Item 1. Business.
General - - -------
Liberty Tax Credit Plus II L.P. (the "Partnership") is a limited partnership which was formed under the laws of the State of Delaware on March 25, 1988. The general partners of the Partnership are Related Credit Properties II L.P., a Delaware limited partnership (the "Related General Partner"), Liberty Associates II L.P., a Delaware limited partnership ("Liberty Associates"), and Liberty GP II Inc. (formerly Shearson Liberty GP II Inc.), a Delaware corporation (the "Liberty General Partner" and together with the Related General Partner and Liberty Associates, the "General Partners"). The general partner of the Related General Partner is Related Credit Properties II Inc., a Delaware corporation. The general partners of Liberty Associates are Related Credit Properties II Inc., and the Liberty General Partner. On November 25, 1997, an affiliate of the Related General Partner purchased 100% of the stock of the Liberty General Partner (the "Transfer"). In addition to the Transfer, by acquiring the stock of the Liberty General Partner, an affiliate of the Related General Partner also acquired the Liberty General Partner's general partnership interest in Liberty Associates, which is also the special limited partner of the Partnership. Pursuant to the Partnership's Amended and Restated Partnership Agreement, the consent of the limited partners was not required to approve the Transfer.
On July 20, 1988 the Partnership commenced a public offering (the "Offering") of Beneficial Assignment Certificates ("BACs") representing assignments of limited partnership interests in the Partnership ("Limited Partnership Interests").
As of January 9, 1989 (the date on which the Partnership held the final closing of the sale of BACs and on which the Offering was terminated), the Partnership had received $115,917,500 of gross proceeds of the Offering from 8,431 investors.
The Partnership was formed to invest, as a limited partner, in other limited partnerships (referred to herein as "Local Partnerships" or "subsidiary partnerships") each of which owns one or more leveraged low-income multifamily residential complexes ("Apartment Complexes") that are eligible for the low-income housing tax credit ("Tax Credit") enacted in the Tax Reform Act of 1986, and to a lesser extent, in Local Partnerships owning properties that are eligible for the historic rehabilitation tax credit (the "Historic Rehabilitation Tax Credit") ("Rehabilitation Projects" and together with the Apartment Complexes, the "Properties"). Some of the Apartment Complexes benefit from one or more other forms of federal and state housing assistance. The Partnership's investment in each Local Partnership represents from 20% to 98% of the partnership interests in the Local Partnership. As of March 31, 2001, the Partnership had acquired interests in 27 Local Partnerships and does not anticipate making any additional investments. See Item 2, Properties. In June 1997, the Partnership sold 24.98% of its limited partnership interest in United-Glenarden I Limited Partnership and 32.32% of its limited partnership interest in Property Development Associates, L.P. See Results of Operations of Certain Local Partnerships.
Liberty Associates is the special limited partner in all 27 Local Partnerships, as well as a general partner of the Partnership. Liberty Associates has certain rights and obligations in its role as special limited partner which permit it to execute control over the management and policies of the Local Partnerships.
Investment Objectives, Tax Credits - - ----------------------------------
The investment objectives of the Partnership are to:
1. Entitle qualified BACs holders to Tax Credits (and to a lesser extent Historic Rehabilitation Tax Credits) over the period of the Partnership's entitlement to claim Tax Credits (for each Property, ten years from the date of investment or, if later, the date the Apartment Complex is placed in service.);
2. Preserve and protect the Partnership's capital;
3. Participate in any capital appreciation in the value of the Apartment Complexes and provide distributions of sale or refinancing proceeds upon the disposition of the Apartment Complexes;
4. Provide cash distributions when available from the operations of Apartment Complexes and Rehabilitations Projects; and
5. Allocate passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investments and other passive activities, and allocate passive losses to corporate BACs holders to offset active business income.
One of the Partnership's objectives is to entitle qualified BACs holders to Tax Credits over the period of the Partnership's entitlement to claim Tax Credits (for each Apartment Complex, ten years from the date of investment or, if later, the date the Apartment Complex is leased to qualified tenants; referred to herein as the "Credit Period"). Each of the Local Partnerships in which the Partnership has acquired an interest has been allocated by the relevant state credit agency the authority to recognize Tax Credits during the Credit Period provided that the Local Partnership satisfies the rent restriction, minimum set-aside and other requirements for recognition of the Tax Credits at all times during the 15-year period (the "Compliance Period") commencing at the beginning of the Credit Period. Once a Local Partnership has become eligible to recognize Tax Credits, it may lose such eligibility and suffer an event of "recapture" if (i) the Local Partnership ceases to meet qualification requirements , (ii) there is a decrease in the qualified basis of Apartment Complex, or (iii) there is a reduction in its interest in the Apartment Complex at any time during the Compliance Period. None of the Local Partnerships in which the Partnership has acquired an interest has suffered an event of recapture.
The Partnership is in the final years of its Credit Period. The Tax Credits are available for a ten-year period which commences when a Property is leased to qualified tenants. However, the annual Tax Credits available in the year in which an Apartment Complex is placed in service must be prorated based upon the months remaining in the year. The amount of the annual Tax Credits not available in the first year will be available in the eleventh year. In certain cases, the Partnership acquired its interest in a Local Partnership after the Local Partnership had placed its Apartment Complex in service. In these cases, the Partnership may be allocated Tax Credits only beginning in the month following the month in which it acquired its interest and Tax Credits allocated in any prior period may not be claimed by the Partnership.
The General Partners generally required, in connection with certain investments in Local Partnerships, that the general partner of the Local Partnership ("Local General Partners") undertake to fund operating deficits (up to a stated maximum amount) of the Local Partnership during a limited period of time following the Partnership's investment ("Guarantee Period"). As of March 31, 2001, all operating deficit guarantees have expired. Generally the amounts funded pursuant to the operating deficit guarantee (the "Operating Deficit Guarantee") have been treated as Operating Loans, do not bear interest and will be repaid only out of 50% of available cash flow or out of available net sale or refinancing proceeds. See Item 8, Note 8 - Related Party Transactions.
The Partnership continues to meet its primary objective of generating Tax Credits to qualified BACs holders. To date, none of the Local Partnerships has failed to remain in compliance with the Tax Credit requirements, and therefore none has suffered an event of recapture of Tax Credits. The Partnership generated $4,415,175, $12,240,583 and $16,707,661 in Tax Credits during the 2000, 1999 and 1998 Fiscal Years, respectively.
The Partnership also continues to meet its objective of allocating passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investments and other passive activities, and allocating passive losses to corporate BACs holders to offset business income.
As of March 31, 2001, cash distributions received from the Local Partnerships have been relatively immaterial. Management expects that the distributions received from the Local Partnerships will increase, although not to a level sufficient to permit cash distributions to BACs holders. The Partnership does not anticipate providing cash distributions to BACs holders in circumstances other than refinancings or sales.
Government Regulations - - ----------------------
The Partnership is subject to the risks incident to potential losses arising from the management and ownership of improved real estate. The Partnership can also be affected by poor economic conditions generally. However, no more than 33% of the properties are located in any single state. There are also substantial risks associated with owning properties receiving government assistance, such as the possibility that Congress may not appropriate funds to enable the U.S. Department of Housing and Urban Development ("HUD") to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owner's equity contribution. The Partnership cannot sell or substantially liquidate its investments in Local Partnerships during the period that the subsidy agreements are in existence, without HUD's approval. Furthermore, there may not be market demand for apartments at full market rents when the rental assistance contracts expire.
Segments - - --------
The Partnership operates in one segment, which is the investment in multi-family residential properties.
Competition - - -----------
The real estate business is highly competitive and substantially all of the Properties acquired by the Partnership are subject to competition from similar properties in their respective vicinities. In addition, various other limited partnerships may, in the future, be formed by the General Partners and/or their affiliates to engage in business which may compete with the Partnership.
Employees - - ---------
The Partnership does not have any direct employees. All services are performed for the Partnership by its General Partners and their affiliates. The General Partners receive compensation in connection with such activities as set forth in Items 11 and 13. In addition, the Partnership reimburses the General Partners and certain of their affiliates for expenses incurred in connection with the performance by their employees of services for the Partnership in accordance with the Partnerships Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement").
Item 2.
Item 2. Properties.
The Partnership has acquired an interest as a limited partner in 27 Local Partnerships. Set forth below is a schedule of these Local Partnerships including certain information concerning the Apartment Complexes (the "Local Partnership Schedule"). Further information concerning these Local Partnerships and their properties, including any encumbrances affecting the properties, may be found in Item 14, Schedule III.
Except for the seven limited partnerships listed below, the following is the allocation of ownership percentage for each of the Local Partnerships:
Local General Partner 1% Special Limited Partner 1% Limited Partner - Liberty Tax Credit Plus II L.P. 98%
Local General Special Liberty Tax Other Partner(s) Limited Partner Credit Plus II L.P. Limited Partners* ---------- --------------- ------------------- ----------------
Concourse Artists 1% 1% 19% 79% Grand Concourse 1% 1% 19% 79% Robin Housing 1% 1% 19% 79% Willoughby-Wyckoff 1% 1% 19% 79% Penn Alto 1% 1% 78.40% 19.60% United Glen Arden I 1% 1% 73.52% 24.48% Property Development Associates 1% 1% 66.33% 31.67%
*Each is an affiliate of Liberty Tax Credit Plus II L.P., with the same management.
All leases are generally for periods not exceeding one to two years and no tenant occupies more than 10% of the rentable square footage.
Rents from commercial tenants (to which average rental per square foot applies) comprise less than 5% of the rental revenues of the Partnership. Maximum rents for the residential units are determined annually by HUD and reflect increases/decreases in consumer price indices in various geographic areas.
Management annually reviews the physical state of the properties and suggests to the respective Local General Partners budget improvements, which are generally funded from cash flow from operations or release of replacement reserve escrows.
Management annually reviews the insurance coverage of the properties and subject to budget constraints recommends to the respective Local General Partners additional coverage if warranted.
See Item 1, Business, above for the general competitive conditions to which the Local Partnerships and the properties described above are subject.
Real estate taxes are calculated using rates and assessed valuations determined by the township or city in which the property is located. Such taxes have approximated 1% of the aggregate cost of the properties as shown in Schedule III to the financial statements included herein.
Item 3.
Item 3. Legal Proceedings.
This information is incorporated by reference to the discussions of Alexis and Metropolitan in the Results of Operations of Certain Local Partnerships contained in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5.
Item 5. Market for the Registrant's Common Equity and Related Security Holder Matters.
The Partnership has issued and outstanding 115,917.5 Limited Partnership Interests, each representing a $1,000 capital contribution to the Partnership, or an aggregate capital contribution of $115,917,500. All of the issued and outstanding Limited Partnership Interests have been issued to Liberty Credit Assignor Inc. (the "Assignor Limited Partner"), which has in turn issued 115,917.5 BACs to the purchasers thereof for an aggregate purchase price of $115,917,500. Each BAC represents all of the economic and virtually all of the ownership rights attributable to a Limited Partnership Interest held by the Assignor Limited Partner. BACs may be converted into Limited Partnership Interests at no cost to the holder (other than payment of transfer costs not to exceed $100), but Limited Partnership Interests so acquired are not thereafter convertible into BACs.
Neither the BACs nor the Limited Partnership Interests are traded on any established public trading market. Because of the provisions of the Revenue Act of 1987, unless there are further changes in such law, the Partnership does not intend to include the BACs for quotation on NASDAQ or for listing on any national or regional stock exchange or any other established securities market. The Revenue Act of 1987 contained provisions which have an adverse impact on investors in "publicly traded partnerships." Accordingly, the General Partners have imposed limited restrictions on the transferability of the BACs and the Limited Partnership Interests in secondary market transactions. Implementation of these restrictions should prevent a public trading market from developing and may adversely affect the ability of an investor to liquidate his or her investment quickly. It is expected that such procedures will remain in effect until such time, if ever, as further revision of the Revenue Act of 1987 may permit the Partnership to lessen the scope of the restrictions.
As of May 18, 2001, the Partnership had 8,649 registered holders of an aggregate of 115,917.5 BACs.
All of the Partnership's general partnership interests, representing an aggregate capital contribution of $2,000, are held by the three General Partners.
There are no material provisions in the Partnership Agreement that restrict the ability of the Partnership to make distributions.
The Partnership has not made any distributions to BACs holders as of March 31, 2001. The Partnership does not anticipate providing cash distributions to BACs holders other than from net refinancings or sales proceeds.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Liquidity and Capital Resources - - -------------------------------
Through March 31, 2001, the Partnership has invested all of the net proceeds in twenty-seven Local Partnerships. None of the purchase price remains to be paid. During the year ended March 31, 2001, $261,000 was paid.
During the year ended March 31, 2001, the primary sources of funds included: (i) working capital reserves; (ii) interest earned on the working capital reserves; and (iii) cash distributions from operations of the Local Partnerships. All these sources of funds are available to meet the obligations of the Partnership but are not expected to be significant.
The Partnership is not expected to have access to additional sources of financing, and in particular will not have the ability to access BACs holders for additional capital contributions to provide capital if needed by the Partnership. There can be no assurance that additional funds will be available to the Partnership or any Local Partnership, nor that, if any property is sold, the proceeds of the sale will be sufficient to pay outstanding balances due on mortgage loans or other outstanding indebtedness to which the property is subject.
During the years ended March 31, 2001, 2000 and 1999, respectively, cash distributions received from operations of the Local Partnerships were approximately $246,000, $6,000 and $334,000. The General Partners believe that cash distributions received from the operations of the Local Partnerships are sufficient to fund the Partnership's ongoing operations for the foreseeable future (assuming the General Partners continue to defer payment of their management fees).
During the year ended March 31, 2001, cash and cash equivalents of the Partnership and its 27 consolidated Local Partnerships increased approximately $162,000. This increase was due to cash provided by operating activities ($3,092,000), a net increase in due to local general partners and affiliates ($643,000) and an increase in due to selling partners ($91,000) which exceeded an increase in acquisitions of property and equipment ($1,543,000), repayments of mortgage loans ($1,743,000), an increase in cash held in escrow ($23,000), an increase in deferred costs ($71,000) and a decrease in capitalization of consolidated subsidiaries attributable to minority interest ($285,000). In the adjustments to reconcile the net loss to cash provided by operating is depreciation and amortization ($8,106,000).
Partnership management fees owed to the General Partners amounting to approximately $8,312,000 and $6,816,000 were accrued and unpaid as of March 31, 2001 and 2000, respectively. Without the General Partner's continued accrual without payment the Partnership will not be in a position to meet its obligations. The General Partners have allowed for the accrual without payment of these amounts but are under no obligation to continue to do so.
For a discussion of contingencies affecting certain Local Partnerships, see Results of Operations of Certain Local Partnerships below. Since the maximum loss the Partnership would be liable for is its net investment in the respective Local Partnerships, the resolution of the existing contingencies are not anticipated to impact future results of operations, liquidity or financial condition in a material way. However, the Partnership's loss of its investment in a Local Partnership will eliminate the ability to generate future Tax Credits from such Local Partnership and may also result in recapture of Tax Credits if the investment is lost before the expiration of the Credit Period.
Except as described above, management is not aware of any trends or events, commitments or uncertainties which have not otherwise been disclosed, that will or are likely to impact liquidity in a material way. Management believes the only impact would be from laws that have not yet been adopted. The portfolio is diversified by the location of the properties around the United States so that if one area of the country is experiencing downturns in the economy, the remaining properties in the portfolio may be experiencing upswings. However, the geographic diversification of the portfolio may not protect against a general downturn in the national economy. The Partnership has fully invested the proceeds of its offering in 27 Local Partnerships, all of which fully have their Tax Credits in place. The Tax Credits are attached to the project for a period of ten years and are transferable with the property during the remainder of the ten-year period. If trends in the real estate market warranted the sale of a property, the remaining tax credits would transfer to the new owner, thereby adding significant value to the property on the market which is not included in the financial statement carrying amount.
