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 September 30, 2005
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________to _________
Commission file number 0-15740
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
Delaware 04-2924048
(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 (1) 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 ___
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes __ No X_
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2005
Assets
Cash and cash equivalents $ 489
Receivables and deposits 239
Other assets 998
Investment property:
Land $ 6,357
Buildings and related personal property 83,046
89,403
Less accumulated depreciation (57,494) 31,909
$ 33,635
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 440
Tenant security deposit liabilities 216
Accrued property taxes 216
Other liabilities 606
Due to affiliates (Note B) 1,152
Mortgage notes payable 52,715
Partners' Deficit:
General partner $ (1,496)
Limited partners (566 units issued and outstanding) (20,214) (21,710)
$ 33,635
See Accompanying Notes to Financial Statements
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Revenues:
Rental income $ 2,856 $ 3,273 $ 9,072 $ 9,453
Other income 376 406 1,185 1,183
Total revenues 3,232 3,679 10,257 10,636
Expenses:
Operating 1,273 1,324 3,809 3,755
General and administrative 125 116 369 367
Depreciation 952 964 2,880 2,886
Interest 653 1,035 2,617 3,129
Property taxes 121 248 583 672
Total expenses 3,124 3,687 10,258 10,809
Net income (loss) $ 108 $ (8) $ (1) $ (173)
Net income (loss) allocated to
general partner (3%) $ 3 $ -- $ -- $ (5)
Net income (loss) allocated to
limited partners (97%) 105 (8) (1) (168)
$ 108 $ (8) $ (1) $ (173)
Net income (loss) per limited
partnership unit $ 185.51 $ (14.13) $ (1.77) $ (296.82)
Distributions per limited
partnership unit $ -- $ -- $ -- $2,030.04
See Accompanying Notes to Financial Statements
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 566 $ -- $ 47,533 $ 47,533
Partners' deficit at
December 31, 2004 566 $(1,496) $(20,213) $(21,709)
Net loss for the nine months
ended September 30, 2005 -- -- (1) (1)
Partners' deficit
at September 30, 2005 566 $(1,496) $(20,214) $(21,710)
See Accompanying Notes to Financial Statements
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
2005 2004
Cash flows from operating activities:
Net loss $ (1) $ (173)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 2,880 2,886
Amortization of loan costs 36 36
Change in accounts:
Receivables and deposits (33) 33
Other assets (144) (153)
Accounts payable 347 124
Tenant security deposit liabilities (5) 4
Accrued property taxes 216 212
Other liabilities 5 (68)
Due to affiliates 289 --
Net cash provided by operating activities 3,590 2,901
Cash flows used in investing activities:
Property improvements and replacements (2,770) (754)
Cash flows from financing activities:
Payments on mortgage notes payable (1,420) (1,318)
Advances from affiliate 513 --
Distributions to partners -- (1,185)
Net cash used in financing activities (907) (2,503)
Net decrease in cash and cash equivalents (87) (356)
Cash and cash equivalents at beginning of period 576 973
Cash and cash equivalents at end of period $ 489 $ 617
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,992 $ 3,093
Supplemental disclosure of non-cash activity:
Property improvements and replacements included in
accounts payable $ 89 $ --
At December 31, 2004 and 2003, property improvements and replacements and
accounts payable were adjusted by approximately $314,000 and $16,000,
respectively, for non-cash activity.
See Accompanying Notes to Financial Statements
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of Riverside Park Associates
Limited Partnership (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 Item 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 AIMCO/Riverside Park Associates, GP, LLC
("AIMCO GP" or the "General Partner"), a wholly-owned subsidiary of NHP
Management Company ("NHP"), all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and nine month periods ended September 30, 2005
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2005. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the year ended December 31, 2004. AIMCO GP and NHP are
affiliates of Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust.
On December 11, 2003, NHP, a Delaware corporation, entered into a Redemption and
Contribution Agreement (the "Agreement") with Winthrop Financial Associates, A
Limited Partnership, a Maryland limited partnership, ("Winthrop"), which was the
previous general partner of the Partnership, with respect to the acquisition of
its general partner interest in the Partnership (the "GP Interest").
As of the time of the execution of the Agreement and until such time as the
transfer of the GP Interest from Winthrop to AIMCO GP was effective, NHP was
vested with the authority to, subject to certain limitations, cause Winthrop to
take such actions as it deemed necessary and advisable in connection with the
activities of the Partnership. The transfer of the GP Interest from Winthrop to
AIMCO GP became effective on April 30, 2004. As used herein, the term "General
Partner" shall mean Winthrop, with respect to matters occurring prior to April
30, 2004 and AIMCO GP for matters occurring from and after April 30, 2004.
