UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________to _________
Commission file number 0-8639
CONSOLIDATED CAPITAL GROWTH FUND
(Exact name of small business issuer as specified in its charter)
California 94-2382571
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (i) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No ___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CAPITAL GROWTH FUND
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 2004
Assets
Cash and cash equivalents $ 348
Receivables and deposits 467
Restricted escrows 99
Other assets 159
Investment property:
Land $ 946
Buildings and related personal property 16,300
17,246
Less accumulated depreciation (12,961) 4,285
$ 5,358
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 216
Tenant security deposit liabilities 89
Accrued property taxes 125
Other liabilities 290
Due to affiliates (Note B) 509
Mortgage note payable 12,240
Partners' Deficit
General partner $ (3,146)
Limited partners (49,196 units issued and
outstanding) (4,965) (8,111)
$ 5,358
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL GROWTH FUND
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenues: (Restated) (Restated)
Rental income $ 656 $ 744 $ 1,311 $ 1,494
Other income 61 64 115 126
Casualty gain (Note D) 9 33 34 33
Total revenues 726 841 1,460 1,653
Expenses:
Operating 455 531 763 862
General and administrative 70 95 123 230
Depreciation 230 230 458 457
Interest 227 218 447 436
Property taxes 62 62 126 125
Total expenses 1,044 1,136 1,917 2,110
Loss from continuing operations (318) (295) (457) (457)
Income (loss) from discontinued operations
(Note A) -- 7 -- (625)
Gain on sale of discontinued operations
(Note C) -- 28 -- 8,831
Net (loss) income $ (318) $ (260) $ (457) $ 7,749
Net (loss) income allocated to general
partners $ (3) $ 1 $ (5) $ 1,225
Net (loss) income allocated to limited
partners (315) (261) (452) 6,524
$ (318) $ (260) $ (457) $ 7,749
Net (loss) income per limited partnership unit:
Loss from continuing operations $ (6.40) $ (5.93) $ (9.19) $ (9.19)
Loss from discontinued operations -- 0.14 -- (12.58)
Gain on sale of discontinued operations -- 0.48 -- 154.38
$ (6.40) $ (5.31) $ (9.19) $132.61
Distribution per limited partnership unit $ -- $ -- $ -- $ 81.82
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL GROWTH FUND
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 49,196 $ 1 $49,196 $49,197
Partners' deficit at
December 31, 2003 49,196 $(3,141) $(4,513) $(7,654)
Net loss for the six months
ended June 30, 2004 -- (5) (452) (457)
Partners' deficit at
June 30, 2004 49,196 $(3,146) $(4,965) $(8,111)
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL GROWTH FUND
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
2004 2003
(Restated)
Cash flows from operating activities:
Net (loss) income $ (457) $ 7,749
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Depreciation 458 1,027
Amortization of loan costs 11 27
Bad debt expense, net 60 240
Casualty gain (34) (33)
Loss on early extinguishment of debt -- 689
Gain on sale of investment property -- (8,831)
Change in accounts:
Receivables and deposits (141) (273)
Other assets (56) (143)
Accounts payable (251) (116)
Tenant security deposit liabilities 10 (32)
Accrued property taxes 125 398
Due to affiliates 9 --
Other liabilities (66) 208
Net cash (used in) provided by operating activities (332) 910
Cash flows from investing activities:
Property improvements and replacements (163) (498)
Net (deposits to) withdrawals from restricted escrows (61) 163
Insurance proceeds received 40 39
Net proceeds from sale of investment property -- 10,991
Net cash (used in) provided by investing activities (184) 10,695
Cash flows from financing activities:
Advances from affiliates 500 --
Principal payments on mortgage notes payable -- (132)
Distributions to partners -- (4,632)
Repayment of mortgage note payable -- (6,000)
Debt extinguishment cost -- (650)
Loan costs paid -- (5)
Net cash provided by (used in) financing activities 500 (11,419)
Net (decrease) increase in cash and cash equivalents (16) 186
Cash and cash equivalents at beginning of period 364 559
Cash and cash equivalents at end of period $ 348 $ 745
Supplemental disclosure of cash flow information:
Cash paid for interest $ 427 $ 1,058
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of Consolidated Capital Growth
Fund (the "Partnership" or "Registrant") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Article 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of ConCap Equities, Inc. (the "General Partner"), all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and six month
periods ended June 30, 2004, are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 2004. For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's Annual Report on Form 10-KSB/A No. 1 for the year ended
December 31, 2003. The General Partner is a wholly owned subsidiary of Apartment
Investment and Management Company ("AIMCO"), a publicly traded real estate
investment trust.
