ITEM 1 - BUSINESS:
Venetian Park Associates, Ltd., a California limited partnership (the "Registrant") was formed on October 31, 1983 to acquire, own and operate a 295 unit rental housing project known as Venetian Park Apartments (the "Property") on a parcel of real property located at 1540, 1555 and 1560 Mosaic Way and 4841 North Pershing Avenue, Stockton, California, for $10,925,000, in accordance with Section 221(d) (4) of the National Housing Act, as amended, and the rules and regulations of the Department of Housing and Urban Development pertaining thereto. Norman Jacobson and Theodore J. Weill are the general partners (the "General Partners") of Registrant.
Registrant's objective from the Property are to:
1) Generate sufficient cash flow from operations to (i) pay all expenses, (ii) reduce the outstanding balances of loans secured by the Partnership property, and (iii) thereafter, provide cash distributions to the Limited Partners;
2) Have potential to appreciate in value in excess of the purchase price; and
3) To the extent possible, the Partners should not realize taxable income with respect to a portion or all of distributions to the Limited Partners of cash from operations. The fundamental objective was to acquire the Property for its economic benefits.
Registrant's property is managed by Norman Jacobson Management Company, an affiliate of one of the General Partners.
GEOGRAPHICAL DATA
VENETIAN PARK APARTMENTS
The Venetian Park Apartments is on a 16.4 acre site in the city of Stockton, California. Stockton is the county seat of San Joaquin Valley and is approximately 45 miles south of Sacramento, California, the state capital. The Property is one block west of Stockton's major regional shopping center which includes Macy's, Sears, Weinstock's, JCPenney's and Ward's. Delta College is immediately across the street, and the University of the Pacific is one mile to the south. Interstate Highway 5 is approximately one mile to the west, and downtown Stockton is approximately three miles due south. The Property is located in northern Stockton where nearly all of the city's population growth has occurred during the past four decades. Stockton's current population is 210,500, an increase of 48,400 since 1982 when the population was 162,100.
Agriculture is Stockton's largest industry and is the home of five of California's major grower and producer associations. Major manufacturing firms include American Forest Products, Gold Bond Building Products, H. J. Heinz Company, Safeway Meat Processing, Libbey-Owens-Ford Glass Company and Sun Diamond Growers of California. Honda Company's district automobile parts center is located in Stockton. American Savings Bank, with offices throughout California, is headquartered in Stockton and is the city's largest financial institution. The Port of Stockton, with approximately 1,000 employees, has been one of the county's leading employers since 1933. It serves all the world's major ports.
Stockton Metropolitan Airport is 10 minutes from Venetian Park Apartments. The city is 85 miles from San Francisco and approximately two and a half hours driving time from South Lake Tahoe, and less than three hours from Reno, Nevada.
ITEM 1 - BUSINESS:
PROPERTY DESCRIPTION
VENETIAN PARK APARTMENTS 1540, 1555 AND 1560 MOSAIC WAY AND 4841 N. PERSHING AVENUE STOCKTON, CALIFORNIA
Number of Units: 295 (41 buildings) Lot Size: 16.44 acres (716,126 square feet) Zoning: R-3, Apartment District Parking: 317 carports, 122 open spaces Year Built: 1976 through 1978 in four phases Construction: 2-story wood frame and stucco except 12 one-story "villa" units
AMENITIES - Clubhouse (includes exercise room with universal gym and sauna) - Extensive network of canals, waterways and fountains - Individually-metered central forced-air conditioning and heating in each unit - Built-in electric ranges and ovens - Dishwashers in all apartments - Refrigerators in all apartments - Garbage disposals - Washer and dryer in each apartment - 209 units with fireplaces - Dining rooms with wet bar in all villas and townhouses - Three swimming pools - One tennis court with access to seven additional courts and 18 night-lighted courts across Pershing Avenue - Wall-to-wall carpets and drapes - Large walk-in closets - Outside storage units in each apartment - Laundry rooms
APARTMENT MIX
ITEM 1 - BUSINESS:
VENETIAN PARK APARTMENTS
SCHEDULED GROSS INCOME
BEGINNING JANUARY, 2000
RENTAL RATES
Scheduled monthly rents...........................................$162,937
Scheduled monthly rents x 12 months.............................$1,955,242 Laundry income.....................................................$23,000 Miscellaneous income (1)...........................................$33,000 Interest income.....................................................$9,400 Total scheduled gross revenues..................................$2,020,642
- ------- (1) Net security deposit forfeitures plus late charges and miscellaneous income.
