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Total # of Pages: 17
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
December 31, 1995 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
---- ----
Commission File Number 0-11502
-----------
BOETTCHER WESTERN PROPERTIES III LTD.
(Exact name of registrant as specified in its charter)
COLORADO 84-091134
--------------------------------- --------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
77 West Wacker Drive
Chicago, Illinois 60601
---------------------------------------- -------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (312) 574-6000
--------------
Indicate by checkmark 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 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
----- -----
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INDEX
Page
----
PART I. Financial Information
Item 1. Financial Statements (unaudited)
Balance Sheets -
December 31, 1995 and September 30, 1995 3
Statements of Operations -
Three months ended December 31, 1995 and 1994 4
Statement of Partners' Capital -
Three months ended December 31, 1995 5
Statements of Cash Flows -
Three months ended December 31, 1995 and 1994 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART III. Other Information
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURE 17
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Item 1: Financial Statements
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Balance Sheets
(Unaudited)
December 31, September 30,
1995 1995
------------ -------------
Assets
------
Real estate investments, at gross cost
Properties held for sale 16,364,757 16,346,743
Less discount on related debt (1,192,518) (1,192,518)
------------ -------------
15,172,239 15,154,225
Less accumulated depreciation (4,949,888) (4,833,753)
------------ -------------
10,222,351 10,320,472
Cash and cash equivalents at cost, which
approximates market value 658,609 836,140
Accounts receivable and other assets 180,932 187,545
Property tax and other escrow deposits 34,182 111,511
Debt issuance costs, net of accumulated
amortization of $164,271 and $154,874,
respectively 26,250 35,647
Deferred leasing costs, net of accumulated
amortization of $438,457 and $427,988,
respectively 190,659 174,354
------------ -------------
$11,312,983 11,665,669
============ =============
Liabilities and Partners' Capital
---------------------------------
Mortgages payable, net of unamortized debt
discount of $6,508 and $7,162,
respectively $7,072,107 7,153,781
Payable to managing general partner 1,414,760 1,527,391
Accounts payable and accrued expenses 288,271 322,420
Property taxes payable 32,900 140,902
Tenants' deposits 78,489 70,533
Unearned rental income 3,724 19,728
Accrued interest payable 33,658 33,685
------------ -------------
Total liabilities 8,923,909 9,268,440
------------ -------------
Commitments and Contingencies
Partners' capital (deficit)
General partners (126,392) (126,310)
Limited partners 2,515,466 2,523,539
------------ -------------
Total partners' capital 2,389,074 2,397,229
------------ -------------
$11,312,983 11,665,669
============ =============
See accompanying notes to financial statements.
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BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Statements of Operations
Three Months Ended December 31, 1995 and 1994
(Unaudited)
Three Months Ended
--------------------
1995 1994
--------- ---------
Revenue:
Rental income $517,215 555,633
Tenant reimbursements for
common area charges,
insurance and taxes 82,820 69,794
Other income 18,324 31,791
--------- ---------
$618,359 $657,218
========= =========
Expenses:
Interest, including amortization of debt
discount and debt issuance costs 189,767 190,335
Depreciation 116,135 112,398
Property taxes 62,458 63,651
Fees and reimbursements to
managing general partner 44,636 43,439
Other management fees 28,850 31,898
Salaries of on-site property managers 31,475 29,798
Repairs and maintenance 51,355 80,673
Utilities 34,852 33,753
Other administrative 63,085 74,834
Environmental costs 3,901 10,940
--------- ---------
626,514 671,719
--------- ---------
Net loss $ (8,155) $(14,501)
========= =========
Net loss per limited partnership unit, using the
weighted average number of limited partnership units
outstanding of 22,000 $ (.37) $ (.65)
========= =========
See accompanying notes to financial statements.
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BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Statement of Partners' Capital
Three Months ended December 31, 1995
(Unaudited)
Total
General Limited Partners'
Partners Partners Capital
---------- --------- ---------
Capital (deficit) at October 1, 1995 $(126,310) 2,523,539 2,397,229
Net loss for the three months
ended December 31, 1995 (82) (8,073) (8,155)
---------- --------- ---------
Capital (deficit) at December 31, 1995 $(126,392) 2,515,466 2,389,074
========== ========= =========
See accompanying notes to financial statements.
