SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
- - - - - - - - - - - - -
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- ---- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 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
----------- -----------
Commission file number 033-80104
---------
GRANITE DEVELOPMENT PARTNERS, L.P.
----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 34-1754061
- --------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1250 Terminal Tower 50 Public Square Cleveland, Ohio 44113
- ---------------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 216-416-6060
------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. YES X NO
---- ----
PART I. FINANCIAL INFORMATION
<TABLE>
GRANITE DEVELOPMENT PARTNERS, L.P.
(A Delaware Limited Partnership)
BALANCE SHEETS
<CAPTION>
April 30, January 31,
1998 1998
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
LAND $ 2,913,159 $ 3,081,890
LAND IMPROVEMENTS 3,161,959 3,278,881
----------- -----------
6,075,118 6,360,771
RESTRICTED CASH EQUIVALENTS 486,954 481,287
MORTGAGE NOTES RECEIVABLE 2,807,490 3,149,565
INVESTMENTS IN AND ADVANCES TO
JOINT VENTURES 30,872,367 29,748,165
OTHER ASSETS
Mortgage procurement costs, net of
accumulated amortization of
$2,020,101 at April 30, 1998 and
$1,906,318 at January 31, 1998 260,501 374,284
Organization costs, net of
accumulated amortization of
$712,620 at April 30, 1998 and
$672,621 at January 31, 1998 39,313 79,312
Cash 67,380 224,158
Interest receivable 7,986,108 7,397,262
Other 25,500 80,500
Administrative fee receivable 135,000 120,000
----------- -----------
8,513,802 8,275,516
----------- -----------
$48,755,731 $48,015,304
=========== ===========
LIABILITIES,
PARTNERS'SPECIAL UNITS
& PARTNERS' DEFICIT
- ----------------------
SENIOR NOTES PAYABLE $36,000,000 $36,000,000
MORTGAGE NOTES PAYABLE 1,172,514 1,242,514
LOAN PAYABLE - SUNRISE 682,629 -
OTHER LIABILITIES
Accounts payable 266,991 463,373
Accrued fees, partners 299,449 207,145
Accrued interest 1,939,715 975,845
Accrued real estate taxes 189,833 143,899
Deposits 1,652,927 1,933,477
Deferred income 6,356,966 5,877,653
----------- -----------
10,705,881 9,601,392
PARTNERS' EQUITY (DEFICIT)
Partners' special units 9,000,000 9,000,000
Partners' deficit (8,805,293) (7,828,602)
----------- -----------
194,707 1,171,398
----------- -----------
$48,755,731 $48,015,304
=========== ===========
<FN>
See notes to financial statements.
</FN>
</TABLE>
<TABLE>
GRANITE DEVELOPMENT PARTNERS, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended
April 30,
--------------------------
1998 1997
---------- -----------
<S> <C> <C>
REVENUES
Sales of developed property $ 673,000 $ 791,497
Cost of sales (416,444) (523,898)
----------- -----------
256,556 267,599
Interest 89,045 231,873
Commission 41,765 24,142
Other 62,248 31,244
----------- -----------
449,614 554,858
EXPENSES
Interest 1,048,464 1,009,832
Fees, partners 92,304 142,925
Real estate taxes 39,996 46,337
Operating and other 33,332 23,135
Amortization 153,782 179,776
----------- -----------
1,367,878 1,402,005
----------- -----------
(918,264) (847,147)
(Loss) income from joint
ventures (58,427) 177,390
----------- -----------
NET LOSS $ (976,691) $ (669,757)
=========== ===========
<FN>
See notes to financial statements.
</FN>
</TABLE>
<TABLE>
GRANITE DEVELOPMENT PARTNERS, L.P.
