1995
Net loss (34,440) (3,409,537) (3,443,977)
Unrealized gain on investments
in bonds available-for-sale, 107,692 107,692
---------------------------------------- --------------
net
Partners' equity (deficit), (161,180) 15,572,895 (95,107) 15,316,608
March 30, 1996
Net loss (27,185) (2,691,351) (2,718,536)
Unrealized loss on investments
in bonds available-for-sale, (87,008) (87,008)
----------------------------------------- ---------------
net
Partners' equity (deficit), (188,365) 12,881,544 (182,115) 12,511,064
March 30, 1997
Net loss (26,493) (2,622,830) (2,649,323)
Unrealized gain on investments in
bonds available-for-sale, net 215,397 215,397
---------------------------------------- --------------
Partners' equity (deficit), $ (214,858) $ 10,258,714 $ 33,282 $ 10,077,138
========== ============ =============== ============
March 30, 1998
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 30, 1998, 1997 AND 1996
1998 1997 1996
----------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 183,964 $ 248,496 $ 256,741
Cash used for local partnerships for deferred (4,750) (4,750) (4,750)
expenses
Cash paid for
administration fees (100,000) (100,000) (100,000)
management fees (100,000) (100,000) (100,000)
professional fees (55,618) (40,999) (41,357)
printing, postage and other expenses (26,828) (9,989) (12,736)
------------ -------------------------
Net cash used in operating activities (103,232) (7,242) (2,102)
----------- --------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions and other income from local 38,191 33,605 29,682
partnerships
Maturity/redemption of bonds 75,000 200,000
Transfer from (to) restricted cash 1,224,775 (206,881) 300,000
Investment in local partnerships (1,224,775) (300,000)
Investments in bonds (301,554)
--------------------------------------
Net cash provided by (used in) investing 113,191 26,724 (271,872)
------------ -------------------------
activities
Net increase (decrease) in cash and cash 9,959 19,482 (273,974)
equivalents
Cash and cash equivalents at beginning of year 409,413 389,931 663,905
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 419,372 $ 409,413 $ 389,931
=========== =========== ===========
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds $ 215,397 $ (87,008) $ 107,692
=========== =========== ===========
available-for-sale, net
Increase in capital contributions payable $ 206,881
===========
- -----------------------------------------------------------------------------------------
See reconciliation of net loss to net cash used in operating activities on page
20.
</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, 1998, 1997 AND 1996
1998 1997 1996
------------------------------------
<S> <C> <C> <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN
OPERATING ACTIVITIES
Net loss $ (2,649,323)$ (2,718,536)$ (3,443,977)
Adjustments to reconcile net loss to net cash
used in
operating activities
Equity in loss of investment in local 2,358,431 2,509,806 3,249,195
partnerships
Distributions from local partnerships (6,672)
classified as other income
Amortization of organization costs 3,125
Amortization of net premium on investments 14,907 16,852 18,640
in bonds
Accretion of zero coupon bonds (85,180) (88,256) (86,046)
Decrease (increase) in interest receivable 3,264 2,835 (11,577)
Increase in accounts payable and accrued 135,520 144,236 142,717
expenses
Increase in payable to general partner 130,571 130,571 130,571
Decrease in other liabilities (4,750) (4,750) (4,750)
-----------------------------------------
NET CASH USED IN OPERATING ACTIVITIES $ (103,232) $ (7,242) $(2,102)
=========================================
</TABLE>
See Notes to Financial Statements.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 30, 1998, 1997 AND 1996
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 Internal Revenue Code (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 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, under which the investment
is carried at cost which includes capital contributions payable, and is
adjusted for the Partnership's share of each Local Partnership's results of
operations and by 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. Equity in loss in excess of the Partnership's investment
balance in a Local Partnership is allocated to other partners' capital in
any 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
investment in a Local Partnership are recorded as other income from Local
Partnerships.
The Partnership regularly assesses its investments in Local Partnerships
for the existence of impairment. If an investment in a Local Partnership is
considered to be permanently impaired, the Partnership reduces its
investment in any such Local Partnership and includes such reduction in
equity in loss of investment in 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
The Partnership has adopted Statement of Financial Accounting
Standard ("SFAS") No. 128, "Earnings Per Share" and SFAS No. 129,
"Disclosure of Information about Capital Structure." SFAS No. 128
establishes standards for computing and presenting 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. The adoption of SFAS Nos. 128 and 129 has not
materially impacted the Partnership's reported earnings, financial
condition, cash flows or presentation of the financial statements.
Accounting Standard not yet Adopted
On March 31, 1998, the Partnership adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components (revenues, expenses,
gains and losses) in a full set of general-purpose financial statements.
The adoption of SFAS No. 130 is not expected to have a material impact on
the Partnership's financial position and results of operations.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
1.Organization,Purpose and Summary of Significant Accounting Policies(continued)
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.
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
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).
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.
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.
Reclassification
Certain reclassifications of amounts have been made to conform to the current
year presentation.
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
organization and offering 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 as syndication costs. 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.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
3. Cash and Cash Equivalents and Restricted Cash
As of March 30, 1998, the Partnership has cash and cash equivalents and
restricted cash in the aggregate of $503,805 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 circumstances 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, 1998, 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
After one year through $680,637 $13,309 $(74) $ 693,872
five years
After five years through 367,021 7,481 (2,467) 372,035
ten years
After ten years 842,237 16,400 (7,550) 851,087
--------------------------------------------------
1,889,895 37,190 (10,091) 1,916,994
------------------------------------ ------------
U.S. Treasury debt
securities
After five years through 537,345 5,202 (1,275) 541,272
ten years
After ten years 479,189 5,608 -- 484,797
1,016,534 10,810 (1,275) 1,026,069
-------------------------------------------------
U.S. government and agency
securities
After ten years 125,730 - (3,352) 122,378
--------------------------------------------------
$ 3,032,159 $ 48,000 $(14,718) $3,065,441
=========== ======================== ===========
</TABLE>
<TABLE>
<CAPTION>
As of March 30, 1997, certain information concerning 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 $ 76,647 $ -- $ (873) $ 75,774
After one year through 486,202 77 (4,059) 482,220
five years
After five years through 401,902 -- (18,362) 383,540
ten years
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 936,320 -- (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>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships
As of March 30, 1998, the Partnership owns a limited partnership interest
in the following Local Partnerships:
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 (the "Christian Street Local
Partnership");
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.;
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) (the"Sydney Engel Local Partnership")*;
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.
* An affiliate of the General Partner is a general partner of and/or
provides services to the Local Partnership.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
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>
The
Partnership ATCP II
<S> <C> <C>
Batesville Family, L.P. 61.75% 37.25%
Bruce Housing Associates, 61.75 37.25
L.P.
Carrington Limited Dividend
Housing 65.95 33.05
Association Limited
Partnership
Ivy Family, L.P. 61.75 37.25
Lawrence Road Properties, 61.75 37.25
Ltd.
Mirador del Toa Limited 59.06 39.94
Partnership
Purvis Heights Properties, 61.75 37.25
L.P.
