UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
FOR THE FISCAL YEAR ENDED MARCH 31, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
COMMISSION FILE NUMBER 33-11194
CENTURY PACIFIC HOUSING FUND-I
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. EMPLOYER IDENTIFICATION NO. 95-3938971
1925 CENTURY PARK EAST, SUITE 1760, LOS ANGELES, CA 90067
(310) 208-1888
Securities registered pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark 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 for 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. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers in response to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K (X).
No documents are incorporated into the text by reference.
[ ] Yes [X ] No
Exhibit Index is located on Page 16.
Registrant's Prospectus dated April 15, 1987, as amended (the "Prospectus") and
the Registrant's Supplement No. 3 dated December 21, 1988 to Prospectus dated
April 15, 1987 ("Supplement No. 3") but only to the extent expressly
incorporated by reference in Parts I through IV hereof. Capitalized terms, which
are not defined herein, have the same meaning as in the Prospectus.
TABLE OF CONTENTS
PART I
ITEM 1. BUSINESS............................................................3
ITEM 2. PROPERTIES..........................................................5
ITEM 3. LEGAL PROCEEDINGS...................................................8
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................8
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS...................9
ITEM 6. SELECTED FINANCIAL DATA.............................................9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS..........................................10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................12
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE...........................................12
PART III
ITEM 10. DIRECTORS AND EXECUTIVE COMPENSATION OF THE REGISTRANT.............13
ITEM 11. EXECUTIVE COMPENSATION.............................................14
ITEM 12. PARTNERSHIP INTEREST OWNERSHIP OF CERTAIN BENEFCIAL
OWNERS AND MANAGEMENT..............................................14
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K....15
EXHIBIT INDEX................................................................16
SIGNATURES...................................................................17
PART I
ITEM 1. BUSINESS
Century Pacific Housing Fund-I (the "Partnership") was formed on October 6, 1986
as a limited partnership under the laws of the State of California to invest in
multi-family housing developments. The Partnership's business is to invest
primarily in other limited partnerships ("Operating Partnerships") that are
organized for the purpose of either constructing or acquiring and operating
existing affordable multi-family rental apartments that are eligible for the
Low-Income Housing Tax Credit, or to a lesser extent, the Rehabilitation Tax
Credit, both enacted by the Tax Reform Act of 1986 (sometimes referred to as
"Credits" or "Tax Credits"). The Partnership invested in 21 properties (the
"Properties"). Each of the Properties qualifies for the Low-Income Housing Tax
Credit, and one property, a historic structure, qualifies for the Rehabilitation
Tax Credit. All of these Properties receive one or more forms of assistance from
federal, state or local governments. A summary of the Partnership's objectives
and a summary of the Tax Credits are provided in the Prospectus under
"Investment Objectives and Policies" and "Federal Income Tax Aspects" on pages
45 and 79, respectively, and are incorporated herein by reference.
In order to stimulate private investment in low and moderate income housing of
the types in which the Partnership has invested, the federal government has
provided investors with significant ownership incentives intended to reduce the
risks and provide investors/owners with certain tax benefits, limited cash
distributions and the possibility of long-term capital gains. The ownership
incentives include interest subsidies, rent subsidies, mortgage insurance and
other measures. Long-term investments in real estate limit the ability of the
Partnership to vary its portfolio in response to changing economic, financial
and investment conditions, and such investments are subject to changes in
economic circumstances and housing patterns, rising operating costs and
vacancies, rent controls and collection difficulties, costs and availability of
energy, as well as other factors which normally affect real estate values. In
addition, these properties usually are rent restricted and are subject to
government agency programs, which may or may not require prior consent to
transfer ownership.
The Partnership acquired the Properties by investing as the limited partner in
Operating Partnerships, which own the Properties. As a limited partner, the
Partnership's liability for obligations of the Operating Partnerships is limited
to its investment. The Partnership made capital contributions to the Operating
Partnerships in amounts sufficient to pay the Operating Partnerships' expenses
and to reimburse the general partners for their costs incurred in forming the
Operating Partnerships, if any, and acquiring the Properties. For each
acquisition, this typically included a cash down payment (in one or more
installments), acceptance of the property's mortgage indebtedness, and execution
of a Purchase Money Note in favor of the seller of the property. For a summary
of the acquisition financing activities for each property, see the financial
information contained under ITEM 2.
The Partnership's primary objective is to provide Low-Income Housing Tax credits
to limited partners generally over a 10-year period. Each of the Partnership's
Operating Partnerships has been allocated by the relevant state tax credit
agency an amount of the Low-Income Housing Tax Credit for 10 years from the date
the property is placed-in-service. The required holding period of the Properties
is 15 years (the "Compliance Period"). The Properties must satisfy rent
restrictions, tenant income limitations and other requirements (the "Low-Income
Housing Tax Credit Requirements") in order to maintain eligibility for
recognition of the Low-Income Housing Tax Credit at all times during the
Compliance Period. Once an Operating Partnership has become eligible for the
Low-Income Housing Tax Credit, it may lose such eligibility and suffer an event
of recapture if its property fails to remain in compliance with the Low-Income
Housing Tax Credit Requirements. To date, none of the Operating Partnerships
have suffered an event of recapture of the Low-Income Housing Tax Credit.
3
Nineteen of the twenty-one Operating Partnerships receives rental subsidy
payments, including payments under Section 8 of Title II of the Housing and
Community Development Act of 1974 ("Section 8"). The subsidy agreements expire
at various times during and after the 15-year compliance period of the Operating
Partnerships. The United States Department of Housing and Urban Development
("HUD") has issued a notice implementing provisions to renew Section 8 contracts
expiring during HUD's fiscal year 1997, where requested by an owner, for an
additional one year term at current rent levels. As of June 16, 1998, eleven of
the Operating Partnerships' Section 8 contracts are due to expire during 1998.
The Operating Partnerships have not yet received HUD's approval of their
extension requests. At the present time, the Partnership cannot reasonably
predict legislative initiatives and government budget negotiations, the outcome
of which could result in a reduction in funds available for the various federal
and state administered housing programs including the Section 8 program. Such
changes could adversely affect the future net operating income and debt
structure of any or all Operating Partnerships receiving such subsidy or similar
subsidies.
EMPLOYEES
The Partnership does not employ any persons. Alternatively, the Partnership
reimburses an affiliate for overhead allocation consisting primarily of payroll
costs.
4
ITEM 2. PROPERTIES
As of March 31, 1998, the Partnership had acquired equity interests in the
Operating Partnerships set forth in the table below. Each of the Properties
acquired by the Operating Partnerships receives benefits under government
assistance programs. The table set forth below summarizes the Properties
acquired, and the purchase price, original indebtedness assumed and the
government assistance programs benefiting each property. Further information
concerning these Properties may be found in Supplement No. 3 to the Prospectus,
pages 4 through 66, which information is incorporated herein by reference and is
summarized below.
