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 June 30, 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_____
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INDEX
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Page
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PART I. Financial Information
Item 1. Financial Statements (unaudited)
Balance Sheets - June 30, 1998
and September 30, 1997 3
Statements of Operations - Three and nine months
ended June 30, 1998 and 1997 4
Statement of Partners' Capital - Nine
months ended June 30, 1998 5
Statements of Cash Flows - Nine months
ended June 30, 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 II. Other Information
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURE 17
2
PART I. FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
--------------------
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Balance Sheets
(unaudited)
June 30, September 30,
1998 1997
---------- --------------
Assets
------
Real estate held for sale $ - $5,769,761
Cash and cash equivalents at cost, which
approximates market value 880,571 855,739
Accounts receivable and other assets 924 172,824
Debt issuance costs, net of accumulated
amortization of $0 and $47,083,
respectively - 2,500
--------- ----------
$ 881,495 $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 201,459 195,003
Accounts payable and accrued expenses 26,169 282,163
Property taxes payable - 21,238
Tenants' deposits - 36,638
Unearned rental income - 5,670
--------- ----------
Total liabilities 227,628 3,710,070
--------- ----------
Partners' capital
General partners (100,745) (109,376)
Limited partners 754,612 3,200,130
--------- ----------
Total partners' capital 653,867 3,090,754
--------- ----------
$ 881,495 $6,800,824
========= ==========
See accompanying notes to financial statements.
3
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Statements of Operations
Three and nine months ended June 30, 1998 and 1997
(unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ ------------------
1998 1997 1998 1997
---- ---- ---- ----
Revenue:
Rental income $ - $196,164 $281,263 $593,969
Tenant reimbursements for
common area charges,
insurance and taxes - 66,528 98,998 203,583
Other income 28,930 7,606 57,361 48,169
------ -------- -------- --------
28,930 270,298 437,622 845,721
------- -------- -------- --------
Expenses:
Interest, including
amortization of debt
discount and debt
issuance costs - 91,995 112,913 274,831
Property taxes - 21,238 19,111 64,624
Fees and reimbursements to
managing general partner - 24,686 31,960 76,395
Other management fees - 12,095 18,667 35,160
Repairs and maintenance - 23,254 42,565 102,207
Utilities - 8,502 9,326 26,433
Other administrative 5,375 23,161 88,079 68,820
Environmental costs - 1,850 8,184 7,825
------- -------- -------- -------
5,375 206,781 330,805 656,295
------- -------- -------- -------
Operating income 23,555 63,517 106,817 189,426
Gain on sale of real estate
investment - - 756,296 -
------- -------- -------- --------
Net earnings $23,555 $ 63,517 $863,113 $189,426
======= ======== ======== ========
Net earnings per limited
partnership unit $ 1.07 $ 2.89 $ 39.23 $ 8.61
======= ======== ======== ========
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
Nine months ended June 30, 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 nine months
ended June 30, 1998 8,631 854,482 863,113
--------- ----------- -----------
Balances at June 30, 1998 $(100,745) $ 754,612 $ 653,867
========= =========== ===========
See accompanying notes to financial statements.
5
BOETTCHER WESTERN PROPERTIES III LTD.
(A Limited Partnership)
Statements of Cash Flows
Nine Months Ended June 30, 1998 and 1997
(unaudited)
Nine Months Ended
June 30,
-------------------------
1998 1997
---- ----
Cash flows from operating activities:
Net earnings $ 863,113 $ 189,426
Adjustments to reconcile net loss to
net cash provided by operating activities
Depreciation and amortization 2,500 12,307
Gain on sale of property (756,296) -
Change in assets and liabilities:
(Increase) decrease in accounts receivable and other assets 10,372 (47,689)
Increase in payable to managing general
partner relating to operations 106,456 123,707
Decrease in accounts payable and accrued expenses (255,693) (2,745)
Decrease in property taxes payable (21,238) (21,238)
Decrease in tenants' deposits (40,025) (881)
Increase (decrease) in unearned rental income (4,221) 1,485
Decrease in accrued interest payable - (490)
----------- ----------
Net cash flows from (used by) operating activities (95,032) 253,882
----------- ----------
Cash flows used by 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:
Payments to managing general partner (100,000) (600,000)
Reductions in mortgage principal (3,188,615) (101,646)
Distributions to limited partners (3,300,000) -
----------- ----------
Net cash flows used in financing activities (6,588,615) (701,646)
----------- ----------
Net increase (decrease) in cash and cash equivalents 24,832 (450,593)
Cash and cash equivalents at September 30 855,739 1,240,077
----------- ----------
Cash and cash equivalents at June 30 $ 880,571 $ 789,484
=========== ==========
Supplemental disclosure of cash flow information:
Interest paid in cash during the period $ 112,913 $ 275,321
=========== ==========
See accompanying notes to financial statements.