(A Delaware Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
<CAPTION>
Sunrise FC-Granite, Limited
Land Co. Inc. Partners Total
--------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Balance at January 31, 1995 $ (38,932) $(9,178,564) $ - $(9,217,496)
Net loss (1,585) (156,902) - (158,487)
--------- ----------- ---------- -----------
Balance at January 31, 1996 (40,517) (9,335,466) - (9,375,983)
Capital contribution -
exercise of warrants - - 3,999,960 3,999,960
Withdrawal of original
limited partner 40,517 (40,517) - -
Distribution of interest
on special units - (1,914,202) - (1,914,202)
Net income - 966,815 - 966,815
--------- ----------- --------- -----------
Balance at January 31, 1997 - (10,323,370) 3,999,960 (6,323,410)
Distribution of interest
on special units - (1,147,980) - (1,147,980)
Net loss - (89,303) (267,909) (357,212)
--------- ----------- --------- -----------
Balance at January 31, 1998 - (11,560,653) 3,732,051 (7,828,602)
Net loss for the three months
ended April 30, 1998
(unaudited) - (244,173) (732,518) (976,691)
--------- ----------- --------- -----------
Balance at April 30, 1998
(unaudited) $ - $(11,804,826) $2,999,533 $(8,805,293)
========= ============ ========== ===========
<FN>
See notes to financial statements.
</FN>
</TABLE>
<TABLE>
GRANITE DEVELOPMENT PARTNERS, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended
April 30,
--------------------------
1998 1997
----------- ------------
<S> <C> <C>
Cash Flow from Operating Activities:
Net loss $ (976,691) $ (669,757)
Adjustments to reconcile net loss to net cash
provide by (used in) operating activities:
Amortization 153,782 179,776
(Loss) income from joint ventures 58,427 (177,390)
Changes in operating assets and liabilities:
Decrease in land and land improvements 285,653 248,174
Increase in restricted cash equivalents (5,667) (694,255)
Decrease in mortgage notes receivable 342,075 184,314
Increase in interest receivable (588,846) (553,452)
Decrease (increase) in other assets 55,000 (25,500)
Decrease in commission receivable - 17,392
Increase in administrative fee receivable (15,000) (15,000)
(Decrease) increase in accounts payable (196,382) 122,011
Increase in accrued fees, partner 92,304 142,925
Increase in accrued interest 963,870 1,000,465
Increase in accrued real estate taxes 45,934 19,923
(Decrease) increase in deposits (280,550) 406,198
Increase in deferred income 479,313 455,152
----------- ------------
Net cash provided by
operating activities 413,222 640,976
----------- ------------
Cash Flow from Investing Activities:
Investments in and advances to affiliates (1,182,629) (557,813)
----------- ------------
Net cash used in investing activities (1,182,629) (557,813)
----------- ------------
Cash Flow from Financing Activities:
Proceeds from loan payable - Sunrise 682,629 -
Repayment of mortgage notes payable (70,000) (124,500)
Increase in mortgage procurement costs - (7,900)
----------- ------------
Net cash provided by (used in)
financing activities 612,629 (132,400)
----------- ------------
Decrease in cash (156,778) (49,237)
Cash at beginning of the period 224,158 286,988
----------- ------------
Cash at end of the period $ 67,380 $ 237,751
=========== ============
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest $ 84,594 $ 9,367
Real estate taxes $ (5,938) $ 26,414
<FN>
See notes to financial statements.
</FN>
</TABLE>
GRANITE DEVELOPMENT PARTNERS, L.P.
(A Delaware Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)
NOTE A - FINANCIAL STATEMENT DISCLOSURES
Certain information and footnote disclosures, which are normally
included in financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or
omitted. It is suggested that these financial statements be read
in conjunction with the financial statements and notes thereto
included in the Partnership's January 31, 1998 Annual Report on
Form 10K.
The financial statements have been prepared on a basis consistent
with accounting principles applied in the prior periods and reflect
all adjustments which are, in the opinion of management, necessary
for a fair representation of the results of the operations for the
periods presented. All adjustments for the three months ended
April 30, 1998 were of a normal recurring nature. Results of
operations for the three months ended April 30, 1998 are not
necessarily indicative of results of operations which may be
expected for the full year.
NOTE B - PARTNERS' SPECIAL UNITS
Until the senior notes are paid in full, $9,000,000 of the
partners' special units bear interest at 10.83% and will be paid
pari-passu with interest on the Senior Notes.
Interest earned on the partners' special units amounted to $240,967
for the three months ended April 30, 1998 and has not been
distributed. As of January 31, 1998, $83,933 of the interest
earned on the special units remained undistributed. Total interest
earned of $324,900 as of April 30, 1998 will be distributed pari-
passu with the interest on the Senior Notes when funds are
available.