Note B - Transactions with Affiliated Parties
The Partnership has no employees and depends on NHP and its affiliates for the
management and administration of all Partnership activities. The Partnership
Agreement provides for certain payments to affiliates for services based on a
percentage of revenue and an annual partnership and investor service fee of
$110,000 subject to a 6% annual increase. For 2005 and 2004, the annual
partnership and investor service fee is estimated at approximately $296,000 and
$279,000, respectively.
Affiliates of NHP receive 4% of gross receipts from the Partnership's investment
property as compensation for providing property management services. The
Partnership paid to such affiliates approximately $412,000 and $420,000 for the
nine months ended September 30, 2005 and 2004, respectively, which are included
in operating expenses.
Affiliates of NHP charged the Partnership for reimbursement of accountable
administrative expenses amounting to approximately $354,000 and $329,000 for the
nine months ended September 30, 2005 and 2004, respectively, which are included
in general and administrative expenses and investment property. These amounts
include the annual partnership and investor service fee discussed above. The
portion of these reimbursements included in investment property for the nine
months ended September 30, 2005 and 2004 are fees related to construction
management services provided by an affiliate of NHP of approximately $10,000 and
$1,000, respectively. The construction management service fees are calculated
based on a percentage of additions to investment property. At September 30,
2005, approximately $317,000 was owed to affiliates for unpaid reimbursements
and is included in due to affiliates.
In accordance with the Partnership Agreement, an affiliate of NHP advanced the
Partnership approximately $176,000 to fund the redevelopment project at
Riverside Park Apartments (as discussed in "Item 2. Management's Discussion and
Analysis or Plan of Operation") and approximately $337,000 to fund routine
capital improvements during the nine months ended September 30, 2005. During the
fourth quarter of 2004, an affiliate of NHP advanced the Partnership
approximately $287,000 to fund capital improvements. Interest accrues at the
prime rate plus 2% (8.75% at September 30, 2005). Interest expense was
approximately $35,000 for the nine months ended September 30, 2005. At September
30, 2005, the amount of the outstanding advances and accrued interest was
approximately $835,000 and is included in due to affiliates. There were no such
advances made by affiliates of NHP to the Partnership during the nine months
ended September 30, 2004. Subsequent to September 30, 2005, an affiliate of NHP
advanced the Partnership approximately $256,000 to fund operating expenses.
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, general
liability and vehicle liability. The Partnership insures its property above the
AIMCO limits through insurance policies obtained by AIMCO from insurers
unaffiliated with NHP. During the nine months ended September 30, 2005 and 2004,
the Partnership was charged by AIMCO and its affiliates approximately $164,000
and $156,000, respectively, for insurance coverage and fees associated with
policy claims administration.
Note C - Redevelopment of Property
In March 2005, the Partnership began a major redevelopment project at the
property. The property has had difficulty staying competitive and needs to be
updated. Therefore, in an effort to remain competitive in the Fairfax area, a
significant redevelopment project has been started. Based on current
redevelopment plans, NHP expects the redevelopment to be complete in February
2009 at a total cost of approximately $80,000,000. During the construction
period, certain expenses are being capitalized and depreciated over the
remaining life of the property. During the nine months ended September 30, 2005,
approximately $431,000 of interest, approximately $64,000 of real estate taxes,
and approximately $91,000 of other construction period operating costs were
capitalized.
Note D - Contingencies
AIMCO Properties L.P. and NHP Management Company, both affiliates of the General
Partner, are defendants in a lawsuit alleging that they 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. The complaint, filed in the
United States District Court for the District of Columbia, attempts to bring 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. and NHP Management Company failed to
compensate maintenance workers for time that they were required to be "on-call".
Additionally, the complaint alleges AIMCO Properties L.P. and NHP Management
Company failed to comply with the FLSA in compensating maintenance workers for
time that they worked in excess of 40 hours in a week. In June 2005 the Court
conditionally certified the collective action on both the on-call and overtime
issues, which allows the plaintiffs to provide notice of the collective action
to all non-exempt maintenance workers from August 7, 2000 through the present.
Those employees will have the opportunity to opt-in to the collective action,
and AIMCO Properties, L.P. and NHP Management Company will have the opportunity
to move to decertify the collective action. Because the court denied plaintiffs'
motion to certify state subclasses, on September 26, 2005, the plaintiffs filed
a class action with the same allegations in the Superior Court of California
(Contra Costa County). 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 consolidated financial condition or results of
operations. 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.
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.