6
BOETTCHER WESTERN PROPERTIES III LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 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
reasonably 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 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 will not have a
material impact on the Partnership's financial position, results of
operations or liquidity.
7
BOETTCHER WESTERN PROPERTIES III LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
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 June 30:
1998 1997
--------- ---------
Money Market $873,867 $631,359
Operating Cash 6,704 158,125
-------- --------
Cash and Cash Equivalents $880,571 $789,484
======== ========
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.
8
BOETTCHER WESTERN PROPERTIES III LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
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 nine months ended
June 30, 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 nine months ended June 30, 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 nine months ended June 30, 1998
such reimbursements totaled $5,760.
9
BOETTCHER WESTERN PROPERTIES III LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
(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 June 30, 1998, the Partnership had cash reserves of $880,571, while the
required minimum amount was $660,000. For the nine months ended June 30,
1998, the payable to Managing General Partner increased by $6,456 to a
total of $201,459 as of June 30, 1998. This increase is the net result of
advances from the $74,497, accruals of fees and reimbursements earned by
the Managing General Partner of $31,960, and a payment of $100,000 to the
Managing General Partner in the second quarter of fiscal 1998.
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
JUNE 30, 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 has
submitted all of the required information within the prescribed filing
guidelines and is currently waiting for a response to its reimbursement
request. 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 nine months ended June 30, 1998, the Partnership
generated total revenue of $28,930 and $437,622 and incurred total expenses of
$5,375 and $330,805, resulting in income from operations of $23,555 and
$106,817, respectively. This represents decreases in the Partnership's results
of operations when compared to the three and nine months ended June 30, 1997 of
$39,962 and $82,609, respectively. The Partnership generated decreased total
revenue, primarily rental and other income, and decreased total expenses in all
categories for the nine months ended June 30, 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 June 30 Nine Months Ended June 30
(in thousands) (in thousands)
------------------------------ -----------------------------
Amount Amount
of % of %
1998 1997 Change Change 1998 1997 Change Change
----- ---- ------ ------ ----- ---- ------ ------
Total revenue $ 29 270 (241) (89%) $ 438 846 (408) (48%)
Total expenses 5 207 (202) (98%) 331 656 (325) (50%)
----- ---- ----- ---- ------
Net operating
income (loss) $ 24 63 (39) $ 107 190 (83)
===== ==== ==== ===== ==== ======
For the nine months ended June 30, 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 on
February 18, 1998.
The increase in other income for the three and nine months ended June 30,
1998 is primarily due to a legal settlement of $15,000 awarded against Custom
T's, a former tenant of Venetian.
Total expenses incurred by the Partnership for the three and nine months
ended June 30, 1998, amounted to $5,375 and $330,805, representing decreases of
$201,406 (97%) and $325,490 (50%), 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 nine months ended June 30,
1998 to the nine months ended June 30, 1997, were in interest expense, repairs
and maintenance, other administrative expenses, and environmental expenses.
Interest expense decreased $161,918 (59%) to $112,913
12
for the nine months ended June 30, 1998 from $274,831 for the corresponding
period 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 $59,642 (58%) for the nine
months ended June 30, 1998 when compared to the corresponding period 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
$19,259 (28%) for the nine ended June 30, 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 $359 (5%) to $8,184 for the nine months ended June 30, 1998 from
$7,825 in the corresponding period of fiscal 1997. This increase is directly
related to the completion of required environmental remediation of 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 $880,571 at June 30, 1998 which represents an increase of $24,832
when compared with the fiscal 1997 year-end balance. Net cash flows used by
operating activities for the nine months ended June 30, 1997 amounted to $95,032
and included an increase in payable to Managing General Partner relating to
operations of $106,456. At June 30, 1998 the payable to Managing General
Partner totaled $201,459. Other significant changes in assets and liabilities
include a decrease in accounts payable and accrued expenses of $255,693,
primarily the result of the sale of Venetian in quarter of 1998.
Net cash flows from investing activities amounted to $6,708,479 for the
nine months ended June 30, 1998, comprised solely of proceeds from the sale of
the Remaining Property, net of closing costs and other costs sale.
Net cash flows used in financing activities amounted to $6,588,615 for the
nine months ended June 30, 1998 and is comprised of a payment to the Managing
General Partner of $100,000 representing deferred acquisition fees, general
reimbursements and repayment of 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:
13
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 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 has submitted all of the required
information within the prescribed filing guidelines and is currently waiting for
a response to its reimbursement response. 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
14
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 II. 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: August 14, 1998 By: /s/ Thomas M. Mansheim
----------------------
Thomas M. Mansheim
Treasurer; Principal
Financial and Accounting
Officer of the Partnership
17