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BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Statements of Cash Flows
Three Months Ended December 31, 1995 and 1994
(Unaudited)
Three Months Ended
December 31,
--------------------
1995 1994
--------- ---------
Cash flows from operating activities: $ (8,155) (14,501)
Net loss
Adjustments to reconcile net loss to
net cash used by operating
activities:
Depreciation and amortization 136,655 143,280
Change in assets and liabilities:
Decrease in accounts receivable
and other assets 6,613 6,698
Decrease in property tax
and other escrow deposits 77,329 65,638
Decrease in payable to managing general
partner (112,631) (50,477)
Decrease in property taxes payable (108,002) (109,807)
Increase (decrease) in tenants' deposits 7,956 (5,510)
Decrease in accrued interest payable (27) (1,004)
Decrease in unearned rental income (16,004) (21,562)
Decrease in accounts payable and
other liabilities (34,149) (22,152)
--------- ---------
Net cash used by operating activities (50,415) (9,397)
--------- ---------
Cash flows used in investing activities:
Additions to real estate investments (18,014) (32,713)
Increase in deferred leasing costs (26,774) (7,499)
--------- ---------
Net cash used in investing activities (44,788) (40,212)
--------- ---------
Cash flows used in financing activities:
Increase debt issuance costs --- (37,589)
Reductions in mortgage principal (82,328) (54,833)
--------- ---------
Net cash used in financing activities (82,328) (92,422)
--------- ---------
Net decrease in cash and
cash equivalents (177,531) (142,031)
Cash and cash equivalents at September 30 836,140 694,828
--------- ---------
Cash and cash equivalents at December 31 $ 658,609 552,797
--------- ---------
Supplemental disclosure of cash flow information:
Interest paid in cash during the period $ 179,742 171,025
========= =========
See accompanying notes to financial statements.
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BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Notes to Financial Statements
December 31, 1995
(Unaudited)
(1) Financial Statement Adjustments and Footnote Disclosure
The accompanying financial statements are unaudited. However, Boettcher
Properties, Ltd. (BPL), the Managing General Partner of Boettcher Western
Properties III Ltd. (the Partnership), believes all material adjustments
necessary for a fair presentation of the interim financial statements
have been made. Certain information and footnotes normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to Securities and
Exchange Commission rules and regulations. The Managing General Partner
believes the disclosures made are adequate to make the information not
misleading and suggests that the condensed financial statements be read
in conjunction with the financial statements and notes thereto included
in the Boettcher Western Properties III Ltd. September 30, 1995 Annual
Report.
(2) Significant Accounting Principles
Deferred Leasing Costs
Costs associated with the leasing of the Partnership's shopping center
are deferred and amortized over the life of the related leases and are
recorded at cost. These costs are comprised of lease commissions and
construction costs related to the buildout of tenant space.
Income Taxes
No provision has been made for federal income taxes, as the liability for
such taxes is that of the partners rather than the Partnership. The
Partnership reports certain transactions differently for tax and
financial statement purposes, primarily depreciation and debt discount.
Real Estate Investments
Properties held for sale are recorded at the lower of cost or fair market
value based upon independent appraised values.
Buildings and improvements are depreciated using the straight-line method
over an estimated useful life of 30 years. Equipment and furnishings are
depreciated using the straight-line method over an estimated useful life
of 5 years. Renewals and betterments are capitalized, and repairs and
maintenance are charged to operations as incurred.
Debt Discount and Debt Issuance Costs
Debt discount is amortized to interest expense using the
level-interest-yield method over the term of the related debt.
Costs incurred in arranging financing, such as loan origination fees,
commitment fees and extension fees, are deferred and amortized using the
level-interest-yield method over the term of the related debt.
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BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Notes to Financial Statements, Continued
December 31, 1995
(Unaudited)
Statements of Cash Flows
For purposes of the Statements of Cash Flows, cash and cash equivalents
include highly liquid debt instruments purchased with an original
maturity of three months or less. Cash and cash equivalents are
comprised of the following at December 31:
1995 1994
-------- --------
Money Market $564,606 $408,193
Operating Cash 94,003 144,604
-------- --------
Cash and Cash Equivalents $658,609 $552,797
======== ========
(3) Transactions with Related Parties
Deferred Acquisition Fee: Pursuant to the Management Agreement, the
Managing General Partner receives an annual fee for acquisition services
provided to the Partnership for each fiscal year equal to (a) 2% of the
average daily Aggregate Capital Investment Account plus (b) 1/2 of 1% of
the average daily Capital Cash Account, as those terms are defined in the
Partnership Agreement. Payments may be made for the lesser of 15 years
or until the limit on payments is reached. For the quarter ended
December 31, 1995, the amount earned by the Managing General Partner was
$35,091.