Environmental
Various Federal, state and local laws subject property owners or operators to
liability for management, and the costs of removal or remediation, of certain
hazardous substances present on a property. Such laws often impose liability
without regard to whether the owner or operator knew of, or was responsible for,
the release or presence of the hazardous substances. The presence of, or the
failure to manage or remedy properly, hazardous substances may adversely affect
occupancy at affected apartment communities and the ability to sell or finance
affected properties. In addition to the costs associated with investigation and
remediation actions brought by government agencies, and potential fines or
penalties imposed by such agencies in connection therewith, the presence of
hazardous substances on a property could result in claims by private plaintiffs
for personal injury, disease, disability or other infirmities. Various laws also
impose liability for the cost of removal, remediation or disposal of hazardous
substances through a licensed disposal or treatment facility. Anyone who
arranges for the disposal or treatment of hazardous substances is potentially
liable under such laws. These laws often impose liability whether or not the
person arranging for the disposal ever owned or operated the disposal facility.
In connection with the ownership, operation and management of its property, the
Partnership could potentially be liable for environmental liabilities or costs
associated with its property.
Mold
The Partnership is aware of lawsuits against owners and managers of multifamily
properties asserting claims of personal injury and property damage caused by the
presence of mold, some of which have resulted in substantial monetary judgments
or settlements. The Partnership has only limited insurance coverage for property
damage loss claims arising from the presence of mold and for personal injury
claims related to mold exposure. Affiliates of NHP have implemented a national
policy and procedures to prevent or eliminate mold from its properties and NHP
believes that these measures will minimize the effects that mold could have on
residents. To date, the Partnership has not incurred any material costs or
liabilities relating to claims of mold exposure or to abate mold conditions.
Because the law regarding mold is unsettled and subject to change NHP can make
no assurance that liabilities resulting from the presence of or exposure to mold
will not have a material adverse effect on the Partnership's financial condition
or results of operations.
SEC Investigation
The Central Regional Office of the United States Securities and Exchange
Commission (the "SEC") continues its formal investigation relating to certain
matters. Although the staff of the SEC is not limited in the areas that it may
investigate, AIMCO believes the areas of investigation have included AIMCO's
miscalculated monthly net rental income figures in third quarter 2003,
forecasted guidance, accounts payable, rent concessions, vendor rebates,
capitalization of payroll and certain other costs, tax credit transactions, and
tender offers for limited partnership interests. AIMCO is cooperating fully.
AIMCO is not able to predict when the investigation will be resolved. AIMCO does
not believe that the ultimate outcome will have a material adverse effect on its
consolidated financial condition or results of operations. Similarly, NHP does
not believe that the ultimate outcome will have a material adverse effect on the
Partnership's financial condition or results of operations.
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 sole asset is a 1,229 unit apartment complex known as
Riverside Park Apartments located in Fairfax County, Virginia. Average occupancy
for the nine months ended September 30, 2005 and 2004 was 87% and 94%,
respectively. NHP attributes the decrease in occupancy to the current
redevelopment project at the property (as discussed in "Results of Operations").
The Partnership's financial results depend 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, NHP 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, NHP 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, NHP may use rental
concessions and rental rate reductions to offset softening market conditions;
accordingly, there is no guarantee that NHP will be able to sustain such a plan.
Further, a number of factors that are outside the control of the Partnership
such as the local economic climate and weather can adversely or positively
affect the Partnership's financial results.
Results of Operations
The Partnership reported net income of approximately $108,000 and net loss of
approximately $1,000 for the three and nine months ended September 30, 2005,
respectively. The Partnership reported net loss of approximately $8,000 and
$173,000 for the three and nine months ended September 30, 2004, respectively.
The decrease in net loss for both the three and nine months ended September 30,
2005 is due to a decrease in total expenses, partially offset by a decrease in
total revenues. The decrease in total expenses for the three months ended
September 30, 2005 is due to decreases in operating, interest and property tax
expenses. The decrease in total expenses for the nine months ended September 30,
2005 is due to decreases in both interest and property tax expense, partially
offset by an increase in operating expenses. Both general and administrative and
depreciation expenses remained relatively constant for both the three and nine
months ended September 30, 2005. The decrease in interest expense for both
periods is due to scheduled principal payments resulting in a lower carrying
balance of the mortgages encumbering the property and interest capitalized at
the property due to the redevelopment project which required 184 units to be
vacated at September 30, 2005 in order to expedite redevelopment (as discussed
below), partially offset by an increase in interest expense on advances from an
affiliate of NHP. The decrease in property tax expense for both periods is due
to the timing and receipt of the tax bill, which affected the tax accrual at the
Partnership's investment property and real estate taxes capitalized at the
property as a result of the redevelopment project. The decrease in operating
expenses for the three months ended September 30, 2005 is primarily due to
operating costs capitalized as a result of the redevelopment project and a
decrease in contract maintenance expense, partially offset by an increase in
utility expenses at the property. The increase in operating expenses for the
nine months ended September 30, 2005 is primarily due to increases in utility
and payroll related expenses, partially offset by a decrease in contract
services and an increase in operating costs capitalized as a result of the
redevelopment project at the property.
