1
Exhibit 99(c)
Financial Statements of
Pacific Place Partners, Ltd.
as at December 31, 1994 and 1995
2
REPORT OF
---------
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
DECEMBER 31, 1994
-----------------
3
KONOWITZ, KAHN & COMPANY, P.C.
- ------------------------------------------------------------------------------
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Pacific Place Partners, LTD.
We have audited the accompanying balance sheet of
Pacific Place Partners, LTD. (A Texas Limited Partnership) as of
December 31, 1994 and 1993, and the related statements of income,
partners capital, and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audit. The 1992 financial statements
of Pacific Place Partners, LTD were audited by other accountants, whose
report dated February 19, 1993 expressed an unqualified opinion on
those statements.
We conducted our audit in accordance with generally
accepted auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the financial position
of Pacific Place Partners, LTD., as of December 31, 1994 and 1993, and
the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
/s/ Konowitz, Kahn & Company, P.C.
- ----------------------------------
February 11, 1995
110 Washington Avenue [LOGO] (203) 239-6888
P.O. Box 190 Bridgeport (203) 366-6888
North Haven, CT 06473 Fax (203) 234-1553
4
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
BALANCE SHEET
-------------
As At As At As At
December 31, 1994 December 31, 1993 December 31, 1992
----------------- ----------------- -----------------
ASSETS
------
CURRENT ASSETS:
Cash $ 3,883 $ 4,593 $ 3,089
----------- ----------- -----------
PROPERTY AND EQUIPMENT:
Land 5,000,000 5,000,000 5,000,000
Building 35,912,072 35,912,072 35,912,072
Equipment 9,000,000 9,000,000 9,000,000
----------- ----------- -----------
Total 49,912,072 49,912,072 49,912,072
Less: Accuutlated depreciation 8,543,039 5,845,237 3,147,435
----------- ----------- -----------
Net Book Value of Property
and Equipment 41,369,033 44,066,835 46,764,637
----------- ----------- -----------
OTHER ASSETS:
Financing fees (net of
accumulated amortization
of $129,333, $87,833
and $46,333) 78,167 119,667 161,167
Acquisition fees (net of
accumulated amortization
of $15,203, $10,390
and $5,577) 177,297 182,110 186,923
----------- ----------- -----------
Total Other Assets 255,464 301,777 348,090
----------- ----------- -----------
TOTAL ASSETS $41,628,380 $44,373,205 $47,115,816
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
5
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
BALANCE SHEET
-------------
As At As At As At
December 31, 1994 December 31, 1993 December 31, 1992
----------------- ----------------- -----------------
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
CURRENT LIABILITIES:
Current portion of long-term
debt $ 2,861,851 $ 2,514,736 $ 2,209,722
Accrued interest 80,112 85,561 75,291
Deferred rent 799,590 799,590 766,268
---------- ---------- ----------
Total Current Liabilities 3,741,553 3,399,887 3,051,281
---------- ---------- ----------
LONG TERM LIABILITIES:
Mortgage payable 36,974,896 39,489,632 41,699,354
Less: Current portion 2,861,851 2,514,736 2,209,722
---------- ---------- ----------
34,113,045 36,974,896 39,489,632
Deferred rent 1,465,916 2,265,506 3,065,072
Less: Current portion 799,590 799,590 766,268
---------- ---------- ----------
666,326 1,465,916 2,298,804
---------- ---------- ----------
Total Long-Term Liabilities 34,779,371 38,440,812 41,788,436
---------- ---------- ----------
Total Liabilities 38,520,924 41,840,699 44,839,717
PARTNERS' CAPITAL 3,107,456 2,532,506 2,276,099
---------- ---------- ----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $41,628,380 $44,373,205 $47,115,816
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
6
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
STATEMENT OF INCOME
-------------------
For the Years Ended
December 31, 1994 December 31, 1993 December 31, 1992
----------------- ----------------- -----------------
INCOME:
Rental income $ 8,301,639 $ 8,301,614 $ 8,301,663
Miscellaneous - 25,000 6,050
----------- ----------- -----------
Total Income 8,301,639 8,326,614 8,307,713
----------- ----------- -----------
EXPENSES:
Interest 4,981,864 5,302,597 5,825,836
Amortization 46,313 46,313 46,313
Depreciation 2,697,802 2,697,802 2,697,802
Legal -- 20,992 3,892
Miscellaneous expenses 710 2,503 -
----------- ----------- -----------
Total Expenses 7,726,689 8,070,207 8,573,843
----------- ----------- -----------
NET INCOME (LOSS) $ 574,950 $ 256,407 $ (266,130)
=========== =========== ============
The accompanying notes are an integral part of these financial statements.