5
AVERAGE CASH GOVERNMENT
PROPERTY NAME, OCCUPANCY PURCHASE DOWN PURCHASE MORTGAGE RESIDUAL ASSISTANCE
LOCATION AND RENTAL UNITS 1997 PRICE PAYMENT NOTE ASSUMED NOTE PROGRAM
- ----------------------------------------------------------------------------------------------------------------------------------
Century Pacific Housing
Partnership V
(CPHP-V) - JAYCEE TOWERS
Dayton, OH Section 236
204 residential units 97% $5,700,000 $400,196 $ 16,500 $3,000,123 $2,283,181 Section 8
CPHP-VIII - SUNSET TOWNHOMES
Newton, KS
50 residential units 90% 1,225,000 138,000 - 751,905 335,095 Section 236
CPHP-XI - CONTINENTAL TERRACE
Fort Worth, TX Section 236
200 residential units 96% 4,600,000 482,883 - 2,609,991 1,507,126 Section 8
CPHP-XII - YALE VILLAGE
Houston, TX Section 236
180 residential units 82% 5,250,000 530,894 - 3,075,000 1,644,106 Section 8
CPHP-XIII - ATLANTIS
Virginia Beach, VA Section 236
208 residential units 100% 6,032,000 801,000 - 2,678,416 2,552,584 Section 8
CPHP-XIV - KINGS ROW
Houston, TX Section 236
180 residential units 97% 3,780,000 394,213 - 1,848,269 1,537,518 Section 8
CPHP-XV - CASTLE GARDENS
Lubbock, TX Section 236
152 residential units 92% 3,268,000 320,140 - 1,787,613 1,160,247 Section 8
CPHP-XVI - ROCKWELL VILLA
Oklahoma City, OK Section 236
60 residential units 89% 1,235,400 129,564 - 707,207 398,629 Section 8
CPHP-XVII - LONDON SQUARE VILLAGE
Oklahoma City, OK Section 236
200 residential units 94% 4,214,000 414,097 - 2,820,832 979,071 Section 8
CPHP-XVIII - ASCENSION TOWERS
Memphis, TN
197 residential units 100% 6,727,500 409,094 50,000 3,863,739 2,404,667 Section 236
COLEMAN MANOR ASSOCIATES
LIMITED PARTNERSHIP
Baltimore, MD Section 221(d)(4)
50 residential units 99% 3,990,000(1) 1,625,000 - 2,365,000 - Section 8
CPHP-XX - HOLIDAY HEIGHTS
Fort Worth, TX Section 236
100 residential units 96% 2,200,000 191,000 - 1,120,000 889,000 Section 8
6
AVERAGE CASH GOVERNMENT
PROPERTY NAME, OCCUPANCY PURCHASE DOWN PURCHASE MORTGAGE RESIDUAL ASSISTANCE
LOCATION AND RENTAL UNITS 1997 PRICE PAYMENT NOTE ASSUMED NOTE PROGRAM
- ----------------------------------------------------------------------------------------------------------------------------------
CPHP-XXII - HARRIET TUBMAN TERRACE
Berkeley, CA Section 236
91 residential units 100% 4,732,000 593,000 - 1,718,171 2,420,829(2) Section 8
-
CPHP-I - CHARTER HOUSE
Dothan, AL
100 residential units 97% 2,146,000 195,000 - 1,169,000 782,000 Section 236
Section 236
CPHP-II-VOA - SUNSET PARK Section 8
Denver, CO Flexible
242 residential units 91% 6,500,000 956,000 - 3,081,144 2,462,856 Subsidy loan
Section 221(d)(3)
CPHP-III - HIGHLAND PARK Section 8
Topeka, KS Flexible
200 residential units 95% 6,900,000 939,000 - 2,024,000 3,937,000 Subsidy loan
Section 236
CPHP-IV - FOREST GLEN ESTATES Section 8
Kansas City, KS Flexible
160 residential units 98% 4,960,000 738,000 - 2,488,000 1,734,000 Subsidy loan
CPHP-VI - EDGEWOOD
Danville, IL
150 residential units 86% 3,540,000 680,000 - 2,359,950 500,050 Section 8
CPHP-VII - GULFWAY TERRACE
New Orleans, LA Section 236
206 residential units 79% 5,700,000 683,000 - 3,301,974 1,715,026 Section 8
Section 236
CPHP-IX - WIND RIDGE Section 8
Wichita, KS Flexible
136 residential units 93% 3,500,000 382,000 - 1,791,936 1,326,064 Subsidy loan
CPHP-X - BERGEN CIRCLE
Springfield, MA Section 236
201 residential units 95% 12,261,000 1,768,000 - 6,946,158 3,546,842 Section 8
- ----------------------------------------------------------------------------------------------------------------------------------
$98,460,900 $12,770,081 $66,500 $51,508,428 $34,115,891
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
1 This amount represents the development cost and not the purchase price.
2 This total includes a flexible subsidy loan in the amount of $185,000 and
the assumption of a prior residual note in the amount of $200,000.
7
ITEM 3. LEGAL PROCEEDINGS
As of June 16, 1998, there were no pending legal proceeding against the
Partnership or any Operating Partnership in which it has invested.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no submissions of matters to a vote of security holders during the
year ended March 31, 1998.
8
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS
There is at present no public market for the units of limited partnership
interests (the "Units"), and it is unlikely that any public market for the Units
will develop. See the Prospectus under "Transferability of Interest" on pages 29
and 72 of the Prospectus, which information is incorporated herein by reference.
The number of owners of Units as of June 16, 1998 was approximately 2,093,
holding 22,315 units.
As of June 16, 1998, there were no cash distributions.
ITEM 6. SELECTED FINANCIAL DATA
The following summary of selected financial data should be read in conjunction
with ITEM 14, herein, which also includes a summary of the Partnership's
significant accounting policies.
YEAR ENDED MARCH 31,
-------------------------------------------------------------------------------------------
OPERATIONS 1998 1997 1996 1995 1994
- -------------------------------- ----------------- ------------------ ----------------- ------------------ -----------------
Revenues $ 1,720 $ 2,100 $ 3,900 $ 5,000 $ 4,200
Operating Expenses (72,591) (73,359) (75,053) (72,069) (106,432)
Equity in Net Losses of
Operating Partnerships (134,311) (136,010) (176,789) (241,098) (256,914)
-------------- -------------- -------------- -------------- --------------
Net Loss $(205,182) $(207,269) $(247,942) $(308,167) $(359,146)
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Net Loss per Unit of
Limited Partnership Interest $ (9) $ (9) $ (11) $ (14) $ (16)
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
MARCH 31,
---------------------------------------------------------------------------------------
FINANCIAL POSITION 1998 1997 1996 1995 1994
- -------------------------------- ------------- ------------ ------------ ------------ -------------
Total Assets $277,925 $410,633 $547,704 $722,045 $961,812
------------- ------------ ------------ ------------ -------------
------------- ------------ ------------ ------------ -------------
9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS
The Partnership raised $8,517,000 in equity capital during calendar year 1987
and raised an additional $13,798,000 through April 15, 1988. In late December
1987, the Partnership invested in eight Operating Partnerships, which own eight
multi-family properties located in various states representing $45,507,000 of
property value. During 1988, the Partnership invested in an additional 13
properties located in eight states representing $52,953,900 of property value.
As of March 31, 1998, the Partnership's portfolio consists of 21 Properties. The
Properties are located in 13 states and contain 3,267 residential units. The
average occupancy level for each property during calendar year 1997 was
approximately 94% and most Properties generated sufficient revenue to cover
operating costs, debt service, and the funding of reserves. For a summary of the
combined financial status of the Operating Partnerships and the Properties, see
the financial information contained under ITEM 14.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership is currently experiencing a liquidity problem. Under the
Partnership Agreement, the Partnership is entitled to receive distributions of
surplus cash from the Operating Partnerships which is to provide the funds
necessary for the Partnership to meet its operating costs. To date, the
Operating Partnerships have not provided sufficient cash distributions to enable
the Partnership to meet its current obligations. The Partnership has also
incurred allocated losses from all but one of its Operating Partnerships to the
extent of the Partnership's cash contributions and has a negative working
capital. As a result of the foregoing, the Partnership has been dependent upon
its general partners and affiliates for continued financial support to meet its
operating costs. Management maintains that the general partners and/or
affiliates, though not required to do so, will continue to fund operations of
the Partnership by continuing to fund operating costs and by deferring payment
of allocated overhead expenses and repayment of operating cash advances.
Management believes the possibility exists that one or several Operating
Partnerships may require additional capital, in addition to that previously
contributed by the Partnership, to sustain operations. In such case, the source
of the required capital needs may be from (i) limited reserves from the
Partnership (which may include distributions received from the Operating
Partnerships that would otherwise be available for distribution to partners),
(ii) debt financing at the Operating Partnership level (which may not be
available), or (iii) additional equity contributions from the general partner of
the Operating Partnerships (which may not be available). There can be no
assurance that any of these sources would be readily available to provide for
possible additional capital requirements, which may be necessary to sustain the
operations of the Operating Partnerships. However, the Partnership is under no
obligation to fund operating deficits of the Operating Partnerships in the form
of additional contributions or loans.
Due to the uncertainty of the continuation of the Section 8 program, management
has been forced to look at several options to prepare for the possible lack of
subsidy income to the Operating Partnerships. The loss of subsidy income to the
Operating Partnerships will make it more difficult for the Operating
Partnerships to provide sufficient cash distributions to the Partnership.
Management has identified the courses of action they will take as a result of
the potential changes to the Section 8 program.
The plan that the Operating Partnerships follow will depend on the federal
government's decision to implement the decentralization or elimination of HUD.
HUD's proposed Mark-to-Market approach would create an atmosphere where the
projects would have to compete for residents in the conventional market. The
following alternatives are listed as plans of action that management plans to
pursue in response to HUD's actions:
10
1. HUD may transfer project control to a local Housing Authority in the form
of block grants. The Housing Authority would determine the market rents
based on the area market. The projects would respond to the local Housing
Authority and follow their procedures and guidelines.
2. The current tenants may receive a housing voucher administered by the local
Housing Authority. The projects will accept vouchers and actively seek
applicants who have vouchers. The projects will also accept non-voucher
residents who will pay rent amounts not to exceed the maximum rents for
persons at 60% of the median income level as in compliance with Section 42
of the Internal Revenue Code ("IRC").
