FORM 10-K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|X| ANNUAL REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the fiscal year ended December 31,
2000
OR
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition period
from _________ to _________.
Commission File number 0-15755
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FJS PROPERTIES FUND I, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 13-3252067
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
264 Route 537 East, Colts Neck, NJ 07722 (Address of principal
executive offices) (Zip Code)
Registrant's telephone number, including area code 732-542-9209
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Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
NONE N/A
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Securities registered pursuant to Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. N/A No public market exists.
Documents Incorporated by Reference
Prospectus of Registrant, dated June 10, 1985, as supplemented by Supplement
dated November 7, 1985, filed pursuant to Rule 424 under the Securities Act of
1933. Annual Report on Form 10-K of Registrant for the fiscal years ended
December 31, 1986 through December 31, 1999, filed pursuant to section 13 or
15(d) of the Securities Exchange Act of 1934, but each only to the extent
expressly incorporated by reference in Parts I, II and III. Forms 8-K and 8-K/A
filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 on
December 13, 1999, and December 23, 1999, respectively.
PART I
Item 1. Business
Registrant is a Delaware limited partnership formed as of October
5, 1984. FJS Properties, Inc., a Delaware corporation and an affiliate of First
Jersey Securities, Inc. ("First Jersey" or the "Underwriter"), is the general
partner ("General Partner") of the Registrant.
Reference is made to the Prospectus (the "Prospectus") of Registrant
dated June 10, 1985, as supplemented by a Supplement (the "Supplement"), dated
November 7, 1985, which have been filed pursuant to rule 424 under the
Securities Act of 1933, as amended, each of which is incorporated herein by
reference. The Prospectus was filed as part of Registrant's Registration
Statement on Form S-11, pursuant to which 100,000 Units of Limited Partnership
Interest (the "Units") were registered. On May 1, 1986, the sole closing of the
Units, the Registrant received $8,391,500 in Gross Proceeds from the sale of
16,783 Units to investors. Registrant paid $671,320 in underwriting commissions
to First Jersey and a total of $419,575 in organization and offering expenses to
the General Partner.
Registrant owns and operates one 312 unit garden apartment complex,
the Pavilion Apartments ("Pavilion"), located in West Palm Beach, Florida. The
description of the acquisition is set forth in the Prospectus under "Property
Acquisitions" and is incorporated herein by reference. Registrant will not
invest in or acquire any other properties.
For the years ended December 31, 2000, 1999 and 1998, revenues from
Pavilion accounted for approximately 99.6%, 99.4% and 98.9% respectively of
Registrant's gross revenues.
Competition
The real estate business is highly competitive and Pavilion has
active competition from similar properties in the vicinity. Registrant will also
experience competition for potential buyers at such time as it seeks to sell
Pavilion.
Employees
Services are performed by Registrant's employees at Pavilion by ten
full-time and one part-time on site personnel. The personnel are under the
direct supervision of a local unaffiliated management company which in turn is
supervised by the General Partner. Salaries for such on-site personnel are paid
by Registrant or by the local unaffiliated management company from fees received
from Registrant. The General Partner also provides certain supervisory property
management services to Registrant under a management agreement.
Page 1
Tax Legislation
The Tax Reform Act of 1986 (the "1986 Act"), which was enacted on
October 22, 1986, requires that losses from "passive activities" (which includes
any rental activity) may only offset income from "passive activities" Passive
losses in excess of passive income are suspended and are carried over to future
years when they may be deducted against passive income generated by the
Partnership in such year (including gain recognized on the sale of the
Partnership's assets) or against passive income derived by Unitholders from
other sources.
The Revenue Act of 1987 (the "1987 Act") was enacted on December 22,
1987 and provides certain adverse tax consequences for "publicly traded
partnerships." A "publicly traded partnership" is defined as a partnership whose
interests are traded on an established securities market or readily tradable on
a secondary market (or the substantial equivalent thereof). Such a partnership
will be taxed as a corporation (unless at least 90% of its gross income is
derived from certain passive sources, such as real property rents, dividends or
interest) and each tax-exempt entity acquiring an interest in any such
partnership after December 17, 1987 will have all of its share of the
partnership's income attributable to interests acquired after such date treated
as unrelated business income. In addition, the income from such a partnership
would be treated as other than passive income, and losses from any such
partnership could only be offset by income from the same partnership.
The Revenue Act of 1987 adopted provisions which have an adverse
impact on investors in a "publicly traded partnership." A "publicly traded
partnership" is a partnership whose interests are traded on an established
securities market or readily tradable on a secon dary market (or the substantial
equivalent thereof). If the Partnership were classified as such, (i) it may be
taxed as a corporation, (ii) qualified plans and other entities exempt from taxa
tion acquiring interests in the Partnership after December 17, 1987 would have
to treat income derived from the Partnership as unrelated business income, with
the result that the limited partnership interests would be less attractive to
tax-exempt investors (and therefore could be less marketable) or (iii) income
derived from an investment in the Partnership would be treated as other than
passive income, in which case losses from the Partnership could only be offset
by income from the same partnership. The IRS has established alternative safe
harbors that allow interests in a partnership to be transferred or redeemed in
certain circum stances without causing the partnership to be characterized a
"publicly traded partnership." Interests in the Partnership are not listed or
quoted for trading on an established securities exchange. However, it is
possible that transfers of interests could occur in a secondary market in
sufficient amount and frequency to cause the Partnership to be treated as a
"publicly traded partnership." The Partnership has adopted a policy of
prohibiting transfers in secondary market transactions unless, notwithstanding
such transfers, the Partnership will satisfy at least one of the safe harbors.
Such a restriction could impair the ability of an investor to liquidate its
investment quickly. It is anticipated that such policy will remain in effect
until such time, if ever, as further clarification of the Revenue Act of 1987
permits the Partnership to lessen the scope of these restrictions. The General
Partner, if so authorized, will take such steps as are necessary, if any, to
prevent the reclassification of the Partnership as a "publicly traded
partnership."
Page 2
Item 2. Properties
The sole property owned and operated by Registrant is the Pavilion
Apartments (the "Project"), a 312 Unit garden apartment complex located at 401
Executive Center Drive, West Palm Beach, Florida. Registrant will not acquire or
invest in any other properties. Registrant acquired a 50% interest in the
Pavilion on December 31, 1984, and the remaining 50% on January 1, 1985. It owns
Pavilion in fee ownership, subject to a first mortgage.
Pavilion, constructed in 1972, is located on a 15 acre tract and
consists of 312 apartment units containing 286,500 square feet of rentable area
in 11 low-rise buildings. Rental units are available in one, two and three
bedroom plans. There are 108 one-bedroom apartments, 44 two- bedroom apartments
with one bath, 116 two-bedroom apartments with two baths, and 44 three-bedroom
apartments. Ground amenities include a heated swimming pool, lighted tennis
courts, basketball and shuffle-board courts, and a clubhouse with game room,
saunas, lounge and outdoor barbecues. An equipped children's playground is also
provided.
The apartments in the Project are available for rent to residential
tenants, generally under one year leases. No tenant occupies more than one
apartment in the Pavilion except for the West Palm Beach Recovery Center which
occupies 5 Units. Each of such units was leased at the then current market
rents. With substantially all tenants occupying their apartments under one year
leases, it is anticipated that leases for all apartments will expire each year.
The current rent schedule for leases is as follows:
Unit Size1 Monthly Rent2
1 BR/1B $589/$609
2 BR/1B $689/$709
2 BR/2B $709/$729
3 BR/2B $809/$829
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In the opinion of the management of Registrant, the Project is
adequately covered by insurance.