NOTE C - MORTGAGE NOTES PAYABLE
The Partnership entered into mortgage notes payable aggregating
$1,172,514 at April 30, 1998 and $1,242,514 at January 31, 1998,
respectively, to purchase certain properties. Amounts borrowed of
$761,659, $322,080, and $88,775 bear interest at a fixed rate of
9%, 8.5%, and 8% per annum, respectively. The notes payable are
collateralized by mortgages on the properties. Principal and
interest are generally payable one year after the date of the notes
payable.
During the year ended January 31, 1998, the Partnership entered
into a construction loan agreement collateralized by a first
mortgage lien in an amount not to exceed $1,400,000. The principal
amount outstanding bears interest at a rate one-half of one percent
(1/2%) in excess of the prime rate (8.5% at April 30, 1998) and
matures on November 21, 2000. As of April 30, 1998, the
outstanding balance related to this loan was $761,659. The loan
was established for the funding of the Thornbury development.
During the year ended January 31, 1997, the Partnership entered
into a construction loan agreement collateralized by a promissory
note in an amount not to exceed $1,600,000. The note bears
interest at the prime rate (8.5% at April 30, 1998) and matures on
August 1, 1998. As of April 30, 1998, the outstanding balance
related to this loan was $88,775. The loan was established for the
funding of the Fairfax Meadows development.
NOTE D - TRANSACTIONS WITH AFFILIATES
The sole general partner is FC-Granite, Inc., an Ohio corporation
("FC-Granite"). FC-Granite is a wholly-owned subsidiary of Sunrise
Land Company ("Sunrise"), the land division subsidiary of Forest
City Enterprises, Inc.
FC-Granite and Sunrise are reimbursed for all direct costs of
operations of the Partnership's affairs and development activities.
FC-Granite is paid a monthly administrative fee as compensation for
its services in administering the business of the partnership which
is equal to one-sixth of 1% of the book value of the partnership
properties, as defined. Total administrative fees accrued for the
three months ended April 30, 1998 and 1997, were $44,812 and
$65,675, respectively. Fees outstanding as of January 31, 1998,
were $16,750. Total outstanding fees of $61,562 as of April 30,
1998, will be paid when funds are available.
Pursuant to a management agreement, Sunrise is paid a semi-annual
development fee equal to 4% of gross revenues as compensation for
its services in managing the development of the partnership
properties. Total development fees accrued for the three months
ended April 30, 1998 and 1997 were $25,329 and $41,200,
respectively. Fees outstanding as of January 31, 1998, were
$101,544. Total outstanding fees of $126,873 as of April 30, 1998,
will be paid when funds are available.
In addition, accrued real estate commissions due to FC-Granite were
$22,163 and $36,050 for the three months ended April 30, 1998 and
1997, respectively. Commissions outstanding as of January 31,
1998, were $88,851. Total outstanding commissions of $111,014 as
of April 30, 1998, will be paid when funds are available.
Pursuant to the Amended and Restated Silver Canyon Partnership
Agreement, the Partnership is to receive a monthly administrative
fee in the amount of $5,000 per month. Fees earned during the
three months ended April 30, 1998 and 1997, were $15,000. Fees
earned for the year ended January 31, 1998, were $120,000. Total
fees due the Partnership as of April 30, 1998 are $135,000.
In addition, the Partnership is to receive a commission equal to
1.67% of gross sales as compensation for its services in conducting
marketing and sales duties and authorization of sales contracts.
The Partnership earned $41,765 and $24,142 during the three months
ended April 30, 1998 and 1997, respectively.
The Partnership has advanced $24,578,008 at April 30, 1998 and
$23,395,379 at January 31, 1998 to its joint ventures. Total
interest earned on the advances amounted to $580,829 and $525,378
for the three months ended April 30, 1998 and 1997, respectively.
Interest income is deferred by the Partnership until the interest
capitalized on the joint ventures is recognized as cost of sales by
the joint ventures. Interest recognized as income for the three
month period ended April 30, 1998 and 1997, was $54,688 and
$54,449, respectively.