3. If no subsidies or vouchers are given to the projects or the tenants, all
rents will be raised not to exceed the maximum rents for persons at 60% of
the median income level as in compliance with Section 42 of the IRC. With
rental rate increases, many of the current residents will be unable to pay
the higher rents, thus forcing them to move from the projects and to seek
housing elsewhere. An increase in the move out rate will cause a severe
cash flow strain to the project. To compensate for the loss of income and
increased vacancy turnover costs, the projects will require effective
marketing, competitive rental rates and possible upgrading to units and/or
common areas to attract qualified applicants and maintain a low vacancy
rate.
4. HUD may restructure loans in order to minimize the monthly costs to the
project and reduce the chances for default. Even with reduced or eliminated
payments, the project will be forced to increase rents in order to operate.
5. The final option is to buy off the HUD insured loan making the complex free
from HUD's or the local Housing Authority's regulations.
TAX REFORM ACT OF 1986, OMNIBUS BUDGET RECONCILIATION ACT OF 1987, TECHNICAL AND
MISCELLANEOUS REVENUE ACT OF 1988, OMNIBUS BUDGET RECONCILIATION ACT OF 1989 AND
OMNIBUS BUDGET RECONCILIATION ACT OF 1990
The Partnership is organized as a limited partnership and is a "pass through"
tax entity which does not, itself, pay federal income tax. However, the partners
of the Partnership, who are subject to federal income tax, may be affected by
the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the
Technical and Miscellaneous Revenue Act of 1988, the Omnibus Budget
Reconciliation Act of 1989 and the Omnibus Budget Reconciliation Act of 1990
(collectively the "Tax Acts"). The Partnership will consider the effect of
certain aspects of the Tax Acts on the partners when making investment
decisions. The Partnership does not anticipate that the Tax Acts will have a
material adverse impact on the Partnership's business operations, capital
resources, plans or liquidity.
RESULTS OF OPERATIONS
The Partnership generated revenue of $1,720, $2,100 and $3,900 in the fiscal
years ended March 31, 1998, 1997 and 1996, respectively, which principally
represents transfer fees charged to limited partners to cover administrative
costs incurred by the Partnership upon the private transfer of their interests.
There were $6,690,770 in tax losses generated during the Partnership's calendar
tax year ended December 31, 1997, arising primarily from Operating Partnership
losses allocated to the Partnership and the Partnership's general and
administrative costs. The Partnership received $3,346,334 in tax credits
allocated directly from the Operating Partnerships for the calendar year ended
December 31, 1997.
11
INFLATION
Inflation is not expected to have a material adverse impact on the Partnership's
operations during its period of ownership of the Properties.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements at March 31, 1998 and 1997 together with the report of
the independent auditors thereon are incorporated by reference from the
Registrant's Financial Statements on the pages indicated in ITEM 14.
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
On September 30, 1997, the prior auditors, Rubin, Brown, Gornstein & Co., LLP,
were dismissed as auditors for the Partnership. The decision to change
accountants was approved by the Partnership's Board of Directors. Rubin, Brown,
Gornstein & Co., LLP's report on the Partnership's financial statements for the
year ended March 31, 1997 contained a modification as to uncertainty of the
Partnership to continue as a going concern. Rubin, Brown, Gornstein & Co., LLP's
report on the above mentioned financial statements contained no adverse opinions
or disclaimer of opinions, and was not qualified as to uncertainty, audit scope
or accounting principles, other than those previously discussed.
Effective September 30, 1997, the Partnership engaged Novogradac & Company LLP
to perform the audit of the Partnership's financial statements as of and for the
year ended March 31, 1998.
There are no known disagreements on any matter of accounting principles or
practices or financial statement disclosure with current or predecessor
auditors.
12
PART III
ITEM 10. DIRECTORS AND EXECUTIVE COMPENSATION OF THE REGISTRANT
The Partnership has no officers or directors. Management of the Partnership is
vested in Irwin Jay Deutch and Century Pacific Capital Corporation ("CPCC") (the
"general partners"). The general partners will involve themselves in the
day-to-day affairs of the Partnership as required to protect the limited
partners' investment and advance the Partnership's tax investment objectives.
Mr. Deutch, the managing general partner, has the overall responsibility of the
preparation and transmittal of periodic reports to the limited partners,
preparation and filing of the Partnership's tax returns with the IRS and the
appropriate state tax authorities, and the preparation and filing of reports to
HUD and other government agencies.
Following is biographical information on Mr. Deutch and the Executive Officers
of CPCC:
IRWIN JAY DEUTCH
IRWIN JAY DEUTCH, age 57, is Chairman of the Board, President, and Chief
Executive Officer of Century Pacific Realty Corporation ("CPRC"), a general
partner of the Operating Partnerships that owns the Properties in which CPHF-I
has invested, and its affiliates. Mr. Deutch has been involved with low-income
housing investments since 1968. He is the individual general partner in 62
private limited partnerships and two public limited partnerships investing in
209 properties, including 196 multi-family properties with 33,700 apartment
units, 10 commercial projects, and 3 hotel properties. Fifty-eight of the 62
private limited partnerships have invested in affordable housing. In his
capacity as general partner and officer of CPRC, he oversees the management of
these partnerships and assumes overall responsibility for the development,
direction, and operation of all affiliated CPRC companies. Mr. Deutch is
recognized as an expert in the field of affordable housing and frequently
addresses professional groups on topics of real estate investment, syndication,
tax law, and the Low-Income Housing Tax Credit program.
Mr. Deutch received a B.B.A. with distinction from the University of Michigan
School of Business Administration in 1962 and a Juris Doctor degree with honors
from the University of Michigan Law School in 1965. He is a member of the Order
of the Coif. Mr. Deutch served in the Honors Program in the Office of the Chief
Counsel of the Internal Revenue Service from 1965 to 1967, where he was assigned
to the Interpretative Division in Washington, D.C. He attended Georgetown Law
Center and received his Masters of Law degree in taxation in 1967. Mr. Deutch is
a member of the State Bars of Michigan and California, as well as the American,
Federal, Los Angeles, and Beverly Hills Bar Associations.
KEY OFFICERS OF CPCC AND AFFILIATES
ESSIE SAFAIE, age 49, is Chief Financial Officer and Chief Operating Officer of
CPRC. Prior to joining CPRC in 1988, from 1985 to 1988, he was Vice President
and Chief Financial Officer of Sunrise Investments, Inc., a real estate
syndication firm with $450 million of real estate under management. During this
period, Mr. Safaie was also President of an affiliated property management firm,
S&L Property Management, Inc., with over 12,000 residential units and 800,000
square feet of commercial office space under direct management. From 1982 to
1985, Mr. Safaie was assistant controller of Standard Management Company,
builder and managers of luxury hotels, commercial offices and residential units.
From 1980 to 1982, he served as financial officer of Diamond "M" Drilling
Company. Mr. Safaie received a B.A. degree in Business Administration from
California State University with a major in accounting.
13
CHARLES L. SCHWENNESEN, age 52, is Vice President of Acquisition Finance of CPRC
and is responsible for financial analysis and "due diligence" reviews of all
properties acquired by CPRC. Prior to joining CPRC in 1987, he was a consultant
to companies, which provided investment opportunities through private
placements. From 1984 to 1985, Mr. Schwennesen was Vice President of Cranston
Securities Company and was responsible for the structuring of more than $30
million of mortgage revenue bond financing for affordable housing projects. From
1977 to 1984, Mr. Schwennesen was a manager with the accounting firm of Price
Waterhouse where he specialized in providing auditing and consulting services to
publicly held California real estate development companies involved in the
affordable housing industry. Mr. Schwennesen is a Certified Public Accountant
and holds a Masters degree in Business Administration from the UCLA Graduate
School of Management and a B.A. degree in Mathematics from UCLA.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. However, in connection with the
operations of the Partnership and the Operating Partnerships, the general
partners and their affiliates will or may receive certain fees, compensation,
income and other payments which are described in the Prospectus under
"Compensation, Fees and Reimbursements" on page 17, the terms of which are
incorporated herein by reference.
During the fiscal years ended March 31, 1998, 1997 and 1996, CPCC, a general
partner of the Partnership, and CPRC, a general partner of the Operating
Partnerships, earned $512,139, $507,803 and $505,381, respectively, in
compensation from the Operating Partnerships and $60,000 was accrued for each
fiscal year for the reimbursement for overhead allocation from Century Pacific
Investment Corporation ("CPIC"). During fiscal year 1998, the general partners
received no payments from the Operating Partnerships.
