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 March 31, 1998
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 84-0911344
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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
--- ---
INDEX
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Page
----
PART I. Financial Information
Item 1. Financial Statements (unaudited)
Balance Sheets - March 31, 1998
and September 30, 1997 3
Statements of Operations - Three and six months
ended March 31, 1998 and 1997 4
Statement of Partners' Capital - Six
months ended March 31, 1998 5
Statements of Cash Flows - Six months
ended March 31, 1998 and 1997 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
PART III. Other Information
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURE 18
2
PART I. Financial Information
---------------------
Item 1. Financial Statements
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Balance Sheets
(unaudited)
March 31, September 30,
1998 1997
--------- -------------
Assets
------
Real estate held for sale $ - $5,769,761
Cash and cash equivalents at cost, which
approximates market value 852,048 855,739
Accounts receivable and other assets 1,617 172,824
Debt issuance costs, net of accumulated
amortization of $0 and $47,083,
respectively - 2,500
-------- ----------
$853,665 $6,800,824
======== ==========
Liabilities and Partners' Capital
---------------------------------
Mortgages payable, net of unamortized debt
discount of $0 and $1,673, respectively $ - $3,169,358
Payable to managing general partner 191,729 195,003
Accounts payable and accrued expenses 31,644 282,163
Property taxes payable - 21,238
Tenants' deposits - 36,638
Unearned rental income - 5,670
-------- ----------
Total liabilities 223,373 3,710,070
-------- ----------
Partners' capital
General partners (100,981) (109,376)
Limited partners 731,273 3,200,130
-------- ----------
Total partners' capital (deficit) 630,292 3,090,754
-------- ----------
$853,665 $6,800,824
======== ==========
See accompanying notes to financial statements.
3
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Statements of Operations
Three and six months ended March 31, 1998 and 1997
(unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
------------------- ------------------
1998 1997 1998 1997
-------- -------- -------- --------
Revenue:
Rental income $ 97,838 $190,885 $281,263 $397,805
Tenant reimbursements for
common area charges,
insurance and taxes 31,289 61,726 98,998 137,055
Other income 16,450 10,608 28,411 40,563
-------- -------- -------- --------
145,577 263,219 408,672 575,423
-------- -------- -------- --------
Expenses:
Interest, including
amortization of debt
discount and debt
issuance costs 26,838 86,108 112,913 182,836
Property taxes - 21,542 19,111 43,386
Fees and reimbursements to
managing general partner 7,990 25,965 31,960 51,709
Other management fees 5,989 10,674 18,667 23,065
Repairs and maintenance 17,009 40,726 42,565 78,953
Utilities 1,259 7,522 9,326 17,931
Other administrative 35,948 14,215 82,704 45,659
Environmental costs - 2,101 8,184 5,975
-------- -------- -------- --------
95,033 208,853 325,430 449,514
-------- -------- -------- --------
Operating income 50,544 54,366 83,242 125,909
Gain on sale of real estate
investment 756,296 - 756,296 -
-------- -------- -------- --------
Net earnings $806,840 $ 54,366 $839,538 $125,909
======== ======== ======== ========
Net earnings per limited
partnership unit $ 36.67 $ 2.45 $ 38.16 $ 5.67
======== ======== ======== ========
Weighted average number of
limited partnership units
outstanding 22,000 22,000 22,000 22,000
======== ======== ======== ========
See accompanying notes to financial statements.
4
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Statement of Partners' Capital
Six months ended March 31, 1998
(unaudited)
Total
General Limited partners'
partners partners capital
---------- ---------- ----------
Balances at October 1, 1997 $(109,376) $3,200,130 $3,090,754
Distributions to limited partners - (3,300,000) (3,300,000)
Net income for the six months
ended March 31, 1998 8,395 831,143 839,538
--------- ---------- ----------
Balances at March 31, 1998 $(100,981) $ 731,273 $ 630,292
========= ========== ==========
See accompanying notes to financial statements.