ITEM 2
ITEM 2 - PROPERTIES:
LOAN INFORMATION
VENETIAN PARK APARTMENTS
Registrant's only property is a 295-unit apartment complex (herein the "Property") consisting of 41 buildings on a 16.44 acre site at 1540, 1555 and 1560 Mosaic Way and 4841 North Pershing Avenue, Stockton, California, and commonly known as the Venetian Park Apartments. The Property is subject to encumbrances, consisting of a first trust deed note totaling $6,300,000 at December 31, 1999. The partnership borrowed $143,000 for equipment and short-term credit. The outstanding loan balance at December 31, 1999 is $139,593. The General Partners believe that the foregoing Property is adequately covered by insurance. Also, at this time there are proposed programs for renovation and improvements of the property. The registrant refinanced and consolidated the property's four trust deed notes into one trust deed note on December 1, 1999. As per the loan covenants $835,460 was withheld from the escrow and deposited into the reserve for replacement account.
FIRST TRUST DEED INFORMATION
ITEM 3
ITEM 3 - LEGAL PROCEEDINGS:
A former employee has filed a complaint claiming discrimination with the State of California. A Mutual Release & Settlement Agreement was procured on January 30, 1998. The Agreement provided for the defendant (the Partnership) to pay $7,500. Venetian Park's insurance carrier covered some of the legal costs. The insurance carrier provided legal counsel for settling the case and paid the agreed upon settlement amount.
ITEM 4
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None
PART II
ITEM 5
ITEM 5 - MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS:
The Limited Partnership Units have limited transferability and no established public trade market has developed or is expected to develop in the future.
There were approximately 510 holders of Limited partnership Units at December 31, 1999, holding 6,041 Limited Partnership Units of Registrant. Although the General Partners have an equity interest in Registrant, they were not issued units. The general partners own 61 units, giving the partnership a total of 6,102 partner units.
During 1999, the Registrant paid $0 or $0 per unit; during 1998, paid $0; and during 1997, paid $60,410 or $10 per unit. Additionally, the Registrant paid the General Partners the following distributions: $0, $0 and $608 for 1999, 1998 and 1997, respectively.
ITEM 6
ITEM 6 - SELECTED FINANCIAL DATA:
ITEM 7
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS:
Results of Operations:
Operating income for 1999 was $1,696,973, an improvement of $85,974 (5.33%) when compared to the 1998 operating income of $1,610,999 and an increase of $190,052 (12.61%) when compared to $1,506,921 for 1997. Net spendable for 1999 was $17,112 vs. $69,434 in 1998, a decline of $52,322 or (75.36%). When compared to the 1997 net spendable of ($170,434), the net spendable generated in 1999 was $187,606 (110.04%) higher. Operating income in 1999 reflects the write off of the reimbursed portion of the Insurance Receivables-Fire Rent Loss of $38,016.
The scheduled gross monthly rental for December 1999 was $162,890, $6,153 (3.93%) more than the December 1998 rent roll of $156,737 and (7.10%) higher than the December 1997 rent roll of $152,097. Aggregate rental loss (vacancies, net delinquencies and rental discounts) for 1999 of $291,856 is a reduction of $6,710 or (2.25%) when compared to 1998's rental loss of $298,566. As mentioned above, 1999's rental loss includes the $38,016 unreimbursed insurance-fire rent loss, which was written off to vacancies. The Property's higher occupancy rate is due in large part to improved economic conditions in the Stockton area. When the buildings are painted and the other work completed, Venetian will reap the benefits of such improvements with lower operating expenses and further increase in occupancy rates.
Operating expenses during 1999 were $1,102,545 vs. $964,881 in 1998, an increase of $137,664 (14.27%). When compared to 1997's operating expenses of $1,114,411, 1999's operating expenses are lower by $11,866 (1.06%). The operating expense increase was due to an increase in expenditures in repairs and maintenance and replacements.