ITEM 12. PARTNERSHIP INTEREST OWNERSHIP OF CERTAIN BENEFCIAL OWNERS AND
MANAGEMENT
No partner in the Partnership owns more than 5% of the total number of
partnership interests outstanding. Irwin J. Deutch, the managing general
partner, holds a one-half percent general partnership interest and C.P. Westwood
Associates holds a one percent limited partnership interest.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Irwin J. Deutch is the managing general partner of the Partnership, and CPCC is
also a general partner. Irwin J. Deutch is the sole Director and President of
CPCC, and the stock of CPCC is solely owned by the Deutch Family Trust. Mr.
Deutch is also the President, sole Director and the Deutch Family trust is the
sole stockholder of CPRC, the general partner of the Operating Partnerships that
own the Properties in which the Partnership is invested. The general partners
were allocated their proportionate share of the Partnership's tax losses and
allocated tax credits. CPCC and CPRC accrued certain fees for their services in
managing and advising the Partnership and its business. CPIC, an affiliate,
provides all the services and materials necessary for the operation of the
Partnership and is reimbursed for actual costs. These transactions are more
particularly set forth in the financial statements found under ITEM 14.
14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Exhibits - See the Exhibit Index at page 16 of this report.
(b) (1) Financial Statements:
Independent Auditors' Reports F-1
Balance Sheets as of March 31, 1998 and 1997 F-2
Statements of Operations for the Years Ended March 31, 1998, 1997 and 1996 F-3
Statements of Partners' Equity (Deficit) for the Years Ended
March 31, 1998, 1997 and 1996 F-4
Statements of Cash Flows for the Years Ended March 31, 1998, 1997 and 1995 F-5
Notes to Financial Statements F-6
(2) Financial Statement Schedules:
Schedule III - Real Estate and Accumulated Depreciation of Operating
Partnerships in which CPHF-I has Limited Partnership Interests F-12
Notes to Schedule III - Real Estate and Accumulated Depreciation of
Operating Partnerships in which CPHF-I has Limited Partnership Interests F-14
Schedule IV - Mortgage Loans on Real Estate of Operating Partnerships
in which CPHF-I has Limited Partnership Interests F-16
Notes to Schedule IV - Mortgage Loans on Real Estate of Operating
Partnerships in which CPHF-I has Limited Partnership Interests F-20
All other schedules are omitted because they are not applicable or
the required information is shown in the financial statements or
notes thereto.
(c) Reports on Form 8-K
Registrant did file with the Securities and Exchange Commission a
Current Report on Form 8-K during the year ended March 31, 1998.
15
EXHIBIT INDEX
These exhibits are numbered in accordance with the exhibit table of Item 601 of
Regulation S-K.
Exhibit Number Description
-------------- -----------
11 Omitted - inapplicable
12 Omitted - inapplicable
13 Omitted - inapplicable
16 Omitted - inapplicable
18 Omitted - inapplicable
21 Omitted - inapplicable
23 Omitted - inapplicable
27 Financial Data Schedule
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CENTURY PACIFIC HOUSING FUND-I
Date: 7/23/98 /s/ Irwin Jay Deutch
--------------------- --------------------------------------------
By: Irwin Jay Deutch, as Managing General Partner
and
Century Pacific Capital I Corporation, as Corporate
General Partner and as Attorney-in-Fact for all
Investor Limited Partners
Date: 7/23/98 /s/ Irwin Jay Deutch
--------------------- --------------------------------------------
By: Irwin Jay Deutch, President
17
REPORT OF INDEPENDENT AUDITORS'
To the Partners of
Century Pacific Tax Credit Housing Fund-I
We have audited the accompanying balance sheet of Century Pacific Tax Credit
Housing Fund-I (the "Partnership"), as of March 31, 1998, and the related
statements of operations, changes in partners' equity (deficit) and cash flows
for the year 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 financial statements of
Century Pacific Tax Credit Housing Fund-I for the years ended March 31, 1997 and
1996 were audited by other auditors, whose reports dated June 16, 1997 and June
13, 1996, respectively, included an explanatory paragraph describing conditions
that raised substantial doubt about the Partnership's ability to continue as a
going concern.
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 Century Pacific Tax Credit
Housing Fund-I as of March 31, 1998, and the results of its operations, changes
in partners' equity (deficit), and cash flows for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 6 to the
financial statements, the Partnership's Operating Partnerships have suffered
recurring operating losses, have not provided sufficient cash distributions to
fund administrative costs and the Partnership has a net capital deficiency,
which raises substantial doubt about the Partnership's ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 6. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
We have also audited the related financial statement schedules listed in Item
14(b)(2) as of December 31, 1997. In our opinion, the financial statement
schedules present fairly, in all material respects, the information required to
be set forth therein.
Atlanta, Georgia
June 16, 1998
F-1
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
BALANCE SHEETS
MARCH 31,
ASSETS 1998 1997
---------------------- ----------------------
Cash $ 2,296 $ 693
Receivable from related party (Note 4) 15,549 15,549
Investments in Operating Partnerships (Notes 1 and 5) 260,080 394,391
---------------------- ----------------------
Total assets $ 277,925 $ 410,633
---------------------- ----------------------
---------------------- ----------------------
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Accounts payable and accrued expenses $ 10,800 $ 11,600
Advance from affiliate (Note 4) 62,455 62,455
Payable to related parties (Note 4) 785,415 712,141
---------------------- ----------------------
Total liabilities $ 858,670 $ 786,196
---------------------- ----------------------
Partners' equity (deficit)
General partners $ (390,337) $ (386,233)
Limited partners, $1,000 stated value per unit
50,000 units autherized, 22,315 units issued
and outstanding (Note 4) (190,408) 10,670
---------------------- ----------------------
Total partners' equity (deficit) $ (580,745) $ (375,563)
---------------------- ----------------------
Total liabilities and partners' equity (deficit) $ 277,925 $ 410,633
---------------------- ----------------------
---------------------- ----------------------
F-2
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,
1998 1997 1996
---------- ---------- ----------
REVENUES
Transfer fees $ 1,720 $ 2,100 $ 3,900
---------- ---------- ----------
EXPENSES
Allocated overhead expenses - affiliate (Note 3) 60,000 60,000 60,000
Other general and administrative 12,591 13,359 15,053
---------- ---------- ----------
Total expenses 72,591 73,359 75,053
---------- ---------- ----------
Loss Before Equity In Net Losses Of
Operating Partnerships (70,871) (71,259) (71,153)
Equity In Net Losses Of Operating
Partnerships (Note 5) (134,311) (136,010) (176,789)
---------- ---------- ----------
NET LOSS $(205,182) $(207,269) $(247,942)
---------- ---------- ----------
---------- ---------- ----------
Allocation Of Net Loss
General partners $ (4,104) $ (4,145) $ (4,959)
Limited partners (201,078) (203,124) (242,983)
---------- ---------- ----------
$(205,182) $(207,269) $(247,942)
---------- ---------- ----------
---------- ---------- ----------
Net Loss Per Unit Of Limited Partnership
Interest (Note 1) $ (9) $ (9) $ (11)
---------- ---------- ----------
---------- ---------- ----------
Average Number Of Outstanding Units 22,315 22,315 22,315
---------- ---------- ----------
---------- ---------- ----------
F-3
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
---------- ---------- ----------
Partners' Equity (Deficit) - March 31, 1995 $(377,129) $ 456,777 $ 79,648
Net Loss (4,959) (242,983) (247,942)
---------- ---------- ----------
Partners' Equity (Deficit) - March 31, 1996 (382,088) 213,794 (168,294)
Net Loss (4,145) (203,124) (207,269)
---------- ---------- ----------
Partners' Equity (Deficit) - March 31, 1997 (386,233) 10,670 (375,563)
Net Loss (4,104) (201,078) (205,182)
---------- ---------- ----------
Partners' Equity (Deficit) - March 31, 1998 $(390,337) $(190,408) $(580,745)
---------- ---------- ----------
---------- ---------- ----------
Percentage Interest - March 31, 1998 2% 98% 100%
---------- ---------- ----------
---------- ---------- ----------
F-4
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31,
1998 1997 1996
--------- --------- ---------
Cash Flows From Operating Activities
Net loss $(205,182) $(207,269) $(247,942)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Equity in net losses of Operating Partnerships 134,311 136,010 176,789
Changes in assets and liabilities:
Decrease in accounts payable
and accrued expenses (800) (9,240) (1,460)
Increase in payable to related parties 73,274 76,738 75,061
Increase (decrease) in advance to affiliate 0 2,700 (1,824)
--------- --------- ---------
Net Cash Provided By (Used In) Operating
Activities 1,603 (1,061) 624
--------- --------- ---------
Net Increase (Decrease) In Cash 1,603 (1,061) 624
Cash - Beginning Of Year 693 1,754 1,130
--------- --------- ---------
Cash - End Of Year $ 2,296 $ 693 $ 1,754
--------- --------- ---------
--------- --------- ---------
F-5
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
Notes to the Financial Statements
For the years ended March 31, 1998, 1997 and 1996
1. ORGANIZATION
Century Pacific Housing Fund-I, a California limited partnership (the
"Partnership"), was formed on October 6, 1986 for the purpose of raising
capital by offering and selling limited partnership interests and then
acquiring limited partnership interests in 21 limited partnerships (the
"Operating Partnerships"), which acquired and operate 21 multi-family
residential apartment properties (the "Properties").