First Mortgage: The existing first mortgage affecting the Project is held
of record by Greenwich Capital Financial Products, Inc., and serviced by Bank
United of Texas FSB, Houston, Texas. As of December 31, 2000, the mortgage had
an unpaid principal balance of approximately $4,560,070. This mortgage was
closed on March 31, 1994, and refinanced the former first mortgage held by The
Bank of Tokyo. At that time, a new loan secured by a first mortgage on the
project was obtained from the Long Beach Bank, FSB, Orange, California, in the
amount of $5,000,000. This loan provides for a term of ten (10) years with an
interest rate of 9.75% per annum. The loan is repayable in equal monthly
installments of $44,556.87 for principal and interest, with a balloon payment
due in March 2004. At maturity
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1BR = Bedroom; B = Bathroom
2Range of rents/unit's rent varies depending on location of unit in the Project.
Page 3
a balance of approximately $4,215,000 will be due. The loan requires deposits
with the lender for real estate taxes, insurance premiums, a debt service
reserve of one month's payment, as well as deposits for replacement reserves for
the project. These deposits are held in interest bearing accounts for the
benefit of Registrant. The loan was not prepayable during the first five years
of its term, and thereafter is prepayable with payment of a penalty based upon a
"rate protection" formula for the lender. The loan requires consent of the
holder to the transfer or sale of the Pavilion Apartments and to certain
transfers of ownership interests in Registrant. For the complete terms and
provisions of this loan see Exhibits 10(m) through 10(s).
The following table sets forth the components of the Pavilion
Apartments upon which depreciation, for Federal Tax purposes, is taken:
Item Tax Basis Rate Method Life
---- --------- ---- ------ ----
Building $6,897,424 4% - 5% ACRS 18 yrs
Improvements $528,798 Fully SL 10 yrs
Depreciated
Improvements $506,692 3.6% MACRS 27.5 yrs
Improvements $103,280 1.6% - 2.8% MACRS 27.5 yrs
Improvements $107,800 0.2% - 1.3% MACRS 27.5 yrs
Furniture/Fixtures $1,048,378 Fully ACRS 5 yrs
Depreciated
Furniture/Fixtures $8,644 Fully MACRS 7 yrs
Depreciated
Furniture/Fixtures $8,896 4.46% MACRS 7 yrs
Furniture/Fixtures $10,336 8.93% MACRS 7 yrs
Furniture/Fixtures $65,649 11.52% MACRS 5 yrs
Furniture/Fixtures $117,749 19.2% MACRS 5 yrs
Furniture/Fixtures $140,787 32.0% MACRS 5 yrs
Furniture/Fixtures $171,376 20.0% MACRS 5 yrs
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Page 4
Ad Valorem Real Estate taxes for the 2000 calendar year were in the
amount of $175,566.30 which was based upon an assessed valuation of $7,000,000
and the following millage rates:
Taxing Authority: Millage
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rate:
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County 4.6000
School State 5.8670
School Local 2.6200
City of West Palm Beach 8.1468
So Fl Water Management Dist. 0.5970
Children's Services Council 0.5000
F.I.N.D. 0.0410
PBC Health Care District 1.0250
Everglades Construction Project 0.1000
County - Debt 0.3362
School - Debt 0.4310
City of West Palm Beach - Debt 0.8169
Total: 25.0809
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In addition a non-advalorem assessment of $17,402.98 was levied by
the Solid Waste Authority against the Pavilion. The aggregate tax of $192,969.28
was paid in the dis counted amount of $185,250.51 in December 2000.
Item 3. Legal Proceedings
There are no material legal proceedings pending against or involving
Registrant or Pavilion.
Item 4. Submission of Matters to a Vote of Security Holders
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No matters were submitted to a vote of security holders during the
2000 calendar year.
Page 5
PART II
Item 5. Market for Registrant's Securities and Related Security Holder Matters
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Units of the Registrant are not publicly traded nor is it
anticipated that a public trading market will develop for the Units. On and as
of December 31, 1997, beneficial interests in an aggregate of 1,843 Units were
acquired from the unaffiliated holders thereof, by three third parties at a
price of $75 per Unit, pursuant to a tender offer filed with the Securities and
Exchange Commission. As of March 15, 2001, there were approximately 674 holders
owning an aggregate of 16,788 Units. The General Partner has established a
policy of limiting transfers of Units in secondary market transactions unless,
notwithstanding such transfers, the Partnership will satisfy one or more
applicable safe harbors prescribed by the Internal Revenue Service to avoid
having the Partnership classified as a publicly traded partnership which could
have adverse tax effects on limited partners. In order to comply with the safe
harbor provisions, the transfer of Units may be restricted.
There were no distributions per Unit of Registrant during the 1985
fiscal year. The Registrant distributed $3.01 per Unit for the 1986 fiscal year,
$4.63 per Unit for 1987, $6.59 per Unit for 1988, $14.72 per Unit for 1989,
$7.75 per Unit for 1990, and $1.97 per Unit for the first quarter of 1991. There
were no distributions made for the second, third or fourth quarters of 1991, for
1992, or for 1993. Distributions aggregating $5.19 and $5.64 per Unit were made
for 1994 and 1995 respectively, and a distribution of $1.54 was made for the
first quarter of 1996. No distributions were made for the remaining quarters of
1996. The reduction in distributions in the years from 1989 through 1991,
resulted from decreasing interest rates and the reduced occupancy levels which
the Pavilion Apartments experienced. When there was cash flow available for
distribution during 1992 and 1993, no distributions were made to retain
available cash which might be required for use in connection with the
refinancing of the existing first mortgage. During the last three quarters of
1996 all available cash flow was utilized for work being done on the Pavilion
Apartments. Distributions of aggregating $5.53 per Unit were made for the first
three quarters of 1997, and no distribution was made for the fourth quarter of
1997 as all available cash flow was utilized for capital improvements at the
Pavilion Apartments. Aggregate distributions of $8.42 per Unit were made for
1998 (including a distribution of $2.19 for the fourth quarter of 1998 which was
made in February 1999). A distribution of $2.29 per Unit was disbursed in May
1999, for the first quarter of 1999. No distributions were made for the
subsequent quarters of 1999 or during 2000, as all available cash flow was
utilized for operations and capital improvements at the Pavilion Apartments.
There are no material legal restrictions set forth in Registrant's
Limited Partnership Agreement, annexed to the Prospectus as Exhibit A thereto
("Partnership Agreement"), upon Registrant's present or future ability to make
distributions.
Page 6
Item 6. Selected Financial Information
The information set forth below presents selected financial data of
Registrant. Additional financial information is set forth in the audited
financial statements and footnotes contained herein.
Years Ended
December 31,
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total Assets $6,799,123 $6,910,861 $7,076,729 $7,258,818 $7,448,953
Mortgage Note
Payable $4,560,070 $4,644,938 $4,722,579 $4,793,033 $4,856,968
Rental Revenue $2,382,348 $2,189,322 $2,081,901 $2,040,543 $1,852,877
Interest Expense -
Mortgages $449,120 $456,410 $463,687 $470,769 $476,199
Net Profit [Loss] ($48,593) ($50,566) $34,952 ($50,582) ($270,996)
Net Cash Provided by
Operating Activities $437,538 $335,890 $233,979 $280,140 $51,495
Net Cash [Used] in
Investing Activities -
Capital Expenditures ($382,454)($423,155) ($134,645) ($80,481) ($10,336)
Net Cash [Used] in
Financing Activities ($84,868) ($153,611) ($176,098) ($157,710) ($89,899)
Profit (Loss) Per
Limited Partnership
Unit ($2.87) ($2.98) $ 2.06 ($2.98) ($15.98)
Distributions Per Limited
Partnership Unit $0.00 $4.48 $6.23 $5.53 $1.88
Weighted Average Number
of Limited Partnership
Units Outstanding 16,788 16,788 16,788 16,788 16,788
Page 7
Item 7. Management's Discussion and Analysis of Financial Conditions and
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Results of Operations
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Liquidity and Capital Resources
As of the present date, Registrant owns one Property, the Pavilion
Apart ments, and does not intend to acquire any other property.