The Property's cash accounts at the end of 1999, 1998 and 1997, respectively, were $300,521, $135,283 and $159,824. Only part of the refinancing proceeds were in the Partnership's capital bank accounts due to holdbacks required by the lender to insure completion of the rehabilitation work. On January 13, 2000, Reilly Mortgage Group, the lender, released $94,056 from the Repair Escrow total of $835,460. As of February 8, 2000, the painters have completed painting 62 units which is 22% of the total job. In addition, the roof replacement along with the repair and re-plastering of one of the Property's three swimming pools are underway.
ANALYSIS OF CASH FLOWS:
Operating Activities:
The Partnership had a cash flow from operating activities of $68,521, $104,097, and ($39,607) for each of the three years in the period ended December 31, 1999, respectively. The decrease of the cash flow is mainly due to the write off of $38,016 to vacancy loss. This amount is the unreimbursed portion of the $52,016 accrued rent loss due to the 1998 fire. Travellers Insurance covered only $14,000.
Financing Activities:
The principal repayment of the long-term debt remained consistent over the three-year period until the last month of 1999 when the loan was refinanced.
On December 1, 1999, the escrow closed for the new First Trust Deed Loan in the amount of $6,300,000 payable $46,139.38 monthly including fixed-rate interest of 7.98% amortized for 30 years and due in 10 years. The prior loans' monthly payments including mortgage insurance were $47,019. We retired loans with balances of $5,173,951 whose combined interest rate plus mortgage insurance averaged approximately 8%.
The former loan holders released $223,018 which had been held in the Property's FHA Replacement Reserve Account. That amount combined with net cash through escrow and a property tax refund enabled us to have on hand $294,015 after retirement of the Property's laundry equipment and short-term credit loan in January 2000.
After the planned renovation work is completed and the lender approves the replacement covenants, the reserve for replacement account will be released. At that time we expect to have approximately $460,000 cash on hand. During the next few months, the rental office will be revamped and a maintenance shop constructed immediately adjacent to one of the pool buildings. This will free up one of the apartments now being used as a shop as we will need such apartment as vacancies diminish.
There were no cash distributions to partners in 1999 or 1998 to recover from the negative cash flow in 1997. The Partnership declared and paid a distribution in January 1997 for the 1996 year. The relatively small distribution of $61,018 is the first to be issued in some period in time. The distributions to partners were $0, $0 and $61,018 for each of the three-year period ended December 31, 1999, respectively.
ITEM 8
ITEM 8 - FINANCIAL STATEMENTS:
The Registrant's Financial Statements for the periods ended December 31, 1999, 1998 and 1997 follow.
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
TO VENETIAN PARK ASSOCIATES, LTD. SANTA MONICA, CALIFORNIA
We have audited the accompanying balance sheets of VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP) as of December 31, 1999 and 1998, and the related statements of operations, changes in partners' equity, and cash flows for each of the years in the three year period ended December 31, 1999. 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 audits.
We conducted our audits 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 audits provide 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 Venetian Park Associates, Ltd. (A Limited Partnership) as of December 31, 1999 and 1998, and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 1999, in conformity with generally accepted accounting principles.
/s/ Block, Plant, Eisner, Fiorito & Belak-Berger
Encino, California FEBRUARY 3, 2000
===============================================================================
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
BALANCE SHEETS ===============================================================================
ASSETS - --------------------------------------------------------------------------------
===============================================================================
LIABILITIES AND PARTNERS' EQUITY ===============================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS ===============================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY ===============================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS ===============================================================================
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS (CONTINUED) ===============================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS ===============================================================================
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION: The partnership, organized as a limited partnership within California, was formed October 31, 1983 to acquire an interest in real property located in Stockton, California. On October 31, 1983 the partnership purchased an existing apartment complex with a total of 295 units comprised of four separate apartment projects operated under Section 221(d) (4) of the National Housing Act. The partnership is economically dependent on the Stockton, California rental market.
CASH AND CASH For purposes of the statements of cash flows, the EQUIVALENTS: Partnership considers all unrestricted investment instruments purchased with original maturities of three months or less to be cash equivalents. At December 31, 1999, 1998 and 1997, there were no cash equivalents.
CONCENTRATION OF The Partnership maintains its cash in bank deposit CREDIT RISK: accounts which exceed federally insured limits. The Partnership has not experienced any losses in such accounts. The Partnership believes it is not exposed to any significant credit risk on cash.