The general partners of the Partnership are Century Pacific Capital
Corporation, a California corporation ("CPCC"), and Irwin Jay Deutch, an
individual (collectively, the "general partners"). The general partners and
affiliates of the general partners (the "general partners and affiliates")
have interests in the Partnership and receive compensation from the
Partnership and the Operating Partnerships (Note 3).
The Properties qualify for the Low-Income Housing Tax Credit established by
Section 42 of the Tax Reform Act of 1986 (the "Low-Income Housing Tax
Credit") and one property qualifies for Historic Rehabilitation Tax Credits
(collectively, the "Tax Credits"). The Properties are leveraged low-income
multi-family residential complexes and receive one or more forms of
assistance from federal, state or local government agencies (the
"Government Agencies").
In July 1987, the Partnership began raising capital from sales of limited
partnership interests, at $1,000 per Unit, to limited partners. The
Partnership authorized the issuance of a maximum of 50,000 Units of which
22,315 were subscribed and issued. The limited partnership interest
offering closed in April 1988.
The Partnership has acquired limited partnership interests ranging from 97%
to 99% in the Operating Partnerships, which have invested in rental
property.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
BASIS OF ACCOUNTING
The Partnership prepares its financial statements on the tax basis of
accounting. Memorandum entries, while not recorded in the records of the
Partnership, have been made in order to prepare the financial statements in
accordance with generally accepted accounting principles.
On August 7, 1991, management changed from a calendar year end to a fiscal
year end of March 31 for financial reporting purposes. Accordingly, the
Partnership's quarterly periods end June 30, September 30 and December 31.
The Operating Partnerships, for financial reporting purposes, have a
calendar year end. The Partnership, as well as the Operating Partnerships,
has a calendar year-end for income tax purposes.
USE OF ESTIMATES
The preparation of financial statements requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
F-6
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
Notes to the Financial Statements
For the years ended March 31, 1998, 1997 and 1996
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
(CONTINUED)
INCOME TAXES
In accordance with federal and state income tax regulations, no income
taxes are levied on the Partnership. Federal and state income taxes on
partnership income are levied on the partners in their individual capacity.
The tax returns, the qualification of the Partnership as such for tax
purposes and the amount of distributable income or loss are subject to
examination by federal and state taxing authorities. If such examination
results in changes in the Partnership qualification or in distributable
income or loss, the tax liability of the partners could change.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include all cash balances and highly liquid
investments with a maturity of three months or less. Restricted cash is not
considered a cash equivalent.
ECONOMIC CONCENTRATIONS
The Partnership operates 21 properties in 13 different states. Future
operations could be affected by changes in the economic or other conditions
in that geographical area or by changes in federal low-income housing
subsidies or the demand for such housing.
CONCENTRATION OF CREDIT RISK
The Partnership deposits its cash in financial institutions. At times,
deposits may exceed federally insured limits. The Partnership has not
experienced losses in such accounts.
INVESTMENTS IN OPERATING PARTNERSHIPS
The Partnership uses the equity method to account for its investment in the
Operating Partnerships (Note 4). Under the equity method of accounting, the
investment is carried at cost and adjusted for the Partnership's share of
the Operating Partnerships' results of operations and by cash distributions
received. Equity in the loss of each Operating Partnership allocated to the
Partnership is not recognized to the extent that the investment balance
would become negative. Costs paid by the Partnership for organization of
the Operating Partnerships as well as direct costs of acquiring Properties,
including acquisition fees and reimbursable acquisition expenses paid to
the general partner, have been capitalized as investments in Operating
Partnerships.
NET LOSS PER UNIT OF LIMITED PARTNERSHIP INTEREST
Net loss per unit of limited partnership interest is calculated based upon
the weighted average number of Units outstanding, which is 22,315 for the
years ended March 31, 1998, 1997 and 1996.
F-7
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
Notes to the Financial Statements
For the years ended March 31, 1998, 1997 and 1996
3. RELATED PARTY TRANSACTIONS
The general partners of the Partnership are CPCC and Irwin Jay Deutch. The
original limited partner of the Partnership is Westwood Associates, of
which its partners are Irwin Jay Deutch and key employees of CPCC. Century
Pacific Placement Corporation ("CPPC"), an affiliate of the general
partners, served as the broker-dealer-manager for sales of the limited
partnership interests in the Partnership. Century Pacific Realty
Corporation ("CPRC"), an affiliate of CPCC, is a general partner in each of
the Operating Partnerships.
The general partners have an aggregate one percent interest in the
Partnership, as does the original limited partner. CPRC has one- percent
interest in each of the Operating Partnerships, except for one Operating
Partnership in which it has a one-half percent interest.
The general partners and affiliates receive compensation and reimbursement
of expenses from the Partnership, as set forth in the limited partnership
agreement, for their services in managing the Partnership and its
business. The general partners and affiliates also receive compensation
and reimbursement of expenses for the Operating Partnerships. This
compensation and reimbursement includes services provided to the
Partnership during its offering stage, acquisition stage, operational
stage, and termination of refinancing stage.
The general partners and affiliates earned the following fees for services
provided to the Partnership and were entitled to reimbursement for costs
incurred by the general partners and affiliates on behalf of the
Partnership and the Operating Partnerships for the years ended March 31,
1998, 1997 and 1996 as follows:
1998 1997 1996
---- ---- ----
Fees and reimbursement from the Partnership:
Reimbursement for overhead allocated from
Century Pacific Investment Corporation
("CPIC") $ 60,000 $ 60,000 $ 60,000
Fees and reimbursement from the Operating Partnerships:
Supervisory management fee (CPCC and CPRC) 152,115 152,115 152,115
Partnership management fee (CPCC and CPRC) 360,024 355,688 353,266
-------- -------- --------
Subtotal 512,139 507,803 505,381
-------- -------- --------
Total $572,139 $567,803 $565,381
-------- -------- --------
-------- -------- --------
At March 31, 1998 and 1997, payable to related parties consists of fees and
certain general and administrative costs accrued as payable by the
Partnership to the general partners and affiliates relating to the above
and prior year's amounts totaling $785,415 and $712,141, respectively. Such
fees and allocated costs have been deferred until the Partnership has
sufficient cash to pay them.
F-8
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
Notes to the Financial Statements
For the years ended March 31, 1998, 1997 and 1996
3. RELATED PARTY TRANSACTIONS (CONTINUED)
Receivable from related party of $15,549 at March 31, 1998 and 1997,
represent cash advances to several of the Operating Partnerships, and the
payment of state franchise taxes for Century Pacific Housing Partnership
III, IV, V, VIII, IX, XVIII, XX, and XXII.
At March 31, 1998 and 1997, CPRC was owed $62,455 for non-interest bearing,
demand cash advances to the Partnership.
The general partners may advance funds to the Partnership to fund operating
deficits, but are not obligated to do so. Such advances shall be evidenced
by a promissory note of a term no more than 12 months in length and at a
rate of interest no lower than the prime rate. All such loans shall be
repaid prior to any distributions of net cash flow. At March 31, 1998 and
1997, the Partnership had no outstanding advances due to the general
partners.
4. INVESTMENTS IN OPERATING PARTNERSHIPS
At March 31, 1998 and 1997, the Partnership owned limited partnership
interests in 21 Operating Partnerships, each of which has invested in a
multi-family rental property.