As of May 1, 1986, Registrant admitted as Limited Partners
purchasers of 16,783 Units. Total capital raised was $8,391,500. In addition,
Registrant received accrued interest on the escrow account in the amount of
$82,471. Thus proceeds from the admission of Limited Partners aggregated
$8,473,971.
The Pavilion Apartments are owned by Registrant subject to a first
mortgage loan in the original principal amount of $5,000,000. This loan was
obtained from Long Beach Bank in March 1994, to refinance the previous first
mortgage affecting the property. (See "First Mortgage" above for a description
of the terms of this loan).
Registrant anticipates that cash flow from Pavilion should be
sufficient to permit the Partnership to make the monthly payments on the first
mortgage due prior to maturity and to meet Registrant's monthly operating
expenses, however, should there be a significant decrease in Pavilion's
occupancy or rental rates, or should there be a significant increase in capital
repair/replacement requirements that can be funded from available cash flow and
current reserves, there can be no assurance that Registrant would be able to
obtain sufficient funds to make such payments.
Registrant distributed $3.01 per Unit for the 1986 fiscal year,
$4.63 per Unit for 1987, $6.59 per Unit for 1988, $14.72 per Unit for 1989,
$7.75 per Unit for 1990, and $1.97 per Unit for the first quarter of 1991. There
were no distributions made for the second, third or fourth quarters of 1991, for
1992, or for 1993. Distributions aggregating $5.19 and $5.64 per Unit were made
for 1994 and 1995 respectively, and a distribution of $1.54 was made for the
first quarter of 1996. No distributions were made for the remaining quarters of
1996. The reduction in distributions in the years from 1989 through 1991,
resulted from decreasing interest rates and the reduced occupancy levels which
the Pavilion Apartments experienced. When there was cash flow available for
distribution during 1992 and 1993, no distributions were made to retain
available cash which might be required for use in connection with the
refinancing of the existing first mortgage. During the last three quarters of
1996 all available cash flow was utilized for work being done on the Pavilion
Apartments. Distributions of aggregating $5.53 per Unit were made for the first
three quarters of 1997, and no distribution was made for the fourth quarter of
1997 as all available cash flow was utilized for capital improvements at the
Pavilion Apartments. Aggregate distributions of $8.42 per Unit were made for
1998 (including a distribution of $2.19 for the fourth quarter of 1998 which was
made in February 1999). A distribution of $2.29 per Unit was disbursed in May
1999, for the first quarter of 1999. No distributions were made for the
subsequent quarters of 1999 (see "Operations - 1999 Fiscal Year" below) or
during 2000, as all cash flow was utilized for operations and capital
improvements at the Pavilion Apartments. (See "Operations" below).
Page 8
OPERATIONS
Registrant has operated the Pavilion Apartments, located in West
Palm Beach, Florida, since January 1985.
Management Agreement
The Pavilion Apartments are currently managed by MSL Property
Management Inc., an unaffiliated property manager, under a five year agreement
as extended in January 1999. The agreement will also terminate on the earlier
sale or disposition of the Pavilion Apartments.
2000 Fiscal Year
Rental Revenue for the year ended December 31, 2000, was $2,382,348
as compared with $2,189,322 for the 1999 calendar year. The increase in income
in 2000 reflected increased rental rates for apartments at the project as well
as reduced vacancies and rental allowances, which while in a reduced amount,
were still being utilized to attracted tenants to the Pavilion. Occupancy rates
at the project held in the low to mid 90% range for the 2000 year. As of
February 12, 2000, the Pavilion Apartments had 5 apartments out of 312 available
for rent. These 5 apartments are included in twenty-two presently vacant
apartments, with 16 apartments rented for occupancy in February 2000, while the
remaining vacant unit is the model apartment. The twenty-two apartments
presently vacant equates to a physical occupancy of 92.9%.
Operating Expenses, consisting mainly of real estate taxes, repairs
and maintenance and utilities, increased in 2000 to $782,764 as compared to the
1999 cost of $716,919. This increase reflected increases in amounts spent on
Repairs and Maintenance, as well as increased costs for Water and Sewer and
Sanitation. In addition there was an increase in Real Estate Taxes as a result
of increased tax rates on the project. These were offset to some extent by a
decrease in Electric expense at the Pavilion as a result of greater occupancy at
the property, with apartment electric being paid for by tenants, and by reducing
the amount of electricity used in vacant apartments.
General and Administrative Expenses for 2000 increased to $830,650
from $752,824 in 1999. This increase resulted from increases in court costs and
eviction expenses, and increased costs for security services. In addition, there
was an increase in professional fees resulting from increased accruals in
anticipation of increased costs for the 2000 annual audit, preparation of tax
returns and tax reporting to limited partners.
Page 9
Capital Improvements, Repairs and Maintenance, and Replacements
During 2000, in addition to items which were expensed under Cost of
Rental Income, substantial sums were spent on capital improvements, upgrades and
replacements at the Pavilion Apartments. Among these items were the following:
Capitalized Improvements
Aggregate
Item Expenditures
---- ------------
Furniture & Fixtures
Carpeting $80,488
Carpet Machine $2,327
Fitness Center Equipment $2,438
Security Lighting $1,473
Stoves/Refrigerators/Dishwashers $84,649
Total: $171,375
Building Improvements
Bathroom Tile Replacements $88,878
Counter Tops $2,660
Dumpster Gates $2,245
Entrance Gates $7,378
Fire Alarm Box Replacements $5,317
Miscellaneous Interior Improvements $1,416
Office Remodel $2,760
Roof Repairs $64,203
Sewer Replacement $10,238
Sprinkler System Replacements $25,984
Total: $211,079
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Aggregate 2000 Capital Expenditures $382,454
===============
During 2000, carpeting was replaced in 91 apartments; stoves in 89
apartments; refrigerators in 84 apartments; and dishwashers in 57 apartments.
Funds for these expenditures were provided from Cash Flow from the
Pavilion Apartments and from cash reserves on hand.
Future Capital Improvement and Replacements
Page 10
It is anticipated that substantial additional funds will be expended
for capital improvements during 2001 and subsequent years in order to keep the
Pavilion Apartments competitive in the rental market. Funds for such items may
be provided from sources such as Partnership cash reserves and cash flow from
the Pavilion Apartments. To the extent these sources are insufficient to
complete work which may be required, the Partnership may be forced to explore
outside sources of financing. There can be no assurance that sufficient
financing can be obtained to complete such work, and the Pavilion Apartments'
ability to compete in the rental market may be adversely affected.