During the three months ended April 30, 1998, Sunrise loaned the
Partnership $682,629 to fund additional development expenditures at
the Silver Canyon project. Funds advanced bear interest at 10% and
will be paid back when excess funds are available.
Included in restricted cash equivalents and deposits at April 30,
1998 and January 31, 1998 is $486,954 and $481,287, respectively,
which represents sales proceeds invested on behalf of Eaton Estate
Partnership in short-term commercial paper. The funds, together
with interest earned, will be returned to the Eaton Estate
Partnership as funding of development expenditures is needed.
NOTE E - INVESTMENTS IN AND ADVANCES TO JOINT VENTURES
The Partnership has a 33 1/3% interest in Silver Canyon Partnership
and a 30% interest in Eaton Estate Partnership. The Partnership's
investments in Silver Canyon Partnership at April 30, 1998 and
January 31, 1998, were $3,928,598 and $4,003,748, respectively, and
in Eaton Estate Partnership at April 30, 1998 and January 31, 1998,
were $2,563,321 and $2,546,597, respectively.
The Partnership has also advanced $24,578,008 at April 30, 1998 and
$23,395,379 at January 31, 1998 to the partnerships. Pursuant to
the Amended and Restated Partnership Agreement for Silver Canyon
Partnership, funds advanced to Silver Canyon Partnership as of
January 31, 1996 bear interest at ten percent (10%) and funds
advanced subsequent to January 31, 1996 bear interest at the rate
of prime plus 1 3/4% (8.5% at April 30, 1998). Funds advanced to
Eaton Estate Partnership bear interest at prime plus three percent
(3%).
For the three months ended April 30, 1998, the Silver Canyon
Partnership generated net loss of $115,616. Of this amount,
$75,150 has been recorded by the Partnership under the equity
method. For the three months ended April 30, 1998, the Eaton
Estate Partnership generated a net income of $55,746. Of this
amount, $16,723 has been recorded by the Partnership under the
equity method.
NOTE F - JOINT VENTURE STATEMENT OF OPERATIONS
<TABLE>
Shown below is the statement of operations for the Silver Canyon
Partnership:
<CAPTION>
Three Months Ended
April 30,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
REVENUES
Operating income $ 664,671 $ 555,484
EXPENSES
Fees, partners 30,000 30,000
Commissions 430,839 108,420
Legal and professional 223,970 4,900
Travel and entertainment 7,193 16,306
Operating and other 36,736 148,333
Depreciation and amortization 51,549 51,447
----------- -----------
Subtotal 780,287 359,406
----------- -----------
NET INCOME (LOSS) $ (115,616) $ 196,078
=========== ===========
</TABLE>
NOTE G - LITIGATION
The Partnership is involved in two separate instances of
litigation related to its operations. The Partnership believes it
has meritorious defenses to the claims of both instances of
litigation, and intends to defend against them both vigorously.
The Partnerships and several affiliates are defendants in a
proceeding arising out of the October 1996 sale of the 194th Street
property located in Miami Beach, Florida. The plaintiff is a
third-party broker seeking a commission on the premise that the
plaintiff initiated contact between the ultimate buyer and the
Partnership. In the opinion of management and legal counsel the
maximum damages based on the litigation proceedings is
approximately $400,000. However, the Partnership and other
defendants deny that any commission has been earned by the
Plaintiff and legal counsel of the Partnership is seeking a summary
judgment seeking dismissal of the case.
The Partnership owns a 33 1/3% interest in the Silver Canyon
Partnership ("Silver Canyon"). Silver Canyon is developing the
Seven Hills project, located in Henderson, Nevada, in conjunction
with a golf course. In August 1997, a class-action lawsuit was
filed by the current homeowners in Seven Hills against Silver
Canyon, the golf course developers and other entities. In
addition, a separate lawsuit was filed by some of the production
homebuilding companies at Seven Hills, against some of the same
parties. Both suits seek a commitment for public play on the golf
course, as well as damages. Silver Canyon and the Partnership are
responding to both suits, and are attempting to reach an
appropriate resolution with all parties involved. Sales efforts
are continuing at the Seven Hills development, and because these
events are recent, it is not yet possible to determine the extent
of any impact on the Partnership's or Silver Canyon's financial
performance. The Partnership and Silver Canyon believe they have
meritorious defenses to these claims and intend to defend against
them vigorously. Parties to the lawsuits are currently engaged in
discovery proceedings.