Investments in Operating Partnerships consist of the following:
1998 1997
---- ----
Cash contributions to Operating Partnerships
to fund purchase of beneficial interests in Properties $ 15,497,467 $ 15,497,467
Cash contributions to Operating Partnerships
to fund operations 6,150 6,150
Cash distribution from Operating Partnership (6,326) (6,326)
Acquisition and organization costs 3,342,778 3,342,778
Equity in net losses of Operating Partnerships (18,579,989) (18,445,678)
------------ ------------
$ 260,080 $ 394,391
------------ ------------
------------ ------------
F-9
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
Notes to the Financial Statements
For the years ended March 31, 1998, 1997 and 1996
4. Investments in Operating Partnerships (continued)
A summary of the combined balance sheet as of December 31, 1997 and 1996
and statements of operations of the aforementioned Operating Partnerships
for the years then ended follows:
COMBINED BALANCE SHEET
ASSETS
1997 1996
---- ----
Cash $ 765,650 $ 696,441
Reserve for replacements 2,662,017 2,404,825
Land and buildings 66,772,562 70,285,050
Other assets 3,032,585 3,158,994
------------ ------------
Total assets $ 73,232,81 $ 76,545,310
------------ ------------
------------ ------------
LIABILITIES AND PARTNERS' DEFICIT
Notes payable $122,299,736 $117,461,408
Other liabilities 3,594,859 3,465,252
------------ ------------
Total liabilities 125,894,595 120,926,660
Partners' deficit (52,661,781) (44,381,350)
------------ ------------
Total liabilities and partners' deficit $ 73,232,814 $ 76,545,310
------------ ------------
------------ ------------
COMBINED STATEMENT OF OPERATIONS
1997 1996
---- ----
Revenues
Rental income $ 16,129,155 $ 15,782,773
Other income 771,008 484,683
------------ ------------
Total revenues 16,900,163 16,267,456
Expenses
Utilities 2,761,690 2,631,303
Repairs and maintenance 4,034,260 4,393,997
Management fees 1,340,547 1,228,089
Other operating expenses 5,044,824 5,466,104
Interest 7,017,451 5,860,931
Depreciation and amortization 4,299,752 4,370,272
------------ ------------
Total expenses 24,498,524 23,950,696
------------ ------------
Net loss $ (7,598,361) $ (7,683,240)
------------ ------------
------------ ------------
ALLOCATION OF NET LOSS
General partners and other limited partners $ (7,446,394) $ (7,547,230)
CPHF-I (151,967) (136,010)
------------ ------------
Total $ (7,598,361) $ (7,683,240)
------------ ------------
------------ ------------
F-10
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
Notes to the Financial Statements
For the years ended March 31, 1998, 1997 and 1996
5. COMMITMENTS AND CONTINGENCIES
The rent of the Operating Partnerships, all of which received rental
subsidy payments, including payments under Section 8 of Title II of the
Housing and Community Development Act of 1974 ("Section 8) are subject to
specific laws, regulations, and agreements with federal and state agencies.
The subsidy agreements expire at various times during and after the 15-year
compliance period of the Operating Partnerships. The United States
Department of Housing and Urban Development ("HUD") has issued a notice
implementing provisions to renew Section 8 contracts expiring during HUD's
fiscal year 1997, where requested by an owner, for an additional one year
term at current rent levels. As of June 16, 1998, eleven of the Operating
Partnerships' Section 8 contracts are due to expire during 1998. The
Operating Partnerships have not yet received HUD's approval of their
extension requests. At the present time, the Partnership cannot reasonably
predict legislative initiatives and governmental budget negotiations, the
outcome of which could result in a reduction in funds available for the
various federal and state administered housing programs including the
Section 8 program. Such changes could adversely affect the future net
operating income and debt structure of any or all Operating Partnerships
receiving such subsidy or similar subsidies.
6. GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation
of the Partnership as a going concern. However, the Partnership's Operating
Partnerships have not achieved the operating results required to provide
the Partnership with sufficient cash distributions to fund the
Partnership's administrative costs. Additionally, the Partnership has
incurred allocated losses from all but one of its Operating Partnerships to
the extent of the Partnership's cash contributions. As a result of the
foregoing, the Partnership is dependent upon the general partners and
affiliates for continued financial support.
The auditors' report on eleven of the Operating Partnerships' financial
statements contained an explanatory paragraph relating to a going concern
issue concerning the expiration of the Housing Assistance Payment ("HAP")
contract. These Operating Partnerships have HAP contracts with HUD that are
due to expire during 1998. As of June 16, 1998, none of the Operating
Partnerships have been granted one-year extensions. Management has
requested one-year extensions for the Operating Partnerships, however, as
of June 16, 1998, these extensions have not yet been granted.
Management maintains that the general partners and affiliates, though not
required to do so, will continue to fund operations by deferring payment to
related parties of allocated overhead expenses, and by funding any
Partnership operating costs. Unpaid allocated overhead expenses will accrue
and become payable when the Operating Partnerships generate sufficient cash
distributions to the Partnership to cover such expenses. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
F-11
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
Schedule III
Page 1 of 2
REAL ESTATE AND ACCUMULATED DEPRECIATION OF OPERATING
PARTNERSHIPS IN WHICH CPTCHF-I HAS LIMITED PARTNERSHIP INTEREST
DECEMBER 31, 1997
INITIAL COST TO COST CAPITALIZED
OPERATING PARTNERSHIP SUBSEQUENT TO ACQUISITION
--------------------- -------------------------
Buildings And Buildings And
Description (1) Encumbrances (2) Land Improvements Land Improvements
- --------------------------------------------------------------------------------------------------
CPHP-I - Charter House
Dothan, Alabama $ 2,385,790 $ 179,577 $ 1,918,125 $ 0 $ 105,298
CPHP-II - Sunset Park
Denver, Colorado 8,763,776 803,595 5,696,405 7,305 820,325
CPHP-III - Highland Park
Topeka, Kansas 10,688,798 434,475 6,465,525 251 469,561
CPHP-IV - Forest Glen Estates
Kansas City, Missouri 6,229,898 427,519 4,469,134 292 230,902
CPHP-V - Jaycee Towers
Dayton, Ohio 7,739,916 599,719 5,096,481 0 363,297
CPHP-VI - Edgewood
Danville, Illinois 3,087,651 223,418 3,316,582 0 250,554
CPHP-VII - Gulfway Terrace
New Orleans, Lousiana 6,305,184 270,343 5,429,657 237 325,872
CPHP-VIII - Sunset Townhomes
Newton, Kansas 1,400,231 50,259 1,174,741 138 126,009
CPHP-IX - Wind Ridge
Wichita, Kansas 4,099,334 169,514 3,330,486 146 667,133
CPHP-X - Bergan Circle
Springfield, Massachusetts 14,542,276 901,206 11,359,794 0 1,131,909
----------- --------- ---------- ----- ---------
Balance Carried
Forward 65,242,854 4,059,625 48,256,930 8,369 4,490,860
----------- --------- ---------- ----- ---------
CONTINUED----
Life Upon
Which
GROSS AMOUNT AT WHICH ACCUMULATED Depreciation
CARRIED AT CLOSE OF YEAR DEPRECIATION In Latest
------------------------------------ ------------- Income
Buildings And Buildings And Date Of Date Statement Is
Description (1) Land Improvements Total Improvements Construction Acquired Computed
- --------------------------------------------------------------------------------------------------------------------------
CPHP-I - Charter House
Dothan, Alabama $ 179,577 $ 2,023,423 $ 2,203,000 $ 751,760 1972 Dec-87 27.5 years
CPHP-II - Sunset Park
Denver, Colorado 810,900 6,516,730 7,327,630 2,388,590 1971 Dec-87 10 - 50 years