Results of Operations - - ---------------------
Property and equipment to be held and used are carried at cost, which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring the properties. The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings. A loss on impairment of assets is recorded when management estimates amounts recoverable through future operations and sale of the property on an undiscounted basis are below depreciated cost. Property investments themselves are reduced to estimated fair value (generally using discounted cash flows) when the property is considered to be impaired and the depreciated cost exceeds estimated fair value. Through March 31, 2001, the Partnership has recorded approximately $4,727,000 as a loss on impairment of assets.
At the time management commits to a plan to dispose of assets, said assets are adjusted to the lower of carrying amount or fair value less costs to sell. Such assets would be classified as property and equipment-held for sale and are not depreciated. There are no assets classified as property and equipment-held for sale through March 31, 2001.
The following is a summary of the results of operations of the Partnership for the years ended March 31, 2001, 2000 and 1999 (the 2000, 1999 and 1998 Fiscal Years, respectively).
The majority of the Local Partnerships' revenues continue to be in the form of rental income with the corresponding expenses divided among operations, depreciation and mortgage interest.
The net loss for the 2000, 1999 and 1998 Fiscal Years totaled $6,923,585, $7,988,881 and $7,937,659, respectively.
The Partnership continues to meet its primary objective of generating Tax Credits to qualified BACs holders. To date, none of the Local Partnerships have failed to remain in compliance with the Tax Credit requirements, and, therefore, none have suffered an event of recapture of Tax Credits. The Partnership generated $4,415,175, $12,240,583 and $16,707,661 in Tax Credits during the 2000, 1999 and 1998 Fiscal Years, respectively.
2000 vs. 1999 - - ------------- Rental income increased approximately 2% for the 2000 Fiscal Year as compared to the 1999 Fiscal Year, primarily due to rental rate increases.
Other income increased approximately $426,000 for the 2000 Fiscal Year as compared to the 1999 Fiscal Year, primarily due to the write-off of old payables at one Local Partnership partially offset by insurance proceeds received at a second Local Partnership.
Forgiveness of indebtedness of approximately $695,000 was recorded in the 2000 Fiscal Year as the result of the restructuring of the outstanding mortgages and write-offs of payables at one Local Partnership.
Total expenses, excluding insurance, remained fairly consistent, with an increase of approximately 2% for the 2000 Fiscal Year as compared to the 1999 Fiscal Year.
Insurance increased approximately $123,000 for the 2000 Fiscal Year as compared to the 1999 Fiscal Year, primarily due to small increases at seven Local Partnerships as a result of increased premiums.
1999 vs. 1998 - - ------------- Rental income increased less than 1% for the 1999 Fiscal Year as compared to the 1998 Fiscal Year, primarily due to rental rate increases.
Other income increased approximately $335,000 for the 1999 Fiscal Year as compared to the 1998 Fiscal Year, primarily due to insurance proceeds received at one Local Partnership, liabilities written off as other income at a second Local Partnership, funds received from the managing agent at a third Local Partnership, and increased interest income received on replacement reserves at a fourth Local Partnership in 1999.
Total expenses excluding repairs and maintenance remained fairly consistent, with a decrease of less than 1% for the 1999 Fiscal Year as compared to the 1998 Fiscal Year.
Repairs and maintenance increased approximately $512,000 for the 1999 Fiscal Year as compared to the 1998 Fiscal Year, primarily due to roof repairs at one Local Partnership and apartment refurbishing at a second Local Partnership in 1999.
Results of Operations of Certain Local Partnerships - - ---------------------------------------------------
(a) Subsidiary Partnerships - Going Concerns and Uncertainties
Whittier Plaza Associates - - ------------------------- The financial statements for Whittier Plaza Associates Limited Partnership ("Whittier") have been prepared assuming that Whittier will continue as a going concern. Whittier has sustained continuous losses since commencement of operations in 1988, including losses of approximately $26,000, $49,000 and $38,000 for the 2000, 1999 and 1998 Fiscal Years, respectively. Whittier has experienced higher vacancies and lower rents than those originally projected, resulting in increased difficulty in meeting both operating and debt service obligations. The Local General Partner, pursuant to a development deficit guarantee agreement, has advanced approximately $40,000 and $23,000 in the 2000 and 1999 Fiscal Years, respectively, and approximately $447,000 since 1988 to fund operating cash shortfalls. In addition, Whittier's management company, an affiliate of the Local General Partner, has deferred receipt of various fees since 1991 totaling approximately $72,000. These items raise substantial doubt about Whittier's ability to continue as a going concern. The Partnership's investment in Whittier at March 31, 2001 and 2000 was reduced to zero as a result of prior years' losses and the minority interest balance was $0 at each date. Whittier's net loss after minority interest amounted to approximately $26,000, $49,000 and $38,000 for the 2000, 1999 and 1998 Fiscal Years.
Alexis Park Apartments - - ---------------------- A hazardous waste issue has affected Alexis Park Apartments ("Alexis") for nearly 10 years. Although this environmental issue is in many respects beyond its control, management believes that the selected remedy of the United States Environmental Protection Agency is practical and is not likely to cause significant disruption to the apartment project's operations beyond what it has experienced over the last several years. The Local Partnership's congressman, U.S. Senators and the Mayor of Bossier City have assisted Alexis in preventing this issue from escalating unnecessarily and management believes that no escalation will occur in the near term. Further, all indications are that an oil company will bear all costs of remediation and that the Local Partnership will not be called upon to share in those costs. Accordingly, management believes the Local Partnership has the opportunity to continue as a going concern.
The financial statements for Alexis have been prepared in conformity with U.S. generally accepted accounting principles, assuming the continuation of the Local Partnership as a going concern. However, negative performance indicators and the environmental issue raise substantial doubt about the Local Partnership's ability to continue as a going concern.
For the year ended December 31, 2000, the Local Partnership sustained a net loss of $277,036. At December 31, 2000, the Local Partnership's current liabilities exceed its current assets by $347,635. Management expects operating income to improve for 2001 as a result of both increased occupancy and slightly reduced expenses. The Local Partnership produced positive cash flows from operating activities for the years 2000 and 1999. Management believes cash flows for 2001 will be sufficient to meet liabilities and subject, to the environmental uncertainty, will enable the Local Partnership to continue as a going concern.
These items raise substantial doubt about Alexis' ability to continue as a going concern. The maximum loss which the Partnership would be liable for is its net investment in Alexis. The Partnership's investment in Alexis at March 31, 2001 and 2000 was $0 and approximately $114,000, respectively, and the minority interest balance was $0 at each date. Alexis' net loss after minority interest amounted to approximately $277,000, $243,000 and $263,000, for the 2000, 1999 and 1998 Fiscal Years, respectively.
Willoughby-Wyckoff Housing Associates - - ------------------------------------- The financial statements for Willoughby-Wyckoff Housing Associates ("Willoughby") have been prepared assuming that Willoughby will continue as a going concern. There are certain conditions that raise substantial doubt about Willoughby's ability to continue as a going concern. Willoughby has had operating losses and equity deficiencies and has required loans from related parties to meet its obligations. Management plans to continue to minimize costs within its control and seeks additional funding sources to supplement project operations. Continuance of Willoughby as a going concern is dependent upon Willoughby's ability to obtain additional funding to supplement project operations and enable Willoughby to meet its obligations as they become due. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Partnership's investment in Willoughby at March 31, 2001 and 2000 has been reduced to zero by prior years' losses and the minority interest balance amounted to approximately $174,000 and $176,000, respectively. Willoughby's net loss after minority interest amounted to approximately $193,000, $204,000 and $220,000 for the 2000, 1999 and 1998 Fiscal Years, respectively.
b) Subsidiary Partnerships - Other
Gramco Development Limited Dividend Partnership, L.P. - - ----------------------------------------------------- Gramco Development Limited Dividend Partnership, L.P. ("Gramco") was granted net funds of $4,867,000. In the event of a substantial violation to the provisions of certain agreements between Gramco and the Municipality of Bayamon (the "Municipality") and between the Municipality and HUD, the funds shall become immediately due and payable at the election of HUD and the Municipality. Otherwise, the principal amount of the obligation together with any interest will be forgiven. Proceeds from the loan have been deducted from fixed assets. The Partnership's investment in Gramco at March 31, 2001 and 2000 was approximately $302,000 and $488,000 and the minority interest balance was approximately $416,000 and $418,000, respectively. Gramco's net loss after minority interest amounted to approximately, $187,000 , $203,000 and $284,000 for the 2000, 1999 and 1998 Fiscal Years, respectively.
Metropolitan Towers Associates, L.P. - - ------------------------------------ The Subsidiary Partnership, Metropolitan Towers Associates, L.P. ("Metropolitan"), is a defendant in a legal proceeding brought by the family of an employee who died in a work related accident. It is management's opinion that the claim should be covered by Metropolitan's insurance policy. Because the Partnership is a limited partner in Metropolitan, the maximum loss which the Partnership would suffer is its net investment in Metropolitan. The Partnership's investment in Metropolitan at March 31, 2001 and 2000 was approximately $827,000 and $1,069,000, respectively, and the minority interest was zero at each date. Metropolitan's net loss after minority interest amounted to approximately $242,000, $39,000 and $119,000 for the 2000, 1999 and 1998 Fiscal Years, respectively.
Rolling Green Limited Partnership - - --------------------------------- Rolling Green Limited Partnership ("Rolling Green") operates and is regulated by HUD under Section 221(d)(3) of the National Housing Act. Rents received by Rolling Green are subsidized by Section 8 Housing Assistance Payments. Rental income from such Assistance Payments totaled $1,425,725 and $1,365,443 in the 2000 and 1999 Fiscal Years, respectively. In September 1999, the three Section 8 contracts were consolidated into one contract, and such contract is in force through September, 2001. However, uncertainties regarding the future of HUD Programs exist. It is not practical to estimate the impact upon Rolling Green's operations if the rents were to revert to market value.
Williamsburg Residential, L.P. - - ------------------------------ In November 1996, the Local General Partner of Williamsburg Residential, L.P. ("Williamsburg") stopped making the mortgage note payments which constituted an event of default. A Reinstatement and Modification Agreement was entered into effective March 1, 1997. The Partnership has advanced Williamsburg the necessary funds to keep the mortgage and escrows current during 2000 and is expected to continue to do so during 2001.
The Partnership's investment in Williamsburg has been written down to $0 by prior years' losses and the minority interest balance was approximately $792,000 and $731,000 at March 31, 2001 and 2000, respectively. Williamsburg net loss after minority interest amounted to approximately $208,000, $201,000 and $285,000 for the 2000, 1999, and 1998 fiscal years, respectively.
Other - - -----
The Partnership's investment, as a limited partner in the Local Partnerships, is subject to the risks incident to potential losses arising from management and ownership of improved real estate. The Partnership's investments also could be adversely affected by poor economic conditions generally, which could increase vacancy levels, rental payment defaults, and increased operating expenses, any or all of which could threaten the financial viability of one or more of the Local Partnerships.
There also are substantial risks associated with the operation of Apartment Complexes receiving government assistance. These include governmental regulations concerning tenant eligibility, which may make it more difficult to rent apartments in the complexes, difficulties in obtaining government approval for rent increases, limitations on the percentage of income which low and moderate-income tenants may pay as rent, the possibility that Congress may not appropriate funds to enable HUD to make the rental assistance payments it has contracted to make, and the possibility that when the rental assistance contracts expire, there may not be market demand for apartments at full market rents in a Local Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation allows for increases in rental rates generally to reflect the impact of higher operating and replacement costs. Inflation also affects the Local Partnerships adversely by increasing operating costs as, for example, for such items as fuel, utilities and labor.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosure About Market Risk.
Not applicable.
Item 8.
Item 8. Financial Statements and Supplementary Data. Sequential Page ----------- (a) 1. Consolidated Financial Statements
Independent Auditors' Report 18
Consolidated Balance Sheets at March 31, 2001 and 2000 88
Consolidated Statements of Operations for the Years Ended March 31, 2001, 2000 and 1999 89
Consolidated Statements of Changes in Partners' Capital (Deficit) for the Years Ended March 31, 2001, 2000 and 1999 90
Consolidated Statements of Cash Flows for the Years Ended March 31, 2001, 2000 and 1999 91
Notes to Consolidated Financial Statements 93
INDEPENDENT AUDITORS' REPORT ---------------------------- To the Partners of Liberty Tax Credit Plus II L.P. and Subsidiaries (A Delaware Limited Partnership)
We have audited the consolidated balance sheets of Liberty Tax Credit Plus II L.P. and Subsidiaries (A Delaware Limited Partnership) as of March 31, 2001 and 2000, and the related consolidated statements of operations, changes in partners' capital (deficit), and cash flows for the years ended March 31, 2001, 2000 and 1999 (the 2000, 1999 and 1998 Fiscal Years). 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 did not audit the financial statements for 27 (2000, 1999 and 1998 Fiscal Years) subsidiary partnerships whose losses aggregated $5,834,878, $6,417,444 and $6,407,403 for the 2000, 1999 and 1998 Fiscal Years, respectively, and whose assets constituted 98% of the Partnership's assets at March 31, 2001 and 2000, presented in the accompanying consolidated financial statements. The financial statements for 27 (2000, 1999 and 1998 Fiscal Years) of these subsidiary partnerships were audited by other auditors whose reports thereon have been furnished to us and our opinion expressed herein, insofar as it relates to the amounts included for these subsidiary partnerships, is based solely upon the reports of the other auditors.
We conducted our audits in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audits 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, based upon our audits, and the reports of the other auditors referred to above, the accompanying consolidated financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of Liberty Tax Credit Plus II L.P. and Subsidiaries at March 31, 2001 and 2000, and the results of their operations and their cash flows for the years ended March 31, 2001, 2000 and 1999, in conformity with U.S. generally accepted accounting principles.
As discussed in Note 10(a), the consolidated financial statements include the financial statements of three limited partnerships with significant contingencies and uncertainties. The financial statements of these subsidiary partnerships were prepared assuming that each will continue as a going concern. The three subsidiary partnerships' net losses aggregated $497,488 (Fiscal 2000), $497,307 (Fiscal 1999) and $525,260 (Fiscal 1998) and their assets aggregated $9,961,575 and $10,458,364 at March 31, 2001 and 2000, respectively. These matters raise substantial doubt about these subsidiary partnerships' abilities to continue as going concerns. Management's plans in regard to these matters are also described in Note 10(a). The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
TRIEN ROSENBERG ROSENBERG WEINBERG CIULLO & FAZZARI LLP
New York, New York June 11, 2001
[Letterhead of FRIEDMAN ALPREN & GREEN LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Polynesian Apartments Associates, Ltd.
We have audited the accompanying balance sheet of POLYNESIAN APARTMENTS ASSOCIATES, LTD. (a limited partnership), FHA Project No. FL29-K005-015-152, as of December 31, 2000, and the related statements of operations, changes in partners' capital and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with auditing standards generally accepted in the Untied States of America. 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 audit provides 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 POLYNESIAN APARTMENTS ASSOCIATES, LTD. as of December 31, 2000 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Friedman Alpren & Green LLP New York, New York February 1, 2001
[Letterhead of FRIEDMAN ALPREN & GREEN LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Polynesian Apartments Associates, Ltd.