As of March 1, 2001, carpeting in 109 apartments in the Pavilion
Apartments is over 3 years old, 171 hot water heaters are over 6 years old; 136
dishwashers, 105 refrigerators and 103 stoves are over 8 years old. In addition
to regular ongoing replacements of such items, other major capital items which
may be required to be completed during the next few years, include but may not
be limited to the following:
Estimated
Potential
Project Costs
----------------------------------
Roof Replacements - all buildings $500,000
Asphalt Overlay for parking Lots $105,000
Shower Tile & Pan Replacements $145,000
Sprinkler System Replacement $55,000
Replacement of the roof on Building F (containing 24 residential units) is
expected to commence during March 2001, at an anticipated cost of approximately
$34,500.
1999 Fiscal Year
Rental Revenue for the year ended December 31, 1999, was $2,189,322
as compared with $2,081,901 for the 1998 calendar year. The increase in income
in 1999 reflected increased rental rates for apartments at the project as well
as reduced vacancies and rental allowances, which while in a reduced amount,
were still being utilized to attracted tenants to the Pavilion. Occupancy rates
at the project held in the low to mid 90% range for the 1999 year. As of
February 29, 2000, the Pavilion Apartments had 12 apartments out of 312
available for rent. These 12 apartments represent 10 of nineteen presently
vacant apartments and 2 additional apartments where the tenants have given
notice of their intent to vacate. Eight of the vacant apartments have already
been rented, while the remaining vacant unit is the model apartment. The
nineteen apartments presently vacant equates to a physical occupancy of 93.9%.
Page 11
Operating Expenses, consisting mainly of real estate taxes, repairs
and maintenance and utilities, increased in 1999 to $716,919 as compared to the
1998 cost of $625,402. This increase reflected increases in amounts spent on
Replacements, Repairs and Maintenance, as well as increased costs for Water and
Sewer and Landscaping. These were offset somewhat by a decrease in Real Estate
Taxes as a result of a reduced assessed valuation of the project.
General and Administrative Expenses for 1999 increased to $752,824
from $689,444 in 1998. This increase resulted from increases in court costs and
eviction expenses as well as increased costs for security services.
Capital Improvements and Replacements
During 1999, in addition to items which were expensed under Cost of
Rental Income, substantial sums were spent on capital improvements, upgrades and
replacements at the Pavilion Apartments. Among these items were the following:
Aggregate
Item Expenditures
---- ------------
Furniture & Fixtures
Carpeting $95,877
Copy Machine $2,332
Security Cameras $1,393
Stoves/Refrigerators/Dishwashers $41,185
Total: $140,787
Building Improvements
Aluminum Roof Coating $21,935
Bathroom Tile Replacements $140,933
Counter Tops $16,514
Entrance Gates $6,480
Miscellaneous Interior Improvements $26,538
Parking Lot $4,785
Roof Repairs $38,228
Sewer Replacement $22,647
Sidewalk Replacements $4,308
Total: $282,368
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Aggregate 1999 Capital Expenditures $423,155
===============
Funds for these expenditures were provided from Cash Flow from the
Pavilion Apartments for the last three quarters of the year and from cash
reserves on hand.
Page 12
INFLATION
As of the present date, inflation has not had a major impact on the
operations of the Partnership. It is anticipated that future increases in
operating expenses will be offset if not exceeded by corresponding increases in
operating income.
YEAR 2000 ISSUES
Registrant experienced no negative operational consequences of Year
2000 issues.
Page 13
Item 8. Financial Statements and Supplementary Data
FJS Properties Fund I, L.P.
Financial Statements
INDEX
Page
Number
Report of Independent Certified Public Accountants.................15
Financial statements
Balance Sheets as of December 31, 2000 and 1999...............16
Statements of Operations for the years ended
December 31, 2000, 1999 and 1998....................17
Statements of Partners' Capital [Deficit] for the years ended
December 31, 2000, 1999 and 1998....................18
Statements of Cash Flows for the years ended
December 31, 2000, 1999 and 1998 ...................19
Notes To Financial Statements .............................20-24
Supplementary Financial Information
Report of Independent Certified Public Accountants
on Supplementary Financial Information..............25
Real Estate and Accumulated Depreciation......................26
Page 14
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of FJS Properties Fund I, L.P.
We have audited the accompanying balance sheets of FJS Properties Fund I, LP as
of December 31, 2000 and 1999, and the related statements of operations,
partners' capital (deficit), and cash flows for each of the three years in the
period ended December 31, 2000. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FJS Properties Fund I, LP as of
December 31, 2000 and 1999, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States of America.
BUCHBINDER TUNICK & COMPANY LLP
Boca Raton, Florida
February 2, 2001
Page 15
FJS PROPERTIES FUND I, L.P.
Balance Sheets
December 31, 2000 and 1999
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $ 188,122 $ 217,906
Cash - escrow 64,184 119,379
Cash - security deposits 125,015 132,748
Tenant receivables 13,215 -
Other current assets 21,446 22,268
---------- ----------
Total current assets 411,982 492,301
---------- ----------
Property investment:
Land 2,296,804 2,296,804
Buildings 6,569,125 6,569,125
Furniture, fixtures and improvements 2,758,619 2,376,165
---------- ----------
Totals - at cost 11,624,548 11,242,094
Less: accumulated depreciation (5,427,009)(5,073,750)
----------------------
Property investment - net 6,197,539 6,168,344
---------- ----------
Other assets 189,602 250,216
---------- ----------
Total assets $6,799,123 $6,910,861
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current liabilities:
Accounts payable $ 117,747 $ 108,403
Accrued interest 37,045 37,740
Other accrued expenses 7,093 6,755
Due to related party 16,704 16,689
Tenant security deposits payable 125,015 132,748
Prepaid rent 27,597 -
Mortgage payable - current portion 94,971 85,557
Deferred income - current portion 7,143 7,143
---------- ----------
Total current liabilities 433,315 395,035
---------- ----------
Long-term liabilities:
Mortgage payable - non-current portion 4,465,099 4,559,381
Deferred income - non-current portion 10,714 17,857
---------- ----------
Total long-term liabilities 4,475,813 4,577,238
---------- ----------
Partners' capital (deficit):
General partner (1,216,959)(1,216,473)
Limited partners 3,106,954 3,155,061
---------- ----------
Total partners' capital (deficit) 1,889,995 1,938,588
---------- ----------
Total liabilities and partners'
capital (deficit) $6,799,123 $6,910,861
========== ==========
See notes to financial statements.
Page 16
FJS PROPERTIES FUND I, L.P.
Statement of Operations
For the years ended December 31, 2000, 1999, and 1998
2000 1999 1998
---- ---- ----
Revenue:
Rental $2,382,348 $2,189,322 $2,081,901
Interest 9,261 12,324 23,664
---------- --------- ---------
Total Revenue 2,391,609 2,201,646 2,105,565
---------- --------- ---------
Expenses:
Operating 782,764 716,919 625,402
General and administrative 830,650 752,824 689,444
Interest 449,120 456,410 463,687
Depreciation and amortization 377,668 326,059 289,180
Other --- --- 2,900
---------- --------- ---------
Total expenses 2,440,202 2,252,212 2,070,613
---------- --------- ---------
Net income (loss) $ (48,593) $ (50,566) $ 34,952
=========== ========== =========
Income (loss) per limited partnership
unit $ (2.87) $ (2.98) $ 2.06
=========== ========== =========
Distributions per limited partnership
unit $ 0.00 $ 4.48 $ 6.23
========== ========== =========
Weighted average number of limited
partnership units outstanding 16,788 16,788 16,788
---------- --------- ---------
See notes to financial statements.
Page 17
FJS PROPERTIES FUND I, L.P.