7
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
---------------------------
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
-----------------------------------------
For the Years Ended
December 31, 1994 December 31, 1993 December 31, 1992
----------------- ----------------- -----------------
PARTNERS' CAPITAL -
Beginning of Year $ 2,532,506 $ 2,276,099 $ 2,542,229
NET INCME (LOSS) 574,950 256,407 (266,130)
----------- ----------- ------------
PARTNERS' CAPITAL -
End of Year $ 3,107,456 $ 2,532,506 $ 2,276,099
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
8
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
STATEMENT OF CASH FLOWS
-----------------------
For the Years Ended
December 31, 1994 December 31, 1993 December 31, 1992
----------------- ----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 574,950 $ 256,407 $ (266,130)
Adjustments to reconcile net ------------ ----------- -----------
income (loss) to net cash
provided by operating
activities:
Depreciation 2,697,802 2,697,802 2,697,802
Amortization 46,313 46,313 46,313
Increase (Decrease) in
Liabilities:
Accrued expenses (5,449) 10,270 75,291
Deferred rent (799,590) (799,566) 2,532,012
------------ ----------- -----------
Total Adjustments 1,939,076 1,954,819 5,351,418
------------ ----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,514,026 2,211,226 5,085,288
CASH FLOWS USED IN FINANCING
ACTIVITIES:
Principal payments on
long-term debt (2,514,736) (2,209,722) (5,083,129)
------------ ----------- -----------
NET (DECREASE) INCREASE
IN CASH (710) 1,504 2,159
CASH AT BEGINNING
OF THE YEAR 4,593 3,089 930
------------ ----------- -----------
CASH AT THE END OF THE YEAR $ 3,883 $ 4,593 $ 3,089
============ =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for
interest $ 4,987,313 $ 5,292,326 $ 5,750,545
The accompanying notes are an integral part of these financial statements.
9
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1994
-----------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and Equipment
- ----------------------
The partnership is computing depreciation using the straight-line method
over the estimtated useful lives of the assets over a period of 5-40
years. Expenditures of maintenance, repairs and improvements which do
not materially extend the useful lives of the property are charged to
earnings.
Income Taxes
- ------------
No provision for income taxes is made in the financial statements of
the partnership because, as a partnership, it is not subject to income
tax, as the tax effect of its activities accrue to the partners.
Amortization
- ------------
Fees and expenses incurred in connection with placing the underlying
financing in the amount of $207,500 are being amortized over five years
on a straight-line basis.
Expenses incurred in acquiring the property in the amount of $192,500
are being amortized over forty years on a straight-line basis.
Statement of Cash Flows
- -----------------------
For purposes of the statement of cash flows, cash consists of
unrestricted cash in a checking account.
Credit Risk-Economic Dependency
- -------------------------------
On March 1, 1993, Lockheed Corporation purchased the Fort Worth Division
of General Dynamics (the sole tenant). Lockheed purchased all of the
assets held by the division and assumed all of the liabilities,
including those under the lease with the Partnership.
In the process of Lockheed's assumption of the General Dynamics Lease,
the Partnership was able to negotiate a Consent Agreement which granted
Lockheed the right to assume the Lease so long as General Dynamics
remains jointly liable under the lease. As of December 31, 1994, two
years remain on the lease. There are no renewal options in the lease
agreement.
10
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1994
-----------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Partnership Income
- ------------------
The income of the partnership differs from the taxable ordinary income
of the partnership on the federal income tax return due to tax laws
regarding deferred expenses and depreciation.
Income Reported on Tax Return $ 679,185
Items (Non-Deductible) Deductible
on Tax Return:
Deferred Rent 799,590
Depreciation (903,825)
---------
Income Per Financial Statements $ 574,950
=========
NOTE 2 - THE PARTNERSHIP
The partnership was formed on April 1, 1983 under the laws of the State
of Texas for the purpose of acquiring, owning, and operating a
twenty-story office building located in Dallas, Texas. On November 25,
1991, the partnership conveyed its land, building and personal property
to 1910 Associates, LTD. (1910) in exchange for land, buildings and
personal property located in Fort Worth, Texas. That transaction was
reported as qualifying for nonrecognition of gain for income tax
purposes.