We have audited the accompanying balance sheet of Polynesian Apartments Associates, Ltd. (a limited partnership), FHA Project No. FL29-K005-015-152, as of December 31, 1999, and the related statements of operations, changes in partners' capital and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 Polynesian Apartments Associates, Ltd. as of December 31, 1999 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Friedman Alpren & Green LLP New York, New York January 24, 2000
[Letterhead of L. H. FRISHKOFF & COMPANY LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Polynesian Apartments Associates, Ltd. (A Limited Partnership) Miami, Florida
FHA PROJECT NO. FL29-K005-01552
We have audited the accompanying statements of financial condition of Polynesian Apartments Associates, Ltd. (A Limited Partnership) as of December 31, 1998 and 1997, and the related statements of operations, changes in partners' capital, and cash flows for the years then ended. 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 audits 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 Polynesian Apartments Associates, Ltd., (A Limited Partnership) as of December 31, 1998 and 1997, and the results of its operations, changes in partners' capital, and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ L.H. Frishkoff & Company LLP New York, New York February 5, 1999
[Letterhead of FRIEDMAN ALPREN & GREEN LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Seagrape Village Associates, Ltd.
We have audited the accompanying balance sheet of SEAGRAPE VILLAGE ASSOCIATES, LTD. (a limited partnership), FHA Project No. FL29-K005-015-151, as of December 31, 2000, and the related statements of operations, changes in partners' capital and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with auditing standards generally accepted in the Untied States of America. 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 audit provides 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 of SEAGRAPE VILLAGE ASSOCIATES, LTD. as of December 31, 2000 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Friedman Alpren & Green LLP New York, New York February 14, 2001
[Letterhead of FRIEDMAN ALPREN & GREEN LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Seagrape Village Associates, Ltd.
We have audited the accompanying balance sheet of Seagrape Village Associates, Ltd. (a limited partnership), FHA Project No. FL29-K005-015-151, as of December 31, 1999, and the related statements of operations, changes in partners' capital and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 Seagrape Village Associates, Ltd. as of December 31, 1999 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Friedman Alpren & Green LLP New York, New York January 24, 2000
[Letterhead of L. H. FRISHKOFF & COMPANY LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Seagrape Village Associates, Ltd. (A Limited Partnership) Miami, Florida
FHA PROJECT NO. FL29-K005-01551
We have audited the accompanying statements of financial condition of Seagrape Village Associates, Ltd. (A Limited Partnership) as of December 31, 1998 and 1997, and the related statements of operations, changes in partners' capital, and cash flows for the years then ended. 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 audits 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 Seagrape Village Associates, Ltd. (A Limited Partnership) as of December 31, 1998 and 1997, and the results of its operations, changes in partners' capital, and its cash flows for the years then ended, in conformity with generally accepted accounting principles.
/s/ L.H. Frishkoff & Company LLP New York, New York February 5, 1999
[Letterhead of JOSE E. ROSARIO & CO.]
INDEPENDENT AUDITOR'S REPORT
To the PartnersPuerto Rico Housing Finance Metropolitan Towers Associates, LPCorporation Rio Piedras, PRSan Juan, Puerto Rico
I have audited the accompanying balance sheet of Metropolitan Towers Associates, LP as of December 31, 2000 and 1999, and the related statements of income, changes in partner's capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Metropolitan Towers Associates, LP, as of December 31, 2000 and 1999, and the results of its operations and the changes in partner's capital, and cash flows for the years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, I have also issued a report dated January 24, 2001, on my consideration of Metropolitan Towers Associates, LP's internal control structure and reports dated January 24, 2001, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Fair Housing and Non-Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of the audits.
My audits were conducted for the purpose of forming an opinion on the basic Financial statements taken as a whole. The accompanying supplementary information on pages 17 to 24 is presented for the purposes of additional analysis and is not a required part of the basic financial statements of Metropolitan Towers Associates, LP. Such information has been subjected to the auditing procedures Applied in the audits of the basic financial statements and, in my opinion, is fairly Stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Jose E. Rosario & Co. License No. 961 Expires December 1, 2001 January 24, 2001
Stamp No. 1690928 of the Puerto Rico College of CPA was affixed to the original.
[Letterhead of JOSE E. ROSARIO & CO.]
INDEPENDENT AUDITOR'S REPORT
To the Partners Puerto Rico Housing Finance Metropolitan Towers Associates, LPCorporation Rio Piedras, PRSan Juan, Puerto Rico
I have audited the accompanying balance sheet of Metropolitan Towers Associates, LP as of December 31, 1998, and the related statements of income, changes in partner's capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Metropolitan Towers Associates, LP, as of December 31, 1998, and the results of its operations and the changes in partner's capital, and cash flows for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, I have also issued a report dated January 21, 1999, on my consideration of Metropolitan Towers Associates, LP's internal control structure and reports dated January 21, 1999, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Affirmative Fair Housing.
/s/ Jose E. Rosario & Co. License No. 961 Expires December 1, 2001 Stamp No. 1553300 of the Puerto Rico College of CPA was affixed to the original. January 21, 1999
[Letterhead of RBG & Co.]
S2100-020
Independent Auditors' Report
To The Partners Westminster Place II - Olive Site, L.P. St. Louis, Missouri
We have audited the accompanying balance sheet of Westminster Place II - Olive Site, L.P., Project No. 085-35415-PM, a limited partnership, as of December 31, 2000 and 1999 and the related statements of profit and loss, partners' equity and cash flows for the years then ended. 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 and Government Auditing Standards, issued by the Comptroller General of the United States. 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 Westminster Place II - Olive Site, L.P. as of December 31, 2000 and 1999 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 13 to 22) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 31, 2001 on our consideration of Westminster Place II - Olive Site, L.P.'s internal controls and reports dated January 31, 2001 on its compliance with specific requirements applicable to major HUD programs, and specific requirements applicable to Fair Housing and Non- Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of the audits.
/s/ Rubin, Brown, Gornstein & Co. LLP St. Louis, Missouri January 31, 2000
[Letterhead of RBG & Co.]
S2300-020
Independent Auditors' Report
To The Partners Westminster Place II - Olive Site, L.P. St. Louis, Missouri
We have audited the accompanying balance sheet of Westminster Place II - Olive Site, L.P., Project No. 0855415-PM, a limited partnership, as of December 31, 1998 and 1997 and the related statements of income, partners' equity and cash flows for the years then ended. 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 and Government Auditing Standards, issued by the Comptroller General of the United States. 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 Westminster Place II - Olive Site, L.P. as of December 31, 1999 and 1998 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 13 to 22) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report dated January 25, 2000 on our consideration of Westminster Place II - Olive Site, L.P.'s internal controls and a report dated January 25, 2000 on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Fair Housing and Non-Discrimination.
/s/ Rubin, Brown, Gornstein & Co. LLP St. Louis, Missouri January 25, 2000
[Letterhead of RBG & Co.]
Independent Auditors' Report
To The Partners Property Development Associates, L.P. St. Louis, Missouri
We have audited the accompanying balance sheet of Property Development Associates, L.P., a limited partnership, as of December 31, 2000 and 1998 and the related statements of income, partners' equity and cash flows for the years then ended. 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 and Government Auditing Standards, issued by the Comptroller General of the United States. 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 Property Development Associates, L.P. as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Rubin, Brown, Gornstein & Co. LLP St. Louis, Missouri February 12, 2001 (Except for Notes 4 and 9, which are dated March 30, 2001)
[Letterhead of RBG & Co.]
Independent Auditors' Report
To The Partners Property Development Associates, L.P. St. Louis, Missouri
We have audited the accompanying balance sheet of Property Development Associates, L.P., a limited partnership, as of December 31, 1998 and 1997 and the related statements of income, partners' equity and cash flows for the years then ended. 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 and Government Auditing Standards, issued by the Comptroller General of the United States. 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 Property Development Associates, L.P. as of December 31, 1998 and 1997 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Rubin, Brown, Gornstein & Co. LLP St. Louis, Missouri January 22, 1999
[Letterhead of RBG & Co.]
S2100-020
Independent Auditors' Report
To The Partners Whittier Plaza Associates Limited Partnership St. Louis, Missouri
We have audited the accompanying balance sheet of Whittier Plaza Associates Limited Partnership, Project No. 085-35412-PM-SR, a limited partnership, as of December 31, 2000 and 1999, and the related statements of income, partners' equity (deficit) and cash flows for the years then ended. 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 and Government Auditing Standards, issued by the Comptroller General of the United States. 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 Whittier Plaza Associates Limited Partnership as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 15 to 24) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 24, 2001 on our consideration of Whittier Plaza Associates Limited Partnership's internal control and a reports dated January 24, 2001, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Fair Housing and Non-Discrimination, and specific requirements applicable to nonmajor HUD program transactions. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of the audits.
The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 5 to the financial statements, the Partnership has sustained recurring losses from operations, excessive vacancies, and has continually required a general partner to fund deficits. These items raise substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Rubin, Brown, Gornstein & Co. LLP St. Louis, Missouri January 24, 2001
[Letterhead of RBG & Co.]
S2100-020
Independent Auditors' Report
To The Partners Whittier Plaza Associates Limited Partnership St. Louis, Missouri
We have audited the accompanying balance sheet of Whittier Plaza Associates Limited Partnership, Project No. 085-35412-PM-SR, a limited partnership, as of December 31, 1999 and 1998 and the related statements of income, partners' equity (deficit) and cash flows for the years then ended. 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 and Government Auditing Standards, issued by the Comptroller General of the United States. 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 Whittier Plaza Associates Limited Partnership as of December 31, 1999 and 1998 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 15 to 24) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated January 27, 2000 on our consideration of Whittier Plaza Associates Limited Partnership's internal control and a reports dated January 27, 2000, on its compliance with specific requirements applicable to major HUD programs, specific requirements applicable to Fair Housing and Non-Discrimination, and specific requirements applicable to nonmajor HUD program transactions.
The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 5 to the financial statements, the Partnership has sustained recurring losses from operations, excessive vacancies, and has continually required a general partner to fund deficits. These items raise substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Rubin, Brown, Gornstein & Co. LLP St. Louis, Missouri January 27, 2000
[Letterhead of Habif, Arogeti & Wynne, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners United - Glenarden I Limited Partnership
We have audited the accompanying balance sheet of United - Glenarden I Limited Partnership as of December 31, 2000, and the related statements of operations, changes in partners' deficit, and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 United - Glenarden I Limited Partnership as of December 31, 2000, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Habif, Arogeti & Wynne, P.C. Atlanta, Georgia February 7, 2001
[Letterhead of Habif, Arogeti & Wynne, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners United - Glenarden I Limited Partnership
We have audited the accompanying balance sheet of UNITED - GLENARDEN I LIMITED PARTNERSHIP as of December 31, 1999, and the related statements of operations, changes in partners' equity [deficit], and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 UNITED - GLENARDEN I LIMITED PARTNERSHIP as of December 31, 1999, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Habif, Arogeti & Wynne, P.C. Atlanta, Georgia February 2, 2000
PAGE> [Letterhead of Habif, Arogeti & Wynne, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners United - Glenarden I Limited Partnership
We have audited the accompanying balance sheet of UNITED - GLENARDEN I LIMITED PARTNERSHIP as of December 31, 1998, and the related statements of operations, changes in partners' equity [deficit], and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 UNITED - GLENARDEN I LIMITED PARTNERSHIP as of December 31, 1998, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Habif, Arogeti & Wynne, P.C. Atlanta, Georgia February 1, 1999
[Letterhead of Habif, Arogeti & Wynne, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners United - Glenarden II Limited Partnership
We have audited the accompanying balance of UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 2000, and the related statements of operations, changes in partners' equity (deficit), and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 2000, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Habif, Arogeti & Wynne, P.C. Atlanta, Georgia February 7, 2001
[Letterhead of Habif, Arogeti & Wynne, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners United - Glenarden II Limited Partnership
We have audited the accompanying balance sheet of UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 1999, and the related statements of operations, changes in partners' deficit, and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 1999, and results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Habif, Arogeti & Wynne, P.C. Atlanta, Georgia February 2, 2000
[Letterhead of Habif, Arogeti & Wynne, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners United - Glenarden II Limited Partnership
We have audited the accompanying balance sheet of UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 1998, and the related statements of operations, changes in partners' deficit, and cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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 UNITED - GLENARDEN II LIMITED PARTNERSHIP as of December 31, 1998, and results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ Habif, Arogeti & Wynne, P.C. Atlanta, Georgia February 1, 1999
[Letterhead of SOLOMON, BAERSON, WITONSKI, PATEL & KASKEL, LTD.]
INDEPENDENT AUDITOR'S REPORT
To the Partners ROLLING GREEN LIMITED PARTNERSHIP D/B/A Prairie View Apartments Libertyville, IL
We have audited the accompanying balance sheets of ROLLING GREEN LIMITED PARTNERSHIP at December 31, 2000 and 1999, and the related statements of income, changes in partners' equity (deficit), and cash flows for the years then ended. 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 ROLLING GREEN LIMITED PARTNERSHIP as of December 31, 2000 and 1999, and the results of its operations, changes in partners' equity (deficit) and cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Solomon, Baerson, Witonski, Patel & Kaskel, Ltd. Chicago, IL January 24, 2001
[Letterhead of SOLOMON, BAERSON, WITONSKI, PATEL & KASKEL, LTD.]
INDEPENDENT AUDITOR'S REPORT
To the Partners ROLLING GREEN LIMITED PARTNERSHIP D/B/A Prairie View Apartments Libertyville, IL
We have audited the accompanying balance sheets of ROLLING GREEN LIMITED PARTNERSHIP at December 31, 1999 and 1998, and the related statements of income, changes in partners' equity (deficit), and cash flows for the years then ended. 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 ROLLING GREEN LIMITED PARTNERSHIP at December 31, 1999 and 1998, and the results of its operations, changes in partners' equity (deficit), and cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Solomon, Baerson, Witonski, Patel & Kaskel, Ltd. Chicago, IL January 26, 2000
[Letterhead of ZAYAS, MORAZZANI & CO.]
Independent Auditors' Report
To the Partners Santa Juanita II Limited Partnership:
We have audited the accompanying balance sheet of Santa Juanita II Limited Partnership, as of December 31, 2000, and the related statements of profit and loss, partners' equity and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. 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 audit provides 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 Santa Juanita II Limited Partnership as of December 31, 2000, and the results of its operations, changes in partners' equity, and cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated February 16, 2001, on our consideration of Santa Juanita II Limited Partnership's internal control, a report dated February 16, 2001, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to major HUD programs, and a report dated February 16, 2001 on its compliance with specific requirements applicable to Affirmative Fair Housing and Non-Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 24 through 33 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
/s/ Zayas, Morazzani & Co.
February 16, 2001, except for Notes 4 and 10, as to which the date is March 23,
Stamp No. 1707989 of the Puerto Rico Society of Certified Public Accountants was affixed to original. Federal Employer Identification Number: 66-0365844
[Letterhead of ZAYAS, MORAZZANI & CO.]
Independent Auditors' Report
To the Partners Santa Juanita II Limited Dividend Partnership:
We have audited the accompanying balance sheet of Santa Juanita II Limited Dividend Partnership, as of December 31, 1999, and the related statements of profit and loss, partners' equity and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. 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 audit provides 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 Santa Juanita II Limited Dividend Partnership as of December 31, 1999, and the results of its operations, changes in partners' equity, and cash flows for the year then ended in conformity with generally accepted accounting principles.