CPHP-III - Highland Park
Topeka, Kansas 434,726 6,935,086 7,369,812 3,375,822 1967 Dec-87 10 - 40 years
CPHP-IV - Forest Glen Estates
Kansas City, Missouri 427,811 4,700,036 5,127,847 1,988,183 1971 Dec-87 40 years
CPHP-V - Jaycee Towers
Dayton, Ohio 599,719 5,459,778 6,059,497 1,815,248 1970 Dec-88 27.5 years
CPHP-VI - Edgewood
Danville, Illinois 223,418 3,567,136 3,790,554 1,313,073 1970 Dec-87 27.5 years
CPHP-VII - Gulfway Terrace
New Orleans, Lousiana 270,580 5,755,529 6,026,109 2,404,910 1970 Dec-87 10 - 40 years
CPHP-VIII - Sunset Townhomes
Newton, Kansas 50,397 1,300,750 1,351,147 546,762 1971 Aug-88 40 years
CPHP-IX - Wind Ridge
Wichita, Kansas 169,660 3,997,619 4,167,279 1,743,906 1969 Dec-87 10 - 40 years
CPHP-X - Bergan Circle
Springfield, Massachusetts 901,206 12,491,703 13,392,909 4,726,153 1976 Dec-87 27.5 years
--------- ---------- ---------- ----------
Balance Carried
Forward 4,067,994 52,747,790 56,815,784 21,054,407
--------- ---------- ---------- ----------
F-12
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
Schedule III
Page 2 of 2
REAL ESTATE AND ACCUMULATED DEPRECIATION OF OPERATING
PARTNERSHIPS IN WHICH CPTCHF-I HAS LIMITED PARTNERSHIP INTEREST
DECEMBER 31, 1997
INITIAL COST TO COST CAPITALIZED
OPERATING PARTNERSHIP SUBSEQUENT TO ACQUISITION
---------------------- -------------------------
Buildings And Buildings And
Description (1) Encumbrances (2) Land Improvements Land Improvements
- -------------------------------------------------------------------------------------------------------
Balance Carried
Forward $65,242,854 $ 4,059,625 $48,256,930 $8,369 $ 4,490,860
CPHP-XI - Continental Terrace
Fort Worth, Texas 5,597,889 231,946 4,368,054 1,049 553,707
CPHP-XII - Yale Village
Houston, Texas 8,035,679 299,925 4,950,075 1,364 671,162
CPHP-XIII - Atlantis
Virginia Beach, Virginia 7,855,166 520,607 5,382,387 2,861 678,475
CPHP-XIV - Kings Row
Houston, Texas 5,164,084 193,458 3,586,542 947 714,225
CPHP-XV - Castle Gardens
Lubbock, Texas 4,214,701 161,989 3,106,011 821 582,953
CPHP-XVI - Rockwell Villa
Oklahoma City, Oklahoma 1,501,218 75,255 1,160,145 1,168 239,741
CPHP-XVII - London Square
Oklahoma City, Oklahoma 4,824,130 203,978 4,009,000 0 701,400
CPHP-XVIII - Ascension Towers
Memphis, Tennessee 8,620,215 176,341 6,551,159 0 716,591
Coleman Manor Associates LP
Baltimore, Maryland 2,346,108 61,281 3,384,621 0 160,330
CPHP-XX- Holiday Heights
Fort Worth, Texas 2,919,427 202,445 1,942,864 0 186,300
CPHP-XXII - Harriet Tubman
Berkeley, Calfornia 5,978,265 361,275 3,807,339 5,097 436,832
------------ ---------- ----------- ------- -----------
$122,299,736 $6,548,125 $90,505,127 $21,676 $10,132,576
------------ ---------- ----------- ------- -----------
------------ ---------- ----------- ------- -----------
CONTINUED-----------
Life Upon
Which
GROSS AMOUNT AT WHICH ACCUMULATED Depreciation
CARRIED AT CLOSE OF YEAR DEPRECIATION In Latest
------------------------------------ ------------- Income
Buildings And Buildings And Date Of Date Statement Is
Description (1) Land Improvements Total Improvements Construction Acquired Computed
- -----------------------------------------------------------------------------------------------------------------------------------
Balance Carried
Forward $ 4,067,994 $ 52,747,790 $56,815,784 $21,054,407
CPHP-XI - Continental Terrace
Fort Worth, Texas 232,995 4,921,761 5,154,756 2,104,681 1971 Oct-88 20 - 40 years
CPHP-XII - Yale Village
Houston, Texas 301,289 5,621,237 5,922,526 2,618,020 1970 Aug-88 20 - 40 years
CPHP-XIII - Atlantis
Virginia Beach, Virginia 523,468 6,060,862 6,584,330 2,515,099 1970 Jul-88 20 - 40 years
CPHP-XIV - Kings Row
Houston, Texas 194,405 4,300,767 4,495,172 1,870,122 1968 Aug-88 20 - 40 years
CPHP-XV - Castle Gardens
Lubbock, Texas 162,810 3,688,964 3,851,774 1,467,418 1971 Jul-88 15 - 40 years
CPHP-XVI - Rockwell Villa
Oklahoma City, Oklahoma 76,423 1,399,886 1,476,309 518,485 1970 Jul-88 27.5 years
CPHP-XVII - London Square
Oklahoma City, Oklahoma 203,978 4,710,400 4,914,378 2,050,912 1975 Aug-88 27.5 years
CPHP-XVIII - Ascension Towers
Memphis, Tennessee 176,341 7,267,750 7,444,091 2,647,578 1975 Aug-88 27.5 years
Coleman Manor Associates LP
Baltimore, Maryland 61,281 3,544,951 3,606,232 1,195,893 1903 May-88 27.5 years
CPHP-XX- Holiday Heights
Fort Worth, Texas 202,445 2,129,164 2,331,609 851,814 1972 Oct-88 32 years
CPHP-XXII - Harriet Tubman
Berkeley, Calfornia 366,372 4,244,171 4,610,543 1,540,513 1975 Aug-88 27.5 years
---------- ------------ ------------ -----------
$6,569,801 $100,637,703 $107,207,504 $40,434,942
---------- ------------ ------------ -----------
---------- ------------ ------------ -----------
F-13
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION OF OPERATING PARTNERSHIPS IN WHICH
CPTCHF-I HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1997
NOTE 1 - DESCRIPTION OF PROPERTIES
The Properties held by the Operating Partnerships in which CPTCHF-I has invested
are housing projects, primarily for families and elderly or handicapped
individuals of low and moderate income.
NOTE 2 - SCHEDULE OF ENCUMBRANCES
OPERATING PARTNERSHIP MORTGAGE RESIDUAL PURCHASE OTHER
NAME AND PROPERTY NAME NOTES NOTE NOTE NOTES TOTAL
- --------------------------------------------------------------------------------------------------------
CPHP-I - Charter House $ 925,132 $1,460,658 $0 $0 $2,385,790
CPHP-II - Sunset Park 2,522,516 5,524,553 0 716,707 8,763,776
CPHP-III - Highland Park 1,216,907 8,818,969 0 652,922 10,688,798
CPHP-IV - Forest Glen Estates 2,000,892 3,884,312 0 344,694 6,229,898
CPHP-V - Jaycee Towers 2,481,363 4,679,328 0 579,225 7,739,916
CPHP-VI - Edgewood 1,983,513 834,742 0 269,396 3,087,651
CPHP-VII - Gulfway Terrace 2,724,803 3,008,516 0 571,865 6,305,184
CPHP-VIII - Sunset Townhomes 611,480 726,528 0 62,223 1,400,231
CPHP-IX - Wind Ridge 1,391,653 2,373,858 0 333,823 4,099,334
CPHP-X - Bergan Circle 6,052,152 7,937,632 0 552,492 14,542,276
CPHP-XI - Continental Terrace 2,095,354 3,137,365 0 365,170 5,597,889
CPHP-XII - Yale Village 2,456,976 3,552,586 0 2,026,117 8,035,679
CPHP-XIII - Atlantis 2,155,114 5,432,707 0 267,345 7,855,166
CPHP-XIV - Kings Row 1,426,021 3,290,356 0 447,707 5,164,084
CPHP-XV - Castle Gardens 1,469,476 2,496,664 0 248,561 4,214,701
CPHP-XVI - Rockwell Villa 538,175 839,426 0 123,617 1,501,218
CPHP-XVII - London Square 2,220,656 2,085,975 0 517,499 4,824,130
CPHP-XVIII - Ascension Towers 3,207,107 5,091,167 0 321,941 8,620,215
Coleman Manor Associates 2,152,954 0 0 193,154 2,346,108
CPHP-XX - Holiday Heights 907,716 1,900,278 0 111,433 2,919,427
CPHP-XXII - Harriet Tubman 1,427,977 4,230,731 221,500 98,057 5,978,265
----------------------------------------------------------------------
$41,967,937 $71,306,351 $221,500 $8,803,948 $122,299,736
----------------------------------------------------------------------
----------------------------------------------------------------------
F-14
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION OF OPERATING PARTNERSHIPS IN WHICH
CPTCHF-I HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1997
NOTE 3 - RECONCILIATION OF REAL ESTATE AND ACCUMULATED DEPRECIATION
ACCUMULATED
COST DEPRECIATION
------------------------------------------------------------
Balance at December 31, 1994 $104,666,235 $27,805,217
Additions during year:
Depreciation 4,100,658
Improvements 726,514
------------------------------------------------------------
Balance at December 31, 1995 105,392,749 31,905,875
Additions during year:
Depreciation 4,272,435
Improvements 1,070,611
------------------------------------------------------------
Balance at December 31, 1996 106,463,360 36,178,310
Additions during year:
Depreciation 4,256,632
Improvements 744,144
------------------------------------------------------------
$107,207,504 $40,434,942
------------------------------------------------------------