Property Management Fee: In accordance with the provisions of the
Management Agreement, property management fees are payable to the
Managing General Partner, regardless of the profitability of the
Partnership, equal to 5% of the actual gross receipts from the
properties, reduced by management fees paid to others. For the quarter
ended December 31, 1995, the fee earned by the Managing General Partner
was $1,829.
Direct Services: The Managing General Partner and its affiliates provide
various services directly related to the operations of the Partnership
and its properties. The Partnership reimburses the Managing General
Partner for its allocable share of salaries of nonmanagement and
nonsupervisory personnel providing accounting, investor reporting and
communications, and legal services to the Partnership; as well as
allowable expenses related to the maintenance and repair of data
processing equipment used for or by the Partnership. For the quarter
ended December 31, 1995, such reimbursements totaled $7,716.
(4) Liquidity and Debt Maturities
The Partnership is required under its Partnership Agreement to maintain
cash reserves of not less than 3% of aggregate capital contributions for
normal repairs, replacements, working capital and other contingencies.
As of December 31, 1995, the Partnership had cash reserves of $658,609,
while the required minimum amount was $660,000.
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BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Notes to Financial Statements, Continued
December 31, 1995
(Unaudited)
(Continued)
During the first quarter of fiscal 1996, the payable to managing general
partner decreased by $112,631 to a total of $1,414,760 as of December 31,
1995. This decrease is the net result of payments to (advances from) the
Managing General Partner totaling $157,267, and the accrual of fees and
reimbursements earned by the Managing General Partner in the first
quarter of fiscal 1996 in the amount of $44,636. The Managing General
Partner intends to apply cash flow generated from Partnership operations
in fiscal 1996, if any, to maintain the minimum required cash reserves,
as necessary, including any additional reserves to cover remediation
costs at Venetian Square Shopping Center. Thereafter, the Partnership
intends to pay the Managing General Partner all unpaid cash advances made
to the Partnership, all unpaid administrative reimbursements and all
deferred fees earned by the Managing General Partner which total $42,733,
$7,716 and $1,364,311, respectively, as of December 31, 1995.
The Managing General Partner is attempting to sell the Partnership's
remaining real estate investments in fiscal 1996. However, there can be
no assurances that the Partnership will sell such Properties in 1996. As
of December 31, 1995, the Partnership has recorded its remaining real
estate investments as properties held for sale. The Partnership has
entered into listing agreements with unrelated real estate brokerage
firms to act as exclusive selling agents for the remaining properties.
The Managing General Partner believes that both of these sales will
provide net proceeds to the Partnership after the payment of sales costs,
closing costs and mortgages payable; however, these sales transactions
may include both cash at closing and deferred payments to the
Partnership. The ability of the Partnership to sell Venetian Square
Shopping Center may be adversely affected by the potential remediation
costs of the petroleum contamination on a parcel of land adjacent to and
part of the property. The Partnership intends to apply net sales
proceeds to maintain the Partnership's minimum required cash reserves, as
necessary, including any additional reserves to cover potential
remediation costs. Thereafter, the Partnership intends to pay amounts
owed to the Managing General Partner and to make distributions to limited
partners.
On December 28, 1995, the Partnership obtained a letter of forbearance
from MBL Life Assurance Corporation ("MBL") on the mortgage payable
secured by the La Risa Apartments which was due January 1, 1996. This
letter provides that MBL will not exercise any of its rights or remedies
under the existing loan agreement prior to March 1, 1996. Under the
forbearance agreement, the annual interest rate (10 5/8%) and monthly
payment ($35,698) remain unchanged. In consideration of this agreement,
the Partnership was obligated to pay a $37,728 fee. The Managing General
Partner believes this forbearance agreement will help facilitate the
Partnership's efforts to sell the property in
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BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Notes to Financial Statements, Continued
December 31, 1995
(Unaudited)
the second quarter of fiscal 1996, with a portion of the sales proceeds
being utilized to pay all principal and interest owed to MBL at that
time. There can be no assurance that the Partnership will be able to
complete the sale of La Risa by March 1, 1996; or that MBL will grant an
additional extension of the letter of forbearance, which expires on
March 1, 1996. If the property is not sold and the Partnership is unable
to obtain an additional extension on the letter of forbearance, the
mortgage payable for La Risa Apartments will be due and payable on March
1, 1996. In this circumstance, if the Partnership does not pay off the
mortgage, the Partnership will be in default, entitling MBL to exercise
its available remedies, including foreclosure of the property.