As discussed in Note 13 to the financials statements, on April 2000, Santa Juanita II Limited Dividend Partnership entered into a reinstatement and amendment agreement related to the balances of the first mortgage and second mortgage and their related accrued interests. The effect of such reinstatement and amendment will be recognized during the year ending December 31, 2000.
As described in Note 9 to the financial statements, the Substitute Management Agent was designated on July 1, 1997. The last audited information prior to such designation, corresponds to the year ended December 31, 1994. For the period of January 1, 1995 thru June 30, 1997, the financial records that have been made available to the Substitute Management Agent were not complete or reliable. The adjustments that could have been made to the beginning balance of partners' equity and other accounts, if all financial records had been available, when the Substitute management Agent assumed the project, may not be determined for those who are not informed about such matters. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated February 16, 2000, except for the first paragraph of such report, as to which the date May 23, 2000 on our consideration of Santa Juanita II Limited Dividend Partnership's internal control, a report dated February 16, 2000, except for the first paragraph of such report, as to which the date May 23, 2000 on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to major HUD programs, and a report dated February 16, 2000 except for the first paragraph of such report, as to which the date May 23, 2000 on its compliance with specific requirements applicable to Affirmative Fair Housing and Non-Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 26 through 35 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
/s/ Zayas, Morazzani & Co.
Stamp No. 1631923 of the Puerto Rico Society of Certified Public Accountants was affixed to original. Federal Employer Identification Number: 66-0365844
February 16, 2000, except for the fourth and sixth paragraphs of this report and Note 13, as to which the date is May 23, 2000
[Letterhead of ZAYAS, MORAZZANI & CO.]
Independent Auditors' Report
To the Partners Santa Juanita II Limited Dividend Partnership:
We have audited the accompanying balance sheet of Santa Juanita II Limited Dividend Partnership, as of December 31, 1998, and the related statements of profit and loss, partners' equity and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. 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 audit provides a reasonable basis for our opinion.
As described in Notes 4 and 6, the amounts reported in the balance sheet for Replacement Reserves, First Mortgage Payable, Accrued Interest - First Mortgage, Accrued Interest - Second Mortgage, and Second Mortgage Payable (stated at $28,750, $1,243,581 (current and long-term portion), $98,009, $47,466, and $474,656 (current and long-term portion), respectively) may not be accurate, since the debts are in the process of renegotiations and for other factors. The effect of such uncertainty can not be reasonably estimated as of the date of the financial statements.
In our opinion, except for the effects of the matters discussed in the preceding paragraph, the financial statements referred to above present fairly, in all material respects, the financial position of Santa Juanita II Limited Dividend Partnership as of December 31, 1998, and the results of its operations, changes in partners' equity, and cash flows for the year then ended in conformity with generally accepted accounting principles.
As described in Note 9 to the financial statements, the Substitute Management Agent was designated on July 1, 1997. The last audited information prior to such designation, corresponds to the year ended December 31, 1994. For the period of January 1, 1995 thru June 30, 1997, the financial records that have been made available to the Substitute Management Agent were not complete or reliable. The adjustments that could have been made to the beginning balance of partners' equity and other accounts, if all financial records had been available, when the Substitute management Agent assumed the project, may not be determined at this time. Accordingly, these financial statements are not designed for those who are not informed about such matters. In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated February 28, 1999, on our consideration of Santa Juanita II Limited Dividend Partnership's internal control and reports dated February 28, 1999, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Affirmative Fair Housing and Non-Discrimination.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 26 through 35 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
/s/ Zayas, Morazzani & Co.
Stamp No. 1549736 of the Puerto Rico Society of Certified Public Accountants was affixed to original. Federal Employer Identification Number: 66-0365844 February 28, 1999
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Creek Associates, L.P. New York, New York
We have audited the accompanying balance sheets of Spring Creek Associates, L.P. (a Delaware limited partnership) as of December 31, 2000 and 1999, and the related statements of income (loss), changes in partners' capital (deficit), and cash flows for the years then ended. 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 Spring Creek Associates, L.P. as of December 31, 2000 and 1999 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. February 9, 2001
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Spring Creek Associates, L.P. New York, New York
We have audited the accompanying balance sheets of Spring Creek Associates, L.P. (a Delaware limited partnership) as of December 31, 1999 and 1998, and the related statements of income (loss), changes in partners' capital (deficit), and cash flows for the years then ended. 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 Spring Creek Associates, L.P. as of December 31, 1999 and 1998 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. February 18, 2000
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of East Two Thirty-Five Associates, L.P. New York, New York
We have audited the accompanying consolidated balance sheets of East Two Thirty-Five Associates, L.P. (a Delaware limited partnership) and subsidiary as of December 31, 2000 and 1999, and the related consolidated statements of income (loss), changes in partners' capital, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of East Two Thirty-Five Associates, L.P. and subsidiary as of December 31, 2000 and 1999 and the consolidated results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. February 6, 2001
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of East Two Thirty-Five Associates, L.P. New York, New York
We have audited the accompanying consolidated balance sheets of East Two Thirty-Five Associates, L.P. (a Delaware limited partnership) and subsidiary as of December 31, 1999 and 1998, and the related consolidated statements of income (loss), changes in partners' capital, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of East Two Thirty-Five Associates, L.P. and subsidiary as of December 31, 1999 and 1998 and the consolidated results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. February 7, 2000
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Upper Fifth Avenue Residential Associates, L.P. New York, New York
We have audited the accompanying balance sheets of Upper Fifth Avenue Residential Associates, L.P. (a Delaware limited partnership) as of December 31, 2000 and 1999, and the related statements of income (loss), changes in partners' capital (deficit), and cash flows for the years then ended. 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 Upper Fifth Avenue Residential Associates, L.P. as of December 31, 2000 and 1999 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. February 6, 2001
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of Upper Fifth Avenue Residential Associates, L.P. New York, New York
We have audited the accompanying balance sheets of Upper Fifth Avenue Residential Associates, L.P. (a Delaware limited partnership) as of December 31, 1999 and 1998, and the related statements of income (loss), changes in partners' capital (deficit), and cash flows for the years then ended. 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 Upper Fifth Avenue Residential Associates, L.P. as of December 31, 1999 and 1998 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. January 31, 2000
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of West 107th Street Associates, L.P. New York, New York
We have audited the accompanying balance sheets of West 107th Street Associates, L.P. (a Delaware limited partnership) as of December 31, 2000 and 1999, and the related statements of income (loss), changes in partners' capital, and cash flows for the years then ended. 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 West 107th Street Associates, L.P. as of December 31, 2000 and 1999 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. February 5, 2001
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of West 107th Street Associates, L.P. New York, New York
We have audited the accompanying balance sheets of West 107th Street Associates, L.P. (a Delaware limited partnership) as of December 31, 1999 and 1998, and the related statements of income (loss), changes in partners' capital, and cash flows for the years then ended. 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 West 107th Street Associates, L.P. as of December 31, 1999 and 1998 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. February 2, 2000
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of General Atlantic Second Avenue Associates, L.P. New York, New York
We have audited the accompanying consolidated balance sheets of General Atlantic Second Avenue Associates, L.P. (a Delaware limited partnership) and subsidiary as of December 31, 2000 and 1999, and the related consolidated statements of income (loss), changes in partners' capital (deficit), and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of General Atlantic Second Avenue Associates, L.P. and subsidiary as of December 31, 2000 and 1999 and the consolidated results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. February 13, 2001
[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]
INDEPENDENT AUDITORS' REPORT
To the Partners of General Atlantic Second Avenue Associates, L.P. New York, New York
We have audited the accompanying consolidated balance sheets of General Atlantic Second Avenue Associates, L.P. (a Delaware limited partnership) and subsidiary as of December 31, 1999 and 1998, and the related consolidated statements of income (loss), changes in partners' capital (deficit), and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of General Atlantic Second Avenue Associates, L.P. and subsidiary as of December 31, 1999 and 1998 and the consolidated results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Grossman, Tuchman & Shah, LLP New York, N.Y. February 8, 2000
[Letterhead of ZINER, KENNEDY & LEHAN LLP
INDEPENDENT AUDITORS' REPORT
To the Partners of Church Lane Associates
We have audited the accompanying balance sheets of Church Lane Associates (a Pennsylvania limited partnership) as of December 31, 2000 and 1999 and the related statements of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's general partners and contracted management agent. 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 audits 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 the Partnership's general partners and contracted management agent, 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 Church Lane Associates as of December 31, 2000 and 1999, and the results of its operations, changes in partners' equity and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Ziner, Kennedy & Lehan LLP Quincy, Massachusetts January 23, 2001
[Letterhead of ZINER & COMPANY, P.C.]
INDEPENDENT AUDITORS' REPORT
To the Partners of Church Lane Associates
We have audited the accompanying balance sheets of Church Lane Associates (a Pennsylvania limited partnership) as of December 31, 1999 and 1998 and the related statements of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's general partners and contracted management agent. 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 audits 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 the Partnership's general partners and contracted management agent, 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 Church Lane Associates as of December 31, 1999 and 1998, and the results of its operations, changes in partners' equity and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Ziner & Company, P.C. Boston, Massachusetts January 18, 2000
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners Campeche Isle Apartments Limited Partnership
We have audited the accompanying balance sheet of Campeche Isle Apartments Limited Partnership as of December 31, 2000, and the related statements of operations, partners' deficit and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that 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 audit provides 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 Campeche Isle Apartments Limited Partnership as of December 31, 2000, and the results of its operations, the changes in partners' deficit and cash flows for the year then ended, in conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman Bethesda, Maryland February 15, 2001
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners Campeche Isle Apartments Limited Partnership
We have audited the accompanying balance sheet of Campeche Isle Apartments Limited Partnership as of December 31, 1999, and the related statements of operations, partners' deficit and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that 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 audit provides 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 Campeche Isle Apartments Limited Partnership as of December 31, 1999, and the results of its operations, the changes in partners' deficit and cash flows for the year then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the partnership will continue as a going concern. As discussed in note B to the financial statements, the partnership has suffered recurring losses from operations. This raises substantial doubt about the partnership's ability to continue as a going concern. Management's plans in regard to these matters are also described in note B. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Reznick Fedder & Silverman Bethesda, Maryland February 1, 2000
[Letterhead of Reznick Fedder & Silverman]
INDEPENDENT AUDITORS' REPORT
To the Partners Campeche Isle Apartments Limited Partnership
We have audited the accompanying balance sheet of Campeche Isle Apartments Limited Partnership as of December 31, 1998, and the related statements of operations, partners' deficit and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that 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 audit provides 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 Campeche Isle Apartments Limited Partnership as of December 31, 1998, and the results of its operations, the changes in partners' deficit and cash flows for the year then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the partnership will continue as a going concern. As discussed in note B to the financial statements, the partnership has suffered recurring losses from operations and its mortgage is due on March 31, 1999. This raises substantial doubt about the partnership's ability to continue as a going concern. Management's plans in regard to these matters are also described in note B. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Reznick Fedder & Silverman Bethesda, Maryland February 22, 1999
[Letterhead of MARDEN, HARRISON & KREUTER]
INDEPENDENT AUDITORS' REPORT
To the Partners Robin Housing Associates 3743-A White Plains Road Bronx, New York 10467
We have audited the accompanying balance sheets of Robin Housing Associates (a limited partnership) as of December 31, 2000 and 1999, and the related statements of operations, partners' capital (deficiency), and cash flows for the years then ended. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 Robin Housing Associates as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Marden, Harrison & Kreuter Certified Public Accountants, P.C. White Plains, New York January 30, 2001
[Letterhead of MARDEN, HARRISON & KREUTER]
INDEPENDENT AUDITORS' REPORT
To the Partners Robin Housing Associates 3743-A White Plains Road Bronx, New York 10467
We have audited the accompanying balance sheets of Robin Housing Associates (a limited partnership) as of December 31, 1999 and 1998, and the related statements of operations, partners' capital (deficiency), and cash flows for the years then ended. 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 audits 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 Robin Housing Associates as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Marden, Harrison & Kreuter Certified Public Accountants, P.C. Port Chester, New York January 28, 2000
[Letterhead of MARDEN, HARRISON & KREUTER]
INDEPENDENT AUDITORS' REPORT
To the Partners Concourse Artists Housing Associates 3743-A White Plains Road Bronx, New York 10467
We have audited the accompanying balance sheets of Concourse Artists Housing Associates (a limited partnership) as of December 31, 2000 and 1999, and the related statements of operations, partners' capital (deficiency), and cash flows for the years then ended. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 Concourse Artists Housing Associates as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Marden, Harrison & Kreuter Certified Public Accountants, P.C. White Plains, New York January 30, 2001
[Letterhead of MARDEN, HARRISON & KREUTER]
INDEPENDENT AUDITORS' REPORT
To the Partners Concourse Artists Housing Associates 3743-A White Plains Road Bronx, New York 10467
We have audited the accompanying balance sheets of Concourse Artists Housing Associates (a limited partnership) as of December 31, 1999 and 1998, and the related statements of operations, partners' capital (deficiency), and cash flows for the years then ended. 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 audits 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 Concourse Artists Housing Associates as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Marden, Harrison & Kreuter Certified Public Accountants, P.C. Port Chester, New York January 28, 2000
[Letterhead of MARDEN, HARRISON & KREUTER]
INDEPENDENT AUDITORS' REPORT
To the Partners 2051 Grand Concourse Housing Associates 3743-A White Plains Road Bronx, New York 10467
We have audited the accompanying balance sheets of 2051 Grand Concourse Housing Associates (a limited partnership) as of December 31, 2000 and 1999, and the related statements of operations, partners' capital (deficiency), and cash flows for the years then ended. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 2051 Grand Concourse Housing Associates as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Marden, Harrison & Kreuter Certified Public Accountants, P.C. Port Chester, New York January 30, 2001
[Letterhead of MARDEN, HARRISON & KREUTER]
INDEPENDENT AUDITORS' REPORT
To the Partners 2051 Grand Concourse Housing Associates 3743-A White Plains Road Bronx, New York 10467
We have audited the accompanying balance sheets of 2051 Grand Concourse Housing Associates (a limited partnership) as of December 31, 1998 and 1998, and the related statements of operations, partners' capital (deficiency), and cash flows for the years then ended. 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 audits 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 2051 Grand Concourse Housing Associates as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Marden, Harrison & Kreuter Certified Public Accountants, P.C. Port Chester, New York January 28, 2000
[Letterhead of MARDEN, HARRISON & KREUTER]
INDEPENDENT AUDITORS' REPORT
To the Partners Willoughby-Wyckoff Housing Associates 3743-A White Plains Road Bronx, New York 10467
We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing Associates (a limited partnership) as of December 31, 2000 and 1999, and the related statements of operations, partners' capital (deficiency), and cash flows for the years then ended. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 Willoughby-Wyckoff Housing Associates as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the company will continue as a going concern. As discussed in Note 1B to the financial statements, the Partnership has had operating losses and equity deficiencies. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Marden, Harrison & Kreuter Certified Public Accountants, P.C. White Plains, New York January 30, 2001
[Letterhead of MARDEN, HARRISON & KREUTER]
INDEPENDENT AUDITORS' REPORT
To the Partners Willoughby-Wyckoff Housing Associates 3743-A White Plains Road Bronx, New York 10467
We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing Associates (a limited partnership) as of December 31, 1999 and 1998, and the related statements of operations, partners' capital (deficiency), and cash flows for the years then ended. 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 audits 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 Willoughby-Wyckoff Housing Associates as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the company will continue as a going concern. As discussed in Note 1B to the financial statements, the Partnership has had operating losses, operating cash flow deficiencies, and equity deficiencies. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Marden, Harrison & Kreuter Certified Public Accountants, P.C. Port Chester, New York January 28, 2000
[Letterhead of WOLFE NILGES NAHORSKI]
INDEPENDENT AUDITORS' REPORT
To the Partners Goodfellow Place Limited Partnership St. Louis, Missouri
We have audited the accompanying balance sheets of Goodfellow Place Limited Partnership as of December 31, 2000 and 1999, and the related statements of Income (loss), partners' equity (deficit), and cash flows for the years then ended. 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 audit.
