SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 1, 1998
BOSTON CAPITAL TAX CREDIT FUND IV L.P.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-26200 04-3208648
(Commission File Number) (IRS Employer Identification No.)
c/o Boston Capital Partners, Inc.,
One Boston Place, Boston, Massachusetts 02108-4406
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 624-8900
None
(Former name or former address, if changed since last report)
Item 5. Other Events
As of May 1, 1998 Boston Capital Tax Credit Fund IV L.P., a
Delaware limited partnership, specifically Series 32 thereof
(the Partnership) entered into various agreements relating to
Pyramid Four Limited Partnership, a Missouri limited partnership
(the Operating Partnership), including the Agreement of Limited
Partnership of the Operating Partnership dated as of May 1, 1998
(the Operating Partnership Agreement), pursuant to which the
Partnership acquired a limited partner interest in the Operating
Partnership. Capitalized terms used and not otherwise defined
herein have their meanings set forth in the Operating Partnership
Agreement, a copy of which is attached hereto as Exhibit (2)(a).
The Operating Partnership owns and has constructed a forty-
eight (48) - unit apartment complex located at 3302-3310 South
Sterling Avenue, Independence, Missouri, which is known as
Sterling Creek Apartments (the Apartment Complex). The Apartment
Complex consists of six (6) buildings containing twenty-four
(24) 2-bedroom units (one unit has been designated a manager
unit) and twenty-four (24) 3-bedroom units. Amenities include a
playground and washer/dryer connections in all of the units.
Construction of the Apartment Complex was completed in May, 1999,
with 100% Occupancy projected for December, 1999.
The Operating Partnership is receiving construction
financing in the amount of $1,328,315 (the Construction Mortgage)
from Midland Mortgage Investment Corporation. The Construction
Mortgage carries an interest rate of prime plus two percent (2%)
and has a twenty-four (24) month term. The Operating Partnership
expects to receive permanent financing in the amount of $685,000
(the Permanent First Mortgage) from Midland Mortgage Investment
Corporation. The Permanent First Mortgage is expected to bear
interest at the Fannie Mae LIHTC rate plus fifty (50) basis
points and to have a thirty (30) - year term. Finally, the
Missouri Housing Development Commission provided a HOME grant to
the Operating Partnership in the amount of $200,000.
It is expected that 100% of the rental apartment units in
the Apartment Complex will qualify for the low-income housing tax
credit (the Tax Credits) under Section 42 of the Internal Revenue
Code of 1986, as amended (the Code).
The General Partner of the Operating Partnership is Phillips
Development Corporation, an Arkansas corporation. The Principals
of the General Partner are Chester D. Phillips (95%) and
Elizabeth S. Small (5%). Phillips Development Corporation served
as the Developer of the Apartment Complex and serves as the
Management Agent for the Apartment Complex. In addition, Chester
Phillips Construction Company, Inc., a wholly-owned subsidiary of
Phillips Development Corporation, served as the Builder of the
Apartment Complex. Phillips Development Corporation (and related
subsidiaries) has extensive development, construction and project
management experience. As of April, 1998, Phillips Development
Corporation had developed and managed in excess of 1,400 multi-
family units, 1,006 of which qualified for low income housing tax
credits.
The Partnership acquired its interest in the Operating
Partnership directly from the Operating Partnership in
consideration of an agreement to make a Capital Contribution of
$2,073,594 to the Operating Partnership in three installments as
follows:
(1) $1,693,431 (the First Installment) on the latest to
occur of (A) the Admission Date; (B) receipt of the
Permanent Mortgage Commitment and the Grant Commitment; or
(C) closing of the Construction Mortgage;
(2) $-0- (the Second Installment) on the latest to occur
of (A) the Completion Date; (B) Cost Certification; (C)
receipt of a current endorsement Title Policy; (D) receipt
of the Construction Contract Payment Letter; (E) receipt of
an estoppel letter from the Construction Lender; (F)
compliance with Due Diligence recommendations; (G) or
satisfaction of all the conditions to the payment of the
First Installment;
(3) $239,044 (the Third Installment) on the latest to
occur of (A) Initial 100% Qualified Occupancy Date; (B)
achievement of the Rental Achievement; (C) Permanent
Mortgage Commencement; (D) State Designation; or (E)
satisfaction of all the conditions to the payment of the
First and Second Installments; and
(4) $141,119 (the Fourth Installment) on the latest to
occur of (A) Rental Achievement Confirmation or (B)
satisfaction of all the conditions to the payment of the
First Second and Third Installments.
All Installments have been paid in by the Partnership.
The total Capital Contribution of the Partnership to the
Operating Partnership is based on the Operating Partnership
receiving $2,880,280 of Tax Credits during the 11-year period
commencing in 1999 of which 99.99% ($2,879,990) will be allocated
to the Partnership as the Investment Limited Partner of the
Operating Partnership.