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. Under the terms of each of the 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 $29,180,043 and $84,433 is outstanding. Restricted cash in the
accompanying balance sheet as of March 30, 1998 represents such outstanding
capital contribution, which is payable upon one Local Partnership's
satisfaction of specified conditions related to operations. As of December
31, 1997, the Local Partnerships have outstanding mortgage loans payable
totaling approximately $86,920,000 and accrued interest payable on such loans
totaling approximately $2,110,000, which are secured by security interests
and liens common to mortgage 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
$1,665,224, $534,104 and $175,282 for the years ended December 31, 1997, 1996
and 1995, 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, 1997
and 1996 and the combined statements of operations of the Local Partnerships
for the years ended December 31, 1997, 1996 and 1995 are reflected on pages
26 and 27, respectively.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of December 31,
1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------
ASSETS
<S> <C> <C>
Cash and other investments $ 863,259 $ 1,340,942
Rents receivable 456,077 354,108
Capital contributions receivable 84,433 1,309,208
Escrow deposits and reserves 4,403,622 3,763,306
Land 3,910,215 3,964,692
Buildings and improvements (net of
accumulated depreciation of $27,045,787 87,586,072 92,443,378
and $23,212,364)
Intangible assets (net of accumulated
amortization of $584,504 and $1,039,889) 762,749 748,879
Other 1,401,766 772,465
--------------------------------
$ 99,468,193 $ 104,696,978
============= =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 442,564 $ 512,801
Due to related parties 5,247,688 5,127,931
Mortgage and construction loans 86,919,773 87,351,443
Notes payable 62,111 70,804
Accrued interest 2,109,721 1,782,695
Other 580,863 557,856
--------------------------------
95,362,720 95,403,530
Partners' equity (deficit)
American Tax Credit Properties III L.P.
Capital contributions, net of
distributions (includes receivable of 29,048,449 29,079,605
$84,433 and $1,309,208)
Cumulative loss (20,522,876) (18,164,445)
-------------- --------------
8,525,573 10,915,160
General partners and other limited
partners, including ATCP II
Capital contributions, net of (123,346) 764,757
distributions
Cumulative loss (4,296,754) (2,386,469)
------------------------------
(4,420,100) (1,621,712)
4,105,473 9,293,448
$ 99,468,193 $ 104,696,978
============= =============
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the
years ended December 31, 1997, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
--------------- --------------- ---------
<S> <C> <C> <C>
REVENUE
Rental $ 10,466,426 $ 10,325,782 $ 10,245,866
Interest and other 365,948 437,813 377,903
-------------- -------------- --------------
TOTAL REVENUE 10,832,374 10,763,595 10,623,769
------------ ------------ ------------
EXPENSES
Administrative 2,049,122 2,121,842 2,158,197
Utilities 1,013,167 1,018,174 966,013
Operating, maintenance and 2,253,753 1,987,209 2,150,242
other
Taxes and insurance 1,270,567 1,249,956 1,149,897
Interest (including
amortization of $48,430, 3,464,203 3,534,807 3,677,468
$105,969 and $192,541)
Depreciation 4,017,625 4,111,594 4,199,670
Loss from impairment of 1,032,653
long-lived assets -------------- ------------- -----------
TOTAL EXPENSES 15,101,090 14,023,582 14,301,487
------------- ------------- -------------
NET LOSS $ (4,268,716) $ (3,259,987) $ (3,677,718)
============= ============= =============
NET LOSS ATTRIBUTABLE TO
American Tax Credit $ (2,358,431) $ (2,509,806) $ (3,249,195)
Properties III L.P.
General partners and other
limited partners, including
ATCP II, which includes
specially allocated items of
revenue (expense) to certain
general partners of $0, ($828)
and $14,573, and
$1,665,224, $534,104 and
$175,282 of American Tax
Credit Properties III L.P.
loss in excess of
investment (1,910,285) (750,181) (428,523)
------------ ------------- -------------
$ (4,268,716) $ (3,259,987) $ (3,677,718)
============ ============ ============
</TABLE>
<PAGE>
- ----------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES III L.P.
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
Investment and capital contribution activity with respect to each Local
Partnership for the year ended March 30, 1998 is as follows:
<TABLE>
<CAPTION>
Cash Cash
Investment Partnership's distrib- distrib- Investment
in Local equity in tion tion classi- in Local Capital
Partnership loss for received fied as Partnership contribution
balance the during the other income balance payable
as of year ended year during the as of as of
Name of Local Partnership March December ended year ended March March
30, 31, 1997 March March 30, 30, 1998 30,
1997 30, 1998 1998 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
April Gardens Apartments
II Limited Partnership $ $ (2) $(960) $960 $ -- $ --
Ashland Park Apartments, 56,021 (51,802) -- -- 4,219 --
L.P.
Auburn Family, L.P. 50,541 (10,791) -- -- 39,750 --
Batesville Family, L.P. -- -- (2) -- -- -- --
Bay Springs Elderly, L.P. 93,455 (20,374) -- -- 73,081 --
Brisas del Mar Apartments -- -- (2) (1,320) 1,320 -- --
Limited Partnership
Bruce Housing Associates, 46,518 (16,029) -- -- 30,489 --
L.P.
Carrington Limited
Dividend Housing 1,126,050 (115,198) -- -- 1,010,852 --
Association Limited
Partnership
Chestnut Park Associates, 1,346,249 (487,017) -- -- 859,232 --
L.P.
Chowan Senior Manor
Associates Limited 62,319 (54,389) -- -- 7,930 --
Partnership
Christian Street Commons 400,233 (400,233) (1)-- -- -- --
Associates
Country View Apartments 185,611 (28,719) (750) -- 156,142 --
Desarrollos de Belen 160,973 (58,452) -- -- 102,521 --
Limited Partnership
Desarrollos de Emaus 242,640 (78,082) -- -- 164,558 --
Limited Partnership
Ellinwood Heights 40,017 (25,785) -- -- 14,232 --
Apartments, L.P.
Fulton Street Houses 850,560 (280,887) -- -- 569,673 --
Limited Partnership
Hayes Run Limited -- -- (2) -- -- -- --
Partnership
Howard L. Miller Sallisaw 36,263 (5,856) -- -- 30,407 --
Apartments II, L.P.
Hurlock Meadow Limited 8,747 (7,247)(1) (1,500) -- -- 84,433
Partnership
Ivy Family, L.P. 34,473 (17,102) -- -- 17,371 --
Justin Associates 1,131,016 (130,723) -- -- 1,000,293 --
LaBelle Commons, Ltd. 104,805 (27,055) (2,500) -- 75,250 --
Lawrence Road Properties, 3,327 (3,327) (1) -- -- -- --
Ltd.