ICA Pacific Place, Inc. , is the general partner of the partnership.
NOTE 3 - MORTGAGE PAYABLE
The partnership is indebted to 1910 Associates, LTD. under a wrap-around
mortgage agreement in the initial amount of $48,187,500. The loan bears
interest at 13% per annum during the initial five year term. Payment
terms call for monthly payments in the amount of $958,333.33 for the
first twelve months and $625,170.70 for the succeeding forty-eight
months. During the initial term of the loan, the debt service payments
are equal to the rental payments. The note is secured by the
partnership's land, buildings, and equipment under a Deed of Trust. The
tenant is making payments directly to the mortgagees. The underlying
mortgagees, Principal Mutual Life Insurance Company, Realty Refund Trust
and Prentiss/Copley Investment Group are secured by liens, security
interests and collateral assignments of rents and leases. The initial
term of the wrap loan is five years but may be extended under certain
conditions. The two extension periods are for five and fifteen years,
respectively.
11
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
---------------------------
NOTES TO FINANCIAL STATEMENTS
------------------------------
DECEMBER 31, 1994
-----------------
NOTE 3 - MORTGAGE PAYABLE (Continued)
Maturities of long-term debt are as follows:
Year Ending December 31,
- ------------------------
1995 $ 2,861,851
1996 34,113,045
-----------
$36,974,896
===========
12
REPORT OF
---------
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
DECEMBER 31, 1995
-----------------
13
KONOWITZ, KAHN & COMPANY, P.C.
- ------------------------------------------------------------------------------
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Pacific Place Partners, LTD.
(A Texas Limited Partnership)
We have audited the accompanying balance sheets of
Pacific Place Partners, LTD. (A Texas Limited Partnership), as at
December 31, 1995, 1994 and 1993, and the related statements of income,
partners capital, and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally
accepted auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the financial position
of Pacific Place Partners, LTD. (A Texas Limited Partnership), as at
December 31, 1995, 1994 and 1993, and the results of its operations and
its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Konowitz, Kahn & Company, P.C.
- ---------------------------------
February 19, 1996
110 Washington Avenue (203)239-6888
P.O. Box 190 [LOGO] Bridgeport (203)366-6888
North Haven, CT 06473 Fax (203)234-1553
14
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
BALANCE SHEET
-------------
As At As At As At
December 31, 1995 December 31, 1994 December 31, 1993
ASSETS ----------------- ----------------- -----------------
------
CURRENT ASSETS:
Cash $ 828 $ 3,883 $ 4,593
----------- ----------- -----------
PROPERTY AND EQUIPMENT:
Land 5,000,000 5,000,000 5,000,000
Building 35,912,072 35,912,072 35,912,072
Equipment 9,000,000 9,000,000 9,000,000
----------- ----------- -----------
Total 49,912,072 49,912,072 49,912,072
Less: Accumulated depreciation 11,240,841 8,543,039 5,845,237
----------- ----------- -----------
Net Book Value of Property
and Equipment 38,671,231 41,369,033 44,066,835
----------- ----------- -----------
OTHER ASSETS:
Financing fees (net of accumulated
amortization of $170,833,
$129,333 and $87,833) 36,667 78,167 119,667
Acquisition fees (net of accumulated
amortization of $20,016, $15,203,
and $10,390) 172,484 177,297 182,110
----------- ----------- -----------
Total Other Assets 209,151 255,464 301,777
----------- ----------- -----------
TOTAL ASSETS $38,881,210 $41,628,380 $44,373,205
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
15
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
----------------------------
BALANCE SHEET
-------------
As At As At As At
December 31, 1995 December 31, 1994 December 31, 1993
----------------- ----------------- -----------------
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 2,684,407 $ 2,861,851 $ 2,514,736
Accrued interest 73,912 80,112 85,561
Deferred rent 666,325 799,590 799,590
Other liabilities 16,570 - -
----------- ----------- -----------
Total Current Liabilities 3,441,214 3,741,553 3,399,887
----------- ----------- -----------
LONG-TERM LIABILITIES:
Mortgage payable 34,113,045 36,974,896 39,489,632
Less: Current portion 2,684,407 2,861,851 2,514,736