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
the accompanying consolidated statements of operations for the three and six
months ended June 30, 2003 reflect the operations of Breckenridge Square,
Churchill Park and Doral Springs Apartments as income (loss) from discontinued
operations due to their sales in January 2003, July 2003 and September 2003,
respectively.
Reclassification
Certain 2003 amounts have been reclassified to conform to the 2004 presentation.
Note B - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
The Partnership Agreement provides for (i) certain payments to affiliates for
services and (ii) reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership.
Affiliates of the General Partner are entitled to receive 5% of gross receipts
from the Partnership's properties for providing property management services.
The Partnership paid to such affiliates approximately $71,000 and $227,000 for
the six months ended June 30, 2004 and 2003, respectively, which is included in
operating expenses and income (loss) from discontinued operations.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $62,000 and $149,000 for the
six months ended June 30, 2004 and 2003, respectively, which is included in
general and administrative expenses.
The Partnership Agreement provides for a fee equal to 9% of the total
distributions made to the limited partners from "cash available for
distribution" (as defined in the Partnership Agreement) to be paid to the
General Partner for executive and administrative management services. During the
six months ended June 30, 2003, affiliates of the General Partner received
approximately $28,000 for providing these services, which is included in general
and administrative expenses. No fees were earned or paid for the six months
ended June 30, 2004.
Pursuant to the Partnership Agreement and in connection with the sale of
Breckinridge Square in January 2003, the General Partner is entitled to a
commission of up to 3% for its assistance in the sale. During the six months
ended June 30, 2003, approximately $178,000 was paid to the General Partner.
During the six months ended June 30, 2004, an affiliate of the General Partner
advanced the Partnership approximately $500,000 to assist in paying city taxes
related to the sales of two investment properties and to fund replacement
reserves at The Lakes Apartments. Interest was charged at the prime rate plus 2%
and was approximately $9,000 for the six months ended June 30, 2004. Advances
and accrued interest are shown as due to affiliates on the accompanying balance
sheet.
The Partnership insures its property up to certain limits through coverage
provided by AIMCO which is generally self-insured for a portion of losses and
liabilities related to workers compensation, property casualty and vehicle
liability. The Partnership insures its property above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner. During the six months ended June 30, 2004 and 2003, the Partnership was
charged by AIMCO and its affiliates approximately $40,000 and $127,000,
respectively, for insurance coverage and fees associated with policy claims
administration.
Note C- Sale of Investment Property
On January 16, 2003, the Partnership sold Breckinridge Square to a third party
for net proceeds of approximately $10,991,000 after payment of closing costs.
The Partnership realized a gain of approximately $8,831,000 as a result of the
sale. The Partnership used approximately $6,000,000 of net proceeds to repay the
mortgage encumbering the property. In addition, the Partnership recorded a loss
on early extinguishment of debt of approximately $689,000 as result of
unamortized loan costs being written off and prepayment penalties. In accordance
with SFAS No. 144, the accompanying statement of operations for the six months
ended June 30, 2003 reflects the operations of Breckinridge Square as income
(loss) from discontinued operations. The additional gain recognized during the
three months ended June 30, 2003 is due to the reversal of certain expense
reserves established at the time of the sale. Included in (loss) income from
discontinued operations for the six months ended June 30, 2003 is approximately
$175,000 of revenue generated by the property.
Note D - Casualties
In October 2003, the Partnership's investment property, The Lakes Apartments,
incurred damage to four apartment units as a result of a fire. As a result of
the damage, approximately $32,000 of fixed assets and $26,000 of accumulated
depreciation were written off resulting in a net write off of approximately
$6,000. The property received approximately $40,000 in insurance proceeds from
the insurance company to repair the damaged units. For financial statement
purposes, a casualty gain of approximately $34,000 was recognized during the six
months ended June 30, 2004 as a result of the difference between the proceeds
received and the net book value of the assets written off.
In December 2002, one of the Partnership's investment properties, The Lakes,
incurred damages to its buildings as a result of a hailstorm. As a result of the
damage, approximately $26,000 of fixed assets and $20,000 of accumulated
depreciation were written off resulting in a net write off of approximately
$6,000. The property received approximately $39,000 in proceeds from the
insurance company to repair the damaged units. For financial statement purposes,
a casualty gain of approximately $33,000 was recognized during the six months
ended June 30, 2003 as a result of the difference between the proceeds received
and the net book value of the assets written off.