5
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Statements of Cash Flows
Six Months Ended March 31, 1998 and 1997
(unaudited)
Six Months Ended
March 31,
--------------------------
1998 1997
----------- ----------
Cash flows from operating activities:
Net earnings $ 839,538 $ 125,909
Adjustments to reconcile net loss to
net cash provided by operating activities
Depreciation and amortization 2,500 8,162
Gain on sale of property (756,296) -
Change in assets and liabilities:
(Increase) decrease in accounts receivable and other assets 9,679 (50,562)
Increase in payable to managing general partner relating
to operations 96,726 89,697
Decrease in accounts payable and accrued expenses (250,218) (11,524)
Decrease in property taxes payable (21,238) (21,238)
Decrease in tenants' deposits (40,025) (3,608)
Increase (decrease) in unearned rental income (4,221) 423
Decrease in accrued interest payable - (490)
----------- ----------
Net cash flows from (used by) operating activities (123,555) 136,769
----------- ----------
Cash flows from investing activities:
Additions to real estate held for sale - (2,829)
Proceeds from sale of property net of closing costs
and other costs of sale 6,708,479 -
----------- ----------
Net cash flows from investing activities 6,708,479 (2,829)
----------- ----------
Cash flows used in financing activities:
Advances from (payments to) managing general partner (100,000) (600,000)
Reductions in mortgage principal (3,188,615) (72,199)
Distributions to limited partners (3,300,000) -
----------- ----------
Net cash flows from financing activities (6,588,615) (672,199)
----------- ----------
Net decrease in cash and cash equivalents (3,691) (538,259)
Cash and cash equivalents at September 30 855,739 1,240,077
----------- ----------
Cash and cash equivalents at March 31 $ 852,048 $ 701,818
=========== ==========
Supplemental disclosure of cash flow information:
Interest paid in cash during the six month period $ 112,913 $ 182,346
=========== ==========
See accompanying notes to financial statements.
6
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1998
(unaudited)
(1) Financial Statement Adjustments and Footnote Disclosure
-------------------------------------------------------
The accompanying financial statements are unaudited. However, Boettcher
Properties, Ltd. 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,
1997 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. In fiscal 1997 upon adoption of SFAS
121, described below, these costs are included in real estate held for sale.
Environmental Remediation Liabilities
Liabilities for loss contingencies, including environmental remediation costs,
arising from claims, assessments, litigation, fines and penalties, and other
sources are recorded when it is probable that a liability has been incurred
and the amount of the assessment and/or remediation can be reasonable
estimated. The costs of site clean-up are recorded in the amount of the cash
payments made or for future estimated costs for that site when fixed or
reliably determinable based upon information derived from the remediation plan
for that site. Recoveries from third parties which are probable of realization
are separately recorded, and are not offset against the related environmental
liability.
In October 1996, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 96-1, Environmental Remediation Liabilities. SOP
96-1 was adopted by the Partnership during fiscal 1997 and requires, among
other things, environmental remediation liabilities to be accrued when the
criteria of SFAS No. 5, Accounting for Contingencies, have been met. The SOP
also provides guidance with respect to the
7
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1998
(unaudited)
measurement of the remediation liabilities. Such accounting is consistent
with the Partnership's current method of accounting for environmental
remediation costs and therefore, adoption of this new Statement did not have a
material impact on the Partnership's financial position, results of
operations, or liquidity.
Financial Instruments
The fair value of the Partnership's financial instruments approximate their
carrying values due to the short maturities of those instruments or due to the
interest rates of those instruments approximating interest rates for similar
issues.
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 value based
upon independent appraised values less estimated selling costs.
Debt Discount and Debt Issuance Costs
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 or the extension
period.
Debt discount is amortized to interest expense using the level-interest-yield
method over the term of the related debt.
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 March 31:
1998 1997
-------- --------
Money Market $638,130 $631,136
Operating Cash 213,918 70,682
-------- --------
Cash and Cash Equivalents $852,048 $701,818
======== ========
8
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1998
(unaudited)
Use of Estimates
Management of the Partnership has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results
could differ from those estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform with current year
financial statement presentation.
(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 Limited Partnership
Agreement. Payments may be made for the lesser of 15 years or until the limit
on payments is reached. For the six months ended March 31, 1998 the amount
earned by the Managing General Partner was $26,200.
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 six months ended March 31, 1998 no fees were earned by the
Managing General Partner.
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 and its
affiliates 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 six months ended March 31, 1998 such
reimbursements totaled $5,760.