----------- ----------- -----------
31,428,638 34,113,045 36,974,896
Deferred rent 666,325 1,465,916 2,265,506
Less: Current portion 666,325 799,590 799,590
----------- ----------- -----------
- 666,326 1,465,916
----------- ----------- -----------
Total Long-Term Liabilities 31,428,638 34,779,371 38,440,812
----------- ----------- -----------
Total Liabilities 34,869,852 38,520,924 41,840,699
PARTNERS' CAPITAL 4,011,358 3,107,456 2,532,506
----------- ----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $38,881,210 $41,628,380 $44,373,205
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
16
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
STATEMENT OF INCOME
-------------------
For the Years Ended
December 31, 1995 December 31, 1994 December 31, 1993
----------------- ----------------- -----------------
INCOME:
Rental income $8,301,639 $8,301,639 $8,301,614
Miscellaneous - - 25,000
---------- ---------- ----------
Total Income 8,301,639 8,301,639 8,326,614
---------- ---------- ----------
EXPENSES:
Interest 4,633,997 4,981,864 5,302,597
Amortization 46,313 46,313 46,313
Depreciation 2,697,802 2,697,802 2,697,802
Legal 15,845 - 20,992
Miscellaneous expenses 3,780 710 2,503
---------- ---------- ----------
Total Expenses 7,397,737 7,726,689 8,070,207
---------- ---------- ----------
NET INCOME $ 903,902 $ 574,950 $ 256,407
========== ========== ==========
The accompanying notes are an integral part of these financial statements
17
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
----------------------------
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
-----------------------------------------
For the Years Ended
December 31,1995 December 31,1994 December 31,1993
---------------- ---------------- ----------------
PARTNERS' CAPITAL -
Beginning of Year $3,107,456 $2,532,506 $2,276,099
NET INCOME 903,902 574,950 256,407
---------- ---------- ----------
PARTNERS' CAPITAL -
End of Year $4,011,358 $3,107,456 $2,532,506
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
18
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
STATEMENT OF CASH FLOWS
-----------------------
For the Years Ended
December 31,1995 December 31,1994 December 31,1993
---------------- ---------------- ----------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 903,902 $ 574,950 $ 256,407
Adjustments to reconcile net ----------- ----------- -----------
income to net cash provided
by operating activities:
Depreciation 2,697,802 2,697,802 2,697,802
Amortization 46,313 46,313 46,313
Increase (Decrease) in Liabilities:
Accrued expenses (6,201) (5,449) 10,270
Deferred rent (799,590) (799,590) (799,566)
Other liabilities 16,570 -- --
----------- ----------- -----------
Total Adjustments 1,954,894 1,939,076 1,954,819
----------- ----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,858,796 2,514,026 2,211,226
CASH FLOWS USED IN
FINANCING ACTIVITIES:
Principal payments on
long-term debt (2,861,851) (2,514,736) (2,209,722)
----------- ----------- -----------
NET (DECREASE) INCREASE
IN CASH (3,055) (710) 1,504
CASH AT THE BEGINNING
OF THE YEAR 3,883 4,593 3,089
----------- ----------- -----------
CASH AT THE END
OF THE YEAR $ 828 $ 3,883 $ 4,593
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
19
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
----------------------------
STATEMENT OF CASH FLOWS
-----------------------
For the Years Ended
December 31, 1995 December 31, 1994 December 31, 1993
----------------- ----------------- -----------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for
interest $4,640,198 $4,987,313 $5,292,326
The accompanying notes are an integral part of these financial statements.
20
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
DECEMBER 31, 1995
-----------------
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PROPERTY AND EQUIPMENT
- ----------------------
The partnership is computing depreciation using the straight-line
method over the estimated useful lives of the assets over a period of
5-40 years. Expenditures of maintenance, repairs and improvements which
do not materially extend the useful lives of the property are charged to
earnings.
INCOME TAXES
- ------------
No provision for income taxes is made in the fmancial statements of the
partnership because, as a partnership, it is not subject to income tax,
as the tax effect of its activities accrue to the partners.
