-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W1ji+NJr7PPkUGbM99/P63WuAIj/anDmRgjvVGvS/Y2SPgL57hGJEDDrBkYWzCzK V2M4aOt6JsWc0sYx4CN8Ew== 0000931763-99-002172.txt : 19990729 0000931763-99-002172.hdr.sgml : 19990729 ACCESSION NUMBER: 0000931763-99-002172 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONDEV LAND GROWTH FUND 86 LTD CENTRAL INDEX KEY: 0000795280 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 592766359 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-06419-A FILM NUMBER: 99671506 BUSINESS ADDRESS: STREET 1: 2487 ALOMA AVENUE SUITE 200 CITY: WINTERPARK STATE: FL ZIP: 32792 BUSINESS PHONE: 4076791748 MAIL ADDRESS: STREET 1: P O BOX 1748 CITY: WINTER PARK STATE: FL ZIP: 32790-1748 10-Q 1 CONDEV LAND GROWTH FUND '86 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 1999 Commission File Number 33-06419-A CONDEV LAND GROWTH FUND '86, LTD. (Exact name of registrant as specified in its charter) FLORIDA 59-2766359 (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification No.) 2479 Aloma Avenue Winter Park, Florida 32792 (Address of principal executive offices) Registrant's telephone number, including area code: (407) 679-1748 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 report), and (2) has been subject to such filing requirements for the past 90 days. YES X NO . ---- ---- CONDEV LAND GROWTH FUND '86, LTD. INDEX PART I. FINANCIAL INFORMATION: Statement of Assets, Liabilities and Partner's Capital - June 30, 1999 and December 31, 1998 1 Statement of Income & Expense - Three Months Ended June 30, 1999 and June 30, 1998 2 Statement of Income & Expense - Six Months Ended June 30, 1999 and June 30, 1998 3 Statement of Cash Flows - Six months ended June 30, 1999 and June 30, 1998 4 Notes to Financial Statements 5 - 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 - 9 PART II. OTHER INFORMATION: Item 1. Legal Proceedings 9 Item 6. Exhibits and Reports on Form 8-K 9 Signatures 10 Second Quarter 1999 report to Limited Partners 11 PART I. FINANCIAL INFORMATION CONDEV LAND GROWTH FUND '86, LTD. STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL JUNE 30, 1999 AND DECEMBER 31, 1998
ASSETS ------ June 30, 1999 December 31, 1998 ------------- ----------------- (Unaudited) * Cash & Cash Equivalents $ 28,278 $ 39,457 Accounts Receivable 1,222 7,300 Land, at Cost (Note 2) 311,105 308,857 Investment in Joint Venture (Note 3) 1,528,486 1,532,361 Organization Costs, Net 13,439 13,439 ---------- ---------- Total Assets $1,882,530 $1,901,414 ========== ========== LIABILITIES AND PARTNERS' CAPITAL --------------------------------- Accounts Payable $ - $ - ---------- ---------- Total Liabilities $ - $ - ---------- ---------- Partners' Capital - General Partner 2,838 3,027 Limited Partners 1,879,692 1,898,387 ---------- ---------- Total Partners' Capital $1,882,530 $1,901,414 ---------- ---------- Total Liabilities and Partners' Capital $1,882,530 $1,901,414 ========== ==========
* Condensed from audited financial statements The accompanying notes are an integral part of these financial statements 1 CONDEV LAND GROWTH FUND '86, LTD. STATEMENT OF INCOME AND EXPENSE THREE MONTHS ENDED JUNE 30, 1999 AND JUNE 30, 1998 (UNAUDITED)
June 30, 1999 June 30, 1998 ------------- ------------- INCOME - ------ Gain on Sale of Land $ - $314,496 Interest and Other Income 232 3,314 --------- -------- Total Income $ 232 $317,810 --------- -------- OPERATING EXPENSES - ------------------ Professional Services - - Equity in loss of joint venture 2,220 (646) Management Fees 2,124 2,124 Other Expense - 6,200 Office Expense 1,932 1,870 --------- -------- Total Operating Expense $ 6,276 $ 9,548 --------- -------- Net Income/(Loss) $ (6,044) $308,262 ========= ========
The accompanying notes are an integral part of these financial statements 2 CONDEV LAND GROWTH FUND '86, LTD. STATEMENT OF INCOME AND EXPENSE SIX MONTHS ENDED JUNE 30, 1999 AND JUNE 30, 1998 (UNAUDITED)
June 30, 1999 June 30, 1998 ------------- ------------- INCOME - ------ Gain on Sale of Land $ - $314,496 Interest and Other Income 599 3,357 --------- -------- Total Income $ 599 $317,853 --------- -------- OPERATING EXPENSES - ------------------ Professional Services 9,000 9,200 Equity in loss of joint venture 3,875 829 Management Fees 4,248 4,248 Other Expense - 7,479 Office Expense 2,361 2,348 -------- -------- Total Operating Expense $ 19,484 $ 24,104 -------- -------- Net Income/(Loss) $(18,885) $293,749 ======== ========
The accompanying notes are an integral part of these financial statements 3 CONDEV LAND GROWTH FUND '86, LTD. STATEMENT OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1999 AND JUNE 30, 1998
June 30, 1999 June 30, 1998 ------------- ------------- Cash flows from operating activities: Net Income (Loss) $(18,885) $ 293,749 Adjustments to reconcile net loss to net cash used for operating activities: Equity in loss of Joint Venture, net 3,875 829 Gain on land sale - (314,497) Cash used for changes: Deposits on land - (2,100) Accounts payable (-) 390 Accounts Receivable 6,078 460 -------- ----------- Net cash used in operating activities: (8,932) (314,918) -------- ----------- Cash flows from investing activities: Land development costs (2,247) 4,982 Investment in Joint Venture - (2,359) Proceeds from land sale - 1,168,169 -------- ----------- Net cash from investing activities: (2,247) 1,170,792 -------- ----------- Cash flows from financing activities: Distributions to partners (-) (1,102,500) -------- ----------- Net cash used in financing activities: (-) (1,102,500) -------- ----------- Net increase (decrease) in cash (11,179) 47,123 Cash and cash equivalents at beginning of year 39,457 19,062 -------- ----------- Cash and cash equivalents at end of period $ 28,278 $ 66,185 ======== ===========