Loma Del Norte Limited 149,057 (26,623) (2,000) -- 120,434 --
Partnership
Long Reach Associates 220,147 (48,059) -- -- 172,088 --
Limited Partnership
Mirador del Toa Limited -- -- (2) (572) 572 -- --
Partnership
Moore Haven Commons, Ltd. -- -- (2) -- -- -- --
NP-89 Limited Dividend
Housing Association 1,644,687 (136,116) (10,000) -- 1,498,571 --
Limited Partnership
Nash Hill Associates, 192,666 (18,780) (3,637) -- 170,249 --
Limited Partnership
North Calhoun City, L.P. 82,162 (6,224) -- -- 75,938 --
Orange City Plaza, Limited 391,105 (15,551) -- -- 375,554 --
Partnership
Puerta del Mar Limited -- -- (2) (1,320) 1,320 -- --
Partnership
Purvis Heights Properties, 71,362 (22,933) -- -- 48,429 --
L.P.
Queen Lane Investors 268,117 (58,615) (3,632) -- 205,870 --
Somerset Manor, Ltd. -- -- (2) -- -- -- --
Sugar Cane Villas, Ltd. -- -- (2) -- -- -- --
Summerfield Apartments 716,388 (43,007) (5,000) -- 668,381 --
Limited Partnership
Sydney Engel Associates -- -- (2) (2,500) 2,500 -- --
L.P.
Union Valley Associates 118,570 (40,993) (1,250) -- 76,327 --
Limited Partnership
Walnut Grove Family, L.P. 39,568 (23,742) -- -- 15,826 --
Waynesboro Apartments 96,977 (40,712) (1,250) -- 55,015 --
Limited Partnership
West Calhoun City, L.P. 119,943 (14,560) -- -- 105,383 --
Westminster Apartments 814,497 (43,448) -- -- 771,049 --
------------------------------------------------------------------
Limited Partnership
$ 10,905,064 $(2,358,431) $(38,191) $6,672 $ 8,515,114 $84,433
========================================= ====================
</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>
- --------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES III L.P.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
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:
<TABLE>
<CAPTION>
Cash
Investment Partnership's distribution Investment
in Local Investment equity in received in Local Capital
Partnership during loss for during Partnership contributions
balance the year the year balance payable
as of ended year ended ended as of as of
Name of Local Partnership March March December March March March 30,
30, 30, 1997 31, 1996 30, 1997 30, 1997 1997
1996
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
April Gardens Apartments
II Limited Partnership $ 12,149 $-- $ (12,149)(1) $-- $ -- $ --
Ashland Park Apartments, 78,159 -- (22,138) -- 56,021 --
L.P.
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 88,088 -- (88,088) (1) -- -- --
Limited Partnership
Bruce Housing Associates, 69,671 -- (23,153) -- 46,518 --
L.P.
Carrington Limited
Dividend Housing 1,292,293 -- (166,243) -- 1,126,050 --
Association Limited
Partnership
Chestnut Park Associates, 1,820,198 -- (473,949) -- 1,346,249 --
L.P.
Chowan Senior Manor
Associates Limited 122,700 -- (58,785) (1,596) 62,319 --
Partnership
Christian Street Commons 452,959 -- (52,726) -- 400,233 --
Associates
Country View Apartments 212,279 -- (26,668) -- 185,611 --
Desarrollos de Belen 219,370 -- (58,397) -- 160,973 --
Limited Partnership
Desarrollos de Emaus 326,694 -- (84,054) -- 242,640 --
Limited Partnership
Ellinwood Heights 64,847 -- (24,830) -- 40,017 --
Apartments, L.P.
Fulton Street Houses 1,068,793 -- (218,233) -- 850,560 --
Limited Partnership
Hayes Run Limited -- -- -- (2) -- -- --
Partnership
Howard L. Miller Sallisaw 56,318 -- (20,055) -- 36,263 --
Apartments II, L.P.
Hurlock Meadow Limited 44,006 -- (33,759) (1,500) 8,747 84,433
Partnership
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, 11,618 -- (8,291) -- 3,327 --
Ltd.
Loma Del Norte Limited 187,621 -- (34,564) (4,000) 149,057 --
Partnership
Long Reach Associates 257,434 -- (37,287) -- 220,147 --
Limited Partnership
Mirador del Toa Limited 36,843 -- (36,843) (1) -- -- --
Partnership
Moore Haven Commons, Ltd. -- -- -- (2) -- -- --
NP-89 Limited Dividend
Housing Association 1,752,636 -- (97,949) (10,000) 1,644,687 --
Limited Partnership
Nash Hill Associates, 217,456 -- (24,790) -- 192,666 --
Limited Partnership
North Calhoun City, L.P. 96,558 -- (14,396) -- 82,162 --
Orange City Plaza, Limited 400,715 -- (7,036) (2,574) 391,105 --
Partnership
Puerta del Mar Limited 75,079 -- (75,079) (1) -- -- --
Partnership
Purvis Heights Properties, 77,168 -- (5,806) -- 71,362 --
L.P.
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 776,800 -- (55,412) (5,000) 716,388 --
Limited Partnership
Sydney Engel Associates -- 206,881 (206,881) (1) -- -- 1,224,775
L.P.
Union Valley Associates 145,809 -- (27,239) -- 118,570 --
Limited Partnership
Walnut Grove Family, L.P. 65,309 -- (25,741) -- 39,568 --
Waynesboro Apartments 114,774 -- (17,797) -- 96,977 --
Limited Partnership
West Calhoun City, L.P. 142,592 -- (22,649) -- 119,943 --
Westminster Apartments 848,644 -- (34,147) -- 814,497 --
-------------------------------------------------------------------
Limited Partnership
$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>
- -----------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES III L.P.
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1997 is
as follows:
<TABLE>
<CAPTION>
Mortgage Buildings Accumulated
Name of Local Partnership loans Land and depreciation
payable improvements
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
April Gardens Apartments II $2,004,455 $39,984 $2,469,537 $(706,940)
Limited Partnership
Ashland Park Apartments, L.P. 1,042,772 50,160 1,247,739 (321,176)
Auburn Family, L.P. 472,356 20,000 557,595 (135,833)
Batesville Family, L.P. 1,443,783 52,000 1,806,202 (474,324)
Bay Springs Elderly, L.P. 678,794 38,000 841,698 (200,630)
Brisas del Mar Apartments 2,664,848 100,280 3,227,091 (946,001)
Limited Partnership
Bruce Housing Associates, L.P. 1,112,700 16,000 1,418,598 (408,466)
Carrington Limited Dividend
Housing Association Limited 3,464,852 200,000 6,364,620 (1,803,962)
Partnership
Chestnut Park Associates, L.P. 5,239,113 781,700 8,654,778 (2,121,750)
Chowan Senior Manor Associates 1,267,699 86,101 1,495,884 (374,073)
Limited Partnership
Christian Street Commons 627,335 - - -
Associates
Country View Apartments 941,880 35,698 1,213,947 (182,517)
Desarrollos de Belen Limited 1,889,550 96,190 2,490,637 (430,785)
Partnership
Desarrollos de Emaus Limited 3,211,920 214,000 4,031,061 (634,977)
Partnership
Ellinwood Heights Apartments, 691,142 10,000 864,075 (199,073)
L.P.