Note E - OSHA Settlement
In 2003, the Partnership accrued approximately $100,000 related to a projected
OSHA penalty arising from various citations at The Lake Apartments. During the
second quarter of 2004, the Partnership was able to settle the penalty for
approximately $25,000. The reserve in excess of estimated legal costs was
reversed and is reflected as a reduction in operating expenses for the six
months ended June 30, 2004.
Note F - Contingencies
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its General Partner and several of
their affiliated partnerships and corporate entities. The action purported to
assert claims on behalf of a class of limited partners and derivatively on
behalf of a number of limited partnerships (including the Partnership) that are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia Financial Group, Inc.
("Insignia") and entities that were, at one time, affiliates of Insignia; past
tender offers by the Insignia affiliates to acquire limited partnership units;
management of the partnerships by the Insignia affiliates; and the series of
transactions which closed on October 1, 1998 and February 26, 1999 whereby
Insignia and Insignia Properties Trust, respectively, were merged into AIMCO.
The plaintiffs sought monetary damages and equitable relief, including judicial
dissolution of the Partnership. In addition, during the third quarter of 2001, a
complaint (the "Heller action") was filed against the same defendants that are
named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or
about August 6, 2001, plaintiffs filed a first amended complaint. The Heller
action was brought as a purported derivative action, and asserted claims for,
among other things, breach of fiduciary duty, unfair competition, conversion,
unjust enrichment, and judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the partnership interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners with the independent appraisals at the time of these tenders. The
proposed settlement also provided for the limitation of the allowable costs
which the General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
("Objector") filed an appeal seeking to vacate and/or reverse the order
approving the settlement and entering judgment thereto. On November 24, 2003,
the Objector filed an application requesting the Court order AIMCO to withdraw
settlement tender offers it had commenced, refrain from making further offers
pending the appeal and auction any units tendered to third parties, contending
that the offers did not conform with the terms of the Settlement. Counsel for
the Objector (on behalf of another investor) had alternatively requested the
Court take certain action purportedly to enforce the terms of the settlement
agreement. On December 18, 2003, the Court heard oral argument on the motions
and denied them both in their entirety.
On January 28, 2004, Objector filed his opening brief in his pending appeal. On
April 23, 2004, the General Partner and its affiliates filed a response brief in
support of the settlement and the judgment thereto. Plaintiffs have also filed a
brief in support of the settlement. On June 4, 2004, Objector filed a reply to
the briefs submitted by the General Partner and Plaintiffs. No hearing has been
scheduled in the matter.
The General Partner does not anticipate that any costs to the Partnership,
whether legal or settlement costs, associated with these cases will be material
to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the General Partner,
was served with a complaint in the United States District Court, District of
Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor
Standards Act ("FLSA") by failing to pay maintenance workers overtime for all
hours worked in excess of forty per week. On March 5, 2004 Plaintiffs filed an
amended complaint also naming NHP Management Company, which is also an affiliate
of the General Partner. The complaint is styled as a Collective Action under the
FLSA and seeks to certify state subclasses in California, Maryland, and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate maintenance workers for time that they were required
to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P.
failed to comply with the FLSA in compensating maintenance workers for time that
they worked in responding to a call while "on-call". The defendants have filed
an answer to the amended complaint denying the substantive allegations. Some
discovery has taken place and settlement negotiations continue. Although the
outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe
that the ultimate outcome will have a material adverse effect on its financial
condition or results of operations taken as a whole. Similarly, the General
Partner does not believe that the ultimate outcome will have a material adverse
effect on the Partnership's financial condition or results of operations taken
as a whole.
The Partnership is unaware of any other pending or outstanding litigation
matters involving it or its investment property that are not of a routine nature
arising in the ordinary course of business.
As previously disclosed, the Central Regional Office of the United States
Securities and Exchange Commission is conducting an investigation relating to
certain matters. AIMCO believes the areas of investigation include AIMCO's
miscalculated monthly net rental income figures in third quarter 2003,
forecasted guidance, accounts payable, rent concessions, vendor rebates, and
capitalization of expenses and payroll. AIMCO is cooperating fully. AIMCO does
not believe that the ultimate outcome will have a material adverse effect on its
consolidated financial condition or results of operations taken as a whole.
Similarly, the General Partner does not believe that the ultimate outcome will
have a material adverse effect on the Partnership's consolidated financial
condition or results of operations taken as a whole.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government regulations. Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including, without limitation: national and local
economic conditions; the terms of governmental regulations that affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates; financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest; real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets; litigation, including costs associated with prosecuting and
defending claims and any adverse outcomes and possible environmental
liabilities. Readers should carefully review the Registrant's financial
statements and the notes thereto, as well as the risk factors described in the
documents the Registrant files from time to time with the Securities and
Exchange Commission.