(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
9
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1998
(unaudited)
capital and other contingencies. As of March 31, 1998, the Partnership had
cash reserves of $852,048, while the required minimum amount was $660,000. For
the six months ended March 31, 1998, the payable to Managing General Partner
decreased by $3,274 to a total of $191,729 as of March 31, 1998. This
decrease is the net result of a payment to the Managing General Partner of
$100,000, additional cash advances of $33,231, and the accrual of fees and
reimbursements earned by the Managing General Partner in the second quarter of
fiscal 1998 in the amount of $7,990.
On February 18, 1998, upon closing of the sale of Venetian Square Shopping
Center (the "Remaining Property", or "Venetian") the Partnership received net
proceeds of approximately $3.3 million. The Partnership made an initial
distribution of $150 per limited partnership unit ("Unit") out of the
Partnership's cash reserves on March 12, 1998. The Partnership will retain
approximately $600,000 as a reserve for the payment of the Partnership's
remaining debts and liabilities, to cover contingent liabilities resulting
from the Partnership's previous ownership of the Remaining Property, and to
cover the costs and expenses associated with the Partnership's liquidation and
dissolution. The Partnership may make one or more interim distributions
during its winding up process as contingent liabilities lapse and the time of
the liquidation and dissolution becomes more certain. Upon liquidation and
dissolution, the Partnership will make a final distribution of its remaining
cash, constituting the remaining asset of the Partnership, to the limited
partners. See Note 6 for further discussion on the sale of the Remaining
Property.
(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 $318,000 to date in
connection with the remediation program and has an accrual of $25,000 as a
provision for possible additional remediation expenses. Amounts expended to
date have been for the evaluation, monitoring, and remediation of the
petroleum contamination. On December 31, 1997, the Partnership received from
the County Health Division a "no further action required" letter, confirming
completion of the remediation effort at Venetian.
10
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Notes to Financial Statements
March 31, 1998
(unaudited)
From time to time the Partnership has analyzed potential sources of
reimbursement for environmental remediation expenses. As a result, the
Partnership made an inquiry to the California State Water Resources Control
Board as to a potential reimbursement claim.
On January 6, 1998, the Partnership received correspondence from the
California State Water Resources Control Board indicating that the
Partnership's claim for reimbursement filed under the Underground Storage Tank
Cleanup Fund Program has been accepted for review. The Partnership is
currently working on submitting all of the required information within the
prescribed preliminary filing guidelines. The Managing General Partner is
unable at this time to determine the amount of reimbursement, if any, that the
Partnership may receive as a result of this filing, and is unable to determine
the timing of the reimbursement, if any. Accordingly, no adjustments have been
made to the financial statements contained herein.
(6) Sale of Real Estate
-------------------
On February 18, 1998, the Partnership closed on the sale of the Remaining
Property, selling the land, related improvements and personal property of the
retail center known as Venetian Square Shopping Center ("Venetian") located in
Stockton, California to an unrelated third party for $6,975,000. Venetian
consists of a 3-building shopping center containing approximately 117,107
square feet of net rentable area on approximately 9.2 acres of land. At the
time of sale, Venetian was approximately 77% leased and occupied.
The net proceeds and gain on sale related to the Remaining Property, are
calculated as follows:
Total of contract sale price $ 6,975,000
Less costs of sale -
Sales commissions (209,250)
Title, legal fees, and other (147,504)
Mortgage payoff (3,139,228)
Security deposit liability (40,025)
Tenant Concessions (173,001)
-----------
Net proceeds on sale 3,265,992
Write off of non-cash assets (2,509,696)
-----------
Net gain on sale $ 756,296
===========
11
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Partnership, pursuant to the Purchase and Sale Agreement, closed the sale of
the Remaining Property on February 18, 1998 and the Partnership is currently in
the process of liquidating and dissolving (i.e. "winding up" its business and
affairs). Management's Discussion and Analysis of Financial Condition and
Results of Operations is qualified in its entirety by the occurrence of the sale
and the Partnership's winding up process.