FIXED ASSETS AND Fixed assets are stated at cost. Depreciation is DEPRECIATION: provided on the straight-line and accelerated methods over estimated useful lives which range from 5 to 35 years. The fixed assets are pledged as collateral for the mortgage note payable. Maintenance, repairs and minor renewals are expensed as incurred.
AMORTIZATION: Prepaid loan fees are being amortized on a straight- line basis over the term of the loans, 10 years. Previous loan fees have been written off.
INCOME TAXES: Income or loss of the partnership is allocated 1% to the general partners and 99% to the limited partners, which represents their respective ownership interests in the partnership. No income tax provision has been included in the financial statements since income or loss of the partnership is required to be reported by the respective partners on their income tax returns. The State of California imposes a minimum franchise tax per year for limited partnerships.
ADVERTISING COSTS: The Partnership's policy is to expense advertising costs when incurred. The advertising costs for 1999, 1998 and 1997 were expensed in the amount of $35,782, $32,121 and $58,634, respectively.
USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ===============================================================================
INSURANCE RECEIVABLE: Venetian Park suffered fire damage to 8 units in Phase II. Venetian Park hired the Greenspan Company, professional adjusters of losses for the insured to represent the partnership to negotiate with the insurance company for settlement of fire damage and loss of rents. The insurance carrier, Travelers Indemnity of Illinois, paid $250,804 to Reilly Mortgage Company and other vendors directly. The monies were held in the reserve for replacement account and payments were made payable to Venetian Park and the specific vendor. As of year end, December 31, 1998, $106,626 was due for fire damage and $52,016 for loss of rents. The $106,626 was received on January 27, 1999. Only $14,000 of the rent receivable was collectible from the insurance company and the balance was written off in 1999. As of the month of February, 1999, the eight units were available for rent.
RECLASSIFICATION: Certain amounts previously reported in financial statements for 1998 have been reclassified to conform to the 1999 presentation.
FAIR VALUE DISCLOSURES: The following estimated fair values have been determined by the Company using available market information.
CASH, AND CASH EQUIVALENTS: The carrying amounts of these items are their fair values.
LONG-TERM DEBT: The carrying amount of this item is recorded at historical cost. The estimated fair value is based on quoted market prices obtained from dealers.
The carrying/commitment amount and fair value of the Partnership's financial instruments at December 31, 1999 and 1998 are as follows:
The fair value estimates presented are based on pertinent information available to management as of December 31, 1999 and 1998. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since such dates, and current estimates of fair value may differ significantly from the amounts presented.
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ===============================================================================
RESERVE FOR The FHA also requires reserve for replacement funds REPLACEMENTS: to be maintained by the mortgagee for the mortgagor to cover major expenditures of the project for replacements. The monthly reserve payments are included with the regular mortgage payments and amount to $2,098 per month. The disbursements from this fund required the approval of HUD. On December 1, 1999, the mortgage was refinanced, the HUD requirements are no longer applicable (see mortgage payable). The disbursement from the lender established fund requires lender approval. The activity was as follows:
MORTGAGE ESCROW The mortgage escrow deposits account is also DEPOSITS ACCOUNT: maintained by the mortgagee for the mortgagor for the future payment of insurance and taxes. Payments to the account are included with the monthly mortgage payments. The activity was as follows:
Fixed assets consist of the following:
LONG-TERM DEBT: ======================================================
MORTGAGE PAYABLE: The Partnership has a 30 year amortized fixed rate mortgage due in 10 years dated November 24, 1999 in the face amount of $6,300,000 payable in monthly installments of $46,139 including principal and interest beginning on January 1, 2000 and due and payable in full on December 1, 2009. The mortgage loan is recorded at fair value. The note is secured by first trust deed on the land and buildings. Under an agreement with the mortgage lender, the Project is required to make monthly escrow deposits for property insurance and taxes.
LOAN PAYABLE: The partnership borrowed $18,000 from Wells Fargo Bank or the acquisition of laundry equipment payable in 60 monthly installments including principal and interest at $426 per month. The interest rate is 14.80% per annum. The outstanding loan balance at December 31, 1999 is $14,593. The loan was paid in full in January, 2000.
The Partnership borrowed $125,000 from Wells Fargo Bank for the good faith deposit made for the refinance. The short term note was payable in interest only installments of $990 per month. The interest rate is 9.5% per annum. The note was due and paid in full January, 2000.
MATURITIES: Long term debt maturing during the next five years is as follows:
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ RELATED PARTY Norman Jacobson, a general partner of the TRANSACTIONS: partnership, is also an officer and the sole shareholder of Norman Jacobson Realty Resources, Inc. Norman Jacobson Realty Resources, Inc. (NJRR) received a management fee for its services equal to 3% of the project's net revenues for the current year. NJRR was paid management fees and reimbursed out of pocket expenses totaling $69,252, $57,840 and $58,918 for the years ended December 31, 1999, 1998 and 1997, respectively.
The General Partners received cash compensation from the partnership totaling $33,803 in 1999 and $31,961 in 1998 and $30,160 in 1997 consisting of project management fees equal to 2% of the project's net revenues for each year.
DISTRIBUTIONS TO LIMITED The Partnership declared and paid the following AND GENERAL PARTNERS: distributions in the amount of $0, $0 and $61,018 for the years ended December 31, 1999, 1998 and 1997, respectively.
COMMITMENTS AND A former employee has filed a complaint claiming CONTINGENCIES: discrimination with the State of California. A Mutual Release & Settlement Agreement was procured on January 30, 1998. The Agreement provided for the Partnership to pay $7,500. Venetian Park's insurance carrier covered some of the legal costs. The insurance carrier provided legal counsel for settling the case and paid the agreed upon settlement amount.
On December 1, 1999 the Partnership refinanced and vconsolidated the original four HUD insured mortgage loans into one FHA mortgage loan. As part of the refinance arrangement, certain loan restrictions were required. The mortgagor withheld out of escrow $835,460 for reserve for replacements. The repair completion exhibit outlined five major repairs to be made, asphalt driveways, parking lots, concrete walkways, prepare and paint all building exteriors and replace all building roofs. As of November, 1999, the Partnership had contracted to have the roofs replaced and the building repainted for a cost of $366,600 and $104,500 of which $122,200 and $25,000 had been paid as of year end, respectively. As of year end, the prefabricated roofs had been ordered and work had commenced on removing the old roofs. None of the painting contract had begun by year end.
ITEM 9
ITEM 9 - DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE:
There have been no disagreements with accountants on any matters of financial statement presentation or related disclosures.
PART III
ITEM 10
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS:
Registrant has no directors or executive officers but is managed by the General Partners.
The General Partners are described below:
NORMAN JACOBSON. Mr. Jacobson co-founded WAGNER/JACOBSON CO., INC. in 1958. That firm engaged primarily in real estate brokerage of income-producing multifamily residential real estate and served as general partner for a number of public and private syndications. Because Mr. Jacobson's time is devoted to property management and syndication activities and serving the interests of the investors in the syndications formed by him, his involvement with WAGNER/JACOBSON CO., INC., has ceased. In 1982, Mr. Jacobson, formed NORMAN JACOBSON REALTY RESOURCES, INC. Mr. Jacobson is also President of NORMAN JACOBSON MANAGEMENT CO, which acts as property manager for various apartment complexes and commercial properties in Los Angeles, Orange, Sacramento, San Joaquin, Solano and Contra Costa Counties.
In 1981 Mr. Jacobson co-formed Jacobson/Weill Income Realty Fund, a publicly offered real estate fund, which purchased the Chateau Apartments, a 104-unit apartment complex located at 1503 Fulton Avenue, Sacramento, California. In 1982 Mr. Jacobson and Mr. Ted Weill were co-general partners with Bateman Eichler, Hill Richards Realty in Parkfair Associates, Ltd., a publicly offered limited partnership, formed for the purpose of purchasing the 120-unit Parkfair Apartments and Parkfair Professional Building in Sacramento. In 1983, Mr. Jacobson and Mr. Weill formed Venetian Park Associates, Ltd. which purchased the 295-unit Venetian Park Apartments in Stockton, California.
Mr. Jacobson is also General Partner for Hilltop Associates, Ltd. (formed in 1983 to purchase the 70-unit Hilltop Apartments), Hillsdale Investors, Ltd. (formed in 1984 to purchase the 48-unit Hillsdale Garden Apartments), Jefferson Place Investors (formed in 1985 to purchase the 66-unit Jefferson Place Apartments) and Cottage Bell Investors (formed in 1985 to purchase the 160-unit Cottage Bell Apartments). These properties are all in Sacramento. In addition, Mr. Jacobson is General Partner for Muir Creek Investors (formed in 1986 to purchase the 108-unit Muir Creek Apartments in Martinez, California), and Med Village Investors (formed in 1988 for the purpose of constructing the 106-unit Mediterranean Village Apartments in Fairfield, California).
Norman Jacobson Realty Resources, Inc., of which Mr. Jacobson is a principal and the sole owner, is general partner of Palm Mesa, Ltd. (formed in 1970 to purchase the 147-unit Palm Mesa Apartments) and Parkwood Village, Ltd. (formed in 1971 to purchase the 276-unit Newport Village Apartments). Both of these properties are in Costa Mesa, California.
In 1977, Mr. Jacobson was president of the Los Angeles Board of Realtors. Formerly he was president of the Venice Board of Realtors. He has been a director of the California Association of Realtors (CAR) periodically since 1963 and was elected regional vice-president of the CAR in 1978. In 1971-72 he was vice-chairman of the CAR's Syndication Division and was founding editor of the Syndication Division's official publication, THE CALIFORNIA SYNDICATOR. Mr. Jacobson lectures and writes extensively in the fields of real estate invest ments. He has periodically instructed for University of California Extension since 1961, lectures from time to time for the UCLA Graduate School of Management and is one of 80 real estate professionals in the United States invited to write a Chapter for THE REAL ESTATE HANDBOOK published by Dow-Jones, Irwin.
Mr. Jacobson holds a degree in business administration from UCLA, where he graduated in 1952. THEODORE J. WEILL. Mr. Weill is a general partner in numerous ongoing private and public syndications, and is active in real estate development and other activities. From December, 1969 to February, 1977, Mr. Weill served as principal in the development of recreational communities and became Executive Vice President of the Resort Development Group of Dart/Kraft Industries in 1970. From January, 1963, to November, 1969, he was President and Chairman of a privately held real estate and brokerage company specializing in commercial, industrial and income property with annual sales of $50 million, and a property management company with managed assets of $100 million. Mr. Weill has served as a consultant to Dart/Kraft Industries, SRI International and ITT Corporation. In March, 1977, he founded Weill Financial Corporation, a Los Angeles real estate investment organization.
Mr. Weill has a Bachelor's degree in marketing and finance from the University of Pennsylvania, Wharton School of Finance and Commerce in 1956, and in 1977 graduated with honors from the Pepperdine University Presidential/Key Executive MBA program.
PROPERTY MANAGEMENT
The Partnership Agreement provides that J/W Management Corp., a California Corporation organized by the General Partners, will be responsible, through its own personnel and/or through subcontracted management services, for the management of the Property, for a fee of 5% of the gross income of the Property, which fee is generally charged in the Stockton area. Historically, J/W Management has subcontracted the off-site property management to firms specializing in apartment house management and has paid 3% of the gross income to such firms while retaining the remaining 2% as compensation for overseeing the subcontractor's work. J/W Management Corp. was dissolved in 1990, and the General Partners individually continue to oversee the subcontractor's work and receive the 2% compensation.
Presently, the off-site management of the property is subcontracted to Norman Jacobson Management Co., an affiliate of one of the General Partners.
ITEM 11
ITEM 11 - EXECUTIVE COMPENSATION:
During the year ended December 31, 1999, the General Partners (see Item 13) received cash compensation from Registrant totaling $33,803 consisting of project management fees. Norman Jacobson received $22,160 and Theodore J. Weill received $11,643.
Also, during the year ended December 31, 1999, one of the General Partners and his affiliate, Norman Jacobson Management Co. (see Item 13) received cash compensation from Registrant totaling $69,252 consisting of project management fees and reimbursement for out-of-pocket expenses.
The following table summarizes the types, estimated amounts and recipients of compensation that will or may be paid to the General Partners or their affiliates from and after January 1, 2000:
ITEM 12
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
Registrant has no directors or officers but is managed by the General Partners. At December 31, 1999, neither of the General Partners owned any of the outstanding Limited Partnership Units nor did any person known to the General Partners own 5% or more of the outstanding Limited Partnership Units.
ITEM 13
ITEM 13 - CERTAIN RELATIONSHIPS:
The General Partners, either personally or through affiliated entities, are General Partners in other real estate limited partnerships, some of which may be comparable in certain respects to the Partnership. The General Partners have organized other partnerships in the past and will organize other partnerships in the future, including partnerships which may have investment objectives similar to those of the Partnership. Such General Partner will have legal and financial obligations with respect to those other partnerships which are similar to his obligations with respect of the Partnership, including contingent liability, for the obligations of such partnerships.
The General Partners are prohibited from entering into any transaction on behalf of the Partnership with any other limited partnership in which the General Partners or any affiliate of the General Partners has an interest.
The General Partners may engage in the real estate business or in other businesses for their own account for the accounts of others or otherwise, and neither the Partnership nor any Limited Partners shall be entitled to any interest therein. There may be conflicts of interest on the part of the General Partners between the Partnership and other limited partnerships with which they are affiliated at such time as the Partnership attempts to sell or rent realty or employ resident and building managers, as well as under other circumstances.
It is the policy of the Partnership that the Limited Partners may not engage directly or indirectly in any capacity for monetary gain. Generally the Limited Partners participate in the profits, losses and distributions and have certain limited partner voting rights. No Limited Partner shall have any right to be active in the conduct or management of the Partnership business, nor have any power to bind the Partnership by contract, agreement, compromise or undertaking; provided, however, that Limited Partners shall have the right to vote on Partnership matters, as set forth in the Partnership Agreement, which affects its basic structure.
Limited Partners holding 10% of the Units may call (in the General Partnership notice) a meeting as provided in the Rules of the Commissioner of Corporations of the State of California, and an affirmative vote of the majority interest of the Limited Partners shall be required to take action upon certain matters as provided in the Partnership Agreement.
PART IV
ITEM 14
ITEM 14 - FINANCIAL STATEMENTS AND EXHIBITS:
(a) EXHIBITS
None
(b) FINANCIAL STATEMENTS
The following financial statements are included in Item 8:
Independent Auditors' Report
Balance Sheets as of December 31, 1999 and 1998
Statements of Operations for the years ended December 31, 1999, December 31, 1998 and December 31, 1997.
Statements of changes in partners' equity for the years ended December 31, 1999, December 31, 1998, and December 31, 1997.
Statements of cash flows for the years ended December 31, 1999, December 31, 1998, and December 31, 1997.
Notes to Financial Statements
The following financial statement schedules follow:
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON SUPPORTING SCHEDULES
TO VENETIAN PARK ASSOCIATES, LTD. SANTA MONICA, CALIFORNIA
Under date of February 3, 2000, we reported on the balance sheets of VENETIAN PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) as of December 31, 1999 and 1998 and the related statements of operations, changes in partners' equity and cash flows for each of the years in the three-year period ended December 31, 1999, which are included in Item 8 of this annual report on Form 10-K. In connection with our audits of the aforementioned financial statements, we also have audited the related financial statement schedule as listed in Item 14 of this annual report on Form 10-K. The financial statement schedule is the responsibility of the Partnership's management. Our responsibility is to express an opinion on the financial statement schedule based on our audits.
In our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
/s/ Block, Plant, Eisner, Fiorito & Belak-Berger
Encino, California FEBRUARY 3, 2000
VENETIAN PARK ASSOCIATES, LTD. (A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999 - --------------------------------------------------------------------------------
(A) The initial cost to the Partnership represents the original purchase price of the property.
(B) Reconciliation of real estate owned for 1999, 1998 and 1997:
(D) Aggregate cost of real estate at December 31, 1999 for Federal income tax purposes is $11,175,461.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) or the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
VENETIAN PARK ASSOCIATES, LTD. A California Limited Partnership
Date: 2/9/2000 By:/s/ Theodore J. Weill ---------------- --------------------------------------- Theodore J. Weill General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: 2/25/2000 By:/s/ Norman Jacobson ---------------- --------------------------------------- Norman Jacobson General Partner