The Partnership's remaining investment property consists of one apartment
complex. The following table sets forth the average occupancy of the property
for the six months ended June 30, 2004 and 2003:
Average Occupancy
Property 2004 2003
The Lakes 75% 85%
Raleigh, North Carolina
The General Partner attributes the decrease in occupancy at The Lakes Apartments
to increased credit standards for tenants.
The Partnership's financial results are dependent upon a number of factors
including the ability to attract and maintain tenants at the investment
property, interest rates on mortgage loans, costs incurred to operate the
investment property, general economic conditions and weather. As part of the
ongoing business plan of the Partnership, the General Partner monitors the
rental market environment of its investment property to assess the feasibility
of increasing rents, maintaining or increasing occupancy levels and protecting
the Partnership from increases in expenses. As part of this plan, the General
Partner attempts to protect the Partnership from the burden of inflation-related
increases in expenses by increasing rents and maintaining a high overall
occupancy level. However, the General Partner may use rental concessions and
rental rate reductions to offset softening market conditions, accordingly, there
is no guarantee that the General Partner will be able to sustain such a plan.
Further, a number of factors which are outside the control of the Partnership
such as the local economic climate and weather can adversely or positively
impact the Partnership's financial results.
Results of Operations
The Partnership's net loss for the three months ended June 30, 2004 was
approximately $318,000 compared to a net loss of approximately $260,000 for the
corresponding period in 2003. The Partnership's net loss for the six months
ended June 30, 2004 was approximately $457,000 compared to net income of
approximately $7,749,000 for the corresponding period in 2003. For the three
month period, net loss increased due to the recognition in 2003 of a gain on the
sale of Breckinridge Square Apartments and a decrease in income from
discontinued operations. For the six month period, net income decreased due to
the gain on the sale of Breckinridge Square partially offset by a decrease in
loss from discontinued operations.
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
the accompanying consolidated statements of operations for the three and six
months ended June 30, 2003 reflect the operations of Breckenridge Square,
Churchill Park and Doral Springs Apartments as income (loss) from discontinued
operations due to their sales in January 2003, July 2003 and September 2003,
respectively.
On January 16, 2003, the Partnership sold Breckinridge Square to a third party
for net proceeds of approximately $10,991,000 after payment of closing costs.
The Partnership realized a gain of approximately $8,831,000 as a result of the
sale. The Partnership used approximately $6,000,000 of net proceeds to repay the
mortgage encumbering the property. In addition, the Partnership recorded a loss
on early extinguishment of debt of approximately $689,000 as result of
unamortized loan costs being written off and prepayment penalties. Included in
income (loss) from discontinued operations for the three and six months ended
June 30, 2003 is approximately $2,000 and $90,000, respectively, of revenue
generated by the property.
Excluding the impact of the gain on sale and the income (loss) from discontinued
operations, the Partnership realized a loss from continuing operations of
approximately $318,000 and $457,000 for the three and six months ended June 30,
2004 compared to a loss from continuing operations of approximately $295,000 and
$457,000 for the corresponding periods in 2003. The increase in loss from
continuing operations for the three month period is due to a decrease in total
revenues partially offset by a decrease in total expenses. The net loss from
continuing operations for the six month period remained constant but was
effected by a decrease in total revenues offset by a decrease in total expenses.
Total revenues for the three month period decreased due to a decrease in rental
income and a decrease in casualty gain. Total revenue for the six month period
decreased due to decreases in rental and other income. Rental income for both
periods decreased due to a decrease in occupancy partially offset by an increase
in the average rental rates at The Lakes Apartments. Other income decreased due
to a decrease in lease cancellation fees at The Lakes Apartments.
In October 2003, the Partnership's investment property, The Lakes Apartments,
incurred damage to four apartment units as a result of a fire. As a result of
the damage, approximately $32,000 of fixed assets and $26,000 of accumulated
depreciation were written off resulting in a net write off of approximately
$6,000. The property received approximately $40,000 in insurance proceeds from
the insurance company to repair the damaged units. For financial statement
purposes, a casualty gain of approximately $34,000 was recognized during the six
months ended June 30, 2004 as a result of the difference between the proceeds
received and the net book value of the assets written off.
In December 2002, one of the Partnership's investment properties, The Lakes,
incurred damages to its buildings as a result of a hailstorm. As a result of the
damage, approximately $26,000 of fixed assets and $20,000 of accumulated
depreciation were written off resulting in a net write off of approximately
$6,000. The property received approximately $39,000 in proceeds from the
insurance company to repair the damaged units. For financial statement purposes,
a casualty gain of approximately $33,000 was recognized during the six months
ended June 30, 2003 as a result of the difference between the proceeds received
and the net book value of the assets written off.