The decrease in total revenues for the three months ended September 30, 2005 is
due to decreases in both rental and other income. The decrease in total revenues
for the nine months ended September 30, 2005 is due to a decrease in rental
income. Other income remained relatively constant for the nine months ended
September 30, 2005. The decrease in rental income for both the three and nine
months ended September 30, 2005 is due to the decrease in occupancy, partially
offset by an increase in the average rental rate, at the Partnership's
investment property. The decrease in other income for the three months ended
September 30, 2005 is primarily due to decreases in lease cancellation fees,
corporate housing revenue and laundry income, partially offset by an increase in
utility reimbursements, at the property.
In March 2005, the Partnership began a major redevelopment project at the
property. The property has had difficulty staying competitive and needs to be
updated. Therefore, in an effort to remain competitive in the Fairfax area, a
significant redevelopment project has been started. Based on current
redevelopment plans, NHP expects the redevelopment to be complete in February
2009 at a total cost of approximately $80,000,000. During the construction
period, certain expenses are being capitalized and depreciated over the
remaining life of the property. During the nine months ended September 30, 2005,
approximately $431,000 of interest, approximately $64,000 of real estate taxes,
and approximately $91,000 of other construction period operating costs were
capitalized.
Liquidity and Capital Resources
At September 30, 2005, the Partnership had cash and cash equivalents of
approximately $489,000, compared to approximately $617,000 at September 30,
2004. The decrease in cash and cash equivalents of approximately $87,000, from
December 31, 2004, is due to approximately $2,770,000 of cash used in investing
activities and approximately $907,000 of cash used in financing activities,
partially offset by approximately $3,590,000 of cash provided by operating
activities. Cash used in investing activities consisted of property improvements
and replacements. Cash used in financing activities consisted of payments of
principal made on the mortgages encumbering the Partnership's investment
property, partially offset by advances from an affiliate of NHP. 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 property 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.
During the nine months ended September 30, 2005, the Partnership completed
approximately $1,224,000 of capital improvements arising from the redevelopment
of the property, which includes capitalization of construction period interest
of approximately $431,000, real estate taxes of approximately $64,000 and other
construction period operating costs of approximately $91,000. Additional capital
improvements of approximately $1,321,000 consisted primarily of structural
improvements, exterior building improvements, heating and air conditioning
upgrades, swimming pool upgrades, and floor covering replacement. These
improvements were funded from operations and advances from an affiliate of NHP.
In March 2005, the Partnership began a major redevelopment project at the
property in order for it to remain competitive with other properties in the
Fairfax area. Based on current redevelopment plans, NHP expects the
redevelopment to be complete in February 2009 at a total cost of approximately
$80,000,000. The redevelopment is expected to consist of renovation and
appliance upgrades to each unit and the addition of a new clubhouse and fitness
center. The Partnership expects to fund the redevelopment from operations and
advances from an affiliate of NHP. Certain other routine capital expenditures
are anticipated during the remainder of 2005. Such capital expenditures will
depend on the physical condition of the property as well as anticipated cash
flow generated by the property.
The capital expenditures will be incurred only if cash is available from
operations, Partnership reserves, or advances from affiliates of NHP. To the
extent that 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 first mortgage
indebtedness of approximately $44,144,000 is being amortized over 240 months
until the loan matures on July 1, 2020, at which time the loan is scheduled to
be fully amortized. The second mortgage indebtedness of approximately $8,571,000
is being amortized over 214 months until the loan matures on July 1, 2020, at
which time the loan is scheduled to be fully amortized.
The Partnership distributed the following amounts during the nine months ended
September 30, 2005 and 2004 (in thousands, except per unit data):
Nine Months Ended Per Limited Nine Months Ended Per Limited
September 30, Partnership September 30, Partnership
2005 Unit 2004 Unit
Operations $ -- $ -- $1,185 $2,030.04
Future cash distributions will depend on the levels of cash generated from
operations, refinancing and/or property sale. The Partnership's cash available
for distribution is reviewed on a monthly basis. In light of the amounts accrued
and payable to affiliates of the General Partner at September 30, 2005 and the
redevelopment project in progress, 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 2005 or subsequent periods.