On October 24, 1995, the Partnership entered into a letter agreement with
Great West Life Assurance Company ("Great West") to extend the maturity
date of the first mortgage payable secured by Venetian Square Shopping
Center to October 1, 1997. Under the agreement, the Partnership was
obligated to pay a $20,000 fee, the interest rate was increased to 10.5%
and the monthly payment was increased to $39,098.
(5) Environmental Contingency
From approximately 1979 through 1990, a card-lock fueling station had
been operated on a parcel of land adjacent to and part of Venetian Square
Shopping Center. In fiscal 1992, upon removal of the three underground
fuel storage tanks, leakage of petroleum contaminants was discovered
through performance of soil and groundwater tests. The Partnership is in
the process of determining the method, cost and timing of required soil
and groundwater remediation measures. The Partnership has spent
approximately $538,000 to date, including an accrual of $250,000, in
evaluating the remediation program. Management is unable at this time to
estimate the full extent of additional expenses that may be incurred.
Due to groundwater contamination, the Partnership may incur significant
additional remediation costs. Accordingly, the accompanying financial
statements do not include any adjustments that reflect the results of the
ultimate resolution of this uncertainty. The Partnership has contacted
all previous and current insurance companies which have underwritten
insurance coverages for Venetian Square. The Partnership intends to
determine with these insurance companies the extent of the Partnership
insurance coverage, if any, related to the environmental matters at
Venetian Square. There can be no assurances that any insurance coverage
will be available to the Partnership related to these matters.
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Item 2:
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
For the three months ended December 31, 1995, the Partnership generated total
revenue of $618,359 and incurred total expenses of $626,514, resulting in a net
loss of $8,155, which represents a decrease of $6,346 (44%) when compared with
the corresponding quarter of fiscal 1995. A summary of the Partnership's
operations and period-to-period comparisons is presented below.
Three Months Ended December
(In Thousands)
---------------------------------------
Amount
of %
1995 1994 Change Change
--------- --------- --------- ------
Total revenue $618 657 (39) (6%)
Total expenses 626 672 46 7%
--------- --------- --------- ------
Net loss (8) (15) 7 47%
========= ========= ========= ======
Based upon the amounts presented above, total revenue generated by the
Partnership amounted to $618,359, representing a decrease of $38,859 (6%) when
compared with the three months ended December 31, 1994. The Partnership's
properties generated rental income of $517,215 for the three months ended
December 31, 1995, which represents a decrease of $38,418 (7%) when compared
with the same period in fiscal 1995. La Risa Apartments achieved a weighted
average occupancy of 93% and a weighted average effective rental rate per unit
per month of $425, representing no change and a decrease of $15, respectively,
when compared with the first quarter of fiscal 1995. Rental income at La Risa
Apartments decreased $10,393 (3%) for the first quarter of fiscal 1996 when
compared to the same period of fiscal 1995. Rental income at Venetian Square
Shopping Center decreased $28,026 (11%) for the three months ended December 31,
1995 when compared with the same period of fiscal 1995. Average occupancy was
unchanged in the first quarter of fiscal 1996 at Venetian Square Shopping
Center, but the average effective rental rate decreased $1.04 when compared
with the same period in fiscal 1995. Other income decreased $13,557 (43%) for
the first quarter of fiscal 1996 when compared with the same period of fiscal
1995, primarily the result of the collection of an aged receivable in the
first quarter of fiscal 1995 from a tenant at Venetian Square Shopping Center
which had been considered uncollectible in prior years.
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A comparative summary of the average occupancies and average effective rental
rates generated by the properties is presented below:
First Quarter
Apartments Fiscal 1996 Fiscal 1995
- ---------- ----------- -----------
La Risa (254 units)
Average Occupancy 93% 93%
Average Effective Rental
Rate per Unit per Month $425 $440
Commercial
- ----------
Venetian Square Shopping Center
(117,115 net rentable square feet)
Average Occupancy 91% 91%
Retail - Average Effective
Rental Rate (1) $8.12 $9.16
(1) The rates are "triple net". In addition to this base rent, the
majority of tenants pay their pro rata share of taxes, insurance and
common area maintenance expenses at the project.