Total expenses decreased for the three and six months ended June 30, 2004 due to
decreases in operating and general and administrative expenses. Operating
expenses decreased due to decreases in administrative and maintenance expenses
partially offset by an increase in property expenses. Administrative expenses
decreased due to the accrual in 2003 for a projected OSHA penalty arising from
various citations at The Lakes Apartments. The penalty was settled during the
six months ended June 30, 2004 for approximately $25,000 and the reserve in
excess of estimated legal costs was reversed. Maintenance expense decreased due
to a decrease in contract labor and repairs at The Lakes Apartments. Property
expense increased due to an increase in payroll and related benefits at The Lake
Apartments.
General and administrative expenses decreased due to decreases in management
reimbursements paid to the General Partner, as allowed under the Partnership
Agreement and in Partnership management fees due to no cash from operations
being distributed in 2004. For 2004 and 2003, costs associated with the
quarterly and annual communications with investors and regulatory agencies and
the annual audit required by the Partnership Agreement are also included in
general and administrative expenses.
Liquidity and Capital Resources
At June 30, 2004, the Partnership had cash and cash equivalents of approximately
$348,000 compared to approximately $745,000 at June 30, 2003. Cash and cash
equivalents decreased approximately $16,000 from December 31, 2003 due to
approximately $332,000 and $184,000 of cash used in operating and investing
activities, respectively, partially offset by approximately $500,000 of cash
provided by financing activities. Cash used in investing activities consisted of
property improvements and replacements and net deposits to restricted escrows
maintained by the mortgage lender partially offset by insurance proceeds
received. Cash provided by financing activities consisted of advances received
from an affiliate of the General Partner. The Partnership invests its working
capital reserves in interest bearing accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership and to comply with Federal,
state, and local legal and regulatory requirements. The General Partner monitors
developments in the area of legal and regulatory compliance. For example, the
Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures
with regard to governance, disclosure, audit and other areas. In light of these
changes, the Partnership expects that it will incur higher expenses related to
compliance, including increased legal and audit fees. Capital improvements
planned for the Partnership's property are detailed below.
The Lakes Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $163,000 of capital improvements at The Lakes Apartments,
consisting primarily of major landscaping, fire safety equipment, exterior
painting, casualty repairs and water heater, appliance and floor covering
replacements. These improvements were funded from operating cash flow and
insurance proceeds. The Partnership evaluates the capital improvement needs of
the property during the year and currently expects to complete an additional
$167,000 in capital improvements during the remainder of 2004. Additional
capital improvements may be considered and will depend on the physical condition
of the property as well as replacement reserves and anticipated cash flow
generated by the property.
Additional capital expenditures will be incurred only if cash is available from
operations and Partnership reserves. To the extent that such budgeted capital
improvements are completed, the Partnership's distributable cash flow, if any,
may be adversely affected at least in the short term.
The Partnership's assets are thought to be sufficient for any near-term needs
(exclusive of capital improvements) of the Partnership. The mortgage
indebtedness encumbering the investment property of approximately $12,240,000
requires monthly interest only payments until December 1, 2005 at which time a
balloon payment is due. The General Partner will attempt to refinance such
indebtedness and/or sell the property prior to such maturity date. If the
property cannot be refinanced or sold for a sufficient amount, the Partnership
will risk losing the property through foreclosure.
The Partnership distributed the following amounts during the six months ended
June 30, 2004 and 2003 (in thousands, except per unit data):
Six Months Per Limited Six Months Per Limited
Ended Partnership Ended Partnership
June 30, 2004 Unit June 30, 2003 Unit
Operations $ -- $ -- $ 317 $ 6.38
Sale proceeds from
Breckinridge Square -- -- 4,315 75.44
$ -- $ -- $4,632 $81.82
The Partnership's cash available for distribution is reviewed on a monthly
basis. Future cash distributions will depend on the levels of net cash generated
from operations, the availability of cash reserves, and the timing of debt
maturity, refinancing, and/or property sale. There can be no assurance that the
Partnership will generate sufficient funds from operations, after required
capital expenditures, to permit any distributions to its partners during the
remainder of 2004 or subsequent periods.