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 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 Goodfellow Place Limited Partnership as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles.
/s/ Wolfe Nilges Nahorski A Professional Corporation St. Louis, Missouri January 18, 2001
[Letterhead of WOLFE NILGES NAHORSKI]
INDEPENDENT AUDITORS' REPORT
To the Partners Goodfellow Place Limited Partnership St. Louis, Missouri
We have audited the accompanying balance sheets of Goodfellow Place Limited Partnership as of December 31, 1999 and 1998, and the related statements of income, partners' equity (deficit), and cash flows for the years then ended. 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 audit.
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 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 Goodfellow Place Limited Partnership as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Project will continue as a going concern. As discussed in Note 10 to the financial statements, the Project has suffered recurring cash flow deficiencies from operations. This raises substantial doubt about the Project's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 11.
/s/ Wolfe Nilges Nahorski A Professional Corporation February 25, 2000, except for Note 11, which is dated March 8, 2000 St. Louis, Missouri
[Letterhead of HAMILTON & MUSSER, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners of Penn Alto Associates, Limited Partnership Altoona, Pennsylvania 16601
We have audited the accompanying balance sheets of Penn Alto Associates, Limited Partnership as of December 31, 2000 and 1999 and the related statements of income, changes in partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit 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 audit provides a reasonable basis for the opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Penn Alto Associates, Limited Partnership, as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information on pages 9 and 10 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Hamilton & Musser Certified Public Accountants Mechanicsburg, Pennsylvania February 22, 2001
[Letterhead of HAMILTON & MUSSER, P.C.]
INDEPENDENT AUDITOR'S REPORT
To the Partners of Penn Alto Associates, Limited Partnership Altoona, Pennsylvania 16601
We have audited the accompanying balance sheets of Penn Alto Associates, Limited Partnership as of December 31, 1999 and 1998 and the related statements of income, changes in partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit 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 audit provides a reasonable basis for the opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Penn Alto Associates, Limited Partnership, as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information on pages 9 and 10 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Hamilton & Musser Certified Public Accountants Mechanicsburg, Pennsylvania February 22, 2000
[Letterhead of Torres Llompart, Sanchez Ruiz & Co.]
Partners Gramco Development Limited Dividend Partnership, L.P. San Juan, Puerto Rico
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
We have audited the accompanying balance sheets of Gramco Development Limited Dividend Partnership, L.P., HUD Project No. 056-35140-LD (HODAG), as of December 31, 2000 and 1999, and the related statements of profit and loss, partners' capital, and cash flows for the years then ended. 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 auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller General of the United States. 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 statements 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 Gramco Development Limited Dividend Partnership, L.P., HUD Project No. 056-35140-LD (HODAG), as of December 31, 2000 and 1999, and the results of its operations, changes in partners' capital and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for audits of HUD Programs, issued by the US Department of Housing and Urban Development, we have also issued a report dated February 3, 2001, on our consideration of the Partnership's internal control structure and reports dated February 3, 2001, on its compliance with specific requirements applicable to major HUD programs; compliance with laws, regulations, contracts, loan covenants and agreements; and compliance with specific requirements applicable to Fair Housing and Non-Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of the audits.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements, taken as a whole. The accompanying supplementary information included in the report on pages 23 to 26 is presented for purposes of additional analysis and is not a required part of the basic financial statements of Gramco Development Limited Dividend Partnership, L.P., HUD Project No. 056-35140-LD (HODAG). Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements for the year ended December 31, 2000, and in our opinion, is fairly stated in all material respects in relation to the basic financial statements for the year ended December 31, 2000, taken as a whole.
/s/ Torres Llompart, Sanchez Ruiz & Co. San Juan, Puerto Rico License No. 169 Stamp number 1703788 was affixed to the original of this report. February 3, 2001
[Letterhead of Torres Llompart, Sanchez Ruiz & Co.]
Partners Gramco Development Limited Dividend Partnership, L.P. San Juan, Puerto Rico
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
We have audited the accompanying balance sheets of Gramco Development Limited Dividend Partnership, L.P., HUD Project No. 0565140-LD (HODAG), as of December 31, 1999 and 1998, and the related statements of profit and loss, partners' capital, and cash flows for the years then ended. 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 and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 statements 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 Gramco Development Limited Dividend Partnership, L.P., HUD Project No. 0565140-LD (HODAG), as of December 31, 1999 and 1998, and the results of its operations, changes in partners' capital and its cash flows for the years then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit Guide for audits of HUD Programs, issued by the US Department of Housing and Urban Development, we have also issued a report dated January 27, 2000, on our consideration of the Partnership's internal control structure and reports dated January 27, 2000, on its compliance with specific requirements applicable to major HUD programs; compliance with laws, regulations, contracts, loan covenants and agreements; and compliance with specific requirements applicable to Fair Housing and Non-Discrimination.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements, taken as a whole. The accompanying supplementary information included in the report on pages 23 to 26 is presented for purposes of additional analysis and is not a required part of the basic financial statements of Gramco Development Limited Dividend Partnership, L.P., HUD Project No. 0565140-LD (HODAG). Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements for the year ended December 31, 1999, and in our opinion, is fairly stated in all material respects in relation to the basic financial statements for the year ended December 31, 1999, taken as a whole.
/s/ Torres Llompart, Sanchez Ruiz & Co. San Juan, Puerto Rico License No. 169 Stamp number 1592887 was affixed to the original of this report. January 27, 2000
[Letterhead of COLE, EVANS & PETERSON]
INDEPENDENT AUDITORS' REPORT
To the Partners Alexis Park Apartments, A Louisiana Partnership In Commendam Bossier City, Louisiana
We have audited the accompanying balance sheets of Alexis Park Apartments, A Louisiana Partnership In Commendam at December 31, 2000 and December 31, 1999 and the related statements of income, partners' capital and cash flows for the years then ended. 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 audits 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 in the first paragraph above present fairly, in all material respects, the financial position of Alexis Park Apartments, A Louisiana Partnership In Commendam at December 31, 2000 and December 31, 1999, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed at Note 10 to the financial statements, there are uncertainties that affect the Partnership concerning the existence of hazardous waste and negative performance indicators that raise substantial doubt about the Partnership's ability to continue as a going concern. Management's position in regard to these matters is also discussed at Note 10. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Our audit was made primarily for the purpose of forming an opinion on the basic financial statements for the years ended December 31, 2000 and December 31, 1999 taken as a whole. The supplementary Schedule 1 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Cole, Evans & Peterson Shreveport, Louisiana February 8, 2001
[Letterhead of COLE, EVANS & PETERSON]
INDEPENDENT AUDITORS' REPORT
To the Partners Alexis Park Apartments, A Louisiana Partnership In Commendam Bossier City, Louisiana
We have audited the accompanying balance sheets of Alexis Park Apartments, A Louisiana Partnership In Commendam at December 31, 1999 and December 31, 1998 and the related statements of income, partners' capital and cash flows for the years then ended. 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 audits 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 in the first paragraph above present fairly, in all material respects, the financial position of Alexis Park Apartments, A Louisiana Partnership In Commendam at December 31, 1999 and December 31, 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed at Note 10 to the financial statements, there are uncertainties that affect the Partnership concerning the existence of hazardous waste and negative performance indicators that raise substantial doubt about the Partnership's ability to continue as a going concern. Management's position in regard to these matters is also discussed at Note 10. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Our audit was made primarily for the purpose of forming an opinion on the basic financial statements for the years ended December 31, 1999 and December 31, 1998 taken as a whole. The supplementary Schedule 1 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Cole, Evans & Peterson Shreveport, Louisiana February 25, 2000
[Letterhead of CHESSER & COMPANY]
INDEPENDENT AUDITOR'S REPORT
Partners Williamsburg Residential, L.P. New York, New York
We have audited the accompanying balance sheet of Williamsburg Residential, L.P. as of December 31, 2000 and 1999, and the related statements of operations, changes in Partners' capital, and cash flows for the years then ended. 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 audit 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 audit provides 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 Williamsburg Residential, L.P. as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Chesser & Company, P.A. Wichita, Kansas March 16, 2001
[Letterhead of CHESSER & COMPANY]
INDEPENDENT AUDITOR'S REPORT
Partners Williamsburg Residential, L.P. New York, New York
We have audited the accompanying balance sheet of Williamsburg Residential, L.P. as of December 31, 1999 nd 1998 and the related statements of operations, changes in Partners' capital, and cash flows for the years then ended. 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 audit 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 audit provides 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 Williamsburg Residential, L.P. as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Chesser & Company, P.A. Wichita, Kansas February 17, 2000
[Letterhead of PHILIP ROOTBERG & COMPANY, LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners Victory Apartments
We have audited the accompanying balance sheet of Victory Apartments (a limited partnership) - F.H.A. Project No. 071-35588 as of December 31, 2000 and 1999, and the related statements of profit and loss, partners' capital, and cash flows for the years then ended. 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 U.S. generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 Victory Apartments, F.H.A. Project No. 071-35588 as of December 31, 2000 and 1999, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 24, 2001, on our consideration of the Partnership's internal control and a report dated January 24, 2001, on its compliance with laws and regulations. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audits.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules listed on the preceding contents page are presented for purposes of additional analysis to comply with HUD reporting requirements and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Philip Rootberg & Company, LLP Chicago, Illinois January 24, 2001
[Letterhead of PHILIP ROOTBERG & COMPANY, LLP]
INDEPENDENT AUDITOR'S REPORT
To the Partners Victory Apartments
We have audited the accompanying balance sheet of Victory Apartments (a limited partnership) - F.H.A. Project No. 0715588 as of December 31, 1999 and 1998, and the related statements of profit and loss, partners' capital, and cash flows for the years then ended. 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 and Government Auditing Standards, issued by the Comptroller General of the United States. 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 Victory Apartments, F.H.A. Project No. 0715588 as of December 31, 1999 and 1998, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated January 31, 2000, on our consideration of the Partnership's internal control and a report dated January 31, 2000, on its compliance with laws and regulations.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules listed on the preceding contents page are presented for purposes of additional analysis to comply with HUD reporting requirements and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Philip Rootberg & Company, LLP Chicago, Illinois January 31, 2000
LIBERTY TAX CREDIT PLUS II L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
March 31, ------------------------------ 2001 2000 ------------- ---------- ASSETS
Property and equipment, at cost, less accumulated depreciation (Notes 2, 4 and 7) $ 154,378,556 $ 160,643,092 Cash and cash equivalents (Notes 2, 3 and 10) 2,624,751 2,463,141 Cash held in escrow (Notes 2, 3 and 5) 7,853,371 7,798,477 Deferred costs - less accumulated amortization (Notes 2 and 6) 3,697,618 3,937,473 Other assets 3,969,776 5,229,595 -----------------------------
Total assets $ 172,524,072 $ 180,071,778 ============ ============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities Mortgage notes payable (Note 7) $ 117,039,709 $ 119,104,452 Accounts payable and other liabilities (Note 10) 8,650,494 9,094,539 Due to local general partners and affiliates (Note 8) 10,970,028 10,326,684 Due to general partners and affiliates (Note 8) 10,560,764 8,887,441 Due to selling partners 2,251,025 2,159,692 -------------- -------------
Total liabilities 149,472,020 149,572,808 ------------ -----------
Minority interests (Note 2) 3,018,863 3,542,196 -------------- -------------
Commitments and contingencies (Notes 8 and 10)
Partners' capital (deficit) Limited partners ( 115,917.5 BACs issued and outstanding) (Note 1) 20,863,541 27,717,890 General partners (830,352) (761,116) --------------- --------------
Total partners' capital (deficit) 20,033,189 26,956,774 ------------- -------------
Total liabilities and partners' capital (deficit) $ 172,524,072 $ 180,071,778 ============ ============
See accompanying notes to consolidated financial statements.
LIBERTY TAX CREDIT PLUS II L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended March 31, 2001 2000 1999 --------- ---------- ---------
Revenues Rental income $ 26,422,668 $ 25,799,708 $25,736,121 Other (Note 10) 1,730,341 1,304,440 969,674 ------------ ----------- ------------ 28,153,009 27,104,148 26,705,795 ----------- ---------- ----------
Expenses General and administrative 6,253,104 6,292,028 6,280,636 General and administrative-related parties (Note 8) 2,615,250 2,608,395 2,648,941 Repairs and maintenance 5,684,571 5,441,649 4,929,821 Operating and other 2,918,215 2,711,898 2,752,456 Real estate taxes 1,129,435 1,082,512 1,066,433 Insurance 1,208,689 1,085,663 1,144,811 Financial, primarily interest 8,094,388 8,176,289 8,241,779 Depreciation and amortization 8,106,445 7,948,800 7,993,156 ----------- ----------- -----------
Total expenses 36,010,097 35,347,234 35,058,033 ---------- ---------- ----------
Loss before minority interest and extraordinary item (7,857,088) (8,243,086) (8,352,238)
Minority interest in loss of subsidiaries 238,349 254,205 414,579 ----------- ----------- -----------
Loss before extraordinary item (7,618,739) (7,988,881) (7,937,659) Extraordinary item-forgiveness of indebtedness income (Note 7) 695,154 0 0 -------------------------------------
Net loss $(6,923,585) $(7,988,881) $(7,937,659) ========== ========== ==========
Limited partners share: Loss before extraordinary item $(7,542,552) $(7,908,992) $(7,858,282) Extraordinary item 688,203 0 0 -----------------------------------
Net loss - limited partners $(6,854,349) $(7,908,992) $(7,858,282) ========== ========== ==========
Number of BACs outstanding 115,917.5 115,917.5 115,917.5 ============ ========= =========
Loss before extraordinary item per BAC $ (65.07) $ (68.23) $ (67.79) Extraordinary item per BAC 5.94 0 0 ---------------------------------------
Loss per BAC $ (59.13) $ (68.23) $ (67.79) ============ ============= ============
See accompanying notes to consolidated financial statements.