AMORTIZATION
- ------------
Fees and expenses incurred in connection with placing the underlying
financing in the amount of $207,500 are being amortized over five years
on a straight-line basis.
Expenses incurred in acquiring the property in the amount of $192,500
are being amortized over forty years on a straight-line basis.
STATEMENT OF CASH FLOWS
- -----------------------
For purposes of the statement of cash flows, cash consists of
unrestricted cash in a checking account.
CREDIT RISK-ECONOMIC DEPENDENCY
- -------------------------------
On March 1, 1993, Lockheed Corporation purchased the Fort Worth Division
of General Dynamics (the sole tenant). Lockheed purchased all of the
assets held by the division and assumed all of the liabilities,
including those under the lease with the Partnership.
In the process of Lockheed's assumption of the General Dynamics Lease,
the Partnership was able to negotiate a Consent Agreement which granted
Lockheed the right to assume the Lease so long as General Dynamics
remains jointly liable under the lease. As of December 31, 1995, 11
months remain on the lease. There are no renewal options in the lease
agreement.
21
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
----------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
DECEMBER 31, 1995
-----------------
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
On November 17, 1995, the general partner wrote to inform the limited
partners of the sole tenants' decision not to continue the lease beyond
November, 1996. The general partner concurrently sought and subsequently
obtained the permission of a majority of limited partners to sell the
entire rental property, subject to certain conditions stated in that
letter, for a price of at least $19,500,000. If that were to occur, the
general partner anticipates being able to settle the partnership's
outstanding debt for an amount which would allow the distribution of
cash to all partners, but such distribution is likely to be
significantly less than each partner's capital. If the property is not
sold, it would eventually be subject to foreclosure by the wrap mortgage
holder, if as is considered likely, no satisfactory tenant can be found
to lease the property under terms necessary to service the debt. In such
event, the general partner similarly anticipates settling the
partnership's debt for an amount which would allow for a smaller
distribution to partners, but in neither case is the resolution of debt
or a distribution assured.
PARTNERSHIP INCOME
- ------------------
The income of the partnership differs from the taxable ordinary income
of the partnership on the federal income tax return due to tax laws
regarding deferred expenses and depreciation.
Income Reported on Tax Return $ 1,263,651
Items (Non-Deductible) Deductible on Tax Return:
Deferred Rent 799,590
Depreciation (1,159,339)
----------
Income Per Financial Statements 903,902
==========
NOTE 2 - THE PARTNERSHIP
The partnership was formed on April 1, 1983 under the laws of the State
of Texas for the purpose of acquiring, owning, and operating a
twenty-story office building located in Dallas, Texas. On November 25,
1991, the partnership conveyed its land, building and personal property
to 1910 Associates, LTD. (1910) in exchange for land, buildings and
personal property located in Fort Worth, Texas. That transaction was
reported as qualifying for nonrecognition of gain for income tax
purposes.
ICA Pacific Place, Inc., is the general partner of the partnership.
22
PACIFIC PLACE PARTNERS, LTD.
(A TEXAS LIMITED PARTNERSHIP)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1995
-----------------
NOTE 3 - MORTGAGE PAYABLE
The partnership is indebted to 1910 Associates, LTD. under a wrap-around
mortgage agreement in the initial amount of $48,187,500. The loan bears interest
at 13% per annum during the initial five year term. Payment terms call for
monthly payments in the amount of $958,333.33 for the first twelve months and
$625,170.70 for the succeeding forty-eight months. During the initial term of
the loan, the debt service payments are equal to the rental payments. The note
is secured by the partnership's land, buildings, and equipment under a Deed of
Trust. The tenant is making payments directly to the mortgagees. The underlying
mortgagees, Principal Mutual Life Insurance Company, Realty Refund Trust and
Prentiss/Copley Investment Group are secured by liens, security interests and
collateral assignments of rents and leases. The initial term of the wrap loan is
five years but may be extended under certain conditions. The general partner
believes the partnership will satisfy the requirements for renewal eligibility
as of November 30, 1996, when the initial five year period ends. The two
extension periods are for five and fifteen years, respectively.
Maturities of long-term debt are as follows:
YEAR ENDING DECEMBER 31,
------------------------
1996 $34,113,045
-----------
$34,113,045
===========