Based upon the amounts previously presented, total expenses incurred by the
Partnership for the three months ended December 31, 1995 amounted to $626,514.
Total Partnership expenses decreased $45,205 (7%) for the three months ended
December 31, 1995 when compared with the three months ended December 31, 1994.
The most significant changes in operating expenses, when comparing the first
quarter of fiscal 1996 to the first quarter of fiscal 1995, were in repairs and
maintenance, other administrative and environmental costs. All other expense
categories remained relatively constant. Repair and maintenance expense
decreased $29,318 (36%) for the first quarter of fiscal 1996 when compared to
fiscal 1995. This decrease is primarily the result of parking lot repairs and
the repair of underground water leaks at Venetian Square Shopping Center and
increased air conditioner repairs at La Risa Apartments completed in the first
quarter of fiscal 1995. Other administrative costs decreased $11,749 (16%) for
the three months ended December 31, 1995 when compared to the corresponding
period in 1994, primarily due to decreased postage and legal expenses in the
first quarter of fiscal 1996. Environmental expense decreased $7,039 (64%) in
the first quarter of 1996 when compared to the corresponding period in fiscal
1995. This represents costs associated with the further evaluation of the soil
and groundwater remediation program at Venetian Square Shopping Center. For
additional information refer to Note 5 to the Financial Statements as contained
in Item 1 of this report.
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Liquidity and Capital Resources
Cash and cash equivalent balances which represent Partnership reserves
amounted to $658,609 at December 31, 1995, which represents a decrease of
$177,531 when compared with fiscal 1995 year-end balances. Net cash used in
operating activities for the three months ended December 31, 1995 amounted to
$50,415. The most significant change in assets and liabilities in fiscal 1996
related to a decrease in property tax payable of $108,002. This decrease is a
result of the payment of property tax liabilities at both La Risa Apartments
and Venetian Square Shopping Center in the first quarter of fiscal 1996. Other
significant changes in assets and liabilities included property tax and other
escrow deposits, which decreased $77,329. This decrease is the result of the
payment of 1995 property taxes at La Risa Apartments in the first quarter of
fiscal 1996. The payable to managing general partner decreased $112,631. This
decrease is the net result of payment of fees and reimbursements to the
Managing General Partner in the first quarter of fiscal 1996.
Net cash used in investing activities in the first quarter of fiscal 1996
amounted to $44,788, which is comprised of additions to real estate investments
in the amount of $18,014 and deferred leasing costs of $26,774. Capital
improvements completed at La Risa Apartments in fiscal 1996 included unit
carpet, unit upgrades and appliance replacement as required. The Partnership's
fiscal 1996 deferred leasing costs include costs associated with repair of
tenant space at Venetian Square Shopping Center.
Net cash used by financing activities for the three months ended December
31, 1995 amounted to $82,328, and is comprised solely of reductions in mortgage
principal.
The Partnership is required under its Partnership Agreement to maintain
cash reserves of 3% of aggregate capital contributions ($660,000). As of
December 31, 1995, the Partnership had $658,609 in cash reserves. The
Partnership intends to apply any cash flow generated from Partnership
operations in fiscal 1996 to maintain minimum required cash reserves, including
any additional reserves deemed necessary by the Managing General Partner to
cover potential remediation costs of the petroleum contamination at Venetian
Square Shopping Center as discussed below. Thereafter, the Partnership intends
to pay the Managing General Partner all unpaid cash advances made to the
Partnership, all unpaid administrative reimbursements and all deferred fees
earned by the Managing General Partner, which totaled $42,733, $7,716 and
$1,364,311, respectively, as of December 31, 1995.
To the knowledge of the Managing General Partner, all properties are in
good physical condition. Budgeted capital improvements, tenant finish and
lease commissions for the remainder of fiscal 1996 total approximately
$110,500, $67,500 and $27,000 respectively. Capital improvements primarily
include unit carpet, appliance replacement and unit upgrades as required at La
Risa Apartments. Tenant finish costs and lease commissions are budgeted in
anticipation of leasing vacant space at Venetian Square Shopping Center.