Statements of Partners' Capital (Deficit)
For the years ended December 31, 2000, 1999 and 1998
General Limited
Partner Partners Total
Partners' capital (deficit)
- December 31, 1997 (1,214,501) 3,350,320 2,135,819
Net income for the year ended
December 31, 1998 350 34,602 34,952
Distributions to Partners (1,056) (104,591) (105,647)
------------- ---------- ----------
Partners' capital (deficit)
- December 31, 1998 (1,215,207) 3,280,331 2,065,124
Net (loss) for the year ended
December 31, 1999 (506) (50,060) (50,566)
Distributions to Partners (760) (75,210) (75,970)
------------- ---------- ----------
Partners' capital (deficit)
- December 31, 1999 $ (1,216,473) $3,155,061 $1,938,588
Net (loss) for the year ended
December 31, 2000 (486) (48,107) (48,593)
------------- ---------- ----------
Partners' capital (deficit)
- December 31, 2000 $ (1,216,959) $3,106,954 $1,889,995
============= ========== ==========
See notes to financial statements.
Page 18
FJS PROPERTIES FUND I, L.P.
Statements of Cash Flows
For the years ended December 31, 2000, 1999 and 1998
2000 1999 1998
---- ---- ----
Operating activities:
Net income (loss) $(48,593)$ (50,566)$ 34,952
Adjustments to reconcile net income
(loss)to net cash provided by operating
activities:
Depreciation 353,259 301,651 264,772
Amortization 24,408 24,408 24,408
Deferred income (7,143) (7,143) (7,143)
Changes in assets and liabilities:
Decrease (increase) in escrow 55,195 29,238 (50,956)
Decrease (increase) in security deposits 7,733 (7,351) (3,519)
Increase in tenant receivables (13,215) - -
Decrease in other current assets 822 3,484 10,219
Decrease (increase) in other assets 36,206 (3,283) (4,954)
Increase (decrease) in accounts payable and
accrued expenses 8,987 41,119 (30,888)
Increase (decrease) in due to related party 15 (3,018) (6,431)
(Decrease) increase in tenant security
deposits payable (7,733) 7,351 3,519
Increase in prepaid rent 27,597 - -
-------- --------- --------
Net cash provided by operating activities 437,538 335,890 233,979
--------- ------- --------
Investing activities:
Capital expenditures (382,454) (423,155)(134,645)
--------- -------- ----------
Net cash (used in) investing activities (382,454) (423,155)(134,645)
--------- -------------------
Financing activities:
Principal payments on mortgages (84,868) (77,641) (70,451)
Cash distributions to Partners - (75,970)(105,647)
--------- -------------------
Net cash (used in) financing activities (84,868) (153,611)(176,098)
-------- -------------------
Net (decrease) increase in cash
and cash equivalents (29,784) (240,876) (76,764)
Cash and cash equivalents - beginning of year 217,906 458,782 535,546
------- ---------- --------
Cash and cash equivalents - end of year $188,122 $ 217,906 $458,782
======== ========== ========
Supplemental disclosure of cash flow information:
Interest paid $449,815 $ 457,043 $464,260
======== ========== ========
See notes to financial statements.
Page 19
FJS PROPERTIES FUND I, L.P.
Notes to Financial Statements (Continued)
December 31, 2000, 1999 and 1998
Note 1 - Organization
FJS Properties Fund 1, LP (the "Partnership") was formed under the Delaware
Revised Uniform Limited Partnership Act on October 5,1984. The Partnership
owns and operates the Pavilion, a 312 unit garden apartment complex in West
Palm Beach, Florida. The Partnership operates under one reportable segment.
Note 2 - Significant Accounting Policies
Loan Acquisition Fees
The Partnership amortizes fees incurred in connection with mortgage
refinancings utilizing the straight-line method over the term of the related
mortgage, which is currently ten years.
Income Taxes
The Partnership is treated as a partnership for federal income tax purposes.
The Partnership will make no provision for income taxes because all income
and losses will be allocated to the Partners for inclusion in their
respective tax returns.
Property Investment and Depreciation
Property, improvements, furniture, and equipment are carried at cost and
depreciated over their estimated useful lives. The cost of maintenance and
repairs are expensed as incurred, whereas significant betterments and
renewals are capitalized. The Partnership depreciates buildings using the
straight-line method over 30 years. Furniture and fixtures and improvements
are depreciated using the straight-line method over periods from 3 to 10
years.
Depreciation expense for the years ended December 31, 2000, 1999, and 1998
was $353,259, $301,651, and $264,772, respectively.
For tax purposes, the Partnership depreciates residential real property using
the 18 year accelerated depreciation method for property placed in service
prior to May 8, 1985. In accordance with ongoing changes in the Internal
Revenue Code, the Partnership will utilize the depreciation method, which, in
the opinion of the Managing General Partner, will be the most beneficial to
the Partnership.
Revenue Recognition
Rental, interest, and other income are recorded on the accrual method of
accounting.
Page 20
FJS PROPERTIES FUND I, L.P.
Notes to Financial Statements (Continued)
December 31, 2000, 1999 and 1998
Cash Equivalents
The Partnership considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.
Concentration of Credit Risk
Financial instruments that subject the Partnership to concentrations of
credit risk include cash. The Partnership had amounts on deposit with
financial institutions which are approximately $95,000, $270,000, and
$454,000 in excess of the amounts insured for December 31, 2000, 1999, and
1998, respectively. The Partnership does not require collateral for financial
instruments.
Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Advertising
The Partnership expenses advertising cost as incurred. Advertising expense
for the years ended December 31, 2000, 1999, and 1998 was $37,323, $36,321,
and $36,773, respectively.
Impairment
Certain long-term assets of the Partnership, including property and furniture
and fixtures, are reviewed at least annually as to whether their carrying
value has become impaired, pursuant to guidance established in Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." Management
considers assets to be impaired if the carrying value exceeds the future
projected cash flows from the related operations (undiscounted and without
interest charges). If impairment is deemed to exist, the assets will be
written down to fair value or projected discounted cash flows from related
operations. Management also reevaluates the periods of amortization to
determine whether subsequent events and circumstances warrant revised
estimates of useful lives.
Page 21
FJS PROPERTIES FUND I, L.P.
Notes to Financial Statements (Continued)
December 31, 2000, 1999 and 1998
Note 3 - Partnership Agreement
Pursuant to the terms of the Partnership Agreement, which expires December
31, 2009, the General Partner is liable for all general obligations of the
Partnership to the extent not paid by the Partnership. The Limited Partners
are not liable for expenses, liabilities, or obligations of the Partnership
beyond the amount of their contributed capital. In addition, adjusted cash
from operations is allocated, after payment of the Partnership Management Fee
to the Managing General Partner, 99% to the Limited Partners, and 1% to the
General Partner.
Taxable income and loss are allocated 99% to the Limited Partners and 1% to
the General Partner subsequent to the release of the Limited Partners' funds
to the Partnership, which occurred on May 1, 1986. Prior to the release of
funds, taxable income and loss were allocated 99% to the General Partner and
1% to the Original Limited Partner.
Allocations of net income or loss among the Partners in the accrual basis
financial statements will be in conformity with the allocations of taxable
income or loss from operations.
