Exhibit 99.1     Letter to The Limited Partners of the Registrant dated March 8,
                 2001

                        PROMETHEUS DEVELOPMENT CO., INC.
                               350 Bridge Parkway
                           Redwood City, Ca 94065-1517
                                 (650) 596-5393

March 8, 2001

To the Limited Partners:

By now you may have become  aware of an  unsolicited  tender offer for up to 300
Units of Limited  Partnership  Interest in  Prometheus  Income  Partners at $800
dollars per unit. The unsolicited  tender offer was made by Everest  Management,
LLC,  a  California  limited  liability  company,  which  is  unaffiliated  with
Prometheus Income Partners.

Prometheus  Income Partners  recently filed revised  preliminary proxy materials
with the  Securities  and  Exchange  Commission  for a proposed  Merger  with an
affiliate of the general partner, which, if completed,  would yield a minimum of
$1,200 per Unit in cash to investors plus possible  additional amounts depending
on the outcome of the  pending  litigation  and the actual cost of the  property
repairs. You can get the revised preliminary version of the proxy statement, and
any  other  relevant  documents,   for  free  at  the  Securities  and  Exchange
Commission's  website  at  www.sec.gov.   We  are  awaiting  comments  from  the
Securities and Exchange Commission, which may require our response.

Once a  definitive  proxy  statement  has been  filed  with the  Securities  and
Exchange  Commission and declared  effective,  it will be distributed to Limited
Partners.  We cannot  assure you that the  definitive  proxy  statement  will be
declared  effective.  The  definitive  proxy  statement  will contain  important
information,  which expands upon and clarifies the information contained in this
letter,  including a detailed list of participants in the proxy  soliticitation,
as well as their direct and indirect interests in the partnership.

As  communicated  previously,  the  Partnership  intends  to  hold,  as  soon as
practicable,  a meeting of the Limited Partners of the Partnership at which time
the Limited Partners will consider and vote on the proposal by the Partnership's
General  Partner.  For  the  Merger  to  proceed,  a  majority  of  the  limited
partnership interests must be voted in favor of the Merger, and other conditions
must be fulfilled.  Of course, we can give you no assurance that the merger will
be consummated.


On behalf of the General Partner,  I thank you and appreciate your consideration
of these matters.








                                 Prometheus Development Co., Inc., a California
                                 corporation


                                             /s/ John J. Murphy
                                 ------------------------------------
                                 By:             John J. Murphy
                                 Title:          Vice President