The Managing General Partner is attempting to sell the Partnership's
remaining real estate investments in fiscal 1996. However, there can be no
assurances that the Partnership will sell
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such Properties in 1996. As of December 31, 1995, the Partnership has recorded
its remaining real estate investments as properties held for sale. The
Partnership has entered into listing agreements with unrelated real estate
brokerage firms to act as exclusive selling agents for the remaining
properties. The Managing General Partner believes that both of these sales will
provide net proceeds to the Partnership after the payment of sales costs,
closing costs and mortgages payable; however, these sales transactions may
include both cash at closing and deferred payments to the Partnership. The
ability of the Partnership to sell Venetian Square Shopping Center may be
adversely affected by the potential remediation costs of the petroleum
contamination on a parcel of land adjacent to and part of the property. The
Partnership intends to apply net sales proceeds to maintain the Partnership's
minimum required cash reserves, as necessary, including any additional reserves
to cover potential remediation costs. Thereafter, the Partnership intends to
pay amounts owed to the Managing General Partner and to make distributions to
limited partners.
On December 28, 1995, the Partnership obtained a letter of forbearance
from MBL Life Assurance Corporation ("MBL") on the mortgage payable secured by
the La Risa Apartments which was due January 1, 1996. This letter provides
that MBL will not exercise any of its rights or remedies under the existing
loan agreement prior to March 1, 1996. Under the forbearance agreement, the
annual interest rate (10 5/8%) and monthly payment ($35,698) remain unchanged.
In consideration of this agreement, the Partnership was obligated to pay a
$37,728 fee. The Managing General Partner believes this forbearance agreement
will help facilitate the Partnership's efforts to sell the property in the
second quarter of fiscal 1996, with a portion of the sales proceeds being
utilized to pay all principal and interest owed to MBL at that time. There can
be no assurance that the Partnership will be able to complete the sale of La
Risa by March 1, 1996; or that MBL will grant an additional extension of the
letter of forbearance, which expires on March 1, 1996. If the property is not
sold and the Partnership is unable to obtain an additional extension on the
letter of forbearance, the mortgage payable for La Risa Apartments will be due
and payable on March 1, 1996. In this circumstance, if the Partnership does
not pay off the mortgage, the Partnership will be in default, entitling MBL to
exercise its available remedies, including foreclosure of the property.
On October 24, 1995, the Partnership entered into a letter agreement with
Great West Life Assurance Company ("Great West") to extend the maturity date of
the first mortgage payable secured by Venetian Square Shopping Center to
October 1, 1997. Under the agreement, the Partnership was obligated to pay a
$20,000 fee, the interest rate was increased to 10.5% and the monthly payment
was increased to $39,098.
From approximately 1979 through 1990, a card-lock fueling station had been
operated on a parcel of land adjacent to and part of Venetian Square Shopping
Center. In fiscal 1992, upon removal of the three underground fuel storage
tanks, leakage of petroleum contaminants was discovered through performance of
soil and groundwater tests. The Partnership is in the process of determining
the method, cost and timing of required soil and groundwater remediation
measures. The Partnership has spent approximately $538,000 to date, including
an accrual of $250,000, in evaluating the remediation program. Management is
unable at this time to estimate the full extent of additional expenses that may
be incurred. Due to groundwater contamination, the Partnership may incur
significant additional remediation costs. Accordingly, the accompanying
financial statements do not include any adjustments that reflect the results of
the
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ultimate resolution of this uncertainty. The Partnership has contacted all
previous and current insurance companies which have underwritten insurance
coverages for Venetian Square. The Partnership intends to determine with these
insurance companies the extent of the Partnership insurance coverage, if any,
related to the environmental matters at Venetian Square. There can be no
assurances that any insurance coverage will be available to the Partnership
related to these matters.
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PART III. OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
No reports on Form 8-K were required or filed by
Registrant during the period for which this report is filed.
(c) Exhibits
Number Exhibit
------ -------
10.18 Loan extension agreement for
Venetian Square Shopping Center
dated October 24, 1995.
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SIGNATURE
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 thereunto duly authorized.
BOETTCHER WESTERN PROPERTIES III LTD.
-------------------------------------
(Registrant)
By: Boettcher Properties, Ltd., as
Managing General Partner
By: BPL Holdings, Inc., as
Managing General Partner
Dated: February 14, 1996 By: /s/ Thomas M. Mansheim
------------------------
Thomas M. Mansheim
Treasurer; Principal
Financial and Accounting
Officer of the Partnership
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