Fulton Street Houses Limited 3,869,930 2 5,959,123 (1,258,635)
Partnership
Hayes Run Limited Partnership 1,431,884 85,060 1,481,235 (273,151)
Howard L. Miller Sallisaw 618,138 39,000 725,785 (175,072)
Apartments II, L.P.
Hurlock Meadow Limited 1,276,908 49,525 1,559,298 (381,270)
Partnership
Ivy Family, L.P. 801,919 11,000 1,035,459 (304,284)
Justin Associates 2,483,842 27,472 4,344,154 (943,253)
LaBelle Commons, Ltd. 1,018,217 98,947 1,184,937 (243,375)
Lawrence Road Properties, Ltd. 762,171 50,000 928,273 (238,923)
Loma Del Norte Limited 1,443,839 84,874 1,769,702 (310,772)
Partnership
Long Reach Associates Limited 1,485,035 118,446 1,868,040 (360,604)
Partnership
Mirador del Toa Limited 1,891,902 105,000 2,327,341 (682,219)
Partnership
Moore Haven Commons, Ltd. 932,340 73,645 1,197,000 (327,540)
NP-89 Limited Dividend Housing
Association Limited 4,306,098 150,000 7,333,401 (1,728,582)
Partnership
Nash Hill Associates, Limited 1,475,786 123,876 1,676,137 (310,390)
Partnership
North Calhoun City, L.P. 495,462 12,000 631,120 (152,679)
Orange City Plaza, Limited 529,837 53,904 1,041,636 (205,726)
Partnership
Puerta del Mar Limited 2,537,277 115,000 3,046,045 (905,213)
Partnership
Purvis Heights Properties, L.P. 1,153,999 47,000 1,443,465 (367,819)
Queen Lane Investors 1,580,073 60,301 2,735,277 (670,274)
Somerset Manor, Ltd. 901,698 53,383 1,097,281 (284,763)
Sugar Cane Villas, Ltd. 3,322,803 58,500 4,059,461 (1,080,291)
Summerfield Apartments Limited 1,806,784 195,411 2,683,173 (416,913)
Partnership
Sydney Engel Associates L.P. 17,831,381 284,305 19,436,525 (4,991,233)
Union Valley Associates Limited 1,453,673 97,800 1,745,528 (319,584)
Partnership
Walnut Grove Family, L.P. 850,407 30,000 1,011,054 (243,598)
Waynesboro Apartments Limited 1,490,153 76,000 1,786,404 (353,765)
Partnership
West Calhoun City, L.P. 783,367 18,000 1,012,925 (237,939)
Westminster Apartments Limited 1,631,651 51,651 2,828,618 (337,413)
Partnership
$ 86,919,773 $3,910,215 $114,631,859 $(27,045,787)
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES III L.P.
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1996 is
as follows:
<TABLE>
<CAPTION>
Mortgage
& Buildings Accumulated
Name of Local Partnership construction Land and depreciation
loans improvements
payable
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
April Gardens Apartments II $2,008,084 $39,984 $ 2,469,537 $ (603,482)
Limited Partnership
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 2,670,432 100,280 3,227,091 (809,838)
Limited Partnership
Bruce Housing Associates, L.P. 1,115,155 16,000 1,418,598 (354,315)
Carrington Limited Dividend
Housing Association Limited 3,487,158 200,000 6,359,188 (1,571,765)
Partnership
Chestnut Park Associates, L.P. 5,284,761 781,700 8,654,778 (1,806,605)
Chowan Senior Manor Associates 1,271,652 86,101 1,495,884 (312,327)
Limited Partnership
Christian Street Commons 633,184 54,477 1,159,293 (181,117)
Associates
Country View Apartments 943,663 35,698 1,213,947 (148,618)
Desarrollos de Belen Limited 1,892,733 96,190 2,494,877 (349,038)
Partnership
Desarrollos de Emaus Limited 3,217,134 214,000 4,030,443 (498,543)
Partnership
Ellinwood Heights Apartments, 692,502 10,000 848,072 (183,547)
L.P.
Fulton Street Houses Limited 3,869,930 2 5,945,597 (1,040,785)
Partnership
Hayes Run Limited Partnership 1,434,682 85,060 1,474,537 (235,260)
Howard L. Miller Sallisaw 619,235 39,000 719,572 (162,101)
Apartments II, L.P.
Hurlock Meadow Limited 1,279,669 49,525 1,559,298 (321,304)
Partnership
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 1,446,530 84,874 1,757,151 (259,644)
Partnership
Long Reach Associates Limited 1,487,788 118,446 1,868,040 (308,488)
Partnership
Mirador del Toa Limited 1,896,098 105,000 2,327,341 (586,192)
Partnership
Moore Haven Commons, Ltd. 934,175 73,645 1,197,000 (281,595)
NP-89 Limited Dividend Housing
Association Limited 4,375,085 150,000 7,303,939 (1,458,692)
Partnership
Nash Hill Associates, Limited 1,478,728 123,876 1,676,137 (263,530)
Partnership
North Calhoun City, L.P. 498,050 12,000 624,675 (128,202)
Orange City Plaza, Limited 549,795 53,904 1,039,150 (172,506)
Partnership
Puerta del Mar Limited 2,542,593 115,000 3,046,045 (775,703)
Partnership
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 1,827,382 195,411 2,683,173 (345,735)
Partnership
Sydney Engel Associates L.P. 17,939,501 284,305 19,436,525 (4,281,622)
Union Valley Associates Limited 1,456,431 97,800 1,745,528 (272,610)
Partnership
Walnut Grove Family, L.P. 851,857 30,000 1,006,847 (204,670)
Waynesboro Apartments Limited 1,493,131 76,000 1,785,244 (304,922)
Partnership
West Calhoun City, L.P. 789,306 18,000 1,012,925 (198,963)
Westminster Apartments Limited 1,642,683 51,651 2,828,618 (266,531)
Partnership
$ 87,351,443 $3,964,692 $115,655,742 $(23,212,364)
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
5. Investment in Local Partnerships (continued)
The summary of property activity during the year ended December 31, 1997 is
as follows:
<TABLE>
<CAPTION>
Net change
Balance as of during the year Balance as of
December 31, 1996 ended December 31, 1997
December 31,
1997
<S> <C> <C> <C>
Land $ 3,964,692 $ (54,477) $ 3,910,215
Buildings and 115,655,742 (1,023,883) 114,631,859
-----------------------------------------------------
improvements
119,620,434 (1,078,360) 118,542,074
Accumulated (23,212,36) (3,833,423) (27,045,787)
------------------------------------------------------
depreciation
$ 96,408,070 $ 4,911,783 $ 91,496,287
=====================================================
</TABLE>
On April 18, 1997 the Sydney Engel Local Partnership closed on its permanent
mortgages with the City of New York. Upon closing, the Partnership paid the
Sydney Engel Local Partnership its outstanding capital contribution of
$1,224,775, which included an additional capital contribution of $206,881,
resulting from the delay in closing the mortgages, which was paid from
reserves.