Results of Operations
- ---------------------
For the three and six months ended March 31, 1998, the Partnership
generated total revenue of $145,577 and $408,672 and incurred total expenses
of $95,033 and $325,430 resulting in income from operations of $50,544 and
$83,242 respectively. This represents decreases in the Partnership's results
of operations when compared to the three and six months ended March 31, 1997
of $113,820 and $42,667, respectively. The Partnership generated decreased
total revenue, primarily rental and other income, and decreased total expenses
in all categories for the six months ended March 31, 1998, primarily due to
the sale of Venetian. A summary of the Partnership's operations and
period-to-period comparisons before gain on sale of Venetian is presented
below.
Three Months Ended March 31 Six Months Ended March 31
(in thousands) (in thousands)
-------------------------------- -----------------------------------
Amount Amount
of % of %
1998 1997 Change Change 1998 1997 Change Change
---- ---- ------ ------ ---- ---- ------ ------
Total revenue $146 263 (117) (44%) $409 575 (166) (29%)
Total expenses 95 209 (114) (55%) 326 450 (124) (28%)
---- --- ---- ---- --- ----
Net operating
income $ 51 54 ( 3) $ 83 125 (42)
==== === ==== ==== === ====
For the six months ended March 31, 1998, the Partnership reported decreased
revenues in all categories when compared to the corresponding periods of fiscal
1997, primarily due to the sale of the Partnership's Remaining Property.
Venetian achieved average occupancy of 77% and an average effective rental
rate of $6.54 for the second quarter of fiscal 1998, representing a decrease of
3% and $1.62, respectively, when compared to the same period in fiscal 1997. As
a result, rental income decreased $116,542 (29%) to $281,263 for the second
quarter of fiscal 1998 compared to $397,805 in the second quarter of fiscal
1997. Tenant reimbursement income also decreased, from $137,055 for the six
months ended March 31, 1997 to $98,998 in the corresponding period in fiscal
1997, a direct result of decreased vacancies at the Remaining Property. Other
income decreased $12,152 (30%) for the six months ended March 31, 1998 compared
to the same period in 1997, primarily due to the maintenance of lower cash
reserves. A summary of the average occupancy and average effective rental rates
of the Partnership's Remaining Property is presented below.
Second Quarter
Fiscal 1998 Fiscal 1997
----------- -----------
Commercial
- ----------
Venetian Square Shopping Center
Average occupancy 77% (2) 80%
Average effective rental rate (1) $6.54 (2) $8.16
12
(1) These 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.
(2) Venetian was sold on February 18, 1998. Average occupancy and average
effective rental rate reflects occupancy as of this date.
Total expenses incurred by the Partnership for the three and six months
ended March 31, 1998 amounted to $95,033 and $325,430, representing decreases
of $124,084 (28%) and $113,820 (54%), respectively, when compared with the
corresponding periods of fiscal 1997. While the majority of expense
categories decreased, the most significant changes in operating expenses, when
comparing the second quarter of fiscal 1998 to the second quarter of fiscal
1997, were in interest expense, repairs and maintenance, other administrative
expenses, and environmental expenses. Interest expense decreased $69,923 (38%)
to $112,913 for the six months ended March 31, 1998 from $182,836 for the
corresponding periods in fiscal 1997. This decrease is due to an increase in
the amount of principal paid down on the Partnership's first mortgage in the
current fiscal quarters. Repairs and maintenance expense decreased $36,388
(46%) for the second quarter of fiscal 1998 when compared to the corresponding
periods in fiscal 1997. This decrease is primarily the result of sewer line
repairs and roof work at Venetian completed in fiscal 1997. Other
administrative expenses increased $37,045 (81%) for the six months ended March
31, 1998 when compared to the corresponding periods in fiscal 1997. This
increase is due to increased legal fees in the current fiscal year incurred in
connection with the Partnership's proxy solicitation that was completed in
December 1997 and with the sale and dissolution of the Partnership's Remaining
Property. Environmental expenses increased $2,209 (37%) to $8,184 for the six
months ended March 31, 1998 from $5,975 in the corresponding period of fiscal
1997. This increase is directly related to the completion of required
environmental remediation at Venetian in the first quarter of fiscal 1998. See
Note 5 of the Notes to the Financial Statements in Item 1 of this report for
further discussion of the environmental remediation status.