Other
In addition to its indirect ownership of the general partner interests in the
Partnership, AIMCO and its affiliates owned 383.41 limited partnership units
(the "Units") in the Partnership representing 67.74% of the outstanding Units at
September 30, 2005. 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, unitholders 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 67.74% of the
outstanding Units, AIMCO and its affiliates are in a position to control all
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
The Partnership's investment property is recorded at cost, less accumulated
depreciation, unless considered impaired. If events or circumstances indicate
that the carrying amount of the 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
asset.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership will offer rental concessions during particularly slow months or
in response to heavy competition from other similar complexes in the area.
Rental income attributable to leases, net of any concessions, is recognized on a
straight-line basis over the term of the lease. 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.
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
AIMCO Properties L.P. and NHP Management Company, both affiliates of the General
Partner, are defendants in a lawsuit alleging that they 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. The complaint, filed in the
United States District Court for the District of Columbia, attempts to bring 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. and NHP Management Company failed to
compensate maintenance workers for time that they were required to be "on-call".
Additionally, the complaint alleges AIMCO Properties L.P. and NHP Management
Company failed to comply with the FLSA in compensating maintenance workers for
time that they worked in excess of 40 hours in a week. In June 2005 the Court
conditionally certified the collective action on both the on-call and overtime
issues, which allows the plaintiffs to provide notice of the collective action
to all non-exempt maintenance workers from August 7, 2000 through the present.
Those employees will have the opportunity to opt-in to the collective action,
and AIMCO Properties, L.P. and NHP Management Company will have the opportunity
to move to decertify the collective action. Because the court denied plaintiffs'
motion to certify state subclasses, on September 26, 2005, the plaintiffs filed
a class action with the same allegations in the Superior Court of California
(Contra Costa County). 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 consolidated financial condition or results of
operations. 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.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
See Exhibit Index.
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.
RIVERSIDE PARK ASSOCIATES LIMITED
PARTNERSHIP
By: AIMCO/RIVERSIDE PARK ASSOCIATES GP,
LLC, A DELAWARE LIMITED LIABILITY
COMPANY,
General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
By: /s/Stephen B. Waters
Stephen B. Waters
Vice President
Date: November 14, 2005
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
Index to Exhibits
Exhibit
3.1 Riverside Park Associates Limited Partnership Amended and Restated Limited
Partnership Agreement, dated July 15, 1986; incorporated by reference to
the Exhibits to the Registrant's Registration Statement on Form 10, filed
on April 29, 1987. (Commission Partnership file number 0-15740).
3.2 Certificate of Limited Partnership of Riverside Park Associates Limited
Partnership, filed with the Secretary of State of Delaware May 14, 1986;
incorporated by reference to the exhibits to the Registrant's Annual
Report filed on Form 10-K on March 30, 1988.
3.3 Amendment to Amended and Restated Partnership Agreement of Riverside Park
Associates Limited Partnership dated August 23, 1995; incorporated by
reference to the Exhibits to the Registrant's Annual Report filed on Form
10KSB, filed on March 31, 1998.
10(e) Multifamily Note dated June 29, 2000, between Riverside Park Associates
Limited Partnership, a Delaware limited partnership, and Reilly Mortgage
Group, Inc., a District of Columbia corporation. Incorporated by reference
to the Exhibits to the Registrant's Annual Report filed on Form 10-KSB on
March 28, 2001.
10(f) Multifamily Note dated August 2, 2002, by and between Riverside Park
Associates Limited Partnership and Reilly Mortgage Group, Inc., a District
of Columbia corporation; incorporated by reference to the Exhibits to the
Registrant's Quarterly Report filed on Form 10-QSB, on August 14, 2002.
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 of equivalent of Chief Executive Officer and Chief Financial
Officer 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 Riverside Park
Associates Limited Partnership;
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: November 14, 2005
/s/Martha L. Long
Martha L. Long
Senior Vice President of AIMCO/Riverside
Park Associates GP, LLC, 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 Riverside Park
Associates Limited Partnership;
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: November 14, 2005
/s/Stephen B. Waters
Stephen B. Waters
Vice President of AIMCO/Riverside
Park Associates GP, LLC, 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 Riverside Park
Associates Limited Partnership (the "Partnership"), for the quarterly period
ended September 30, 2005 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: November 14, 2005
/s/Stephen B. Waters
Name: Stephen B. Waters
Date: November 14, 2005
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.