Due to ongoing operating deficits and the uncertainty of future operating
income, the Christian Street Local Partnership determined the underlying
rental property to be permanently impaired and has recognized an impairment
loss of $1,032,653 as of December 31, 1997.
6. Transactions with General Partner and Affiliates
For the years ended March 30, 1998, 1997 and 1996, 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>
1998 1997 1996
-----------------------------------------------
Paid Incurred Paid Incurred Paid Incurred
<S> <C> <C> <C> <C> <C> <C>
Management fees $100,000 $230,571 $100,000 $230,571 $100,000 $230,571
(see Note 8)
</TABLE>
For the years ended December 31, 1997, 1996 and 1995, 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>
1997 1996 1995
----------------------------------- -----------------
Paid Incurred Paid Incurred Paid Incurred
<S> <C> <C> <C> <C> <C> <C>
Property $ 112,083 $127,518 $3,599 $35,787 $35,817 $35,884
management fees
Insurance 22,079 22,079 35,943 34,316 37,140 34,779
Property -- -- -- -- 150,000 --
development fees
</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, 1998, 1997 AND 1996
7. Taxable Loss
A reconciliation of the financial statement net loss of the Partnership for
the years ended March 30, 1998, 1997 and 1996 to the tax return net loss for
the years ended December 31, 1997, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
1998 1997 1996
--------------------------------------------
<S> <C> <C> <C>
Financial statement net loss for
the years ended March 30, 1998, $ (2,649,323) $ (2,718,536) $ (3,443,977)
1997 and 1996
Add (less) net transactions
occurring between
January 1, 1995 and March 30, -- -- (52,556)
1995
January 1, 1996 and March 30, -- (49,819) 49,819
1996
January 1, 1997 and March 30, (58,090) 58,090 --
1997
January 1, 1998 and March 30, 76,012 -- --
------------- ----------------- -----------
1998
Adjusted financial statement net
loss for the years ended December (2,631,401) (2,710,265) (3,446,714)
31, 1997, 1996 and 1995
Adjustment to management fees
pursuant to Internal Revenue 130,571 130,571 130,571
Code Section 267
Differences arising from equity
in loss of investment in (718,329) (514,969) (200,215)
Local Partnerships
Interest revenue (208,732) -- --
Other differences (5,367) (107) (14,250)
--------------- ---------------- ---------------
Tax return net loss for the
years ended December 31, $ (3,433,258) $ (3,094,770) $ (3,530,608)
============ ============ ============
1997, 1996 and 1995
</TABLE>
The differences between the equity in the investment in Local Partnerships
for tax return and financial reporting purposes as of December 31, 1997 and
1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------
<S> <C> <C>
Investment in Local Partnerships - $ 8,525,573 $ 10,915,160
financial reporting
Investment in Local Partnerships - tax 7,473,246 10,581,161
------------ ---------------
$ 1,052,327 $ 333,999
============ ==============
</TABLE>
Payable to general partner in the accompanying balance sheets represents
accrued management fees not deductible for tax purposes pursuant to
Internal Revenue Code Section 267.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
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, 1998. 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, 1998. Such amounts are aggregated and reflected under
the caption management fees in the accompanying financial statements.
Unpaid Management Fees in the amount of $930,614 and $800,043 are recorded
as payable to general partner in the accompanying balance sheets as of
March 30, 1998 and 1997, 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, 1998. 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, 1998. Such amounts
are aggregated and reflected under the caption administration fees in the
accompanying financial statements. Unpaid Administration Fees in the amount
of $930,625 and $800,054 are included in accounts payable and accrued
expenses in the accompanying balance sheets as of March 30, 1998 and 1997,
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. In October 1997, Congress passed the Multifamily
Assisted Housing and Reform and Affordability Act whereby the United States
Department of Housing and Urban Development ("HUD") has been given
authority to renew certain project based Section 8 contracts expiring
during HUD's fiscal year 1998, where requested by an owner, for an
additional one year term generally at or below current rent levels, subject
to certain guidelines. HUD has additional programs which, in general,
provide 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 October 1998.
On July 16, 1997, the Partnership received a demand for certain information
with respect to the holders of Units, the stated purpose of which was to
assist such party in making an offer to Unit holders to purchase their
Units and otherwise to communicate with them concerning such an offer.
Subsequently, the Partnership requested certain information from such party
in order to assess the appropriateness of the demand. On July 28, 1997, a
complaint was filed in the Court of Chancery of the State of Delaware in
and for New Castle County against the Partnership, the General Partner and
its general partner seeking, among other things, an order directing the
defendants to immediately furnish the requested information and awarding
the plaintiff any resulting damages. A one day trial was held on September
29, 1997. On December 5, 1997, the Court of Chancery issued a memorandum
opinion and order, holding that the plaintiff is entitled to the requested
information regarding Unit holders. On December 15, 1997, defendants filed
a Notice of Appeal to the Supreme Court of Delaware, which appeal was heard
and denied. The Partnership has complied with the Court of Chancery's
order.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1998, 1997 AND 1996
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.
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.
Capital Contributions Payable
The carrying amount approximates fair value in accordance with the Local
Partnerships' partnership agreements.
The estimated fair value of the Partnership's financial instruments as of
March 30, 1998 and 1997 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:
<TABLE>
<CAPTION>
<S> <C> <C>
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
</TABLE>
- ------------------------------------------------------------------------
1Director holds office until his successor is elected and qualified.
All officers serve at the pleasure of the Director.
Richard Paul Richman, age 50, is the sole Director and President of Richman
Housing. Mr. Richman is the President and sole stockholder of Richman Group. 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 46, is a Vice President of Richman Housing. Mr.
Richelson is President of Wilder Richman Management Corporation, a
property management company affiliated with Richman Housing. In
addition, Mr. Richelson is a Vice President of Richman Asset
Management, LLC ("RAM") an affiliate of Richman Housing. Mr.
Richelson's responsibilities in connection with RAM include advisory
services provided to a small business investment company.
Neal Ludeke, age 40, is a Vice President and the Treasurer of Richman
Housing. Mr. Ludeke, a Vice President and the 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 the Treasurer of RAM. Mr. Ludeke's responsibilities in
connection with RAM include advisory services provided to a small
business investment company and various partnership management
functions.
David A. Salzman, age 37, 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 42, is the Secretary of Richman Housing. Ms.
Scotti is a Vice President and the Secretary of Richman Group. As the
Director of Investor Services, Ms. Scotti is responsible for
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,
1998, Richman Housing did not pay any remuneration to any of its officers or its
director.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
As of May 20, 1998, 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, 1997 allocated to the General Partner were $34,333 and
$55,780, respectively. The tax losses and Low-income Tax Credits generated by
the General Partner during the year ended December 31, 1997 (from the allocation
of Registrant discussed above) and allocated to Richman Housing were $27,751 and
$45,088, 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, 1998.