Note 4 - Other Assets
A summary of other assets is as follows:
2000 1999
-------- ------
Cash in escrow - replacement reserves $ 89,272 $ 124,183
Loan acquisition fees - net of amortization
of $164,255, and $139,847 at
December 31, 2000 and 1999, respectively 79,840 104,248
Deposits 20,490 21,785
---------- ----------
$ 189,602 $ 250,216
========== ==========
Note 5 - Mortgage Payable
The Partnership has a loan of $5,000,000 that is serviced by Bank United of
Texas that is collateralized by a first mortgage lien on the property and all
personal property and income from the project. This loan is for a term of ten
years with an interest rate of 9.75% per annum. The loan is repayable in
equal monthly installments of $44,557 for principal and interest with a
balloon payment due in ten years. The loan requires deposits with the lender
for real estate taxes, insurance premiums, a debt service reserve of one
month's payment, as well as deposits for replacement reserves for the
project. These amounts are included in cash escrow and other assets on the
balance sheet.
Page 22
FJS PROPERTIES FUND I, L.P.
Notes to Financial Statements (Continued)
December 31, 2000, 1999 and 1998
At December 31, 2000 maturities of the mortgage payable are as follows:
2001 94,971
2002 103,897
2003 114,492
2004 4,246,710
----------
Total mortgage payable $4,560,070
==========
The fair value of the Partnership's mortgage payable, which is determined by
discounting expected cash flows based on the Partnership's projected current
incremental borrowing rate, is approximately equal to the current obligation.
Note 6 - Related Party Transactions
The Managing General Partner, pursuant to the Partnership Agreement, has
earned Property Management Fees of $118,518, $107,540, and $103,806 for the
years ended December 31, 2000, 1999, and 1998, respectively, of which,
$94,242, $86,032, and $83,045, respectively, was paid to an unaffiliated
Florida based management company. These fees are based on a percentage of
gross rental income as defined in the agreement.
Also pursuant to the Partnership Agreement the Managing General Partner has
earned Partnership Management Fees of $0, $3,172, and $6,673, for the years
ended December 31, 2000, 1999, and 1998, respectively, which represents 4% of
adjusted cash flow as defined in the agreement.
Additionally, in accordance with provisions of the Partnership Agreement, the
Partnership has agreed to pay to the Managing General Partner, administrative
service fees. These fees amounted to $24,000 for the year ended December 31,
2000, $27,000 for the year ended December 31, 1999, and $24,000 for the year
ended December 31, 1998.
The Managing General Partner received distributions from cash flows of $0,
$760, and $1,056, during the years ended December 31, 2000, 1999, and 1998,
respectively.
Page 23
FJS PROPERTIES FUND I, L.P.
Notes to Financial Statements (Continued)
December 31, 2000, 1999 and 1998
Note 7 - Income Taxes
The reconciliation of net (loss) as reported in the statements of operations
and as would be reported for tax purposes for the years ended December 31,
2000, 1999, and 1998, are as follows:
December 31,
------------
2000 1999 1998
------ ------ -----
Net income (loss) -
statement of operations $ (48,593) $ (50,566) $ 34,952
Tax depreciation in excess
of book depreciation (57,797) (67,099) (71,010)
----------- ---------- ----------
Net (loss) for tax purposes $ (106,390) $ (117,665) $ (36,058)
=========== =========== =========
Page 24
FJS PROPERTIES FUND I, LP
Schedule III - Real Estate and Accumulated Depreciation
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON SUPPLEMENTARY FINANCIAL INFORMATION
To the Partners of
FJS Properties Fund I, LP
We have audited the financial statements of FJS Properties Fund I, LP as of
December 31, 2000 and 1999, and for each of the three years in the period ended
December 31, 2000, and have issued our report thereon dated February 2, 2001.
Our audits also included the financial statement Schedule III of FJS Properties
Fund I. LP. This financial statement schedule is the responsibility of the
Partnership's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
BUCHBINDER TUNICK & COMPANY LLP
Boca Raton, Florida
February 2, 2000
Page 25
FJS PROPERTIES FUND I, LP
Schedule III - Real Estate and Accumulated Depreciation
Initial Cost to Partnership
Costs
Buildings, Capitalized
Furniture, Subsequent
Fixtures, to Acquisition
and
Description Encumbrances Land Improvements Improvements
- ------------------- -------------- ------------ ----------------------------
Pavilion Apartments
West Palm Beach,
Florida $ 4,560,070 $ 2,296,804 $ 7,196,789 $ 2,130,955
=========== =========== =========== ===========
Gross Amount at Which
Carried at Close of Period
----------
Life on
Which
Depreciation
Buildings, Year in Latest
Furniture, of Construc- Income
Fixtures, (1) (2) Accumulated tion Date Statement is
Description Land and Total Depreciation Acquired Computed
Improveme
nts
- ------------------ --------- ---------- ---------- ------------------------ -------- -----------
Pavilion Apartments
West Palm Beach,
Florida $2,296,804 $9,327,744 $11,624,548 $5,427,009 1972 1/85 3-30 yrs
========== ==========
(1)The aggregate cost for federal income tax purposes is $9,715,898.
(2)A reconciliation of the carrying amount of land, buildings and improvements
as of December 31, 2000 and 1999 is as follows:
Cost as of December 31,
2000 1999
-------------- ------------
Balance at beginning of year $11,242,094 $10,818,939
Improvements 382,454 423,155
----------- -----------
Balance at end of year $11,624,548 $11,242,094
=========== ===========
(3)A reconciliation of accumulated depreciation for the years ended December 31,
2000, and 1999 is as follows:
Cost as of December 31,
2000 1999
----------------------------
Balance at beginning of year $ 5,073,750 $ 4,772,099
Expense 353,259 301,651
------------ -----------
Balance at end of year $ 5,427,009 $ 5,073,750
=========== ===========
See independent accountants' report on supplementary financial information.
Page 26
Item 9. Changes In and Disagreements With Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure
--------------------
None
PART III
Item 10. Directors and Executive Officers of the Registrant
Registrant has no officers or directors. FJS Properties, Inc., the General
Partner, manages and controls the Registrant's affairs and has general
responsibility and ultimate auth ority in all matters affecting its business.
The names and ages of, as well as the positions held by, the officers and
directors of the General Partner are as follows:
SERVED AS AN
OFFICER AND/OR
NAME AGE OFFICES HELD DIRECTOR SINCE
- ---- --- ------------ --------------
A Andrew C. Alson 55 President and Director 1/85
Lawrence E. Bathgate II 61 Director 10/84
There are no family relationships between any executive officer or
director and any other executive officer or director of the General Partner.
Andrew C. Alson is a director and President of the General Partner. Until
May, 1995, Mr. Alson was a Director of and until January 1, 1993, was President
and Chief Executive Officer of PriMedex Health Systems, Inc. ("PMDX"), a public
company which is principally engaged through its wholly-owned subsidiary, RadNet
Management, Inc. in the healthcare services industry. Until June 16, 1994, Mr.
Alson, as a designee of PMDX, also served as a director of ImmunoTherapeutics,
Inc. ("IMNO"). IMNO is a publicly owned development stage Minnesota based
company which is engaged in the research and development of immunotherapeutic
drugs, primarily for the treatment of cancer. Mr. Alson is an attorney admitted
to the bar of the State of New York, and is a graduate of the University of
Pennsylvania and the Fordham University School of Law.
Lawrence E. Bathgate, II is a director of the General Partner. Mr.
Bathgate is the senior partner of Bathgate, Wegener & Wolf, P.A., a law firm in
Lakewood, New Jersey. Mr. Bathgate is a graduate of Villanova University,
Villanova, Pennsylvania and Rutgers Law School, Newark, New Jersey. Mr. Bathgate
also engages in extensive real estate and other investment activities. Mr.
Bathgate owns 20% of the common stock of the General Partner. Mr. Bathgate is a
director of Carson, Inc., a publicly held company listed on the New York Stock
Exchange.