LIBERTY TAX CREDIT PLUS II L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Year Ended March 31, 2001 2000 1999 --------- ------------ ----------
Cash flows from operating activities: Net loss $(6,923,585) $(7,988,881) $(7,937,659) ---------- ---------- ---------- Adjustments to reconcile net loss to net cash provided by operating activities:
Extraordinary item - forgiveness of Indebtedness income (695,154) 0 0 Depreciation and amortization 8,106,445 7,948,800 7,993,156 Write-off of deferred legal costs 12,287 0 0 Minority interest in loss of subsidiaries (238,349) (254,205) (414,579) Accrued interest added to principal of mortgage note payable 52,873 52,873 52,873 (Increase) decrease in assets: Cash held in escrow (31,739) 144,147 (336,227) Other assets 1,252,652 (896,488) (246,324) Increase (decrease) in liabilities: Accounts payable and other liabilities (116,380) (427,385) 182,103 Due to general partners and affiliates 1,673,323 1,504,417 2,425,035 ----------- --------- ----------
Total adjustments 10,015,958 8,072,159 9,656,037 ---------- --------- ----------
Net cash provided by operating activities 3,092,373 83,278 1,718,378 ----------- ----------- ----------
Cash flows from investing activities: Acquisition of property and equipment (1,542,962) (1,192,241) (1,258,853) (Increase) decrease in cash held in escrow (23,155) (1,040,481) 258,027 ------------- ---------- -----------
Net cash used in investing activities (1,566,117) (2,232,722) (1,000,826) ----------- ---------- ----------
Cash flows from financing activities: (Increase) decrease in deferred costs (71,379) (434,230) 71,025 Proceeds from mortgage notes 0 9,990,000 0 Repayments of mortgage notes (1,742,960) (6,972,100) (1,350,512) Increase in due to local general partners and affiliates 758,900 491,747 890,189 Decrease in due to local general partners and affiliates (115,556) (210,612) (980,298) Increase (decrease) in due to selling partners 91,333 (1,365,758) 77,766 Decrease in capitalization of consolidated subsidiaries attributable to minority interest(284,984) (220,825) (268,942) ----------- ---------- ----------
Net cash (used in) provided by financing activities (1,364,646) 1,278,222 (1,560,772) ---------- --------- ----------
Net increase (decrease) in cash and cash equivalents 161,610 (871,222) (843,220)
Cash and cash equivalents at beginning of year 2,463,141 3,334,363 4,177,583 --------- --------- ---------- Cash and cash equivalents at end of year $2,624,751 $2,463,141 $ 3,334,363 ========= ========= ==========
Supplemental disclosure of cash flows information: Cash paid during the year for interest $7,986,485 $ 7,123,406 $ 8,088,271
Supplemental disclosures of noncash investing and financing activities: Construction in progress reclassified to property and equipment 0 0 604,411
Decrease in property and equipment due to a decrease in due to selling partners 0 54,005 0
Forgiveness of indebtedness income Decrease in mortgage notes payable (374,656) 0 0 Decrease in accounts payable (327,665) 0 0 Decrease in other assets 7,167 0 0
See accompanying notes to consolidated financial statements.
LIBERTY TAX CREDIT PLUS II L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2001
NOTE 1 - General
Liberty Tax Credit Plus II L.P., a Delaware limited partnership (the "Partnership"), was organized on March 25, 1988, but had no activity until July 1, 1988 (which date is considered to be inception for financial accounting purposes). The Partnership had no operations until commencement of the public offering on July 20, 1988.
The Partnership's business is to invest in other limited partnerships ("Local Partnerships", "subsidiaries" or "subsidiary partnerships") owning leveraged Apartment Complexes that are eligible for the low-income housing tax credit ("Housing Tax Credit") enacted in the Tax Reform Act of 1986, and to a lesser extent in Local Partnerships owning properties that are eligible for the historic rehabilitation tax credit. The Partnership's investment in each Local Partnership represents a 20% to 98% interest in that Local Partnership.
The Partnership had acquired interests in 27 Local Partnerships as of March 31, 2001, and does not anticipate making any additional investments.
The Partnership was authorized to issue a total of 200,000 Beneficial Assignment Certificates ("BACs"), of which 120,000 have been registered with the Securities and Exchange Commission for sale to the public. The public offering was completed on January 9, 1989 with a total of 115,917.5 BACs sold and $115,917,500 of proceeds received by the Partnership.
The terms of the Partnership's Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement") provide, among other things, that net profits or losses and distributions of cash flow are, in general, allocated 99% to the limited partners and BACs holders and 1% to the general partners.
NOTE 2 - Summary of Significant Accounting Policies
a) Basis of Consolidation
The consolidated financial statements include the accounts of the Partnership and 27 subsidiary partnerships in which the Partnership is a limited partner. Through the rights of the Partnership and/or a General Partner (which has a contractual obligation to act on behalf of the Partnership) to remove the general partner of the subsidiary local partnerships and to approve certain major operating and financial decisions, the Partnership has a controlling financial interest in the subsidiary local partnerships.
For financial reporting purposes, the Partnership's fiscal year ends on March 31, in order to allow adequate time for the subsidiaries' financial statements to be prepared and consolidated. The books and records of the Partnership are maintained on the accrual basis of accounting, in accordance with U.S. generally accepted accounting principles ("GAAP"). All subsidiaries have fiscal years ending December 31. Accounts of the subsidiaries have been adjusted for intercompany transactions from January 1 through March 31. All intercompany accounts and transactions with the subsidiary partnerships have been eliminated in consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries attributable to minority interest arise from cash contributions and cash distributions to the minority interest partners.
The Partnership's investment in each subsidiary partnership is equal to the respective subsidiary partners' equity less minority interest capital, if any. Losses attributable to minority interests which exceed the minority interest's investment in a subsidiary partnership have been charged to the Partnership. Such losses aggregated approximately $562,000, $510,000 and $431,000 for the years ended March 31, 2001, 2000 and 1999 (the 2000, 1999 and 1998 Fiscal Years), respectively. In consolidation, all subsidiary partnership losses are included in the Partnership's capital account except for losses allocated to minority interest capital.
b) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and investments in short-term highly liquid instruments purchased with original maturities of three months or less.
c) Property and Equipment
Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring the properties. The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings. A loss on impairment of assets is recorded when management estimates amounts recoverable through future operations and sale of the property on an undiscounted basis are below depreciated cost. Property investments themselves are reduced to estimated fair value (generally using discounted cash flows) when the property is considered to be impaired and the depreciated cost exceeds estimated fair value. Through March 31, 2001, the Partnership has recorded approximately $4,727,000 on impairment of assets.
At the time management commits to a plan to dispose of assets, said assets are adjusted to the lower of carrying amount or fair value less costs to sell. Such assets would be classified as property and equipment-held for sale and are not depreciated. There are no assets classified as property and equipment-held for sale through March 31, 2001.
d) Offering Costs
Costs incurred to sell BACs, including brokerage and the nonaccountable expense allowance, are considered selling and offering expenses. These costs are charged directly to limited partners' capital.
e) Income Taxes
The Partnership is not required to provide for, or pay, any federal income taxes. Net income or loss generated by the Partnership is passed through to the partners and is required to be reported by them. The Partnership may be subject to state and local taxes in jurisdictions in which it operates. For income tax purposes, the Partnership has a fiscal year ending December 31 (Note 9).
f) Loss Contingencies
The Partnership records loss contingencies as a charge to income when information becomes available which indicates that it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements and the amount of loss can be reasonably estimated. In addition, the Partnership evaluates a potential environmental liability independently from any potential claim for recovery.
g) Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
h) New Pronouncements
In April of 1998, the Financial Accounting Standards Board issued Statement of Position 98-5 ("SOP 98-5") "Reporting on the Costs of Start-Up Activities." SOP 98-5 provides guidance on the financial reporting of start-up costs and organization costs. SOP 98-5 is effective for all fiscal quarters of fiscal years beginning after December 15, 1998. Such change in accounting principle amounted to $211,549 for the year ended March 31, 2000.
NOTE 3 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instruments (all of which are held for nontrading purposes) for which it is practicable to estimate that value:
Cash and Cash Equivalents, and Cash Held in Escrow The carrying amount approximates fair value.
Mortgage Notes Payable The fair value of mortgage notes payable is estimated, where practicable, based on the borrowing rate currently available for similar loans.
The estimated fair values of the Partnership's mortgage notes payable are as follows:
NOTE 4 - Property and Equipment
The components of property and equipment are as follows:
Estimated March 31, Useful Lives ----------------------------- 2001 2000 (Years) ------------ -------------- -----------
Land $ 14,444,085 $ 14,444,085 - Building and improvements 221,339,125 220,100,710 15 to 40 Other 6,080,210 5,886,055 5 to 15 ------------- ------------- 241,863,420 240,430,850 Less: Accumulated depreciation (87,484,864) (79,787,758) ------------ ------------
$154,378,556 $160,643,092 =========== ===========
Included in property and equipment are $6,955,050 of acquisition fees paid or accrued to the general partners and $1,606,014 of acquisition expenses as of March 31, 2001 and 2000. In addition, as of March 31, 2001 and 2000, buildings and improvements include $7,015,991 of capitalized interest.
Depreciation expense for the years ended March 31, 2001, 2000 and 1999 amounted to $7,807,498, $7,700,682 and $7,694,504, respectively.
In connection with the rehabilitation of the properties, the subsidiary partnerships have incurred developer's fees of $20,563,695 to the Local General Partners and affiliates. Such fees have been included in the cost of property and equipment.
During the 2000 and 1999 Fiscal Years, there was a decrease in accumulated depreciation in the amounts of $110,392 and $123,735, respectively, due to write-offs on dispositions.
NOTE 5 - Cash Held in Escrow
Cash held in escrow is restricted and consists of the following:
March 31, ----------------------- 2001 2000 ---------- ----------
Real estate taxes, insurance, reconstruction and other $3,508,074 $3,462,163 Reserve for replacements 3,283,223 3,260,068 Tenant security deposits 1,062,074 1,076,246 --------- ---------
$7,853,371 $7,798,477 ========= =========
NOTE 6 - Deferred Costs
The components of other deferred costs and their periods of amortization are as follows:
March 31, ----------------------- 2001 2000 Period ---------- ---------- -----------
Financing expenses $5,588,502 $ 5,519,861 * Other 639,858 741,253 Various ----------- ----------- 6,228,360 6,261,114 Less: Accumulated amortization (2,530,742) (2,323,641) ---------- ----------
$3,697,618 $ 3,937,473 ========= ========== *Over the life of the respective related mortgages.
Amortization expense for the years ended March 31, 2001, 2000 and 1999 amounted to $298,947, $248,118 and $298,652, respectively. During the years ended March 31, 2001 and 2000, respectively, $91,846 and $1,419,792 of fully amortized deferred costs were written off. During the year ended March 31, 2001, $12,287 of unamortized deferred costs was written off.
NOTE 7 - Mortgage Notes Payable
The mortgage notes are payable in aggregate monthly installments of approximately $692,000 including principal and interest at rates varying from 1% to 15% per annum, through 2034. Each subsidiary partnership's mortgage note payable is collateralized by the land and buildings of the respective subsidiary partnership and the assignment of certain subsidiary partnership's rents and leases and is without further recourse.
Annual principal payment requirements for each of the next five fiscal years and thereafter are as follows:
Fiscal Year Ending Amount - - ------------------ ------
2001 $ 1,872,617 2002 1,910,511 2003 2,036,139 2004 8,611,179 2005 7,273,692 Thereafter 95,335,571 ------------ $117,039,709 ============
One subsidiary partnership, United Glen Arden II Limited Partnership, holds a mortgage note which is eligible for an interest reduction subsidy under Section 236 of the National Housing Act. At December 31, 2000, said note, which bears interest at 7.5% per annum through April 1, 2011, had a balance of $2,240,908.
Santa Juanita II Limited Partnership - - ------------------------------------ Effective April 1, 2000, a reinstatement and modification agreement was made and entered by and between Santa Juanita II Limited Partnership ("Santa Juanita"), Federal National Mortgage Association, and Banco Popular de Puerto Rico, regarding the outstanding debt of $1,243,581 as of December 31, 1999.
Based on this agreement, the debt of $1,243,581, plus accrued interest, was modified and reinstated for the amount of $986,021 at a rate of 10%, payable in 61 monthly installments of $11,784, and the remaining unpaid balance payable on May 1, 2005.
Effective January 27, 2000, the financial institution where the second mortgage was held, reinstated the mortgage in the amount of $500,000 for a fixed amount of $100,000, payable with a cash payment of $40,000 due within the next 150 days from the date of the acceptance, and the balance of $60,000 would be payable in 30 monthly installments of $2,000 commencing not later than June 16, 2000.
As a result of these transaction forgiveness of indebtedness income of approximately $695,000 was recognized.
Campeche Isle Apartments, L.P. - - ------------------------------ On October 6, 1999, Campeche refinanced its existing indebtedness by borrowing $4,125,000 from Lehman Brothers Bank, FSB. The loan bears interest at the rate of 8.02% per annum, and matures on November 1, 2006. Campeche's prior mortgages indebtedness in the principal amount of approximately $4,000,000 together with $25,000 in accrued interest was repaid.
Rolling Green Limited Partnership - - --------------------------------- On February 1, 1999, Rolling Green refinanced its existing indebtedness by borrowing $5,865,000 from the United States Department of Housing and Urban Development ("HUD"). The loan bears interest at the rate of 6.85% per annum, and matures on March 1, 2034. Rolling Green's prior mortgage indebtedness in the principal amount of approximately $1,671,000 and a purchase money note of $1,450,000 along with $1,695,000 in accrued interest were repaid.
NOTE 8 - Related Party Transactions
Related Party Fees - - ------------------
One of the General Partners has a 1% interest as a special limited partner in each of the Local Partnerships. An affiliate of the General Partners also has a minority interest in certain Local Limited Partnerships.
The General Partners and their affiliates perform services for the Partnership. The costs incurred for the years ended March 31, 2001, 2000 and 1999 are as follows:
Year Ended March 31, 2001 2000 1999 ------------ ----------- ---------
Partnership management fees (a) $1,496,000 $1,496,000 $1,496,000 Expense reimbursement (b) 150,970 193,721 156,680 Property management fees incurred to affiliates of the General Partners (c) 348,560 341,738 335,031 Local administrative fee (d) 54,000 51,500 49,000 ----------- ----------- -----------
Total general and administrative- General Partners 2,049,530 2,082,959 2,036,711 --------- --------- ---------
Property management fees incurred to affiliates of the subsidiary partnerships general partners (c) 565,720 525,436 612,230 ------------------------------
Total general and administrative -related parties $2,615,250 $2,608,395 $2,648,941 ========= ========= =========
(a) The General Partners are entitled to receive a partnership management fee, after payment of all Partnership expenses, which together with the local annual administrative fees will not exceed a maximum of 0.5% per annum of invested assets (as defined in the Partnership Agreement), for administering the affairs of the Partnership. The partnership management fee, subject to the foregoing limitation, will be determined by the General Partners in their sole discretion based upon their review of the Partnership's investments. Partnership management fees owed to the General Partners amounting to approximately $8,312,000 and $6,816,000 were accrued and unpaid as of March 31, 2001 and March 31, 2000. Without the General Partner's continued accrual without payment, the Partnership will not be in a position to meet its obligations. The General Partners have allowed for the accrual without payment of these amounts but are under no obligation to do so.
(b) The Partnership reimburses the General Partners and their affiliates for actual Partnership operating expenses incurred by the General Partners and their affiliates on the Partnership's behalf. The amount of reimbursement from the Partnership is limited by the provisions of the Partnership Agreement. Another affiliate of the General Partners performs asset monitoring for the Partnership. These services include site visits and evaluations of the subsidiary partnerships' performance.
(c) Property management fees incurred by subsidiary partnerships amounted to $1,629,770, $1,568,548 and $1,537,420 for the 2000, 1999 and 1998 Fiscal Years, respectively. Of these fees $914,280, $867,174 and $947,261 were incurred to affiliates of the subsidiary partnerships' general partners. Included in amounts incurred to affiliates of the subsidiary partnerships' general partners are $348,560, $341,738 and $335,031, respectively, which were also incurred to affiliates of the Partnership.
(d) Liberty Associates II L.P., a special limited partner of the subsidiary partnerships, is entitled to receive a local administrative fee of up to $2,500 per year from each subsidiary partnership.
