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Exhibit 99.2
MORAGA CAPITAL LLC
1640 School Street, Suite 100
Moraga, California 94556
April 3, 1996
Mr. Herbert M. Gelfand
Chairman of the Board
De Anza Corporation
Operating General Partner
De Anza Properties - X
9171 Wilshire Boulevard, Suite 627
Beverly Hills, California 90210
Re: De Anza Properties - X
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Dear Mr. Gelfand:
Enclosed is a letter from the undersigned and certain other limited
partners of De Anza Properties - X requesting a meeting of the limited partners
of De Anza Properties - X. The reasons for calling the meeting, which are
spelled out more fully in the enclosed letter, relate to:
o entering into a new management contract for the Woodbridge Meadows
Apartments with a nationally or regionally recognized, experienced
and qualified apartment property management firm following a
competitive bidding process;
o entering into an arrangement with a real estate syndication firm to
provide administrative services to the partnership that are necessary
for the operation of the partnership and its properties;
o amending Section 24.2 of the partnership agreement to require that
the consent of a limited partner to be adversely affected is required
in the case of an amendment to alter the
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De Anza properties - X
April 3, 1996
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interest of a limited partner in profits or losses or in
distributable cash or sale or refinancing proceeds; and
o amending the allocation of profits and distributable cash as between
the general partners and the limited partners such that the interest
of the general partners, which is currently 23.6816%, would be
reduced by 5% of such amount as of the last day of each month
occurring in the period commencing 90 days after the adoption of such
amendment and continuing until such time as the partnership's sole
remaining property has been sold and at least 95% of the proceeds
attributable to such sale have been distributed to the partners, and
the interest of the limited partners would be increased as of the
last day of each month occurring in such period by the amount of each
such reduction.
The first two proposed amendments referenced above relate to improving
the economics of De Anza Properties - X for the benefit of all the partners of
De Anza Properties - X. The Affiliated Partners (as such term is defined in
the enclosed letter) believe that the terms of the property management and
administrative arrangements that are currently in place at De Anza
Properties - X can be replaced with comparable services provided by unaffiliated
third parties at significant cost savings. In particular, we believe that
various property management firms would be willing to assume the management of
the Woodbridge Meadows Apartments for a fee equal to 4% of the aggregate gross
receipts from the operation of the property without the need for any additional
reimbursable cost or expense. Further, we believe that the administration of De
Anza Properties - X by the Operating General Partner is an uneconomical
endeavor, and that significant economies of scale could be recognized if
administrative services were provided by a third party that provides similar
services to other limited partnerships. We estimate that the cost savings that
could be realized from these two areas would allow the dividend rate for the
partnership to be increased from the current rate of 6% to approximately 10%.
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De Anza Properties - X
April 3, 1996
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As to the latter two proposed amendments, the Affiliated Partners
believe that the allocation of distributable cash and profits to the general
partners is too high, as any future growth in value disproportionately benefits
the general partners. We also believe that Woodbridge Meadows Apartments, the
sole remaining real property owned by the partnership, should be sold in an
expeditious manner. Further, we believe that the proposed reduction is an
equitable one since it would not take effect until three months following its
adoption and would then be implemented in steps on a monthly basis, creating an
incentive for the general partners to arrange for the sale of the Woodbridge
Meadows property and to distribute the proceeds therefrom in an expeditious
manner.
Representatives of the Affiliated Partners would be happy to meet with
you to discuss the proposed amendments after you have had an opportunity to
review the enclosed letter. You may contact the undersigned by telephone at
(516) 822-0022, or, if you prefer, your counsel may contact James E. Lyons of
Skadden, Arps, Slate, Meagher & Flom, counsel to the undersigned.
Very truly yours,
Moraga Capital, LLC
By: /s/ Michael L. Ashner
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Name: Michael L. Ashner
Title: Member