Other
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates owned 32,142.75 limited partnership units
(the "Units") in the Partnership representing 65.34% of the outstanding Units at
June 30, 2004. A number of these Units were acquired pursuant to tender offers
made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates
will acquire additional Units in exchange for cash or a combination of cash and
units in AIMCO Properties, L.P., the operating partnership of AIMCO, either
through private purchases or tender offers. Pursuant to the Partnership
Agreement, unit holders holding a majority of the Units are entitled to take
action with respect to a variety of matters that include, but are not limited
to, voting on certain amendments to the Partnership Agreement and voting to
remove the General Partner. As a result of its ownership of 65.34% of the
outstanding Units, AIMCO and its affiliates are in a position to control all
such voting decisions with respect to the Partnership. Although the General
Partner owes fiduciary duties to the limited partners of the Partnership, the
General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As
a result, the duties of the General Partner, as general partner, to the
Partnership and its limited partners may come into conflict with the duties of
the General Partner to AIMCO, as its sole stockholder.
Critical Accounting Policies and Estimates
The financial statements are prepared in accordance with accounting principles
generally accepted in the United States which require the Partnership to make
estimates and assumptions. The Partnership believes that of its significant
accounting policies, the following may involve a higher degree of judgment and
complexity.
Impairment of Long-Lived Assets
Investment property is recorded at cost, less accumulated depreciation, unless
considered impaired. If events or circumstances indicate that the carrying
amount of a property may be impaired, the Partnership will make an assessment of
its recoverability by estimating the undiscounted future cash flows, excluding
interest charges, of the property. If the carrying amount exceeds the aggregate
future cash flows, the Partnership would recognize an impairment loss to the
extent the carrying amount exceeds the fair value of the property.
Real property investments are subject to varying degrees of risk. Several
factors may adversely affect the economic performance and value of the
Partnership's investment property. These factors include, but are not limited
to, changes in the national, regional and local economic climate; local
conditions, such as an oversupply of multifamily properties; competition from
other available multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
Rental income attributable to leases is recognized monthly as it is earned. The
Partnership evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
The Partnership will offer rental concessions during particularly slow months or
in response to heavy competition from other similar complexes in the area. Any
concessions given at the inception of the lease are amortized over the life of
the lease.
ITEM 3. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. The Partnership's management, with the
participation of the principal executive officer and principal financial officer
of the General Partner, who are the equivalent of the Partnership's principal
executive officer and principal financial officer, respectively, has evaluated
the effectiveness of the Partnership's disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and principal financial officer of the General Partner, who are the
equivalent of the Partnership's principal executive officer and principal
financial officer, respectively, have concluded that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Partnership's internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its General Partner and several of
their affiliated partnerships and corporate entities. The action purported to
assert claims on behalf of a class of limited partners and derivatively on
behalf of a number of limited partnerships (including the Partnership) that are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia Financial Group, Inc.
("Insignia") and entities that were, at one time, affiliates of Insignia; past
tender offers by the Insignia affiliates to acquire limited partnership units;
management of the partnerships by the Insignia affiliates; and the series of
transactions which closed on October 1, 1998 and February 26, 1999 whereby
Insignia and Insignia Properties Trust, respectively, were merged into AIMCO.
The plaintiffs sought monetary damages and equitable relief, including judicial
dissolution of the Partnership. In addition, during the third quarter of 2001, a
complaint (the "Heller action") was filed against the same defendants that are
named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or
about August 6, 2001, plaintiffs filed a first amended complaint. The Heller
action was brought as a purported derivative action, and asserted claims for,
among other things, breach of fiduciary duty, unfair competition, conversion,
unjust enrichment, and judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the partnership interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners with the independent appraisals at the time of these tenders. The
proposed settlement also provided for the limitation of the allowable costs
which the General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
("Objector") filed an appeal seeking to vacate and/or reverse the order
approving the settlement and entering judgment thereto. On November 24, 2003,
the Objector filed an application requesting the Court order AIMCO to withdraw
settlement tender offers it had commenced, refrain from making further offers
pending the appeal and auction any units tendered to third parties, contending
that the offers did not conform with the terms of the Settlement. Counsel for
the Objector (on behalf of another investor) had alternatively requested the
Court take certain action purportedly to enforce the terms of the settlement
agreement. On December 18, 2003, the Court heard oral argument on the motions
and denied them both in their entirety.
On January 28, 2004, Objector filed his opening brief in his pending appeal. On
April 23, 2004, the General Partner and its affiliates filed a response brief in
support of the settlement and the judgment thereto. Plaintiffs have also filed a
brief in support of the settlement. On June 4, 2004, Objector filed a reply to
the briefs submitted by the General Partner and Plaintiffs. No hearing has been
scheduled in the matter.