All of the directors will hold office until the next annual meeting of the
stockholders of the General Partner and until their successors are elected and
qualified.
Page 27
Other controlling individuals:
On August 7, 1995, Robert E. Brennan, the owner of 80% of the common stock
of the General Partner filed a voluntary petition for relief in the United
States Bankruptcy Court for the District of New Jersey under Chapter 11 of the
Bankruptcy Code.
On June 10, 1997, United States Bankruptcy Judge Kathryn C. Ferguson
appointed Donald F. Conway, C.P.A. as the Trustee in the Chapter 11 Bankruptcy
Proceeding involving Robert E. Brennan as Debtor, pending in the United States
Bankruptcy Court for the District of New Jersey (Case No 95-35502).
By virtue of his appointment as Trustee, Mr. Conway is empowered to vote
(and with the approval of the Court), to sell Mr. Brennan's Common Stock and to
direct the disposition of the sale proceeds. As a result Mr. Conway, in his
capacity as Trustee, may be deemed the beneficial owner of such shares and a
controlling person of FJS Properties, Inc. and Registrant.
Mr. Conway, age 60, is currently and since 1995 has been a principal of
Druker, Rahl & Fein, Business Consultants and Certified Public Accountants, with
offices in Princeton, New Jersey. From 1988 until 1995, Mr. Conway was the
Senior Manager of the Insolvency and Reorganization and Sports and Entertainment
practice of Withum, Smith & Brown, a Princeton, New Jersey certified public
accounting firm.
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of Forms 3 and 4 (17 CFR 249.103 and 249.104)
and any amendments thereto furnished to Registrant under Rule 16a-3(d) (17 CFR
240.16a-3(e) or written representations received by Registrant that no Forms 5
were required, Registrant believes that other than as hereinafter noted there
were no officers, directors or beneficial owners of more than 10% of any class
of equity securities of Registrant registered pursuant to Section 12, that
failed to file on a timely basis any reports required by Section 16(a) during
the most recent fiscal years. As noted above, as of June 10, 1997, Donald F.
Conway may be deemed a beneficial owner of 80% of the general partner of
Registrant and a controlling person of FJS Properties, Inc. and Registrant. Mr.
Conway has advised that no filings were required for a one year period after
such appointment, and it would appear that a filing was required to have been
made in June 1998. Registrant has not been advised of any filings by Mr. Conway
as of March 15, 2001.
Item 11. Executive Compensation
The Registrant is not required to pay and did not pay any remuneration to
the officers and directors of the General Partner. See Item 12, "Certain
Relationships and Related Transactions."
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The Family Trust, a New Jersey trust, which was established by Robert
Brennan, but as to which Mr. Brennan is neither a Trustee nor a Beneficiary,
owns 1,558 Units (9.28%). No other person was known by Registrant to own
beneficially more than 5% of the outstanding Units of Registrant. No directors,
officers or partners of the General Partner own
Page 28
Units of Registrant except for the five Units owned by Mr. Bathgate, as the
initial limited partner.
Ownership of more than 5% of Registrant:
(1) Title of Class (2) Name and (3) Amount and (4) Percent of Class
- ------------------ ------------ -------------- --------------------
Address of nature of Beneficial
---------- --------------------
Beneficial Owner Ownership
---------------- ---------
Units of Limited The Family Trust 1,558 Units - legal 9.28%
Partnership 340 North Avenue and beneficial
Cranford, NJ 07016 owner
- ------------------ ------------------ ------------------ ------------------
As of March 1, 2000, Robert E. Brennan, Chapter 11 Debtor and Lawrence E.
Bathgate, II were the sole shareholders of the common stock of the General
Partner, owning 80% and 20% respectively. As described above under Item 10,
Donald F. Conway, CPA, has been appointed as Trustee in the Chapter 11
Bankruptcy Proceeding involving Robert E. Brennan as Debtor. Mr. Conway is
empowered to vote (and with the approval of the Court), to sell Mr. Brennan's
Common Stock and to direct the disposition of the sale proceeds. As a result Mr.
Conway, in his capacity as Trustee, may be deemed a beneficial owner of such
shares and a controlling person of FJS Properties, Inc. and Registrant.
Page 29
Item 13. Certain Relationships and Related Transactions
During Registrant's fiscal years ended December 31, 2000, 1999, and 1998
the General Partner and certain affiliated entities have earned or received
compensation or payments for services from Registrant or its General Partner as
follows:
Reimbursement/Compensation
--------------------------
Name of Recipient Capacity in Which served or 2000 1999 1998
Payment Received
- ----------------- ----------------
FJS Properties, Inc. General Partner3 $0 $760 $1,056
Partnership Management Fee $0 $3,172 $6,673
Property Management Fee4 $24,276 $21,508 $20,760
Administrative Expenses5 $24,000 $27,000 $24,000
Tender Offer Administrative Fees6 $0 $0 $9,000
-------- -------- ---------
Table Continued on next Page.
- --------
3 Represents the General Partner's interest in Adjusted Cash From Operations.
Under Registrant's Partnership Agreement 99% of the Net Income and Net Loss
of Registrant was allocated to the Limited Partners and 1% was allocated to
the General Partner. Pursuant thereto, for the years ended December 31, 2000,
1999, and 1998, ($1,064), ($1,177), and $360 of the Registrant's taxable
income (loss) was allocated to FJS Properties, Inc. For further information,
reference is made to the material contained in the Prospectus under the
heading "MANAGEMENT COMPENSATION."
4 The following property management fees were applicable to the years 2000,
1999, and 1998:
YEAR Aggregate Retained by Paid to local
Management Fee General Partner unaffiliated
management
company
2000 $118,518 $24,276 $94,242
1999 $107,540 $21,508 $86,032
1998 $103,805 $20,760 $83,045
- --------- ------------------- ----------------- ------------------
In addition, the local unaffiliated management company received construction
supervision fees of $8,068 during 1999, and $2,748 during 1998, for supervision
of outside construction work at the Pavilion Apartments.
5 Represents administrative fees for the respective years for preparation of
the annual Forms 10K, quarterly Forms 10Q, and the Form 8-K of December,
1999, for Registrant for filing with the Securities and Exchange Commission.
Such charges are in accordance with and pursuant to ss.10.1.3(b) of the
Partnership Agreement of Registrant and do not exceed 90% of the amount
Registrant would be required to pay to independent parties for comparable
administrative services in the same geographic location.
6 Represents administrative fees for review of tender offer filings,
preparation, filing and mailings of required responsive Securities and
Exchange Commission Filings and materials for mailings to Limited Partners.
As provided in the Partnership Agreement of Registrant such fees do not
exceed 90% of the amount Registrant would be required to pay to independent
parties for comparable administrative services in the same geographic
location.
Page 30
Name of Recipient Capacity in Which served or 2000 1999 1998
Payment Received
- ----------------- ----------------
Lawrence E. Bathgate II Initial Limited Partner7 $0 $22 $31
Other Officers/Director Officer/Director of General $0 $0 $0
of General Partner Partner
-------- --------- ---------
In addition, certain officers and directors of the General Partner receive
compensation from the General Partner and/or its affiliates (but not from
Registrant) for services performed for various affiliated entities, which may
include services performed for Registrant.
- --------
7 Represents distribution of Adjusted Cash From Operations attributable to the
five Units Owned by Mr. Bathgate. For the years ended December 31, 2000,
1999, and 1998, ($31.57), ($34.69), and $10.63 of the Registrant's taxable
income (loss) was allocated to his Units.