Item 2. Management's Discussion and Analysis of Financial
Condition
The following discussion and analysis of Granite Development
Partners, L.P. should be read in conjunction with the audited
financial statements as of January 31, 1998 contained in the Annual
Report on Form 10-K.
Results of Operations
The Partnership recorded sales of $673,000 for the three month
period ended April 30, 1998 versus $791,497 for the three month
period ended April 30, 1997. The Partnership sold four lots
located in the River Oaks subdivision in Kirtland Hills, Ohio for
a total of $480,000. The Eaton Estate Partnership, a joint venture
of the Partnership accounted for under the equity method, reported
no sales for the three months ended April 30, 1998 and $795,000 for
the three month period ended April 30, 1997. The Silver Canyon
Partnership reported sales of $3,935,882 for the three months ended
April 30, 1998 versus $1,445,938 for the three months ended April
30, 1997. The increase in sales corresponds with the significant
development increases over the last two years.
As of April 30, 1998, the following significant sales were
under contract: 79 lots of the Eaton Estates development in
Sagamore Hills, Ohio for $6,414,000; 75 sublots of the Ledges
subdivision located in Twinsburg, Ohio for $4,347,316; and 358 lots
of the Silver Canyon development in Henderson, Nevada for
$15,160,769. None of the contracts are guaranteed to close.
Interest income totalled $89,045 for the three months ended
April 30, 1998 versus $231,873 for the three months ended April 30,
1997. Interest income is comprised of interest earned on notes
receivable from the sales of developed property, from funds
advanced to the joint ventures and from the investment of proceeds
from sales in short-term commercial paper. Interest income earned
on funds advanced to the Silver Canyon Partnership is being
deferred. The decrease in interest income is mainly due to a lower
average mortgage note receivable balance and the recognition of
$54,688 of deferred interest income related to the Silver Canyon
advance during the three month period ended April 30, 1998.
For the three months ended April 30, 1998 and 1997, the
Partnership reported net losses of $976,691 and $669,757,
respectively. The increase in net loss is due to the decrease in
sales of $673,000 during the three month period ended April 30,
1998 versus $791,497 for the three month period ended April 30,
1997. The increase in net loss is also the result of a net loss in
income from joint ventures of $58,427 for the three month period
ended April 30, 1998 versus a net income of $177,390 for the three
month period ended April 30, 1997.
Financial Condition and Liquidity
Net cash provided by operating activities was $413,222 for the
three months ended April 30, 1998 versus $640,976 for the three
months ended April 30, 1997. The decrease in net cash provided by
operating activities is primarily the result of a decrease in land
deposits of $280,550 for the three months ended April 30, 1998
versus an increase in land deposits of $406,198 for the three
months ended April 10, 1997. This was partially offset by the
decrease in funds held in investments in short-term commercial
paper. The restricted cash, which is reserved for development
purposes, was used to fund development expenses of the Partnership
and the joint ventures.
Net cash used in investing activities was $1,182,629 and
$557,813 for the three months ended April 30, 1998 and 1997,
respectively. The increase in funds advanced to the Silver Canyon
Partnership is due to a shortfall of cash available from sales
proceeds from the joint venture. While a substantial amount of the
funds necessary to pay improvements for the Silver Canyon
Partnership is obtained through financing from the underground
improvement loan with General Motors Acceptance Corporation -
Residential Funding Corporation (GMAC), any shortfall of funds
necessary to pay improvements is partially funded by the
Partnership.
Net cash provided by financing activities was $612,629 for the
three month period ended April 30, 1998 versus net cash used of
$132,400 for the three month period ended April 30, 1997. The net
cash provided during the three month period ended April 30, 1998
was primarily the result of funds advanced from Sunrise Land
Company to the Partnership to fund additional advances to Silver
Canyon Partnership. The net cash used during the three month
period ended April 30, 1997, was the result of two principal
payments on mortgage notes payable for a total of $124,500. The
Partnership had adequate funds available to make the semi-annual
payment of interest on the Senior Notes on May 15, 1998.