Liberty Associates II L.P. has a 1% interest as the special limited partner in each of the subsidiary partnerships. Liberty Associates II L.P. received cash distributions of approximately $5,200, $2,600 and $4,900 during the 2000, 1999 and 1998 Fiscal Years, respectively.
Pursuant to the Partnership Agreement and the Local Partnership Agreements, the General Partners and Liberty Associates II L.P. received their allocable share of profits, losses and tax credits allocated by the Partnership and the Local Partnerships, respectively.
(e) Due to Local General Partners and affiliates at March 31, 2001 and 2000 consists of the following:
March 31, ------------------------------ 2001 2000 ------------ --------------
Operating advances $ 1,138,466 $ 1,002,159 Development fee payable 2,472,093 2,499,090 Operating deficit advances 5,041,079 4,666,883 Management and other fees 656,636 603,007 Long-term notes payable (f) 965,541 965,541 Interest long-term notes payable 696,213 590,004 ------------ ----------- $10,970,028 $10,326,684 ========== ==========
(f) Long-term notes payable consist of the following:
Polynesian $ 316,370 $ 316,370 - - ---------- This promissory note bears interest at 11% with a maturity date of June 1, 2003. Interest expense of $34,800 was incurred for each of the years ended March 31, 2001 and 2000.
Seagrape 649,171 649,171 - - -------- ------------ ------------ This promissory note bears interest at 11% with a maturity date of July 1, 2002. Interest expense of $71,409 was incurred for each of the years ended March 31, 2001 and 2000. $ 965,541 $ 965,541 =========== ============
NOTE 9 - Income Taxes
A reconciliation of the financial statement net loss to the income tax loss for the Partnership and its consolidated subsidiaries is as follows:
Year Ended December 31, 2000 1999 1998 ----------- ----------- ----------
Financial statement Net loss $(6,923,585) $(7,988,881) $(7,937,659)
Difference resulting from parent company having a different fiscal year for income tax and financial reporting purposes (35,930) (8,740) 17,468
Difference between depreciation and amortization expense recorded for financial reporting purposes and the accelerated cost recovery system utilized for income tax purposes (2,180,925) (2,306,951) (1,894,545)
Excess losses allocated to minority interest for income tax purposes 1,347,334 681,252 896,524
Other (402,302) 441,380 163,393) ----------- ----------- ---------
Net loss as shown on the income tax return for the calendar year ended $(8,195,408) $(9,181,940) $(9,081,605) ========== ============ ==========
NOTE 10 - Commitments and Contingencies
a) Subsidiary Partnerships - Going Concerns and Uncertainties
The auditors for three subsidiary partnerships, Whittier Plaza Associates Limited Partnership, Alexis Park Apartments and Willoughby-Wyckoff Housing Associates modified their reports on the 2000 Fiscal Year financial statements due to the uncertainty of each subsidiary partnership's ability to continue as a going concern. The financial statements do not include any adjustments that would be necessary in the event the subsidiary partnerships are unable to continue as going concerns.
Whittier Plaza Associates - - ------------------------- The financial statements for Whittier Plaza Associates Limited Partnership ("Whittier") have been prepared assuming that Whittier will continue as a going concern. Whittier has sustained continuous losses since commencement of operations in 1988, including losses of approximately $26,000, $49,000 and $38,000 for the 2000, 1999 and 1998 Fiscal Years, respectively. Whittier has experienced higher vacancies and lower rents than those originally projected, resulting in increased difficulty in meeting both operating and debt service obligations. The Local General Partner, pursuant to a development deficit guarantee agreement, has advanced approximately $40,000 and $23,000 in the 2000 and 1999 Fiscal Years, respectively, and approximately $447,000 since 1988 to fund operating cash shortfalls. In addition, Whittier's management company, an affiliate of the Local General Partner, has deferred receipt of various fees since 1991 totaling approximately $72,000. These items raise substantial doubt about Whittier's ability to continue as a going concern. The Partnership's investment in Whittier at March 31, 2001 and 2000 was reduced to zero as a result of prior years' losses and the minority interest balance was $0 at each date. Whittier's net loss after minority interest amounted to approximately $26,000, $49,000 and $38,000 for the 2000, 1999 and 1998 Fiscal Years.
Alexis Park Apartments - - ---------------------- A hazardous waste issue has affected Alexis Park Apartments ("Alexis") for nearly 10 years. Although this environmental issue is in many respects beyond its control, management believes that the selected remedy of the United States Environmental Protection Agency is practical and is not likely to cause significant disruption to the apartment project's operations beyond what it has experienced over the last several years. The Local Partnership's congressman, U.S. Senators and the Mayor of Bossier City have assisted Alexis in preventing this issue from escalating unnecessarily and management believes that no escalation will occur in the near term. Further, all indications are that an oil company will bear all costs of remediation and that the Local Partnership will not be called upon to share in those costs. Accordingly, management believes the Local Partnership has the opportunity to continue as a going concern.
The financial statements for Alexis have been prepared in conformity with U.S. generally accepted accounting principles, assuming the continuation of the Local Partnership as a going concern. However, negative performance indicators and the environmental issue raise substantial doubt about the Local Partnership's ability to continue as a going concern.
For the year ended December 31, 2000, the Local Partnership sustained a net loss of $277,036. At December 31, 2000, the Local Partnership's current liabilities exceed its current assets by $347,635. Management expects operating income to improve for 2001 as a result of both increased occupancy and slightly reduced expenses. The Local Partnership produced positive cash flows from operating activities for the years 2000 and 1999. Management believes cash flows for 2001 will be sufficient to meet liabilities and subject, to the environmental uncertainty, will enable the Local Partnership to continue as a going concern.
These items raise substantial doubt about Alexis' ability to continue as a going concern. The maximum loss which the Partnership would be liable for is its net investment in Alexis. The Partnership's investment in Alexis at March 31, 2001 and 2000 was $0 and approximately $114,000, respectively, and the minority interest balance was $0 at each date. Alexis' net loss after minority interest amounted to approximately $277,000, $243,000 and $263,000, for the 2000, 1999 and 1998 Fiscal Years, respectively.
Willoughby-Wyckoff Housing Associates - - ------------------------------------- The financial statements for Willoughby-Wyckoff Housing Associates ("Willoughby") have been prepared assuming that Willoughby will continue as a going concern. There are certain conditions that raise substantial doubt about Willoughby's ability to continue as a going concern. Willoughby has had operating losses and equity deficiencies and has required loans from related parties to meet its obligations. Management plans to continue to minimize costs within its control and seeks additional funding sources to supplement project operations. Continuance of Willoughby as a going concern is dependent upon Willoughby's ability to obtain additional funding to supplement project operations and enable Willoughby to meet its obligations as they become due. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Partnership's investment in Willoughby at March 31, 2001 and 2000 has been reduced to zero by prior years' losses and the minority interest balance amounted to approximately $174,000 and $176,000, respectively. Willoughby's net loss after minority interest amounted to approximately $193,000, $204,000 and $220,000 for the 2000, 1999 and 1998 Fiscal Years, respectively.
b) Subsidiary Partnerships - Other
Gramco Development Limited Dividend Partnership, L.P. - - ----------------------------------------------------- Gramco Development Limited Dividend Partnership, L.P. ("Gramco") was granted net funds of $4,867,000. In the event of a substantial violation to the provisions of certain agreements between Gramco and the Municipality of Bayamon (the "Municipality") and between the Municipality and HUD, the funds shall become immediately due and payable at the election of HUD and the Municipality. Otherwise, the principal amount of the obligation together with any interest will be forgiven. Proceeds from the loan have been deducted from fixed assets. The Partnership's investment in Gramco at March 31, 2001 and 2000 was approximately $302,000 and $488,000 and the minority interest balance was approximately $416,000 and $418,000, respectively. Gramco's net loss after minority interest amounted to approximately, $187,000 , $203,000 and $284,000 for the 2000, 1999 and 1998 Fiscal Years, respectively.
Metropolitan Towers Associates, L.P. - - ------------------------------------ The subsidiary partnership, Metropolitan Towers Associates, L.P. ("Metropolitan"), is a defendant in a legal proceeding brought about by the family of an employee who died in a work related accident. It is management's opinion that the claim should be covered by Metropolitan's insurance policy. Because the Partnership is a limited partner in Metropolitan, the maximum loss which the Partnership would suffer is its net investment in Metropolitan. The Partnership's investment in Metropolitan at March 31, 2001 and 2000 was approximately $827,000 and $1,069,000, respectively, and the minority interest was zero at each date. Metropolitan's net loss after minority interest amounted to approximately $242,000, $39,000 and $119,000 for the 2000, 1999 and 1998 Fiscal Years, respectively.
Rolling Green Limited Partnership - - --------------------------------- Rolling Green Limited Partnership ("Rolling Green") operates and is regulated by HUD under Section 221(d)(3) of the National Housing Act. Rents received by Rolling Green are subsidized by Section 8 Housing Assistance Payments. Rental income from such Assistance Payments totaled $1,425,725 and $1,365,443 in the 2000 and 1999 Fiscal Years, respectively. In September 1999, the three Section 8 contracts were consolidated into one contract, and such contract is in force through September, 2001. However, uncertainties regarding the future of HUD Programs exist. It is not practical to estimate the impact upon Rolling Green's operations if the rents were to revert to market value.
Williamsburg Residential, L.P. - - ------------------------------ In November 1996, the Local General Partner of Williamsburg Residential, L.P. ("Williamsburg") stopped making the mortgage note payments which constituted an event of default. A Reinstatement and Modification Agreement was entered into effective March 1, 1997. The Partnership has advanced Williamsburg the necessary funds to keep the mortgage and escrows current during 2000 and is expected to continue to do so during 2001.
The Partnership's investment in Williamsburg has been written down to $0 by prior years' losses and the minority interest balance was approximately $792,000 and $731,000 at March 31, 2001 and 2000, respectively. Williamsburg net loss after minority interest amounted to approximately $208,000, $201,000 and $285,000 for the 2000, 1999, and 1998 fiscal years, respectively.
c) Uninsured Cash and Cash Equivalents
The Partnership maintains its cash and cash equivalents in various banks. Accounts at each bank are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. As of March 31, 2001, uninsured cash and cash equivalents approximated $1,655,000.
d) Other
The Partnership is subject to the risks incident to potential losses arising from the management and ownership of improved real estate. The Partnership can also be affected by poor economic conditions generally. However, no more than 33% of the properties are located in any single state. There are also substantial risks associated with owning properties receiving government assistance, such as the possibility that Congress may not appropriate funds to enable HUD to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owner's equity contribution. The Partnership cannot sell or substantially liquidate its investments in subsidiary partnerships during the period that the subsidy agreements are in existence, without HUD's approval. Furthermore, there may not be market demand for apartments at full market rents when the rental assistance contracts expire.
e) Tax Credits
The Partnership and BACs holders began recognizing Housing Tax Credits with respect to a Property when the Credit Period for such Property began. Because of the time required for the acquisition, completion and rent-up of Properties, the amount of Tax Credits per BAC gradually increased over the first three years of the Partnership. Housing Tax Credits not recognized in the first three years will be recognized in the 11th through 13th years. For the 2000, 1999 and 1998 tax years, Housing Tax Credits of $4,415,175, $12,240,583 and $16,707,661, were generated.
A portion of the Housing Tax Credits are subject to recapture in future years if (i) the Partnership ceases to meet qualification requirements, (ii) there is a decrease in the qualified basis of the projects, or (iii) there is a reduction in the taxpayer's interest in the project at any time during the 15-year Compliance Period that began with the first tax year of the credit period.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
On November 25, 1997, an affiliate of the Related General Partner, purchased 100% of the stock of the Liberty General Partner (the "Transfer"). In addition to the Transfer, by acquiring the stock of the Liberty General Partner, an affiliate of the Related General Partner also acquired the Liberty General Partner's general partnership interest in Liberty Associates, which is also the special limited partner of the Partnership. Pursuant to the Partnership's Amended and Restated Partnership Agreement, the consent of the limited partners was not required to approve the Transfer.
The Partnership has no directors or executive officers. The Partnership's affairs are managed and controlled by the General Partners. Certain information concerning the directors and executive officers of the Liberty General Partner and of Related Credit Properties II, Inc., the general partner of the Related General Partner, is set forth below.
Related Credit Properties II, Inc. - - ----------------------------------
Name Position - - ---- --------
Stephen M. Ross Director
Alan P. Hirmes President
Stuart J. Boesky Senior Vice President
Marc D. Schnitzer Vice President
Denise L. Kiley Vice President
Glenn F. Hopps Treasurer
Teresa Wicelinski Secretary
STEPHEN M. ROSS, 61, is the President, and a Director and shareholder of The Related Realty Group, Inc., the General Partner of The Related Companies, L.P. He graduated from the University of Michigan School of Business Administration with a Bachelor of Science degree and from Wayne State University School of Law with a Juris Doctor degree. Mr. Ross then received a Master of Laws degree in taxation from New York University School of Law. He joined the accounting firm of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York, where he worked for two large Wall Street investment banking firms in their real estate and corporate finance departments. Mr. Ross formed the predecessor of The Related Companies, L.P. in 1972 to develop, manage, finance and acquire subsidized and conventional apartment developments. Mr. Ross also serves on the Board of Trustees of Charter Municipal Mortgage Acceptance Company.
ALAN P. HIRMES, 46, has been a Certified Public Accountant in New York since 1978. Prior to joining Related Capital Company ("Capital") in October 1983, Mr. Hirmes was employed by Weiner & Co., certified public accountants. Mr. Hirmes is also a Vice President of Capital. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts degree. Mr. Hirmes also serves on the Board of directors of Aegis Realty, Inc. and Charter Municipal Mortgage Acceptance Company.
STUART J. BOESKY, 45, practiced real estate and tax law in New York City with the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined Capital. From 1983 to 1984 Mr. Boesky practiced law with the Boston law firm of Kaye, Fialkow, Richard & Rothstein (which subsequently merged with Strook & Strook & Lavan), and from 1978 to 1980 was a consultant specializing in real estate at the accounting firm of Laventhol & Horwath. Mr. Boesky graduated from Michigan State University with a Bachelor of Arts degree and from Wayne State School of Law with a Juris Doctor degree. He then received a Master of Laws degree in Taxation from Boston University School of Law. Mr. Boesky also serves on the Board of Directors of Aegis Realty, Inc., Charter Municipal Mortgage Acceptance Company and American Mortgage Acceptance Company.
MARC D. SCHNITZER, 40, joined Capital in January 1988 after receiving his Master of Business Administration degree from The Wharton School of The University of Pennsylvania in December 1987. From 1983 to 1986, Mr. Schnitzer was a Financial Analyst with The First Boston Corporation in New York, an international investment banking firm. Mr. Schnitzer received a Bachelor of Science degree, summa cum laude, in Business Administration, from the School of Management at Boston University in May 1983.
DENISE L. KILEY, 41, is responsible for overseeing the due diligence and asset management of all multifamily residential properties invested in RCC sponsored corporate, public and private equity and debt funds. Prior to joining Capital in 1990, Ms. Kiley had experience acquiring, financing and asset managing multifamily residential properties. From 1981 through 1985, she was an auditor with Price Waterhouse. Ms. Kiley holds a Bachelor of Science in Accounting from Boston College.
GLENN F. HOPPS, 38, prior to joining Capital in December 1990, was employed by Marks Shron & Company and Weissbarth, Altman and Michaelson, certified public accountants. Mr. Hopps graduated from New York State University at Albany with a Bachelor of Science Degree in Accounting.