<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 Exhibit 10.1 to Form 10-Q
Limited Partnership (A Delaware Report
Limited Partnership) Amended and dated December 30, 1990
Restated Agreement of Limited (File No. 33-31390)
Partnership
10.2 Ashland Park Apartments, L.P. Exhibit 10.2 to Form 10-K
Second Amended and Restated Report
Agreement of Limited Partnership dated March 30, 1991
(File No. 33-31390)
10.3 Auburn Family, L.P. Amended and Exhibit 10.1 to Form 10-Q
Restated Limited Partnership Report
Agreement and Certificate of dated December 31, 1991
Limited Partnership (File No. 0-19217)
10.4 Amended No. 2 to the Batesville Exhibit 10.2 to Form 10-Q
Family, L.P. Amended and Report
Restated Agreement of Limited dated December 30, 1990
Partnership (File No. 33-31390)
10.5 Batesville Family, L.P. Exhibit 10.2 to Form 10-Q
Amendment No. 3 to the Amended Report
and Restated Agreement of dated December 31, 1991
Limited Partnership (File No. 0-19217)
10.6 Bay Springs Elderly, L.P. (A Exhibit 10.1 to Form 10-Q
Mississippi Limited Partnership) Report
Amended and Restated Limited dated September 29, 1991
Partnership Agreement and (File No. 0-19217)
Certificate of Limited
Partnership
10.7 Brisas del Mar Apartments Exhibit 10.3 to Form 10-Q
Limited Partnership (A Delaware Report
Limited Partnership) Amended and dated December 30, 1990
Restated Agreement of Limited (File No. 33-31390)
Partnership
10.8 Amendment No. 1 to the Bruce Exhibit 10.8 to Form 10-K
Housing Associates, L.P. Amended Report
and Restated Agreement of dated March 30, 1992
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 Exhibit 10.4 to Form 10-Q
Housing Associates, L.P. Amended Report
and Restated Agreement of Limited dated December 30, 1990
Partnership (File No. 33-31390)
10.10 Bruce Housing Associates, L.P. Exhibit 10.3 to Form 10-Q
Amendment No. 3 to the Amended Report
and Restated Agreement of Limited dated December 31, 1991
Partnership (File No. 0-19217)
10.11 Carrington Limited Dividend Exhibit 10.1 to Form 10-Q
Housing Association Limited Report
Partnership Amended and Restated dated September 29, 1990
Agreement of Limited Partnership (File No. 33-31390)
10.12 Carrington Limited Dividend Exhibit 10.2 to Form 10-Q
Housing Association Limited Report
Partnership Second Amended and dated September 29, 1990
Restated Agreement of Limited (File No. 33-31390)
Partnership
10.13 Carrington Limited Dividend Exhibit 10.5 to Form 10-Q
Housing Association Limited Report
Partnership Amendment No. 1 to dated December 30, 1990
the Second Amended and Restated (File No. 33-31390)
Agreement of Limited Partnership
10.14 Chestnut Park Associates, L.P. Exhibit 10.3 to Form 10-Q
Amended and Restated Agreement of Report
Limited Partnership dated September 29, 1990
(File No. 33-31390)
10.15 Chowan Senior Manor Associates Exhibit 10.15 to Form 10-K
Limited Partnership Amended and Report
Restated Agreement of Limited dated March 30, 1992
Partnership (File No. 33-31390)
10.16 Christian Street Commons Exhibit 10.16 to Form 10-K
Associates Amended and Restated Report
Limited Partnership Agreement and dated March 30, 1992
Certificate of Limited Partnership (File No. 33-31390)
10.17 Country View Apartments Second Exhibit 10.17 to Form 10-K
Amended and Restated Limited Report
Partnership Agreement and dated March 30, 1992
Certificate of Limited Partnership (File No. 33-31390)
10.18 Desarrollos de Belen Limited Exhibit 10.18 to Form 10-K
Partnership Amended and Restated Report
Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.19 Desarrollos de Emaus Limited Exhibit 10.19 to Form 10-K
Partnership Amended and Restated Report
Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.20 Ellinwood Heights Apartments, Exhibit 10.1 to Form 10-Q
L.P. Amended and Restated Report
Agreement of Limited Partnership dated June 29, 1991
(File No. 0-19217)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Incorporated by Reference
to
<S> <C> <C>
10.21 Fulton Street Houses Limited Exhibit 10.21 to Form 10-K
Partnership Amended and Restated Report
Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.22 Hayes Run Limited Partnership Exhibit 10.2 to Form 10-Q
Amended and Restated Agreement of Report
Limited Partnership dated June 29, 1991
(File No. 0-19217)
10.23 Howard L. Miller Sallisaw Exhibit 10.10 to Form 10-K
Apartments II, L.P. Third Amended Report
and Restated Agreement and dated March 30, 1991
Certificate of Limited Partnership (File No. 33-31390)
10.24 Hurlock Meadow Limited Exhibit 10.24 to Form 10-K
Partnership Amended and Restated Report
Limited Partnership Agreement dated March 30, 1992
(File No. 33-31390)
10.25 Amendment No. 1 to the Ivy Exhibit 10.6 to Form 10-Q
Family, L.P. Amended and Restated Report
Agreement of Limited Partnership dated December 30, 1990
(File No. 33-31390)
10.26 Ivy Family, L.P. Amendment No. 3 Exhibit 10.4 to Form 10-Q
to the Amended and Restated Report
Agreement of Limited Partnership dated December 31, 1991
(File No. 0-19217)
10.27 Justin Associates Amended and Exhibit 10.7 to Form 10-Q
Restated Agreement and Report
Certificate of Limited Partnership dated December 30, 1990
(File No. 33-31390)
10.28 LaBelle Commons, Ltd. Amended and Exhibit 10.13 to Form 10-K
Restated Agreement of Limited Report
Partnership dated March 30, 1991
(File No. 33-31390)
10.29 LaBelle Commons, Ltd. Amendment Exhibit 10.29 to Form 10-K
No. 1 to Amended and Restated Report
Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.30 Amendment No. 2 to the Lawrence Exhibit 10.8 to Form 10-Q
Road Properties, Ltd. Amended and Report
Restated Agreement of Limited dated December 30, 1990
Partnership (File No. 33-31390)
10.31 Lawrence Road Properties, Ltd. Exhibit 10.5 to Form 10-Q
Amendment No. 3 to the Amended Report
and Restated Agreement of Limited dated December 31, 1991
Partnership (File No. 0-19217)
10.32 Loma Del Norte Limited Exhibit 10.2 to Form 10-Q
Partnership Amended and Restated Report
Limited Partnership Agreement dated September 29, 1991
(File No. 0-19217)
10.33 Long Reach Associates Limited Exhibit 10.15 to Form 10-K
Partnership Sixth Amended and Report
Restated Agreement of Limited dated March 30, 1991
Partnership (File No. 33-31390)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Incorporated by Reference
to
<S> <C> <C>
10.34 Mirador del Toa Limited Exhibit 10.16 to Form 10-K
Partnership Amended and Restated Report
Agreement of Limited Partnership dated March 30, 1991
(File No. 33-31390)
10.35 Amendment No. 1 to the Mirador Exhibit 10.17 to Form 10-K
del Toa Limited Partnership Report
Amended and Restated Agreement of dated March 30, 1991
Limited Partnership (File No. 33-31390)
10.36 Moore Haven Commons, Ltd. Amended Exhibit 10.9 to Form 10-Q
and Restated Agreement of Limited Report
Partnership dated December 30, 1990
(File No. 33-31390)
10.37 NP-89 Limited Dividend Housing Exhibit 10.3 to Form 10-Q
Association Limited Partnership Report
Second Restated and Amended dated June 29, 1991