The Partnership is involved in two separate instances of
litigation related to its operations. The Partnership believes it
has meritorious defenses to the claims of both instances of
litigation, and intends to defend against them both vigorously.
The Partnerships and several affiliates are defendants in a
proceeding arising out of the October 1996 sale of the 194th Street
property located in Miami Beach, Florida. The plaintiff is a
third-party broker seeking a commission on the premise that the
plaintiff initiated contact between the ultimate buyer and the
Partnership. In the opinion of management and legal counsel the
maximum damages based on the litigation proceedings is
approximately $400,000. However, the Partnership and other
defendants deny that any commission has been earned by the
Plaintiff and legal counsel of the Partnership is seeking a summary
judgment seeking dismissal of the case.
The Partnership owns a 33 1/3% interest in the Silver Canyon
Partnership ("Silver Canyon"). Silver Canyon is developing the
Seven Hills project, located in Henderson, Nevada, in conjunction
with a golf course. In August 1997, a class-action lawsuit was
filed by the current homeowners in Seven Hills against Silver
Canyon, the golf course developers and other entities. In
addition, a separate lawsuit was filed by some of the production
homebuilding companies at Seven Hills, against some of the same
parties. Both suits seek a commitment for public play on the golf
course, as well as damages. Silver Canyon and the Partnership are
responding to both suits, and are attempting to reach an
appropriate resolution with all parties involved. Sales efforts
are continuing at the Seven Hills development, and because these
events are recent, it is not yet possible to determine the extent
of any impact on the Partnership's or Silver Canyon's financial
performance. The Partnership and Silver Canyon believe they have
meritorious defenses to these claims and intend to defend against
them vigorously. Parties to the lawsuits are currently engaged in
discovery proceedings.
Information Relating to Forward-Looking Statements
This Quarterly Report, together with other statements and
information publicly disseminated by the Partnership, contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements
reflect management's current views with respect to financial
results related to future events and are based on assumptions and
expectations which may not be realized and are inherently subject
to risks and uncertainties, many of which cannot be predicted with
accuracy and some of which might not even be anticipated. Future
events and actual results, financial or otherwise, may differ from
the results discussed in the forward-looking statements. Risks and
other factors that might cause differences, some of which could be
material, include, but are not limited to, the effect of economic
and market conditions on a nation-wide basis as well as regionally
in areas where the Partnership has a geographic concentration of
land; failure to consummate financing arrangements; development
risks, including lack of satisfactory financing, construction and
cost overruns; the level and volatility of interest rates; the rate
of revenue increases versus expenses increases; as well as other
risks listed from time to time in the Partnership's reports filed
with the Securities and Exchange Commission. The Partnership has
no obligation to revise or update any forward-looking statements as
a result of future events or new information. Readers are
cautioned not to place undue reliance on such forward-looking
statements.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is involved in two separate instances of
litigation related to its operations. The disclosure required by
this item is incorporated by reference to Note G of the April 30,
1998 unaudited financial statements and management's discussion and
analysis of financial condition which appears in Part I of this
Form 10-Q.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none.
(b) No reports on Form 8-K have been filed by the Registrant
during the quarter ended April 30, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Granite Development Partners, L.P.
(Registrant)
DATE: 6/12/98 /s/ Robert F. Monchein
------- -------------------------------------
Robert F. Monchein
President
FC-Granite, Inc., the general partner
of Granite Development Partners, L.P.
DATE: 6/12/98 /s/ Mark A. Ternes
------- -------------------------------------
Mark A. Ternes
Controller
FC-Granite, Inc., the general partner
of Granite Development Partners, L.P.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> APR-30-1998
<CASH> 67380
<SECURITIES> 0
<RECEIVABLES> 2807490
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6075118
<DEPRECIATION> 0
<TOTAL-ASSETS> 48755731
<CURRENT-LIABILITIES> 0
<BONDS> 37172514
<COMMON> 0
0
0
<OTHER-SE> 194707
<TOTAL-LIABILITY-AND-EQUITY> 48755731
<SALES> 0
<TOTAL-REVENUES> 256556
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 319414
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1048464
<INCOME-PRETAX> (976691)
<INCOME-TAX> 0
<INCOME-CONTINUING> (976691)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (976691)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