TERESA WICELINSKI, 35, joined Capital in June 1992, and prior to that date was employed by Friedman, Alpren & Green, certified public accountants. Ms. Wicelinski graduated from Pace University with a Bachelor of Arts Degree in Accounting.
Liberty GP II Inc. - - ------------------
Name Position - - ---- --------
Michael Brenner Director
Alan P. Hirmes President
Stuart J. Boesky Executive Vice President
Marc D. Schnitzer Vice President
Denise L. Kiley Vice President
Glenn F. Hopps Treasurer
Teresa Wicelinski Secretary
MICHAEL BRENNER, 55, is a Director of Aegis Realty, Inc., and is the Executive Vice President and Chief Financial Officer of TRCLP. Prior to joining TRCLP in 1996, Mr. Brenner was a partner with Coopers & Lybrand, having served as managing partner of its Industry Programs and Client Satisfaction initiatives from 1993-1996, managing partner of the Detroit group of offices from 1986-1993 and the Chairman of its National Real Estate Industry Group from 1984-1986. Mr. Brenner graduated summa cum laude from the University of Detroit with a Bachelors degree in Business Administration and from the University of Michigan with a Masters of Business Administration, with distinction. Mr. Brenner also serves on the Board of Trustees of Charter Municipal Mortgage Acceptance Company and Aegis Realty, Inc.
Biographical information with respect to Messrs. Hirmes, Boesky, Schnitzer, Ms. Kiley, Hopps and Ms. Wicelinski is set forth above.
Item 11.
Item 11. Executive Compensation.
The Partnership has no officers or directors. The Partnership does not pay or accrue any fees, salaries or other forms of compensation to directors or officers of the Liberty General Partner or the general partner of the Related General Partner for their services. Certain directors and executive officers of the Liberty General Partner and the general partner of the Related General Partner receive compensation from the General Partners and their affiliates for services performed for various affiliated entities which may include services performed for the Partnership.
Under the terms of the Partnership Agreement, the General Partners and their affiliates are entitled to receive compensation from the Partnership in consideration of certain services rendered to the Partnership by such parties. Such arrangements include, but are not limited to, the payment of an accountable operating expense reimbursement, an annual partnership management fee not to exceed 0.5% of invested assets and subordinated disposition fees. In addition, the General Partners are entitled to 1% of all cash distributions and Housing Tax Credit allocations and a subordinated 15% interest in Net Sales or Refinancing Proceeds. Also see Note 8 to the Financial Statements in Item 8 for a presentation of the types and amounts of compensation paid to the General Partners and their affiliates, which is incorporated by reference thereto.
Tabular information concerning salaries, bonuses and other types of compensation payable to executive officers has not been included in this annual report. As noted above, the Partnership has no executive officers. The level of compensation payable to the General Partners and/or their affiliates is limited by the terms of the Partnership Agreement and may not be increased therefrom on a discretionary basis.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The general partnership interest and BACs in the Partnership are owned in the manner indicated on the chart below.
Liberty Associates II L.P. holds a 1% limited partnership interest in each Local Partnership.
No person is known by the Partnership to be the beneficial owner of more than 5% percent of the Limited Partnership Interests and/or the BACs; and none of the General Partners nor any director or executive officer of the Liberty General Partner or of the general partner of the Related General Partner owns any Limited Partnership Interests or BACs, except as noted in the chart below.
Name and Address of Amount and Nature of Percentage Title of Class Beneficial Owner Beneficial Ownership of Class - - -------------- ---------------- -------------------- -----------
General Partnership Related Credit $500 capital contribution 49% Interest in the Properties II L.P. - directly owned Partnership 625 Madison Avenue New York, NY 10022
General Partnership Liberty GP II, Inc. $500 capital contribution 49% Interest in the 625 Madison Avenue - directly owned Partnership New York, NY 10022
General Partnership Liberty Associates II L.P. $1,000 capital contribution 2% Interest in the 625 Madison Avenue - directly owned Partnership New York, NY 10022
Name and Address of Amount and Nature of Percentage Title Beneficial Ownership Beneficial Ownership of Class - - ----- -------------------- -------------------- ---------------
BACs Lehigh Tax Credit 2,239 (1) 1.9% Partners, Inc. 625 Madison Avenue New York, NY 10022
BACs Alan P. Hirmes 2,239 (1)(2) 1.9% 625 Madison Avenue New York, NY 10022
BACs Stuart J. Boesky 2,239 (1)(2) 1.9% 625 Madison Avenue New York, NY 10022
BACs Marc D. Schnitzer 0 0% 625 Madison Avenue New York, NY 10022
BACs Denise L. Kiley 0 0% 625 Madison Avenue New York, NY 10022
BACs Glenn F. Hopps 0 0% 625 Madison Avenue New York, NY 10022
BACs Teresa Wicelinski 0 0% 625 Madison Avenue New York, NY 10022
BACs All directors and 2,239 (1)(2) 1.9% executive officers of the general partner of the Related General Partner as a group (seven persons) 625 Madison Avenue New York, NY 10022
(1) All such BACs represent BACs owned directly by Lehigh Tax Credit Partners L.L.C. ("Lehigh I") and Lehigh Tax Credit Partners II L.L.C. ("Lehigh II") for which Lehigh Tax Credit Partners, Inc. (the "Managing Member") serves as managing member. As of June 1, 2001, Lehigh I held 1,080.5 BACs and Lehigh II held 1,161.5 BACs.
(2) Each such party serves as a director and executive officer of the Managing Member, and owns an equity interest therein.
Item 13.
Item 13. Certain Relationships and Related Transactions.
The Partnership has and will continue to have certain relationships with the General Partners and their affiliates, as discussed in Item 11 and also Note 8 to the Financial Statements in Item 8 above, which is incorporated herein by reference thereto. However, there have been no direct financial transactions between the Partnership and the directors and executive officers of the Liberty General Partner and the general partner of the Related General Partner.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. Sequential Page -------- (a) 1. Financial Statements
Independent Auditors' Report 18
Consolidated Balance Sheets at March 31, 2001 and 2000 88
Consolidated Statements of Operations for the Years Ended March 31, 2001, 2000 and 1999 89
Consolidated Statements of Changes in Partners' Capital (Deficit) for the Years Ended March 31, 2001, 2000 and 1999 90
Consolidated Statements of Cash Flows for the Years Ended March 31, 2001, 2000 and 1999 91
Notes to Consolidated Financial Statements 93
(a) 2. Financial Statement Schedules
Independent Auditors' Report 115
Schedule I - Condensed Financial Information of Registrant 116
Schedule III - Real Estate and Accumulated Depreciation and Mortgage Loans on Real Estate 119
All other schedules have been omitted because they are not required or because the required information is contained in the financial statements and notes thereto.
(a) 3. Exhibits
(3B) Form of Amended and Restated Agreement of Limited Partnership of Liberty Tax Credit Plus II L.P. (incorporated by reference to exhibits filed with Amendment No. 1 to Liberty Tax Credit Plus II L.P.'s Registration Statement on Form S-11 Registration No. 33-21429) 112
(21) Subsidiaries of the Registrant
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (continued)
Jurisdiction (c) Subsidiaries of the Registrant (Exhibit 21) of Organization ------------------------------ ---------------
Polynesian Apartments Associates, Ltd. (a Limited Partnership) FL Seagrape Village Associates, Ltd. (a Limited Partnership) FL Metropolitan Towers Associates, L.P. PR Westminster Place II - Olive Site, L.P. MO Property Development Associates, L.P. (Bridgeport) MO Whittier Plaza Associates Limited Partnership MO United-Glen Arden I Limited Partnership MD United-Glen Arden II Limited Partnership MD Rolling Green Limited Partnership IL Santa Juanita II Limited Partnership NY Spring Creek Associates, L.P. (a Delaware Limited Partnership) DE East Two Thirty-Five Associates L.P. (a Delaware Limited Partnership) (14th Street) DE Upper Fifth Avenue Residential Associates, L.P. DE West 107th Street Associates, L.P. (a Delaware Limited Partnership) DE General Atlantic Second Avenue Associates, L.P. (a Delaware Limited Partnership) (96th Street) NY Church Lane Associates PA Campeche Isle Apartments Limited Partnership TX Robin Housing Associates (a Limited Partnership) NY Concourse Artists Housing Associates (a Limited Partnership) NY 2051 Grand Concourse Housing Associates (a Limited Partnership) NY Willoughby-Wyckoff Housing Associates (a Limited Partnership) NY Goodfellow Place Limited Partnership MO Penn Alto Associates Limited Partnership PA Gramco Development Limited Dividend Partnership, L.P. (Bayamon) PR Alexis Park Apartments, a Louisiana Partnership in Commendam LA Williamsburg Residential, L.P. KS Victory Apartments IL
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.
LIBERTY TAX CREDIT PLUS II L.P. (Registrant)
By: RELATED CREDIT PROPERTIES II L.P., a General Partner
By: Related Credit Properties II Inc., its general partner
Date: June 14, 2001 By: _/s/ Alan P. Hirmes -------------------- Alan P. Hirmes President and Chief Executive Officer (Principal Executive Officer)
and
By: LIBERTY GP II INC., a General Partner
Date: June 14, 2001 By: _/s/ Alan P. Hirmes ------------------ Alan P. Hirmes President
and
By: LIBERTY ASSOCIATES II, L.P., a General Partner
By: Related Credit Properties II, Inc., its General Partner
Date: June 14, 2001 By: _/s/ Alan P. Hirmes ------------------ Alan P. Hirmes President
By: Liberty G.P. II Inc., its General Partner
By: _/s/ Alan P. Hirmes -------------------- Alan P. Hirmes 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 and in the capacities and on the dates indicated:
Signature Title Date - - --------------- --------------------------- ------------
President and Chief Executive Officer (Principal Executive and Financial Officer) of Related Credit Properties II Inc., (general partner of each of Related Credit Properties II L.P. and Liberty Associates II, L.P., General Partners of Registrant) and Liberty GP II, Inc. (general partner of Liberty /s/ Alan P. Hirmes Associates II, L.P., - - ------------------ Alan P. Hirmes a General Partner of Registrant) June 14, 2001
Treasurer (Principal Accounting Officer) of Related Credit Properties II Inc., (general partner of each of Related Credit Properties II L.P. and Liberty Associates II, L.P., General Partners of Registrant) and Liberty GP II, Inc. (general partner of Liberty. /s/ Glenn F. Hopps Associates II, L.P., - - ------------------ Glenn F. Hopps a General Partner of Registrant) June 14, 2001
Director of Related Credit Properties II Inc., (general partner of each of Related Credit Properties II L.P. /s/ Stephen M. Ross and Liberty Associates II, L.P., each a - - ------------------- Stephen M. Ross General Partner of Registrant) June 14, 2001
INDEPENDENT AUDITORS' REPORT ----------------------------
To the Partners of Liberty Tax Credit Plus II L.P. and Subsidiaries (A Delaware Limited Partnership)
In connection with our audits of the consolidated financial statements of Liberty Tax Credit Plus II L.P. and Subsidiaries (A Delaware Limited Partnership) included in this Form 10-K as presented in our opinion dated June 11, 2001 on page 18, and based on the reports of other auditors, we have also audited supporting Schedule I for the 2000, 1999 and 1998 Fiscal Years and Schedule III at March 31, 2001. In our opinion, and based on the reports of the other auditors, these consolidated schedules present fairly, when read in conjunction with the related consolidated financial statements, the financial data required to be set forth therein.
As discussed in Note 10(a), the consolidated financial statements include the financial statements of three limited partnerships with significant contingencies and uncertainties. The financial statements of these subsidiary partnerships were prepared assuming that each will continue as a going concern. The three subsidiary partnerships' net losses aggregated $497,488 (Fiscal 2000), $497,307 (Fiscal 1999) and $525,260 (Fiscal 1998) and their assets aggregated $9,961,575 and $10,458,364 at March 31, 2001 and 2000, respectively. These matters raise substantial doubt about these subsidiary partnerships' abilities to continue as going concerns. Management's plans in regard to these matters are also described in Note 10(a). The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
TRIEN ROSENBERG ROSENBERG WEINBERG CIULLO & FAZZARI LLP
New York, New York June 11, 2001
LIBERTY TAX CREDIT PLUS II L.P. AND SUBSIDIARIES SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Summarized condensed financial information of registrant (not including consolidated subsidiary partnerships)
CONDENSED BALANCE SHEETS
ASSETS
March 31, ------------------------- 2001 2000 ------------- ---------
Cash and cash equivalents $ 244,166 $ 620,498 Investment and advances in subsidiary partnerships 43,942,919 46,137,524 Other assets 149,390 153,197 ------------ ------------
Total assets $44,336,475 $46,911,219 ========== ==========
LIABILITIES AND PARTNERS' EQUITY
Due to general partner and affiliates $10,049,127 $ 8,582,422 Other liabilities 61,105 79,795 ------------- ------------
Total liabilities 10,110,232 8,662,217
Partners' equity 34,226,243 38,249,002 ---------- ----------
Total liabilities and partners' equity $44,336,475 $46,911,219 ========== ==========
Investments in subsidiary partnerships are recorded in accordance with the equity method of accounting, wherein the investments are not reduced below zero. Accordingly, partners' equity on the consolidated balance sheet will differ from partners' equity shown above.
LIBERTY TAX CREDIT PLUS II L.P. AND SUBSIDIARIES SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS
Year Ended March 31, 2001 2000 1999 ------------ ------------ ------------
Revenues Other $ 37,250 $ 20,952 $ 16,869 ----------- ------------ ------------
Expenses Administrative and management 161,239 106,721 169,819 Administrative and management- related parties 1,635,761 1,689,721 1,652,680 ---------- ---------- ----------
Total expenses 1,797,000 1,796,442 1,822,499 ---------- ---------- ----------
Loss from operations (1,759,750) (1,775,490) (1,805,630)
Equity in loss of subsidiary partnerships(*)(2,263,009) (4,553,152) (4,547,392) ---------- ---------- ----------
Net loss $(4,022,759) $(6,328,642) $(6,353,022) ========== ========== ==========
(*) Includes suspended prior year losses in excess of investment in accordance with the equity method of accounting amounting to $(162,132), $(130,920) and $(207,946) for 2001, 2000, and 1999, respectively.
LIBERTY TAX CREDIT PLUS II L.P. AND SUBSIDIARIES SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Year Ended March 31, 2001 2000 1999 ------------- ---------- ------------
Cash flows from operating activities:
Net loss $(4,022,759) $(6,328,642) $(6,353,022) ---------- ---------- ----------
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Equity in loss of subsidiary partnerships 2,263,009 4,553,152 4,547,392
Increase (decrease) in liabilities
Due to general partners and affiliates 1,466,705 1,939,219 2,490,983 Other liabilities (14,883) (23,552) (7,895) ------------ ----------- -------------
Total adjustment 3,714,831 6,468,819 7,030,480 ---------- ---------- ----------
Net cash (used in) provided by operating activities (307,928) 140,177 677,458 ----------- ---------------------
Cash flows from investing activities:
Distributions from subsidiaries 245,953 6,343 334,217 Decrease (increase) in cash held in escrow 0 501,219 (343,638) Advances and investments in subsidiary partnerships (314,357) (309,250) (647,620) ---------- ---------- -----------
Net cash (used in) provided by investing activities (68,404) 198,312 (657,041) ----------- ---------- -----------
Net (decrease) increase in cash and cash equivalents (376,332) 338,489 20,417
Cash and cash equivalents, beginning of year 620,498 282,009 261,592 ---------- ---------- ----------
Cash and cash equivalents, end of year $ 244,166 $ 620,498 $ 282,009 ========== ========== ==========