Agreement of Limited Partnership (File No. 0-19217)
10.38 Nash Hill Associates, Limited Exhibit 10.37 to Form 10-K
Partnership Amended and Restated Report
Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.39 North Calhoun City, L.P. (A Exhibit 10.3 to Form 10-Q
Mississippi Limited Partnership) Report
Amended and Restated Limited dated September 29, 1991
Partnership Agreement and (File No. 0-19217)
Certificate of Limited Partnership
10.40 Orange City Plaza, Limited Exhibit 10.40 to Form 10-K
Partnership Amended and Restated Report
Partnership Agreement dated March 30, 1992
(File No. 33-31390)
10.41 Puerta del Mar Limited Exhibit 10.10 to Form 10-Q
Partnership (A Delaware Limited Report
Partnership) Amended and Restated dated December 30, 1990
Agreement of Limited Partnership (File No. 33-31390)
10.42 Amendment No. 2 to the Purvis Exhibit 10.11 to Form 10-Q
Heights Properties, L.P. Amended Report
and Restated Agreement of Limited dated December 30, 1990
Partnership (File No. 33-31390)
10.43 Purvis Heights Properties, L.P. Exhibit 10.6 to Form 10-Q
Amendment No. 3 to the Amended Report
and Restated Agreement of Limited dated December 31, 1991
Partnership (File No. 0-19217)
10.44 Queen Lane Investors Amendment Exhibit 10.12 to Form 10-Q
No. 1 to Amended and Restated Report
Agreement and Certificate of dated December 30, 1990
Limited Partnership (File No. 33-31390)
10.45 Somerset Manor, Ltd. Amended and Exhibit 10.13 to Form 10-Q
Restated Agreement and Report
Certificate of Limited Partnership dated December 30, 1990
(File No. 33-31390)
10.46 Sugar Cane Villas, Ltd. Amended Exhibit 10.23 to Form 10-K
and Restated Agreement of Limited Report
Partnership dated March 30, 1991
(File No. 33-31390)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Incorporated by
Exhibit Reference to
10.47 Summerfield Apartments Limited Exhibit 10.47 to Form 10-K
Partnership Amended and Restated Report
Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.48 Amendment No.1 to the Summerfield
Apartments Limited Partnership
Amended and Restated Agreement of
Limited Partnership
10.49 Sydney Engel Associates Second Exhibit 10.4 to Form 10-Q
Amended and Restated Agreement of Report
Limited Partnership dated September 29, 1990
(File No. 33-31390)
10.50 First Amendment to Second Amended Exhibit 10.49 to Form 10-K
and Restated Agreement of Limited Report
Partnership of Sydney Engel dated March 30, 1997
Associates (File No. 0-19217)
10.51 Second Amendment to Second Exhibit 10.50 to Form 10-K
Amended and Restated Agreement of Report
Limited Partnership of Sydney dated March 30, 1997
Engel Associates L.P. (File No. 0-19217)
10.52 Third Amendment to Second Amended Exhibit 10.51 to Form 10-K
and Restated Agreement of Limited Report
Partnership of Sydney Engel dated March 30, 1997
Associates L.P. (File No. 0-19217)
10.53 Fourth Amendment to Second Exhibit 10.52 to Form 10-K
Amended and Restated Agreement of Report
Limited Partnership of Sydney dated March 30, 1997
Engel Associates L.P. (File No. 0-19217)
10.54 Union Valley Associates Limited Exhibit 10.14 to Form 10-Q
Partnership Amended and Restated Report
Agreement and Certificate of dated December 30, 1990
Limited Partnership (File No. 33-31390)
10.55 Walnut Grove Family, L.P. (A Exhibit 10.4 to Form 10-Q
Mississippi Limited Partnership) Report
Amended and Restated Limited dated September 29, 1991
Partnership Agreement and (File No. 0-19217)
Certificate of Limited Partnership
10.56 Waynesboro Apartments Limited Exhibit 10.15 to Form 10-Q
Partnership Amended and Restated Report
Agreement and Certificate of dated December 30, 1990
Limited Partnership (File No. 33-31390)
10.57 West Calhoun City, L.P. (A Exhibit 10.5 to Form 10-Q
Mississippi Limited Partnership) Report
Amended and Restated Limited dated September 29, 1991
Partnership Agreement and (File No. 0-19217)
Certificate of Limited Partnership
10.58 Westminster Apartments Limited Exhibit 10.53 to Form 10-K
Partnership Second Amended and Report
Restated Agreement of Limited dated March 30, 1992
Partnership (File No. 33-31390)
27 Financial Data Schedule
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Incorporated by
Exhibit Reference to
------- ------------
28.0 Pages 20 through 31, 44 through Exhibit 28.0 to Form 10-K
71 and 78 through 80 of Report
Prospectus filed pursuant to Rule dated March 30, 1990
424(b)(3) under Securities Act of (File No. 33-31390)
1933
28.1 Pages 14 through 19 of Prospectus Exhibit 28.1 to Form 10-K filed
pursuant to Rule 424(b)(3) Report under Securities Act of 1933 dated
March 30, 1991
(File No. 33-31390)
28.2 Supplement No. 1 dated June 6, Exhibit 28.2 to Form 10-K
1990 to Prospectus Report
dated March 30, 1991
(File No. 33-31390)
28.3 Supplement No. 2 dated November Exhibit 28.3 to Form 10-K
21, 1990 to Prospectus Report
dated March 30, 1991
(File No. 33-31390)
28.4 Supplement No. 3 dated December Exhibit 28.4 to Form 10-K
20, 1990 to Prospectus Report
dated March 30, 1991
(File No. 33-31390)
28.5 Supplement No. 4 dated October Exhibit 28.5 to Form 10-K
30, 1991 to Prospectus Report
dated March 30, 1992
(File No. 33-31390)
28.6 Supplement No. 5 dated December Exhibit 28.6 to Form 10-K
26, 1991 to Prospectus Report
dated March 30, 1992
(File No. 33-31390)
28.7 Supplement No. 6 dated January Exhibit 28.7 to Form 10-K
15, 1992 to Prospectus Report
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 29, 1998 /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.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Richard Paul Richman President, Chief June 29, 1998
------------------------ -------------
Executive Officer
and Director of the
general partner
of the General Partner
/s/ Neal Ludeke Vice President and June 29, 1998
------------------------ -------------
Treasurer of
the general partner of
the General
Partner (Principal
Financial and
Accounting Officer of
Registrant)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the year ended March 30, 1998 Form 10-K 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
<MULTIPLIER> 1,000
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-30-1998
<PERIOD-START> APR-1-1997
<PERIOD-END> MAR-30-1998
<EXCHANGE-RATE> 1.00
<CASH> 504
<SECURITIES> 3,065
<RECEIVABLES> 22
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,106
<CURRENT-LIABILITIES> 2,029
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12,106
<SALES> 0
<TOTAL-REVENUES> 258
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 549
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,649)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,649)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,649)
<EPS-PRIMARY> (73.09)
<EPS-DILUTED> 0
</TABLE>
AMENDMENT NO. 1
TO THE
SUMMERFIELD APARTMENTS LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
This Amendment No. 1 to the Amended and Restated Agreement of
Limited Partnership is made and entered into as of the 1st day of
January, 1993, by and among the undersigned parties.