The General Partner does not anticipate that any costs to the Partnership,
whether legal or settlement costs, associated with these cases will be material
to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the General Partner,
was served with a complaint in the United States District Court, District of
Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor
Standards Act ("FLSA") by failing to pay maintenance workers overtime for all
hours worked in excess of forty per week. On March 5, 2004 Plaintiffs filed an
amended complaint also naming NHP Management Company, which is also an affiliate
of the General Partner. The complaint is styled as a Collective Action under the
FLSA and seeks to certify state subclasses in California, Maryland, and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate maintenance workers for time that they were required
to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P.
failed to comply with the FLSA in compensating maintenance workers for time that
they worked in responding to a call while "on-call". The defendants have filed
an answer to the amended complaint denying the substantive allegations. Some
discovery has taken place and settlement negotiations continue. Although the
outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe
that the ultimate outcome will have a material adverse effect on its financial
condition or results of operations taken as a whole. Similarly, the General
Partner does not believe that the ultimate outcome will have a material adverse
effect on the Partnership's financial condition or results of operations taken
as a whole.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
See Exhibit Index attached.
b) Reports on Form 8-K filed during the quarter ended June 30,
2004:
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSOLIDATED CAPITAL GROWTH FUND
By: CONCAP EQUITIES, INC.
General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
By: /s/Stephen B. Waters
Stephen B. Waters
Vice President
Date: August 13, 2004
EXHIBIT INDEX
Exhibit
3 Certificate of Limited Partnership, as amended to date.
10.1 Property Management Agreement No. 201 dated October 23,
1990, by and between the Partnership and CCEC
(Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1990).
10.2 Property Management Agreement No. 302 dated October 23,
1990, by and between the Partnership and CCEC
(Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1990).
10.3 Property Management Agreement No. 401 dated October 23,
1990, by and between the Partnership and CCEC
(Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1990).
10.4 Bill of Sale and Assignment dated October 23, 1990, by and
between CCEC and ConCap Services Company (Incorporated by
reference to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1990).
10.5 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCEC and ConCap Management Limited Partnership
("CCMLP") (Incorporated by reference to the Quarterly Report
on Form 10-Q for the quarter ended September 30, 1990).
10.6 Assignment and Agreement as to Certain Property Management
Services dated October 23, 1990, by and between CCMLP and
ConCap Capital Company (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended September
30, 1990).
10.7 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCMLP and Horn-Barlow Companies (200 Series of
Property Management Contracts), (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.8 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCMLP and Metro ConCap, Inc. (300 Series of
Property Management Contracts), (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.9 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCMLP and R&B Realty Group (400 Series of Property
Management Contracts) (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended September
30, 1999).
10.10 Assignment and Assumption Agreement dated September 1, 1991,
by and between the Partnership and CCGF Associates, Ltd.
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.11 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between the Partnership and
Horn-Barlow Companies (the "Horn-Barlow Construction
Management Agreement"). (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31,
1991).
10.12 Assignment and Assumption Agreement dated September 1, 1991,
by and between the Partnership and CCGF Associates, Ltd.
(Horn-Barlow Construction Management Agreement). (Incorporated
by reference to the Annual Report on Form 10-K for the year
ended December 31, 1991).
10.13 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between the Partnership and Metro
ConCap, Inc. (Incorporated by reference to the Annual Report
on Form 10-K for the year ended December 31, 1991).
10.14 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between the Partnership and R&B
Apartment Management Company, Inc. (Incorporated by reference
to the Annual Report on Form 10-K for the year ended December
31, 1991).
10.15 Investor Services Agreement dated October 23, 1990, by and
between the Partnership and CCEC (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.16 Assignment and Assumption Agreement (Investor Services
Agreement) dated October 23, 1990, by and between CCEC and
ConCap Services Company (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31,
1990).
10.17 Letter of Notice dated December 20, 1991, from
Partnership Services, Inc. ("PSI") to the Partnership
regarding the change in ownership and dissolution of
ConCap Services Company whereby PSI assumed the Investor
Services Agreement. (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December
31, 1991).
10.18 Financial Services Agreement dated October 23, 1990, by and
between the Partnership and CCEC (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.19 Assignment and Assumption Agreement (Financial Service
Agreement) dated October 23, 1990, by and between CCEC and
ConCap Capital Company (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended September
30, 1990).
10.20 Letter of Notice dated December 20, 1991, from PSI to the
Partnership regarding the change in ownership and dissolution
of ConCap Captial Company whereby PSI assumed the Financial
Services Agreement (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December 31, 1991).
10.21 Property Management Agreement No. 414 dated May 13, 1993, by
and between the Partnership and Coventry Properties, Inc.
(Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1993).
10.22 Assignment and Assumption Agreement (Property Management
Agreement No. 414) dated May 13, 1993, by and between
Coventry Properties, Inc., R&B Apartment Management
Company, Inc., and Partnership Services, Inc.
(Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1993).
10.23 Assignment Agreement as to Certain Property Management
Services dated May 13, 1993, by and between Coventry
Properties, Inc. and Partnership Services, Inc.
(Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1993).
10.24 Property Management Agreement No. 506 dated June 1, 1993,
by and between the Partnership and Coventry Properties,
Inc.
10.25 Assignment and Assumption Agreement as to Certain
Property Management Services dated November 17, 1993, by
and between Coventry Properties, Inc. and Partnership
Services, Inc.
10.27 Assignment and Assumption Agreement as to Certain
Property Management Services dated November 17, 1993, by
and between Coventry Properties, Inc. and Partnership
Services, Inc.
10.28 Multifamily Note dated November 30, 1995 between
Consolidated Capital Growth Fund, a California limited
partnership, and Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, A Division of Lehman Brothers Holdings, Inc.
10.29 Multifamily Note dated November 30, 1995 between
Consolidated Capital Growth Fund, a California limited
partnership, and Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, A Division of Lehman Brothers Holdings, Inc.
10.30 Multifamily Note dated November 30, 1995 between
Consolidated Capital Growth Fund, a California limited
partnership, and Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, A Division of Lehman Brothers Holdings, Inc.
10.31 Multifamily Note dated November 1, 1996 between
Consolidated Capital Growth Fund, a California limited
partnership, and Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, A Division of Lehman Brothers Holdings, Inc.
10.32 Purchase and Sale Contract between Registrant and
Brookside Properties, Inc., dated November 22, 2002.
10.33 First Amendment to Purchase and Sale Contract between
Registrant and Brookside Properties, Inc., dated November
22, 2002.
10.34 Second Amendment to Purchase and Sale Contract between
Registrant and Brookside Properties, Inc., dated November
22, 2002.
10.35 Assignment of Purchase Agreement between Brookside
Properties, Inc. and Breckinridge Multifamily, LLC, dated
January 16, 2003.
10.36 Purchase and Sale Contract between Registrant and Churchill
Park Investors, LLC, dated May 7, 2003.
10.37 Reinstatement and Amendment to Purchase and Sale Contract
between Registrant and Churchill Park Investors, LLC dated
June 24, 2003.
10.38 Purchase and Sale Contract between Registrant and FF Realty,
LLC, dated June 6, 2003.
10.39 Reinstatement and Amendment to Purchase and Sale Contract
between Registrant and FF Realty, LLC dated July 11, 2003.
10.40 Second Amendment to Purchase and Sale Contract between
Registrant and FF Realty, LLC dated August 15, 2003.
10.41 Escrow Agreement between Registrant and FF Realty, LLC dated
June 6, 2003.
10.42 Assignment and Assumption of Real Estate Sales Agreement
between FF Realty, LLC and Fairfield Doral Springs, LLC dated
August 22, 2003.
31.1 Certification of equivalent of Chief Executive Officer
pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a),
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.2 Certification of equivalent of Chief Financial Officer
pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a),
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
Exhibit 31.1
CERTIFICATION
I, Martha L. Long, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Consolidated
Capital Growth Fund;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the small business issuer as of, and for, the periods presented in this
report;
4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based
on such evaluation; and
(c) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's
ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business
issuer's internal control over financial reporting.
Date: August 13, 2004
/s/Martha L. Long
Martha L. Long
Senior Vice President of ConCap
Equities Inc., equivalent of the chief
executive officer of the Partnership
Exhibit 31.2
CERTIFICATION
I, Stephen B. Waters, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Consolidated
Capital Growth Fund;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the small business issuer as of, and for, the periods presented in this
report;
4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based
on such evaluation; and
(c) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's
ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business
issuer's internal control over financial reporting.
Date: August 13, 2004
/s/Stephen B. Waters
Stephen B. Waters
Vice President of ConCap Equities Inc.,
equivalent of the chief financial
officer of the Partnership
Exhibit 32.1
Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-QSB of Consolidated Capital
Growth Fund (the "Partnership"), for the quarterly period ended June 30, 2004 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), Martha L. Long, as the equivalent of the chief executive officer of
the Partnership, and Stephen B. Waters, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership.
/s/Martha L. Long
Name: Martha L. Long
Date: August 13, 2004
/s/Stephen B. Waters
Name: Stephen B. Waters
Date: August 13, 2004
This certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.