The total Capital Contribution of Missouri Affordable
Housing Fund IX, L.P. (the Missouri Limited Partner) to the
Operating Partnership is $748,790; $654,827 of which is payable
for the Second Installment and $93,958 of which is payable for
the Third Installment ($5.00 was paid to the Operating
Partnership on the Admission Date). The total contribution of
the Missouri Limited Partner to the Operating Partnership is
based on the Missouri Limited Partner receiving $2,879,990 of
Missouri Tax Credits during the 11-year period commencing in 1999
of which all 100% will be allocated to the Missouri Limited
Partner.
The Partnership believes that the Apartment Complex is
adequately insured.
Ownership interests in the Operating Partnership are as
follows, subject in each case to certain priority allocations and
distributions as set forth in the Operating Partnership
Agreement:
Profits, Losses and
Tax Credits from Capital Cash Missouri
Normal Operations Transactions Flow Credits
General Partner .01% 80% 80% 0%
Investment
Limited
Partner 99.99% 19.998% 20% 0%
Special
Limited
Partner 0% .001% 0% 0%
Missouri Limited
Partner 0% .001% 0% 100%
The Special Limited Partner of the Operating Partnership is BCTC
94, Inc., (an affiliate of the Partnership).
The Partnership used the funds obtained from the payments of
the holders of its beneficial assignee certificates to make the
acquisition of its interest in the Operating Partnership.
BCCLP or an Affiliate thereof, will receive an Asset
Management Fee commencing in 2000 from the Operating Partnership
for services in connection with the Operating Partnership's
accounting matters and the preparation of tax returns and reports
to the Partnership in the annual amount of $2,000. The Asset
Management Fee for each Fiscal Year will be payable from Cash
Flow in the manner and priority set forth in Section 10.2(a) of
the Operating Partnership Agreement; provided, however, that if
in any fiscal year, Cash Flow is insufficient to pay the full
amount of the Asset Management Fee, the unpaid portion thereof
shall accrue and be payable on a cumulative basis in the first
fiscal year in which there is sufficient Cash Flow or Capital
Proceeds as provided in Article X of the Operating Partnership
Agreement.
The Operating Partnership shall pay to the General Partners
a non-cumulative fee (the Annual Partnership Management
Fee) commencing in 2000 for services in connection with the
administration of the day-to-day business of the Operating
Partnership in an annual amount equal to $2,000. The Partnership
Management Fee for each fiscal year of the Operating Partnership
shall be payable from Cash Flow in the manner and priority set
forth in Section 10.2(a) of the Operating Partnership Agreement
to the extent Cash Flow is available therefor for such year.
In consideration of its consultation, advice and other
services in connection with the construction and development of
the Apartment Complex, the Operating Partnership will pay the
General Partners a fee (the Construction and Development Fee) in
the principal amount of $474,121 pursuant to the terms of a
Development Agreement dated April 30, 1998 as modified from time
to time. The Construction and Development Fee shall be payable
$333,002 from the proceeds of the Third Installment and the
Missouri Capital Contribution and $141,119 from the proceeds of
the Fourth Installment.
The Builder of the Apartment Complex will receive a total
compensation of $2,706,800 which includes Builder's Profit of
$95,000. The Management Agent of the Apartment Complex will
receive a Management Fee equal to $30.00 per occupied unit mer
month.
Item 7. Exhibits.
(c) Exhibits.
(1) (a)* Form of Dealer-Manager Agreement between Boston
Capital Services, Inc. and the Registrant (including, as
an exhibit thereto, the form of Soliciting Dealer Agreement)
(2) (a) Pyramid Four Limited Partnership Agreement of Limited
Partnership
(2) (b) Pyramid Four Limited Partnership Certification and
Agreement.
(2) (c) Development Agreement by and between Pyramid Four
Limited Partnership and Phillips Development Corporation
(4) (a)** Agreement of Limited Partnership of the Partnership
(16) None
(17) None
(20) None
(23) None
(24) None
(27) None
* Incorporated by reference to Exhibit (1) to Registration Statement
No. 33-70564 on Form S-11, as filed with the Securities and Exchange
Commission.
** Incorporated by reference to Exhibit (4) to Registration Statement
No. 33-70564 on Form S-11, as filed with the Securities and Exchange
Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereto duly authorized.
Dated: February 16, 2000
BOSTON CAPITAL TAX CREDIT FUND IV
L.P.
By: Boston Capital Associates IV
L.P.,
its General Partner
By: C&M Associates, d/b/a Boston
Capital Associates, its
General Partner
By: /s/ Herbert F. Collins
Herbert F. Collins, Partner