Liquidity and Capital Resources
-------------------------------
Cash and cash equivalent balances which represent Partnership reserves
amounted to $852,048 at March 31, 1998 which represents a decrease of $3,691
when compared with the fiscal 1997 year-end balance. Net cash flows used by
operating activities for the six months ended March 31, 1998 amounted to
$123,555, and included an increase in payable to Managing General Partner
relating to operations of $96,726. At March 31, 1998 the payable to Managing
General Partner totaled $191,729. Other significant changes in assets and
liabilities include a decrease in accounts payable and accrued expenses of
$250,218, and a decrease in tenant security deposits, primarily the result of
sale of Venetian in the second quarter of fiscal 1998.
Net cash flows from investing activities amounted to $6,708,479 for the
six months ended March 31, 1998, comprised solely of proceeds from the sale of
the Remaining Property, net of closing costs and other costs of sale.
13
Net cash flows from financing activities amounted to $6,588,615 for the
six months ended March 31, 1998 and is comprised of a payment to the Managing
General Partner of $100,000 representing deferred acquisition fees, general
reimbursements and prior cash advances; distribution to limited partners of
$3,300,000, and reductions in mortgage principal in the amount of $3,188,615.
The sale of the Remaining Property closed on February 18, 1998 and the
Partnership received gross proceeds of $6,975,000. Upon closing the sale of
the Remaining Property, the Partnership used a portion of the proceeds to pay
the first mortgage secured by the Remaining Property and certain customary
losing expenses. The Partnership is currently in the process of liquidating
and dissolving (i.e. "winding up" its business and affairs). Once the
liquidation and dissolution is completed, the operations and existence of the
Partnership will cease.
The net proceeds and net gain related to the Remaining Property, are
calculated as follows:
Total of contract sale price $ 6,975,000
Less costs of sale -
Sales commissions (209,250)
Title, legal fees, and other (147,504)
Mortgage payoff (3,139,228)
Security deposit liability (40,025)
Tenant Concessions (173,001)
-----------
Net proceeds on sale 3,265,992
Write off of non-cash assets (2,509,696)
-----------
Net gain on sale $ 756,296
===========
On February 18, 1998, upon closing of the sale of Venetian Square
Shopping Center (the "Remaining Property", or "Venetian") the Partnership
received net proceeds of approximately $3.3 million. The Partnership made an
initial distribution of $150 per limited partnership unit ("Unit") out of the
Partnership's cash reserves on March 12, 1998. The Partnership will retain
approximately $600,000 as a reserve for the payment of the Partnership's
remaining debts and liabilities, to cover contingent liabilities resulting
from the Partnership's previous ownership of the Remaining Property, and to
cover the costs and expenses associated with the Partnership's liquidation and
dissolution. The Partnership may make one or more interim distributions
during its winding up process as contingent liabilities lapse and the time of
the liquidation and dissolution becomes more certain. Upon liquidation and
dissolution, the Partnership will make a final distribution of its remaining
cash, constituting the remaining asset of the Partnership, to the limited
partners. See Note 6 for further discussion on the sale of the Remaining
Property.
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
14
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 $318,000 to date in connection with the remediation program and
has an accrual of $25,000 as a provision for possible additional remediation
expenses. Amounts expended to date have been for the evaluation, monitoring,
and remediation of the petroleum contamination. On December 31, 1997, the
Partnership received from the County Health Division a "no further action
required" letter, confirming completion of the remediation effort at Venetian.
From time to time the Partnership has analyzed potential sources of
reimbursement for environmental remediation expenses. As a result, the
Partnership made an inquiry to the California State Water Resources Control
Board as to a potential reimbursement claim.
On January 6, 1998, the Partnership received correspondence from the
California State Water Resources Control Board indicating that the
Partnership's claim for reimbursement filed under the Underground Storage Tank
Cleanup Fund Program has been accepted for review. The Partnership is
currently working on submitting all of the required information within the
prescribed preliminary filing guidelines. The Managing General Partner is
unable at this time to determine the amount of reimbursement, if any, that the
Partnership may receive as a result of this filing, and is unable to determine
the timing of the reimbursement, if any. Accordingly, no adjustments have
been made to the financial statements contained in Item 1 of this report.
15
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 filed by the Registrant during the period
covered by this report.
16
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: May 15, 1998 By: /s/ Thomas M. Mansheim
--------------------------------
Thomas M. Mansheim
Treasurer; Principal
Financial and Accounting
Officer of the Partnership
17