Page 31
PART IV
Item 14. Exhibits Financial Statement Schedules, and Reports On Form 8-K
---------------------------------------------------------------
(a)1&2 Financial Statements: See Index to Financial Statements in Item
8.
(a) 3 Exhibits:
3.4 (a) Agreement of Limited Partnership, dated as of April
30, 1985, incorporated by reference to Exhibit A to the
Prospectus of Registrant dated June 10, 1985 included in
Registrant's Registration Statement on Form S-11 (Reg. No.
2-93980).
(b) Amendment to Agreement of Limited Partnership dated as of
October 22, 1985 incorporated by reference to Exhibit 3A.1 to
Registrant's Registration Statement on Form S-11 (Reg. No.
2-93980).
(c) Amendment to Agreement of Limited Partnership dated as of
October 22, 1985, incorporated by reference to Exhibit 3.4(c)
to Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1986 (File No 2-93980).
(d) Amendment to Agreement of Limited Partnership, dated as of
March 24, 1987, incorporated by reference to Exhibit 3.4(d) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987 (File No 2-93980).
(e) Amendment No. 1 to Amended and Restated Certificate of
Limited Partnership, dated as of August 17, 1987, incorporated
by reference to Exhibit 3.4(e) to Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1987 (File
No 2-93980).
10. (a) Acquisition and Disposition Agreement dated as of May
2, 1986 between Registrant and FJS Properties, Inc.,
incorporated by reference to Exhibit 10A to Registrant's
Annual Report on Form 10-K for the fiscal year ended December
31, 1986 (File No. 2- 93980).
(b) Management Services Agreement dated as of May 2, 1986
between Registrant and FJS Properties, Inc., incorporated by
reference to Exhibit 10B to Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1986 (File No.
2-93980).
(c) Contract for Sale and Purchase dated December 17, 1984,
between Rockwell Investments, Ltd. and Registrant,
incorporated by reference to Exhibit 10D to Registrant's
Registration Statement on Form S-11 (Reg. No. 2-93980.)
Page 32
(d) Contract for Sale and Purchase dated December 17, 1984,
between Vinsteve Investments Inc., Jimstein Investments, Ltd.,
Barwell Corporation, N.W. and Registrant, incorporated by
reference to Exhibit 10E to Registrant's Registration
Statement on Form S-11 (Reg. No. 2-93980.)
(e) Mortgage and Security Agreement dated September 9, 1987,
by FJS Properties Fund I, L.P., as mortgagor, and The Bank of
Tokyo, Ltd., Miami Agency, as mortgagee, incorporated by
reference to Exhibit 10(g) to Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987 (File No
2-93980).
(f) Mortgage Note, dated September 9, 1987, by FJS Properties
Fund I, L.P. as maker to The Bank of Tokyo, Ltd., Miami
Agency, as payee in the principal amount of $5,000,000,
incorporated by reference to Exhibit 10(h) to Registrant's
Annual Report on Form 10-K for the fiscal year ended December
31, 1987 (File No 2-93980).
(g) Modification of Note, Mortgage and Assignment Agreement,
dated as of September 9, 1992, between FJS Properties Fund I,
L.P. as Mortgagor, and The Bank Of Tokyo, Ltd., Miami Agency,
as Mortgagee incorporated by reference to Exhibit 10(g) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987 (File No 0-15755).
(h) Modification of Note, Mortgage and Assignment Agreement,
dated as of November 10, 1992, between FJS Properties Fund I,
L.P. as Mortgagor, and The Bank Of Tokyo, Ltd., Miami Agency,
as Mortgagee incorporated by reference to Exhibit 10(h) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987 (File No 0-15755).
(i) Modification of Note, Mortgage and Assignment Agreement,
dated as of March 31, 1993, between FJS Properties Fund I,
L.P. as Mortgagor, and The Bank of Tokyo, Ltd., Miami Agency,
as Mortgagee incorporated by reference to Exhibit 10(i) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987 (File No 0-15755).
(j) Renewal Note, dated March 31, 1993, made by FJS Properties
Fund I, L.P. to the Bank of Tokyo, Ltd incorporated by
reference to Exhibit 10(j) to Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987 (File No
0-15755).
(k) Property Management Agreement made as of December 1993,
between FJS Properties Fund I, L.P., Owner, and M.L. Property
Management, Inc., Managing Agent, incorporated by reference to
Exhibit 10(k) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 (File No 0-15755).
Page 33
(l) Third Modification of Note, Mortgage and Assignment
Agreement dated as of February 28, 1994, between FJS
Properties Fund I, L.P. and The Bank of Tokyo, Ltd.,
incorporated by reference to Exhibit 10(l) to Registrant's
Annual Report on Form 10-K for the fiscal year ended December
31, 1993 (File No 0-15755).
(m) Multifamily Note, dated March 29, 1994, made by FJS
Properties Fund I, L.P. to Long Beach Bank, FSB, in the
principal amount of $5,000,000, incorporated by reference to
Exhibit 10(m) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 (File No 0- 15755).
(n) Multifamily Mortgage, Assignment of Rents and Security
Agreement and Fixture Filing, dated March 29, 1994, made by
FJS Properties Fund I, L.P. to Long Beach Bank, FSB,
incorporated by reference to Exhibit 10(n) to Registrant's
Annual Report on Form 10-K for the fiscal year ended December
31, 1993 (File No 0-15755).
(o) Assignment of Leases, dated March 29, 1994, made by FJS
Properties Fund I, L.P. to Long Beach Bank, FSB, incorporated
by reference to Exhibit 10(o) to Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993 (File No
0-15755).
(p) Operations and Maintenance Agreement dated March 29, 1994,
between FJS Properties Fund I, L.P. and Long Beach Bank, FSB,
incorporated by reference to Exhibit 10(p) to Registrant's
Annual Report on Form 10-K for the fiscal year ended December
31, 1993 (File No 0-15755).
(q) Debt Service Reserve Fund Security Agreement, dated March
29, 1994, between FJS Properties Fund I, L.P. and Long Beach
Bank, FSB, incor porated by reference to Exhibit 10(q) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 (File No 0-15755).
(r) Replacement Reserve and Security Agreement, dated March
29, 1994, between FJS Properties Fund I, L.P. and Long Beach
Bank, FSB, incor porated by reference to Exhibit 10(r) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 (File No 0-15755).
(s) Completion/Repair and Security Agreement, dated March 29,
1994, between FJS Properties Fund I, L.P. and Long Beach Bank,
FSB, incor porated by reference to Exhibit 10(s) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 (File No 0-15755).
(t) Extension of Property Management Agreement dated as of
January 1, 1999, by and between FJS Properties Fund I, L.P.
and ML Property Management Inc., incorporated by reference to
Exhibit 10(t) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 (File No 0-15755).
Page 34
(b) Reports on Form 8-K filed during the last quarter of the fiscal
year:
None
Financial Statement Schedules Filed Pursuant to Item 13(B)
See Index to Financial Statements in Item 8.
Page 35
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FJS PROPERTIES FUND I, L.P.
FJS PROPERTIES, INC.
General Partner
Dated: March 15, 2001 By: Andrew C. Alson
-------------------------------
Andrew C. Alson,
President
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities (with respect to the General Partner) and on
the dates indicated.
Dated: March 14, 2001 By: Lawrence E. Bathgate, II
-------------------------------
Lawrence E. Bathgate,
II Director of the
General Partner
Dated: March 15, 2001 By: Andrew C. Alson
-------------------------------
Andrew C. Alson,
President and Director
of the General Partner
(Principal Executive
Officer and Principal
Financial Officer)
Page S-1