WHEREAS, as of November 28, 1990, Crosland Investors, Inc., a North
Carolina corporation ("Crosland") and SML, Inc., a North Carolina corporation
("SML") as general partners, and SML, as the Initial Limited Partner, executed
an Agreement of Limited Partnership (the "Agreement") and a Certificate of
Limited Partnership (the "Certificate"), pursuant to the North Carolina Revised
Uniform Limited Partnership Act, N.C. Gen. Stat. (delta)59-101 to 59-1106 (the
"Act"), for the formation of Summerfield Apartments Limited Partnership (the
"Partnership"), which Certificate was subsequently filed in the Office of the
Secretary of State of North Carolina, on December 20, 1990; and
WHEREAS, the Partnership has been formed to acquire, develop, finance,
construct, own, maintain, operate and sell or otherwise dispose of a 52-unit
multifamily apartment complex intended for rental to low-income individuals and
families, to be known as Summerfield Apartments, and to be located in Charlotte,
North Carolina (the "Apartment Complex"); and
WHEREAS, the Partnership has received a construction loan for the
development of the Apartment Complex from First Union Bank of North Carolina in
the principal amount of $2,396,000, and a construction/permanent loan for the
development of the Apartment Complex from Charlotte-Mecklenburg Housing
Partnership, Inc. ("CMHP") in the principal amount of $475,000; and
WHEREAS, the Partnership has received permanent loan financing
(collectively, the "Mortgage Loan") for the Apartment Complex from in the
aggregate amount of $1,902,000 (including the $475,000 construction/permanent
loan from CMHP); and
WHEREAS, as of February 1, 1992, an Amended and Restated Agreement of
Limited Partnership (the "Amended Agreement") was executed to (i) continue the
Partnership; (ii) admit American Tax Credit Properties III L.P., a Delaware
limited partnership, to the Partnership as a Limited Partner ("ATCP III"); (iii)
withdraw the Initial Limited Partner from the Partnership; (iv) withdraw
Crosland from the Partnership; (v) reassign Interests in the Partnership; and
(vi) set forth all of the provisions governing the Partnership (hereinafter
referred to as the "Partnership Agreement"); and
WHEREAS, the parties hereto now desire to enter into this Amendment No. 1
to the Partnership Agreement to (i) continue the Partnership; (ii) reduce the
Percentage Interest of ATCP III as the Limited Partner of the Partnership; (iii)
increase the percentage Interest of SML as the General Partner of the
Partnership; and (iv) amend certain provisions of the Partnership Agreement to,
among other things, reflect such reduction and increase in Percentage Interests.
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 hereby are acknowledged, the parties hereby agree to amend
the Partnership Agreement as follows:
<PAGE>
I. Article II. The definition of "Projected Credit" is revised
to read as follows:
"Projected Credit" means Low-Income Housing Tax Credits in the
aggregate amount of $2,314,150 for the applicable credit period for
each building in the Apartment Complex which the Investment
Partnership has projected (and which have been reviewed and accepted
by the General Partner) to be the total amount of Tax Credits
available to the Partnership.
In addition, the reference to the amount of the Projected Credit in
Section 4.01 (u) of the Partnership Agreement and in Paragraph (u) of
Schedule B to the Partnership Agreement are similarly revised.
II. Schedule A. Schedule A is revised by substituting
therefor the revised schedule A attached hereto.
The revised Percentage Interests set forth in Schedule A are agreed
to in lieu of any increase in the Capital Contribution of ATCP III which
otherwise may have been applicable pursuant to Section 5.01(e)(i) of the
Partnership Agreement.
III. The Summerfield Apartments Limited Partnership Amended and
Restated Agreement of Limited Partnership, as amended hereby,
shall remain in full force and effect.
<PAGE>
COUNTY OF MECKLENBURG )
: ss
STATE OF NORTH CAROLINA )
Before me, the undersigned Notary Public in and for the aforesaid County
and State, personally appeared Charles E. Teal, in his capacity as Vice
President of SML, Inc., as General Partner, of Summerfield Apartments Limited
Partnership, and being duly sworn, acknowledged the execution of the foregoing
Amendment No. 1 to the Amend and Restated Agreement and Certificate of Limited
Partnership
Witness my hand and notarial seal this 27th day of January, 1993
/s/ Melanie Mastalski
Notary Public
My Commission Expires:
<PAGE>
SCHEDULE A
Partners, Capital Contributions and Partnership Interests
<TABLE>
<CAPTION>
Capital Partnership
General Partner Contribution Interest
<S> <C> <C>
SML, Inc. $100.00 5.50%
135 Scaleybark Road
Charlotte, NC 28220
Capital Partnership
Limited Partner Contribution Interest
American Tax Credit $1,038,667 94.50%
Properties III L.P.
10 Valley Drive
Greenwich, CT 06831
</TABLE>
<PAGE>
IN WITNESS WHEREOF, the parties have affixed their signatures and
seals to this Amendment No. 1 to the Amended and Restated Agreement of
Limited Partnership of Summerfield Apartments Limited Partnership as of
the date first written above.
GENERAL PARTNER:
ATTEST: SML, INC.
Bonnie Williams By: /s/ Charles Teal
Charles Teal
Vice President
LIMITED PARTNER:
AMERICAN TAX CREDIT PROPERTIES III L.P.
By: Richman Tax Credit Properties
III L.P., its general partner
By: Richman Housing Credits
Inc., its general partner
_________________________________ By: /s/ Richard H. Edson
Richard H. Edson
Vice President
<PAGE>
- -------------------------------------------------------------------------------
)
- -------------------------------------------------------------------------------
DISTRICT OF COLUMBIA : ss
)
Before me, the undersigned Notary Public in and for the aforesaid County
and State, personally appeared Richard H. Edson, in his capacity as Vice
President of Richman Housing Credits, Inc., as general partner of Richman Tax
Credit Properties III L.P., as general partner of American Tax Credit Properties
III L.P., as a Limited Partner of Summerfield Apartments Limited Partnership,
and being duly sworn, acknowledged the execution of the foregoing Amendment No.
1 to the Amended and Restated Agreement and Certificate of Limited Partnership.
Witness my hand and notarial seal this 26th day of January, 1993.
/s/ Trudy McBride
Notary Public
My Commission Expires:
