FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PERSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period endedJune 30, 2001
or
( ) TRANSITION REPORT PERSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-21718
BOSTON CAPITAL TAX CREDIT FUND III L.P.
(Exact name of registrant as specified in its charter)
Delaware | 52-1749505 |
(State or other jurisdiction | (I.R.S. Employer |
of incorporation or organization) | Identification No.) |
One Boston Place, Suite 2100, Boston, Massachusetts 02108
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code(617)624-8900
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceeding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes | X | No | _ |
BOSTON CAPITAL TAX CREDIT FUND III L.P.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2001
TABLE OF CONTENTS
FOR THE QUARTER ENDED JUNE 30, 2001*
Statements_of_Operations_Series_15*
Statements_of_Operations_Series_16*
Statements_of_Operations_Series_17*
Changes_in_Partners_Capital 16
Changes_in_Partners_Capital_Series_15 17
Changes_in_Partners_Capital_Series_16 17
Changes_in_Partners_Capital_Series_17 18
THREE MONTHS Ended JUNE 30
Statements_of_Cash_Flows_Series_15 22
Statements_of_Cash_Flows_Series_16 24
Statements_of_Cash_Flows_Series_17 26
Notes_to_Financial_Statements*
Cost
Combined_Statements_of_Operations 37
Combined_Statements_Series_15 37
Combined_Statements_Series_16 38
Combined_Statements_Series_17 39
Combined_Statements_Series_18 40
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
| June 30, 2001 (Unaudited) | March 31, 2001 (Audited) |
ASSETS | ||
INVESTMENTS IN OPERATING | $ 82,909,804 | $ 85,319,858 |
OTHER ASSETS | ||
Cash and cash equivalents | 1,872,048 | 1,122,380 |
Investments | 790,757 | 1,465,643 |
Notes receivable | 1,309,982 | 1,309,982 |
Deferred acquisition costs, net of accumulated amortization (Note B) |
1,457,229 |
1,474,454 |
Other assets | 3,173,178 | 3,032,043 |
$ 91,512,998 | $ 93,724,360 | |
LIABILITIES | ||
Accounts payable & accrued expenses | $ 4,553 | $ 4,553 |
Accounts payable affiliates | 15,818,210 | 15,040,788 |
Capital contributions payable | 1,384,034 | 1,384,034 |
17,206,797 | 16,429,375 | |
PARTNERS CAPITAL | ||
Limited Partners |
|
|
General Partner | (1,146,601) | (1,116,713) |
74,306,201 | 77,294,985 | |
$ 91,512,998 | $ 93,724,360 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
| June 30, | March 31, |
ASSETS |
|
|
INVESTMENTS IN OPERATING | $10,306,888 | $10,617,785 |
OTHER ASSETS | ||
Cash and cash equivalents | 235,356 | 229,627 |
Investments | 286,218 | 286,218 |
Notes receivable | - | - |
Deferred acquisition costs, |
223,372 |
226,000 |
Other assets | 803,720 | 799,327 |
$11,855,554 | $12,158,957 | |
LIABILITIES | ||
Accounts payable & accrued expenses | $ 1,145 | $ 1,145 |
Accounts payable affiliates | 4,355,480 | 4,218,465 |
Capital contributions payable | 16,206 | 16,206 |
4,372,831 | 4,235,816 | |
PARTNERS CAPITAL | ||
Limited Partners |
|
|
| (257,844) | (253,440) |
7,482,723 | 7,923,141 | |
$11,855,554 | $12,158,957 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
June 30, | March 31, | |
ASSETS |
| |
INVESTMENTS IN OPERATING | $19,882,076 | $20,493,977 |
| ||
OTHER ASSETS | ||
Cash and cash equivalents | 680,955 | 113,123 |
Investments | - | 535,809 |
Notes receivable | - | - |
Deferred acquisition costs, |
358,108 |
362,321 |
Other assets | 136,943 | 138,036 |
$21,058,082 | $21,643,266 | |
LIABILITIES | ||
Accounts payable & accrued expenses | $ - | $ - |
Accounts payable affiliates | 3,584,021 | 3,411,025 |
Capital contributions payable | 138,506 | 138,506 |
3,722,527 | 3,549,531 | |
PARTNERS CAPITAL | ||
Limited Partners |
|
|
General Partner | (293,254) | (285,672) |
17,335,555 | 18,093,735 | |
$21,058,082 | $21,643,266 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
Series 17
June 30, | March 31, | |
ASSETS |
| |
INVESTMENTS IN OPERATING | $19,002,645 | $19,483,775 |
| ||
OTHER ASSETS | ||
Cash and cash equivalents | 375,669 | 397,129 |
Investments | - | - |
Notes receivable | 1,309,982 | 1,309,982 |
Deferred acquisition costs, |
322,660 |
326,548 |
Other assets | 2,113,841 | 1,985,681 |
$23,124,797 | $23,503,115 | |
LIABILITIES | ||
Accounts payable & accrued expenses | $ - | $ - |
Accounts payable affiliates | 4,902,228 | 4,633,143 |
Capital contributions payable | 1,186,768 | 1,186,768 |
6,088,996 | 5,819,911 | |
PARTNERS CAPITAL | ||
Limited Partners |
|
|
| (259,322) | (252,848) |
17,035,801 | 17,683,204 | |
$23,124,797 | $23,503,115 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
Series 18
June 30, | March 31, | |
ASSETS |
| |
INVESTMENTS IN OPERATING PARTNERSHIPS (NOTE D) | $13,980,255 | $14,578,072 |
OTHER ASSETS | ||
Cash and cash equivalents | 241,687 | 238,396 |
Investments | 107,824 | 107,824 |
Notes receivable | - | - |
Deferred acquisition costs, Net of accumulated amortization (Note B) |
243,476 |
246,330 |
Other assets | 94,756 | 93,007 |
$14,667,998 | $15,263,629 | |
LIABILITIES | ||
Accounts payable & accrued expenses (Note C) |
| $ - |
Accounts payable affiliates | 1,989,372 | 1,893,885 |
Capital contributions payable | 18,554 | 18,554 |
2,007,926 | 1,912,439 | |
PARTNERS CAPITAL | ||
Limited Partners |
|
|
| (183,627) | (176,716) |
12,660,072 | 13,351,190 | |
$14,667,998 | $15,263,629 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
Series 19
June 30, | March 31, | |
ASSETS |
| |
INVESTMENTS IN OPERATING | $19,737,940 | $20,146,249 |
OTHER ASSETS | ||
Cash and cash equivalents | 338,381 | 144,105 |
Investments | 396,715 | 535,792 |
Notes receivable | - | - |
Deferred acquisition costs, |
309,613 |
313,255 |
Other assets | 23,918 | 15,992 |
$20,806,567 | $21,155,393 | |
LIABILITIES | ||
Accounts payable & accrued expenses | $ 3,408 | $ 3,408 |
Accounts payable affiliates | 987,109 | 884,270 |
Capital contributions payable | 24,000 | 24,000 |
1,014,517 | 911,678 | |
PARTNERS CAPITAL | ||
Limited Partners |
|
|
| (152,554) | (148,037) |
19,792,050 | 20,243,715 | |
$20,806,567 | $21,155,393 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
|
| |
Income | ||
Interest income | $ 28,524 | $ 28,179 |
Other income | 16 | 998 |
28,540 | 29,177 | |
Share of loss from Operating | (2,356,628) | (2,489,704) |
Expenses | ||
Professional fees | 73,407 | 13,372 |
Fund management fee (Note C) | 548,490 | 547,815 |
Amortization | 17,225 | 17,225 |
General and administrative expenses | 21,574 | 44,858 |
| 660,696 | 623,270 |
NET LOSS | $(2,988,784) | $(3,083,797) |
Net loss allocated to limited partners | $(2,958,896) | $(3,052,958) |
Net loss allocated to general partner | $ (29,888) | $ (30,839) |
Net loss per BAC | $ (.68) | $ (.69) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
|
| |
Income | ||
Interest income | $ 5,727 | $ 4,294 |
Other income | 16 | 9 |
5,743 | 4,303 | |
Share of loss from Operating | (310,584) | (455,506) |
Expenses | ||
Professional fees | 9,690 | 3,230 |
Fund management fee | 119,368 | 110,891 |
Amortization | 2,628 | 2,628 |
General and administrative expenses | 3,891 | 8,214 |
| 135,577 | 124,963 |
NET LOSS | $ (440,418) | $ (576,166) |
Net loss allocated to limited partners | $ (436,014) | $ (570,404) |
Net loss allocated to general partner | $ (4,404) | $ (5,762) |
Net loss per BAC | $ (.11) | $ (.15) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
|
| |
Income | ||
Interest income | $ 8,605 | $ 10,425 |
Other income | - | 436 |
8,605 | 10,861 | |
Share of loss from Operating | (608,222) | (819,165) |
Expenses | ||
Professional fees | 12,922 | 4,283 |
Fund management fee | 136,198 | 152,430 |
Amortization | 4,213 | 4,213 |
General and administrative expenses | 5,230 | 11,227 |
| 158,563 | 172,153 |
NET LOSS | $ (758,180) | $ (980,457) |
Net loss allocated to limited partners | $ (750,598) | $ (970,652) |
Net loss allocated to general partner | $ (7,582) | $ (9,805) |
Net loss per BAC | $ (.14) | $ (.18) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 17
|
| |
Income | ||
Interest income | $ 2,176 | $ 2,998 |
Other income | - | 553 |
2,176 | 3,551 | |
Share of loss from Operating | (481,118) | (473,016) |
Expenses | ||
Professional fees | 39,993 | 2,446 |
Fund management fee | 119,219 | 112,419 |
Amortization | 3,888 | 3,888 |
General and administrative expenses | 5,361 | 10,574 |
| 168,461 | 129,327 |
NET LOSS | $ (647,403) | $ (598,792) |
Net loss allocated to limited partners | $ (640,929) | $ (592,804) |
Net loss allocated to general partner | $ (6,474) | $ (5,988) |
Net loss per BAC | $ (.13) | $ (.12) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 18
|
| |
Income | ||
Interest Income | $ 2,879 | $ 3,310 |
Other income | - | - |
2,879 | 3,310 | |
Share of loss from Operating | (594,861) | (407,350) |
Expenses | ||
Professional fees | 6,309 | 1,916 |
Fund management fee | 86,634 | 72,916 |
Amortization | 2,854 | 2,854 |
General and administrative expenses | 3,339 | 6,982 |
| 99,136 | 84,668 |
NET LOSS | $ (691,118) | $ (488,708) |
Net loss allocated to limited partners | $ (684,207) | $ (483,821) |
Net loss allocated to general partner | $ (6,911) | $ (4,887) |
Net loss per BAC | $ (.19) | $ (.14) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 19
|
| |
Income | ||
Interest income | $ 9,137 | $ 7,152 |
Other income | - | - |
9,137 | 7,152 | |
Share of loss from Operating | (361,843) | (334,667) |
Expenses | ||
Professional fees | 4,493 | 1,497 |
Fund management fee | 87,071 | 99,159 |
Amortization | 3,642 | 3,642 |
General and administrative expenses | 3,753 | 7,861 |
| 98,959 | 112,159 |
NET LOSS | $ (451,665) | $ (439,674) |
Net loss allocated to limited partners | $ (447,148) | $ (435,277) |
Net loss allocated to general partner | $ (4,517) | $ (4,397) |
Net loss per BAC | $ (.11) | $ (.11) |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 2001
(Unaudited)
|
|
| |
Partners' capital |
|
|
|
| |||
Net income (loss) | (2,958,896) | (29,888) | (2,988,784) |
Partners' capital |
|
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 2001
(Unaudited)
Assignees | General | Total | |
Partners' capital |
|
|
|
| |||
Net income (loss) | (436,014) | (4,404) | (440,418) |
Partners' capital |
|
|
|
Partners' capital |
|
|
|
Net income (loss) | (750,598) | (7,582) | (758,180) |
Partners' capital |
|
|
|
The accompanying notes are an integral part of these statements.
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 2001
(Unaudited)
Assignees | General | Total | |
Partners' capital |
|
|
|
| |||
Net income (loss) | (640,929) | (6,474) | (647,403) |
�� | |||
Partners' capital |
|
|
|
Partners' capital |
|
|
|
Net income (loss) | (684,207) | (6,911) | (691,118) |
Partners' capital |
|
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30, 2001
(Unaudited)
Assignees | General | Total | |
Partners' capital |
|
|
|
| |||
Net income (loss) | (447,148) | (4,517) | (451,665) |
Partners' capital |
|
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
2001 | 2000 | |
Cash Flows from operating activities: | ||
Net Loss | $(2,988,784) | $(3,083,797) |
Adjustments | ||
Distributions from Operating |
|
|
|
|
|
Share of Loss from Operating |
|
|
Changes in assets and liabilities | ||
(Decrease) Increase in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Net cash (used in) provided by |
|
|
Cash Flows from investing activities: | ||
Capital contributions paid to |
|
|
Advances in Operating Partnerships | - | 54,340 |
Investments | 674,886 | (1,752) |
Net cash (used in) provided by |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
2001 | 2000 | |
Continued | ||
Cash flows from financing activity: | ||
Credit adjusters received from |
|
|
Net cash (used in)provided by |
|
|
INCREASE (DECREASE) IN CASH AND |
|
|
Cash and cash equivalents, beginning | 1,122,380 | 1,754,063 |
Cash and cash equivalents, ending | $ 1,872,048 | $ 1,873,383 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 15
2001 | 2000 | |
Cash Flows from operating activities: | ||
Net Loss | $ (440,418) | $ (576,166) |
Adjustments | ||
Distributions from Operating |
|
|
|
|
|
Share of Loss from Operating |
|
|
Changes in assets and liabilities | ||
(Decrease) Increase in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Net cash (used in) provided by |
|
|
Cash Flows from investing activities: | ||
Capital contributions paid to |
|
|
Advances in Operating Partnerships | - | 32,170 |
Investments | - | - |
Net cash (used in) provided by |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 15
2001 | 2000 | |
Continued | ||
Cash flows from financing activity: | ||
Credit adjusters received from |
|
|
Net cash (used in)provided by |
|
|
INCREASE (DECREASE) IN CASH AND | 5,729 | 49,442 |
Cash and cash equivalents, beginning | 229,627 | 308,497 |
Cash and cash equivalents, ending | $ 235,356 | $ 357,939 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 16
2001 | 2000 | |
Cash Flows from operating activities: | ||
Net Loss | $ (758,180) | $ (980,457) |
Adjustments | ||
Distributions from Operating |
|
|
|
|
|
Share of Loss from Operating |
|
|
Changes in assets and liabilities | ||
(Decrease) Increase in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Net cash (used in) provided by |
|
|
Cash Flows from investing activities: | ||
Capital contributions paid to |
|
|
Advances in Operating Partnerships | - | - |
Investments | 535,809 | (1,752) |
Net cash (used in) provided by |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 16
2001 | 2000 | |
Continued | ||
Cash flows from financing activity: | ||
Credit adjusters received from |
|
|
Net cash (used in)provided by |
|
|
INCREASE (DECREASE) IN CASH AND | 567,832 | 8,749 |
Cash and cash equivalents, beginning | 113,123 | 307,415 |
Cash and cash equivalents, ending | $ 680,955 | $ 316,164 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 17
2001 | 2000 | |
Cash Flows from operating activities: | ||
Net Loss | $ (647,403) | $ (598,792) |
Adjustments | ||
Distributions from Operating |
|
|
|
|
|
Share of Loss from Operating |
|
|
Changes in assets and liabilities | ||
(Decrease) Increase in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Decrease (Increase) in accounts |
| 174,000 |
| ||
Net cash (used in) provided by |
|
|
Cash Flows from investing activities: | ||
Capital contributions paid to |
|
|
Advances in Operating Partnerships | - | 22,170 |
Investments | - | - |
Net cash (used in) provided by |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 17
2001 | 2000 | |
Continued | ||
Cash flows from financing activity: | ||
Credit adjusters received from |
|
|
Net cash (used in)provided by |
|
|
INCREASE (DECREASE) IN CASH AND |
|
|
Cash and cash equivalents, beginning | 397,129 | 404,005 |
Cash and cash equivalents, ending | $ 375,669 | $ 436,868 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 18
2001 | 2000 | |
Cash Flows from operating activities: | ||
Net Loss | $ (691,118) | $ (488,708) |
Adjustments | ||
Distributions from Operating |
|
|
|
|
|
Share of Loss from Operating |
|
|
Changes in assets and liabilities | ||
(Decrease) Increase in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Net cash (used in) provided by |
|
|
Cash Flows from investing activities: | ||
Capital contributions paid to |
|
|
Advances in Operating Partnerships | ||
Investments | - | - |
Net cash (used in) provided by |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 18
2001 | 2000 | |
Continued | ||
Cash flows from financing activity: | ||
Credit adjusters received from |
|
|
Net cash (used in)provided by |
|
|
INCREASE (DECREASE) IN CASH AND | 3,291 | 31,353 |
Cash and cash equivalents, beginning | 238,396 | 377,094 |
Cash and cash equivalents, ending | $ 241,687 | $ 408,447 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 19
2001 | 2000 | |
Cash Flows from operating activities: | ||
Net Loss | $ (451,665) | $ (439,674) |
Adjustments | ||
Distributions from Operating |
|
|
|
|
|
Share of Loss from Operating |
|
|
Changes in assets and liabilities | ||
(Decrease) Increase in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Decrease (Increase) in accounts |
|
|
Net cash (used in) provided by |
|
|
Cash Flows from investing activities: | ||
Capital contributions paid to |
|
|
Advances in Operating Partnerships | - | - |
Investments | 139,077 | - |
Net cash (used in) provided by |
|
|
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 19
2001 | 2000 | |
Continued | ||
Cash flows from financing activity: | ||
Credit adjusters received from |
|
|
Net cash (used in)provided by |
|
|
INCREASE (DECREASE) IN CASH AND | 194,276 | (3,087) |
Cash and cash equivalents, beginning | 144,105 | 357,052 |
Cash and cash equivalents, ending | $ 338,381 | $ 353,965 |
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE A - ORGANIZATION
Boston Capital Tax Credit Fund III L.P. (the "Fund") was formed under the laws
of the State of Delaware as of September 19, 1991 for the purpose of
acquiring, holding, and disposing of limited partnership interests in
Operating Partnerships which will acquire, develop, rehabilitate, operate and
own newly constructed, existing or rehabilitated low-income apartment
complexes ("Operating Partnerships").Effective as of June 1, 2001 there was
a restructuring, and as a result, the Fund's general partner was reorganized
as follows. The General Partner of the Fund continues to be Boston Capital
Associates III L.P., a Delaware limited partnership. The general partner of
the General Partner is now BCA Associates Limited Partnership, a Massachusetts
limited partnership, whose sole general partner is C&M Management, Inc., a
Massachusetts corporation and whose limited partners are Herbert F. Collins
and John P. Manning. Mr. Manning is the principal of Boston Capital Partners,
Inc. The limited partner of the General Partner is Capital Investment
Holdings, a general partnership whose partners are certain officers and
employees of Boston Capital Partners, Inc., and its affiliates. The Assignor
Limited Partner is BCTC III Assignor Corp., a Delaware corporation which is
wholly-owned by Herbert F. Collins and John P. Manning.
Pursuant to the Securities Act of 1933, the Fund filed a Form S-11
Registration Statement with the Securities and Exchange Commission, effective
January 24, 1992 which covered the offering (the "Public Offering") of the
Fund's beneficial assignee certificates ("BACs") representing assignments of
units of the beneficial interest of the limited partnership interest of the
Assignor Limited Partner. The Fund registered 20,000,000 BACs at $10 per BAC
for sale to the public in one or more series. On September 4, 1993 the Fund
filed an amendment to Form S-11 with the Securities and Exchange Commission
which registered an additional 2,000,000 BACs at $10 per BAC for sale to the
public in one or more series. The registration for the additional BACs became
effective on October 6, 1993. Offers and sales of BACs in Series 15 through 19
of the Fund were completed and the last of the BACs in Series 15, 16, 17, 18
and 19 were issued by the Fund on June 26, 1992, December 28, 1992, June 17,
1993, September 22, 1993, and December 17, 1993, respectively. The Fund sold
3,870,500 of Series 15 BACs, for a total of $38,705,000; 5,429,402 of Series
16 BACs, for a total of $54,293,000; 5,000,000 of Series 17 BACs, for a total
of $50,000,000; 3,616,200 of Series 18 BACs, for a total of $36,162,000; and
4,080,000 of Series 19 BACs, for a total of $40,800,000. The Fund issued the
last BACs in Series 19 on December 17, 1993. This concluded the Public
offering of the Fund.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2001
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of June 30, 2001 and for
the three months then ended have been prepared by the Fund, without
audit. The Fund accounts for its investments in Operating Partnerships using
the equity method, whereby the Fund adjusts its investment cost for its share
of each Operating Partnership's results of operations and for any
distributions received or accrued. Costs incurred by the Fund in acquiring
the investments in the Operating Partnerships are capitalized to the
investment account. The Fund's accounting and financial reporting policies
are in conformity with generally accepted accounting principles and include
adjustments in interim periods considered necessary for a fair presentation
of the results of operations. Such adjustments are of a normal recurring
nature.
The Fund has included in investments Certificates of Deposit with original
materities of one year or less. These investments are carried at costs.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2001
(Unaudited)
Amortization
On July 1, 1995, the Fund began amortizing unallocated acquisition
costs over 330 months from April 1, 1995. As of June 30, 2001 the Fund has
accumulated unallocated acquisition amortization totaling $436,107. The
breakdown of accumulated unallocated acquisition amortization within the fund
as of June 30, 2001 and 2000 is as follows:
2001 | 2000 | |
Series 15 | $ 65,797 | $ 55,286 |
Series 16 | 105,321 | 88,471 |
Series 17 | 105,090 | 89,540 |
Series 18 | 71,463 | 60,050 |
Series 19 | 88,436 | 73,866 |
$436,107 | $367,213 |
NOTE C - RELATED PARTY TRANSACTIONS
The Fund has entered into several transactions with various affiliates
of the general partner, including Boston Capital Partners, Inc., and Boston
Capital Asset Management Limited Partnership as follows:
Boston Capital Partners, Inc. is entitled to asset acquisition fees for
selecting, evaluating, structuring, negotiating, and closing the Funds
acquisition of interests in the Operating Partnerships. Prior to the quarter
ended June 30, 2001 all series had completed payment of all acquisition fees
due to Boston Capital Partners, Inc.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2001
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS - CONTINUED
An annual fund management fee based on .5 percent of the aggregate cost
of all apartment complexes owned by the Operating Partnerships, has been
accrued to Boston Capital Asset Management Limited Partnership. The fund
management fees accrued for the quarter ended June 30, 2001 and 2000 are as
follows:
2001 | 2000 | |
Series 15 | $137,013 | $137,013 |
Series 16 | 172,995 | 172,995 |
Series 17 | 140,925 | 140,925 |
Series 18 | 95,487 | 95,487 |
Series 19 | 102,837 | 102,837 |
$649,257 | $649,257 |
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS
At June 30, 2001 and 2000, the Fund had limited partnership interests in
241 Operating Partnerships which own or are constructing apartment
complexes. The breakdown of Operating Partnerships within the Fund at June
30, 2001 and 2000 is as follows:
Series 15 | 68 |
Series 16 | 64 |
Series 17 | 49 |
Series 18 | 34 |
Series 19 | 26 |
241 |
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2001
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS - CONTINUED
Under the terms of the Fund's investment in each Operating Partnership,
the Fund is required to make capital contributions to the Operating
Partnerships. These contributions are payable in installments over several
years upon each Operating Partnership achieving specified levels of
construction and/or operations. The contributions payable at June 30, 2001
and 2000 are as follows:
2001 | 2000 | |
Series 15 | $ 16,206 | $ 32,922 |
Series 16 | 138,506 | 140,006 |
Series 17 | 1,186,768 | 1,206,768 |
Series 18 | 18,554 | 18,554 |
Series 19 | 24,000 | 34,000 |
$1,384,034 | $1,432,250 |
The Funds fiscal year ends March 31st of each year, while all the Operating
Partnerships' fiscal years are the calendar year. Pursuant to the provisions
of each Operating Partnership Agreement, financial results for each of the
Operating Partnerships are provided to the Fund within 45 days after the close
of each Operating Partnerships quarterly period. Accordingly, the current
financial results available for the Operating Partnerships are for the three
months ended March 31, 2001.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
2001 | 2000 | |
Revenues | ||
Rental | $ 2,552,986 | $ 2,486,174 |
Interest and other | 100,993 | 82,688 |
2,653,979 | 2,568,862 | |
Expenses | ||
Interest | 690,636 | 687,628 |
Depreciation and amortization | 872,515 | 902,907 |
Operating expenses | 1,707,206 | 1,653,173 |
3,270,357 | 3,243,708 | |
NET LOSS | $ (616,378) | $ (674,846) |
Net loss allocation to Boston |
|
|
Net loss allocated to other |
|
|
Net loss suspended | $ (299,630) | $ (212,592) |
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
2001 | 2000 | |
Revenues | ||
Rental | $ 3,260,693 | $ 3,367,472 |
Interest and other | 131,989 | 139,573 |
3,392,682 | 3,507,045 | |
Expenses | ||
Interest | 878,033 | 996,864 |
Depreciation and amortization | 1,152,243 | 1,239,477 |
Operating expenses | 2,118,641 | 2,204,378 |
4,148,917 | 4,440,719 | |
NET LOSS | $ (756,235) | $ (933,674) |
Net loss allocation to Boston |
|
|
Net loss allocated to other |
|
|
Net loss suspended | $ (140,451) | $ (105,172) |
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
2001 | 2000 | |
Revenues | ||
Rental | $ 3,040,833 | $ 2,934,851 |
Interest and other | 105,039 | 106,438 |
3,145,872 | 3,041,289 | |
Expenses | ||
Interest | 942,480 | 905,724 |
Depreciation and amortization | 957,277 | 930,184 |
Operating expenses | 1,870,452 | 1,746,883 |
3,770,209 | 3,582,791 | |
NET LOSS | $ (624,337) | $ (541,502) |
Net loss allocation to Boston |
|
|
Net loss allocated to other |
|
|
Net Loss Suspended | $ (136,975) | $ - |
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
2001 | 2000 | |
Revenues | ||
Rental | $ 1,691,947 | $ 1,649,338 |
Interest and other | 45,151 | 86,082 |
1,737,098 | 1,735,420 | |
Expenses | ||
Interest | 512,831 | 470,360 |
Depreciation and amortization | 642,559 | 630,183 |
Operating expenses | 1,214,852 | 1,062,904 |
2,370,242 | 2,163,447 | |
NET LOSS | $ (633,144) | $ (428,027) |
Net loss allocation to Boston |
|
|
Net loss allocated to other |
|
|
Net loss suspended | $ (31,952) | $ (16,397) |
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
2001 | 2000 | |
Revenues | ||
Rental | $ 2,442,319 | $ 2,375,194 |
Interest and other | 61,362 | 65,676 |
2,503,681 | 2,440,870 | |
Expenses | ||
Interest | 822,043 | 803,038 |
Depreciation and amortization | 724,214 | 742,598 |
Operating expenses | 1,334,282 | 1,240,333 |
2,880,539 | 2,785,969 | |
NET LOSS | $ (376,858) | $ (345,099) |
Net loss allocation to Boston Capital Tax Credit Fund |
|
|
Net loss allocated to other |
|
|
Net loss suspended | $ (11,246) | $ (6,981) |
The Partnership accounts for its investments using the equity method of
accounting. Under the equity method of accounting, the Partnership adjusts
its investment cost for its share of each Operating Partnerships results of
operations and for any distributions received or accrued. However, the
Partnership recognizes individual operating losses only to the extent of
capital contributions. Excess losses are suspended for use in future years to
offset excess income.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
NOTE E - TAXABLE LOSS
The Fund's taxable loss for the year ended March 31, 2002 is expected to
differ from its loss for financial reporting purposes. This is primarily due
to accounting differences in depreciation incurred by the Operating
Partnerships and also differences between the equity method of accounting and
the IRS accounting methods. No provision or benefit for income taxes has been
included in these financial statements since taxable income or loss passes
through to, and is reportable by, the partners and assignees individually
Item 2. Management's Discussions and Analysis of Financial Condition and
Results of Operations
The Funds primary source of funds is the proceeds of its Public
Offering. Other sources of liquidity will include (i) interest earned on
capital contributions held pending investment and on Working Capital Reserves
and (ii) cash distributions from operations of the operating Partnerships in
which the Fund has and will invest. Interest income is expected to decrease
over the life of the Fund as capital contributions are paid to the Operating
Partnerships and Working Capital Reserves are expended. The Fund does not
anticipate significant cash distributions from operations of the Operating
Partnerships.
The Fund is currently accruing the fund management fee. Fund management
fees accrued during the quarter ended June 30, 2001 were $649,257 and total
fund management fees accrued as of June 30, 2001 were $14,497,281. Pursuant
to the Partnership Agreement, such liabilities will be deferred until the Fund
receives sales of refinancing proceeds from Operating Partnerships which will
be used to satisfy such liabilities. The Funds working capital and sources of
liquidity coupled with affiliated party liability accruals allow sufficient
levels of liquidity to meet the third party obligations of the Fund. The
Fund is currently unaware of any trends which would create insufficient
liquidity to meet future third party obligations of the Fund.
The Fund has recorded an additional $1,320,928 as payable to affiliates.
This represents fundings to make advances and/or loans to certain Operating
Partnerships in Series 15 and Series 17 of the Fund of $213,564, and
$1,107,364 respectively.
The Fund offered BACs in a Public Offering declared effective by the
Securities and Exchange Commission on January 24, 1992. The Fund received
$38,705,000, $54,293,000, $50,000,000, $36,162,000 and $40,800,000
representing 3,870,500, 5,429,402, 5,000,000, 3,616,200 and 4,080,000 BACs
from investors admitted as BAC Holders in Series 15, Series 16, Series 17,
Series 18, and Series 19, respectively. The Public Offering was completed on
December 17, 1993.
(Series 15) The Fund commenced offering BACs in Series 15 on January 24,
1992. Offers and sales of BACs in Series 15 were completed on June 26,
1992. The Fund has committed proceeds to pay initial and additional
installments of capital contributions to 68 Operating Partnerships in the
amount of $28,257,701.
During the quarter ended June 30, 2001, none of Series 15 net offering
proceeds had been used to pay capital contributions. Series 15 net offering
proceeds in the amount of $16,206 remain to be used by the Fund to pay
remaining capital contributions to the Operating Partnerships that Series 15
has invested in as of June 30, 2001.
(Series 16) The Fund commenced offering BACs in Series 16 on July 13, 1992.
Offers and sales of BACs in Series 16 were completed on December 28, 1992. The
Fund has committed proceeds to pay initial and additional installments of
capital contributions to 64 Operating Partnerships in the amount of
$39,579,774.
During the quarter ended June 30, 2001, none of Series 16 net offering
proceeds had been used to pay capital contributions. Series 16 net offering
proceeds in the amount of $138,506 remain to be used by the Fund to pay
remaining capital contributions to the Operating Partnerships that Series 16
has invested in as of June 30, 2001.
(Series 17) The Fund commenced offering BACs in Series 17 on January 24,
1993. Offers and sales of BACs in Series 17 were completed on June 17, 1993.
The Fund has committed proceeds to pay initial and additional installments of
capital contributions to 49 Operating Partnerships in the amount of
$36,538,204.
During the quarter ended June 30, 2001, none of Series 17 net offering
proceeds had been used to pay capital contributions. Series 17 has
outstanding contributions payable in the amount of $1,186,768 as of June 31,
2001. Of the amount outstanding, $1,139,873 has been advanced or loaned to
the Operating Partnerships. The advances and loans will be converted to
capital and the remaining contributions of $46,895 will be released from
available net offering proceeds when the Operating Partnerships have achieved
the conditions set forth in their partnership agreements.
(Series 18) The Fund commenced offering BACs in Series 18 on June 17, 1993.
Offers and sales of BACs in Series 18 were completed on September 22, 1993.
The Fund has committed proceeds to pay initial and additional installments of
capital contributions to 34 operating Partnerships in the amount of
$26,442,202.
During the quarter ended June 30, 2001, none of Series 18 net offering
proceeds had been used to pay capital contributions. Series 18 net offering
proceeds in the amount of $18,554 remain to be used by the Fund to pay
remaining capital contributions to the Operating Partnerships that Series 18
has invested in as of June 30, 2001.
(Series 19). The Fund commenced offering BACs in Series 19 on October 8,
1993. Offers and sales of BACs in Series 19 were completed on December 17,
1993. The Fund has committed proceeds to pay initial and additional
installments of capital contributions to 26 Operating Partnerships in the
amount of $29,614,506.
During the quarter ended June 30, 2001, none of Series 19 net offering
proceeds had been used to pay capital contributions. Series 19 net offering
proceeds in the amount of $24,000 remain to be used by the Fund to pay
remaining capital contributions to the Operating Partnerships that Series 19
has invested in as of June 30, 2001.
As of June 30, 2001 and 2000 the Fund held limited partnership
interests in 241 Operating Partnerships. In each instance the Apartment
Complex owned by the applicable Operating Partnership is eligible for the
Federal Housing Tax Credit. Occupancy of a unit in each Apartment Complex
which initially complied with the Minimum Set-Aside Test (i.e., occupancy by
tenants with incomes equal to no more than a certain percentage of area median
income) and the Rent Restriction Test (i.e., gross rent charged tenants does
not exceed 30% of the applicable income standards) is referred to hereinafter
as "Qualified Occupancy." Each of the Operating Partnerships and each of the
respective Apartment Complexes are described more fully in the Prospectus or
applicable report on Form 8-K. The General Partner believes that there is
adequate casualty insurance on the properties.
The Fund incurred a fund management fee to Boston Capital Asset
Management Limited Partnerships (formerly Boston Capital Communications
Limited Partnership) in an amount equal to .5 percent of the aggregate cost of
the apartment complexes owned by the Operating Partnerships, less the amount
of certain asset management and reporting fees paid by the Operating
Partnerships. The fund management fees incurred for the quarter ended
June 30, 2001 for Series 15, Series 16, Series 17, Series 18 and Series 19
were $119,368, $136,198, $119,219, $86,634, and $87,071 respectively.
The Funds investment objectives do not include receipt of significant
cash distributions from the Operating Partnerships in which it has invested or
intends to invest. The Funds investments in Operating Partnerships have been
made principally with a view towards realization of Federal Housing Tax
Credits for allocation to its partners and BAC holders.
Series 15
As of June 30, 2001 and 2000, the average qualified occupancy for the
series was 100% for both years. The series had a total of 68 properties at
June 30, 2001, all of which were at 100% qualified occupancy.
For the three months being reported Series 15 reflects a net loss from
Operating Partnerships of $616,378. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$256,137. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
Operations continue to improve at Hidden Cove Apartments (Hidden Cove) as
evidenced by stabilized occupancy and increased rental collections. Occupancy
for the second quarter of 2001 averaged 98%. To date, the property has been
able to complete minor capital improvements and fund its replacement reserve
account without financial assistance. The property operated above breakeven
for the year 2000 and continued to do so through the second quarter of 2001.
At this time, the Operating General Partner has completed negotiations with
the property's management company and has transferred the Operating General
Partnership interest to that entity effective January 1, 2001. It is
anticipated that the addition of a local Operating General Partner will
enhance the property's ability to refinance its permanent mortgage.
In April of 2000, School Street I LP, (School Street Apartments - Phase
I) inserted Marshall School Street I, LLC, as the Operating General Partner
and property management company. Since taking control, the management company
completed the capital improvements program and improved the tenant selection
criteria. As a result, physical occupancy at the property improved and should
continue to improve in to 2001. During the first six months of 2001 occupancy
averaged 97%. Based on the higher occupancy and the improved tenant selection
criteria, the property's operations and cash should improve in 2001. The
Operating General Partner continues to fund any operating cash deficits.
Series 16
As of June 30, 2001 and 2000, the average qualified occupancy for the
series was 99.9% and 99.7%,respectively. The series had a total of 64
properties at June 30, 2001. Out of the total, 62 had 100% qualified
occupancy.
For the three months being reported Series 16 reflects a net loss from
Operating Partnerships of $756,235. When adjusted for depreciation, which
is a non-cash item, the Operating Partnerships reflect positive operations of
$396,008. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
Cass Partners, L.P. (Fitzgerald Apartments) continues to operate below
breakeven due to low occupancy. An increased supply of affordable housing in
the area with superior amenities hampered marketing efforts and made tenant
retention difficult. Average physical occupancy for 2000 was 75%, down from an
average of 85% in 1999. Occupancy trended up to an average of 80% for the
first quarter ended March 31, 2001 and 82% for the second quarter ended June
30, 2001. Property management has lowered rents during 2001 to better compete
against the newer affordable housing complexes. As a result of the improved
occupancy and reduced operating expenses, operations have improved from the
same period in 2000. Marketing efforts are referrals from the nearby Air
Force Base, newspaper advertising and flyers. The Operating General Partner
continues to support the property financially. The second mortgage was
renewed on April 26, 2001 with a reduction in the interest rate. The
mortgage, taxes, and payable are current.
In January of 2001, Haynes House Associates II, L.P. (Haynes House
Apartments) experienced a fire in one of the units due to tenant neglect.
Only the unit in which the fire started suffered fire damage, however;
surrounding units experienced smoke and water damage. All of the units have
been repaired as of March 31, 2001. The Insurance company covered all costs
incurred after the $1,000 deductible to repair the damages caused by the fire.
The tenant responsible for the fire has been evicted and the unit has been re-
leased
Series 17
As of June 30, 2001 and 2000, the average qualified occupancy for the
series was 99.7% for both years. The series had a total of 49 properties at
June 30, 2001. Out of the total 48 had 100% qualified occupancy.
For the three months being reported Series 17 reflects a net loss from
Operating Partnerships of $624,337. When adjusted for depreciation, which,
is a non-cash item, the Operating Partnerships reflect positive operations of
$332,940. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
Annadale Housing Partners (Kingsview Manor & Estates) has historically
reported net losses due to operational issues associated with the
property. Average occupancy for the year 2000 was 93.54%. Occupancy remains
stable at 90% for the second quarter of 2001. During 1999 the mortgage was
restructured to reduce operating costs. As a result of the mortgage
restructure and improved occupancy the property maintained break-even
operations during 2000. An affiliate of the management company assumed the
General Partner responsibilities for the partnership, on January 1, 2001. The
Investment General Partner continues to monitor this situation closely.
The mortgage lender for Cypress Point Limited Partnership (Laurel Ridge
Apartment) placed the partnership in default of its mortgage because the
property failed to achieve the required debt service coverage ratio and failed
to make its required real estate tax payment. The existing loan terms
provided for an interest rate adjustment after the initial five-year permanent
mortgage period. When this adjustment occurred there was a rate increase,
which in turn increased the property's debt service payment, adversely
affecting operations. The Investment Limited Partner advanced funds to the
partnership to bring the taxes current. In September 2000, BCP Wisconsin
LLC became the managing general partner of the partnership. BCP Wisconsin LLC
negotiated a standstill agreement with the lender in order to allow time to
devise different options for dealing with existing loan defaults. The lender
was not amenable to the work out plan that BCP Wisconsin LLC had previously
proposed. BCP Wisconsin LLC ultimately decided that the interests of the
property would best be served if it took out the existing lender under a
refinancing with an alternate mortgage lender. Application for refinancing
was made with an alternate lender. In June of 2001 the Investment General
Partner refinanced the first mortgage and put in place BCP Cypress LLC as the
new sole General Partner. The refinancing provided significantly more
favorable loan terms. The scope of capital improvement at the property is
nearing completion and is having a positive impact on rents. No further
funding advances from the Investment Limited Partner are expected to be
required. The loan proceeds from the refinancing will allow repayment of all
prior advances (including capital improvement work) from the Investment
Limited Partner.
The area surrounding the property owned by California Investors VI LP
(Orchard Park) continues to experience economic growth. Currently a high
school is in the process of being built across the street from the front
entrance of the community. It is anticated that the school will open this
fall. The location of this school will continue to enhance marketing efforts.
Occupancy averaged 98% for the second quarter of 2001. In addition to the
positive changes affecting this partnership, an affiliate of the management
company assumed the General Partner responsibilities for the partnership on
January 1, 2001.
Physical occupancy at Palmetto Properties Ltd. (Palmetto Villas)
for 2000 averaged 84%. Occupancy in the first half of 2001 has increased
97%. The property suffered from low occupancy in 1999 and the first half of
2000 due to poor on-site management and significant deferred maintenance
issues. As a result, the property management company was replaced in January
2000. Since the management company change occurred, occupancy levels have
steadily increased as improvements have been made at the property and deferred
maintenance has been addressed. However, property taxes remain in arrears for
1998, 1999, and 2000. At this time, the Investment General Partner is working
with the new management company to obtain low interest deferred maintenance
loans to complete the remaining necessary repairs, and cure the tax
delinquency. The Investment General Partner continues negotiations with the
current Operating General Partner aimed at removing him from the partnership.
The new management company has expressed interest in assuming the role of
Operating General Partner, and based on the management company's performance
to date, the partnership would benefit substantially from this arrangement.
Series 18
As of June 30, 2001 and 2000 the average qualified occupancy
for the series was 100% for both years. The series had a total of
34 properties at June 30, 2001, all of which were at 100% qualified
occupancy.
For the three months being reported Series 18 reflects a net loss from
Operating Partnerships of $633,144. When adjusted for depreciation, which
is a non-cash item, the Operating Partnerships reflect positive operations of
$9,415. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
Harris Housing Limited Partnership (Harris Music Lofts), located in West
Palm Beach, Florida, operated below break-even for the second quarter of 2001
mainly due to high operating expenses. Insurance costs in the state of
Florida have increased significantly during 2001. In addition, the project
has performed some necessary roof repairs. The General Partner continues to
share operating costs with an affiliated property in the same neighborhood in
an attempt to reduce expenses. The Operating Genral Partner has also managed
to secure a rental increase resulting in a net increase of gross potential
rents of $18,000 annually. It is anticipated that the project will breakeven
in 2002. Average occupancy for the second quarter of 2001 was strong at 97%.
Marengo Park Apartments, Limited Partnership (Marengo Park) operated
below breakeven due to low occupancy levels. Occupancy averaged 84% in 2000.
Management has attributed the occupancy problem to the local economy. Due to
historical low occupancy rates, the property suffered from under funded
reserves and delinquent real estate taxes. The Investment General Partner and
the Operating General Partner negotiated a workout plan with Rural Development
to address these issues. Now that the workout plan is in place both real
estate taxes and reserves are current. Additionally, Rural Development
approved Special Market Rate rents at the property in an effort to improve
occupancy. Occupancy continued to improve into the second quarter of 2001,
averaging 96% for June 2001.
Parvin's Limited Partnership (Parvin's Branch Townhomes) continues to
incur operating deficits due to higher than average operating expenses and
debt service. The management company increased the number of transitional
units to five from two. There are several reasons for the additional
transitional units, including the receipt of additional funding from HUD to
subsidize the units. In addition, originally transitional residents were only
allowed to live at the property for 30-days, thus, the property would incur
significant maintenance and turnover costs. Currently, transitional residents
are allowed to reside at the property for up to six months, which has
significantly reduced the turnover costs. The Operating General Partner and
the management company have been deferring their respective fees to improve
the property's cash flow. In addition, the Operating General Partner
continues to fund deficits. The property currently has an occupancy rate of
100%. The management company continues to monitor operating expenses and
reports that expenses remain stable and within acceptable levels. The
management company reports the property generates sufficient cash flow to
cover the operating expenses. However the property continues to operate with a
deficit as a result of the high debt service requirement and/or refinance the
existing debt. Management continues to anticipate breakeven operations when
the debt service requirement is reduced.
On March 20, 2000 Glen Place Apartments Limited Partnership (Glen Place
Apartments) received a 60-Day letter from the IRS stating the Operating
Partnership had not met certain IRS Section 42 requirements. The Investment
Limited Partner was notified of the 60-day letter in the second quarter of
2000. The IRS has proposed an adjustment that would disallow the Partnership
from utilizing certain past or future credits. In late October 2000, counsel
representing the General Partner had a conference with the appellate conferee.
At this point, conversations with the appellate conferee continue but no
deadline has been set forth settling the case. The Operating General
Partner and its counsel do not anticipate an outcome that would have a
material effect on the financial statements and accordingly, no adjustment has
been made in the accompanying financial statements. While the Operating
General Partner and its counsel are of this opinion, it is of the opinion of
the Investment General Partner that the outcome could, in total, be material.
At this point, no adjustments have been made to the accompaning financial
statement. The Investment General Partner will continue to closely monitor
the process.
Series 19
As of June 30, 2001 and 2000 the average qualified occupancy
for the series was 100% for both years. The series had a total of 26
properties at June 30, 2001, all of which were at 100% qualified
occupancy.
For the three months being reported Series 19 reflects a net loss from
Operating Partnerships of $376,858. When adjusted for depreciation, which
is a non-cash item, the Operating Partnerships reflect positive operations of
$347,356. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the Fund has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Boston Capital Tax Credit Fund III L.P. | ||
By: | Boston Capital Associates III L.P. | |
General Partner | ||
By: | BCA Associates Limited Partnership, | |
General Partner | ||
By: | C&M Management Inc., | |
General Partner | ||
Date: August 15, 2001 | By: | /s/ John P. Manning |
John P. Manning |
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 Fund
and in the capacities and on the dates indicated:
DATE: | SIGNATURE: | TITLE: |
August 15, 2001 | /s/ John P. Manning | Director, President |
(Principal Executive | ||
John P. Manning | Officer) C&M Management | |
Inc.; Director, | ||
President (Principal | ||
Executive Officer) | ||
BCTC III Assignor Corp. |