------------------------------------------------------------
F-15
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
MORTGAGE LOANS ON REAL ESTATE OF OPERATING
PARTNERSHIPS IN WHICH CPTCHF-I HAS
LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1997
Schedule IV
Page 1 of 2
Monthly
Payments
to Maturity Original
(Net of Face Carrying
Final Maturity HUD Amount of Amount of
Description (1) Interest Rate Date Subsidy) Mortgage Mortgage (2)
- ---------------------------- --------------- -------------- ----------- ----------- ------------
First mortgages assumed by
Operating Partnerships:
CPHP-I - Charter House
Dothan, Alabama 7.00% Mar-13 $ 8,238 $1,325,700 $925,132
CPHP-II - Sunset Park
Denver, Colorado 7.00% Nov-14 8,592 4,859,300 2,522,516
CPHP-III - Highland Park
Topeka, Kansas 3.00% Dec-08 10,835 2,914,500 1,216,907
CPHP-IV - Forest Glen Estates
Kansas City, Missouri 7.50% Apr-13 6,582 2,729,761 2,000,892
CPHP-V - Jaycee Towers
Dayton, Ohio 8.50% Sep-12 7,387 3,361,200 2,481,363
CPHP-VI - Edgewood
Danville, Illinois 6.25% Mar-13 18,155 2,360,000 1,983,513
CPHP-VII - Gulfway Terrace
New Orleans, Lousiana 7.00% Jun-15 13,576 3,616,200 2,724,803
CPHP-VIII - Sunset Townhomes
Newton, Kansas 8.50% Sep-12 1,819 828,300 611,480
CPHP-IX - Wind Ridge
Wichita, Kansas 8.50% Nov-10 4,544 2,021,600 1,391,653
CPHP-X - Bergan Circle
Springfield, Massachusetts 6.92% Mar-18 24,646 7,381,100 6,052,152
--------- ----------- ----------
Balance Carried
Forward 104,374 31,397,661 21,910,411
--------- ----------- ----------
F-16
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
MORTGAGE LOANS ON REAL ESTATE OF OPERATING
PARTNERSHIPS IN WHICH CPTCHF-I HAS
LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1997
Schedule IV
Page 2 of 2
Monthly
Payments
to Maturity Original
(Net of Face Carrying
Final Maturity HUD Amount of Amount of
Description (1) Interest Rate Date Subsidy) Mortgage Mortgage (2)
- ------------------------------ ------------- --------------- ----------- ----------- ------------
Balance Brought Forward $104,374 $31,397,661 $21,910,411
CPHP-XI - Continental Terrace
Fort Worth, Texas 7.00% Mar-13 18,659 3,002,600 2,095,354
CPHP-XII - Yale Village
Houston, Texas 7.00% Jun-15 12,400 3,363,300 2,456,976
CPHP-XIII - Atlantis
Virginia Beach, Virginia 8.50% Mar-12 7,200 2,946,500 2,155,114
CPHP-XIV - Kings Row
Houston, Texas 7.05% Aug-11 13,925 2,116,000 1,426,021
CPHP-XV - Castle Gardens
Lubbock, Texas 8.50% Jun-15 14,353 1,949,900 1,469,476
CPHP-XVI - Rockwell Villa
Oklahoma City, Oklahoma 7.00% Sep-13 1,922 812,700 538,175
CPHP-XVII - London Square
Oklahoma City, Oklahoma 7.50% Jun-12 7,787 3,153,900 2,220,656
CPHP-XVIII - Ascension Towers
Memphis, Tennessee 7.00% May-15 9,506 4,290,000 3,207,107
Coleman Manor Associates LP
Baltimore, Maryland 10.00% Jul-29 12,545 2,365,000 2,152,954
CPHP-XX- Holiday Heights
Fort Worth, Texas 7.00% Apr-14 2,787 1,252,700 907,716
CPHP-XXII - Harriet Tubman
Berkeley, California 7.00% Oct-15 4,155 1,882,700 1,427,977
-------- ----------- -----------
$209,613 $58,532,961 $41,967,937
-------- ----------- -----------
-------- ----------- -----------
F-17
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
MORTGAGE LOANS ON REAL ESTATE OF OPERATING
PARTNERSHIPS IN WHICH CPTCHF-I HAS
LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1997
Schedule IV
Page 1 of 2
Monthly
Payments
to Maturity Original
(Net of Face Carrying
Final Maturity HUD Amount of Amount of
Description (1) Interest Rate Date Subsidy) Mortgage Mortgage (2)
- ------------------------------ ------------- --------------- ----------- ----------- -------------
Residual notes (second mortgages):
CPHP-I - Charter House
Dothan, Alabama (1) Dec-02 (1) $781,581 $1,460,658
CPHP-II - Sunset Park
Denver, Colorado (1) Dec-02 (1) 2,462,936 5,524,553
CPHP-III - Highland Park
Topeka, Kansas (1) Dec-02 (1) 3,936,695 8,818,969
CPHP-IV - Forest Glen Estates
Kansas City, Missouri (1) Dec-02 (1) 1,733,923 3,884,312
CPHP-V - Jaycee Towers
Dayton, Ohio (1) Oct-05 (1) 2,245,673 4,679,328
CPHP-VI - Edgewood
Danville, Illinois (1) Dec-02 (1) 415,192 834,742
CPHP-VII - Gulfway Terrace
New Orleans, Lousiana (1) Dec-02 (1) 1,255,000 3,008,516
CPHP-VIII - Sunset Townhomes
Newton, Kansas (1) Aug-03 (1) 341,229 726,528
CPHP-IX - Wind Ridge
Wichita, Kansas (1) Dec-02 (1) 1,045,000 2,373,858
CPHP-X - Bergan Circle
Springfield, Massachusetts (1) Jul-13 (1) 3,547,072 7,937,632
---------- ----------
Balance Carried
Forward 17,764,301 39,249,096
---------- ----------
F-18
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
MORTGAGE LOANS ON REAL ESTATE OF OPERATING
PARTNERSHIPS IN WHICH CPTCHF-I HAS
LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1997
Schedule IV
Page 2 of 2
Monthly
Payments
to Maturity Original
(Net of Face Carrying
Final Maturity HUD Amount of Amount of
Description (1) Interest Rate Date Subsidy) Mortgage Mortgage (2)
- ------------------------------ ------------- --------------- ----------- ----------- ------------
Balance Brought Forward $17,764,301 $39,249,096
CPHP-XI - Continental Terrace
Fort Worth, Texas (1) Oct-03 (1) 1,595,364 3,137,365
CPHP-XII - Yale Village
Houston, Texas (1) Jul-03 (1) 1,255,000 3,552,586
CPHP-XIII - Atlantis
Virginia Beach, Virginia (1) Jul-03 (1) 2,552,584 5,432,707
CPHP-XIV - Kings Row
Houston, Texas (1) Aug-03 (1) 1,537,518 3,290,356
CPHP-XV - Castle Gardens
Lubbock, Texas (1) Jul-03 (1) 1,160,247 2,496,664
CPHP-XVI - Rockwell Villa
Oklahoma City, Oklahoma (1) Jul-03 (1) 398,629 839,426
CPHP-XVII - London Square
Oklahoma City, Oklahoma (1) Jul-03 (1) 979,071 2,085,975
CPHP-XVIII - Ascension Towers
Memphis, Tennessee (1) Aug-03 (1) 2,404,667 5,091,167
CPHP-XX- Holiday Heights
Fort Worth, Texas (1) Oct-04 (1) 909,472 1,900,278
CPHP-XXII - Harriet Tubman
Berkeley, California (1) Dec-03 (1) 2,036,000 4,230,731
----------- -----------
$32,592,853 $71,306,351
----------- -----------
----------- -----------
F-19
CENTURY PACIFIC TAX CREDIT HOUSING FUND - I
NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL
ESTATE OF OPERATING PARTNERSHIPS IN WHICH
CPTCHF-I HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1997
NOTE 1 - DESCRIPTION
Each Operating Partnership has invested in a Property. The Operating
Partnerships assumed mortgage loan obligations from the sellers of the
properties, and with the exception of two mortgages, all mortgage loan
obligations are insured by the United States Department of Housing and Urban
Development. All mortgages are secured by the land and buildings of the
properties.
In addition, the Operating Partnerships issued residual notes to the sellers of
the properties as partial consideration. The notes bear interest at the minimum
long-term federal rate as announced from time-to-time pursuant to Section 1274
of the Internal Revenue Code, provided that such rate shall not be less than 7%
nor greater than 15%. The notes are secured by the land and buildings of the
properties. The notes are repayable out of future cash available for
distribution and unpaid principal and interest are due at maturity.
NOTE 2 - RECONCILIATION OF MORTGAGES
For the Year Ended
December 31, 1997
-----------------------------------
Mortgage Residual
Loans Notes
-----------------------------------
Balance at December 31, 1994 $45,702,571 $56,404,386
Additions during year:
Accrued interest 4,571,877
Deductions during year:
Payments (1,162,519)
----------- -----------
Balance at December 31, 1995 44,540,052 60,976,263
Additions during year:
Accrued interest 5,041,436
Deductions during year:
Payments (1,242,226)
----------- -----------
Balance at December 31, 1996 43,297,826 66,017,699
Additions during year:
Accrued interest 5,288,652
Deductions during year:
Payments (1,329,889)
----------- -----------
$41,967,937 $71,306,351
----------- -----------
----------- -----------
F-20