The accompanying notes are an integral part of these financial statements 4 CONDEV LAND GROWTH FUND '86, LTD. NOTES TO FINANCIAL STATEMENTS Note 1 BASIS OF PRESENTATION --------------------- The accompanying financial statements, in the opinion of Condev Associates, the general partner of Condev Land Growth Fund '86, Ltd., reflect all adjustments (which include only normal recurring adjustments) necessary to a fair statement of the financial position, the results of operations and the changes in cash position for the periods presented. For a full description of accounting policies, see notes to financial statements in the 1998 annual report on Form 10-K. Note 2 INVESTMENT IN LAND: ------------------ At June 30, 1999, land consisted of the following: 6.00 acre parcel (zoned commercial) in Brevard County, Florida $311,105 On October 10, 1998, the Partnership contracted with a developer of retail centers for the sale of this parcel. The contract calls for a 180-day inspection period, with appropriate performance standards, and a closing following issuance of required development permits. The inspection period was extended to May 10, 1999, and was further extended to July 15, 1999. This was done to allow the contract buyer additional time to conclude arrangements with a tenant for the property. In November, 1998, the general partner received notification from St. Johns River Water Management District that this property contains some jurisdictional wetlands, and that the area in question had been disturbed when the property was cleared of underbrush as part of the normal maintenance routine. The general partner engaged an environmental consultant to assist in resolving the matter. The area in question was flagged and surveyed, and it was determined that approximately 1.3 acres of the site are in fact jurisdictional wetlands. The General Partner is in the process of working with the Water Management District to mitigate the wetlands so the entire site will be useable by the prospective buyer. The ultimate cost of such mitigation and fines, if any, is unknown at this time, but it is not expected to be material in relation to the total value of the parcel. 5 Note 3 INVESTMENT IN JOINT VENTURE: --------------------------- The Partnership owns a 59% interest in West 50 Joint Venture (A Florida Joint Venture) whose purpose is to acquire and hold a 133-acre parcel of land in Lake County, Florida for investment purposes. The remaining 41% interest is owned by Condev West 50, Ltd., an affiliate of the general partner. The operations of West 50 Joint Venture consist primarily of professional services and real estate taxes. The Partnership's investment is carried at its equity in the net underlying assets. A summary of the assets, liabilities, and venturers' capital of West 50 Joint Venture as of June 30, 1999 is as follows:
Assets ------ Cash $ 6,778 Investment in land 2,748,742 ---------- $2,755,520 ========== Liabilities and Venturers' Capital ---------------------------------- Liabilities ----------- Mortgage note payable $ 163,865 Other liabilities 1,000 ---------- Total liabilities $ 164,865 Venturers' capital ------------------ Venturers' capital $ 2,597,223 Current profit (loss) (6,568) ----------- Total Venturers' capital 2,590,655 Total liabilities and venturers' capital $ 2,755,520 ===========
Note 4 DISTRIBUTIONS TO PARTNERS: ------------------------- Pursuant to the partnership agreement, cash flow generated each year by the Partnership is to be distributed 99% to the limited partners and 1% to the general partner. There were no cash flow distributions during the first six months of 1999. Pursuant to the partnership agreement, proceeds realized from the sale of properties, after the establishment of reserves for future operating costs, are to be distributed at least annually. During the first six months of 1999 6 there were no distributions to limited partners as there were no sales of land. Note 5 RELATED PARTY TRANSACTIONS: -------------------------- The Partnership Agreement provides for the reimbursement to the general partner of administrative expenses incurred in the direct operation of the partnership. For the six months ended June 30, 1999, $730 as reimbursed to the general partner for direct expenses incurred. When properties are sold, under certain circumstances an affiliate of the general partner may be paid real estate commissions in amounts customarily charged by others rendering similar services with such commissions plus commissions paid to nonaffiliates not to exceed 10% of the gross sales price. No real estate commissions have been paid to the general partner or any affiliate of the general partner during the first six months of 1999. The general partner is obligated to loan up to $100,000 to the Partnership during its term to meet working capital requirements. The General Partner has previously advanced $156,048.27 of working capital to the Partnership, which advance was repaid in December, 1993. Since the General Partner has met its obligation to advance funds, it is not required to make further advances. Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- During the quarter ended June 30, 1999, the Partnership continued to manage the portfolio properties with the objective of selling the properties at fair market prices. As of June 30, 1999, the Partnership had one contract for sale of one of its two remaining properties. Year 2000 - --------- The Partnership is heavily dependent upon a computer system to accurately maintain limited partner records, including name and address information, number of units owned, and distribution historical records. The Partnership is utilizing a system which was specially designed for the Partnership in 1990, and it is possible that the system will be affected by the date change which will occur at the end of 1999. The Partnership has engaged a computer consultant to evaluate the potential problems, and make system changes if necessary so the operation of the Partnership will not be affected by the date change. Work on modifying the computer system was completed in June, 1999. The cost of evaluating the current system and bringing it up to date to be year 2000 compliant was less than $1,000. The Partnership's computer records are backed up on a weekly basis, so all of the stored information is available from a secondary source. Even if the system were to be completely shut down by the 7 date change at the end of 1999, the data necessary to continue operation of the Partnership is available and could readily be adapted to a new system which is year 2000 compliant, so no significant interruption in the operations of the Partnership is anticipated. Results of Operations - --------------------- Total revenues for the six months ended June 30, 1999 were $366, compared with total revenues of $317,853 for the six months ended June 30, 1998. Income is generated from short-term cash investments, and income can be expected to fluctuate, depending on the level of cash reserves in the Partnership and prevailing interest rates. In the 1998 period, total revenues included a gain on sale of land in the amount of $314,396 and interest and other income of $3,357. There were no sales of land in the 1999 period. Operating expenses (excluding equity in the losses of the Partnership's joint venture) for the six months ended June 30, 1999 were $15,609, a decrease from $23,275 for the six months ended June 30, 1998. In both periods, operating expenses represent the normal costs of operating the Partnership and managing the Partnership properties. However, in the 1998 period, real estate taxes paid on the properties which were sold amounting to $7,479. Real estate taxes on the Partnership's properties are normally paid in November each year. The total real estate tax amount will decrease as properties are sold. West 50 Joint Venture, in which the Partnership holds a 59% interest, had a loss of $6,568 for the six months ended June 30, 1999 compared with a loss of $1,405 for the six months ended June 30, 1998. The larger loss in 1999 resulted from the refund of billboard rental income because of a decision to terminate existing billboard leases. As discussed under Liquidity and Capital Resources and West 50 Joint Venture below, the joint venture has borrowed money under a secured line of credit with a commercial bank to pay for engineering, planning and construction expenses related to the extension of water and sewer facilities to the property. Since these expenses are incurred to develop land for sale, interest charges incurred on outstanding debt will be capitalized. These additional expenses are expected to be offset by higher sales prices for the Joint Venture's land. Liquidity and Capital Resources at June 30, 1999 - ------------------------------------------------ Total assets decreased slightly from $1,901,414 at December 31, 1998 to $1,882,530 at June 30, 1999. This reflects the net results of operations for the period. Assets can be expected to decline in the future as properties are sold and distributions are made to limited partners. The Partnership currently holds one contract for sale of portfolio property which is expected to close during the fourth quarter of 1999 or the first quarter of 2000. 8 Liquidity remained at a relatively low level. Cash and equivalents decreased from $39,457 at 1998 year-end to $28,278 at June 30, 1999. As provided in the Partnership Agreement, the general partner intends to add to reserves from the net proceeds of future land sales. West 50 Joint Venture - --------------------- The area of Lake County, Florida in which the West 50 Joint Venture's 132.7-acre parcel is located has experienced heightened activity in recent months, with significant new residential development beginning in the immediate area. The City of Clermont has extended sewer facilities to one such development which is directly across from the property on the south side of State Road 50. Water service has been extended to the Joint Venture's property. In order to insure that the Joint Venture's property will have adequate sewer capacity for future development of its property, the Joint Venture has paid $38,623 to the City of Clermont to upgrade the facilities which have been installed. The Partnership has engaged an engineer to design and permit the extension of sewer utilities under SR 50 to the site and to design and permit the construction of access points and related highway improvements from SR 50 to the site. The general partner is in the process of bidding the related construction contracts and obtaining the necessary development permits. In addition, the Joint Venture has entered into a contract with an excavation and grading company to remove up to 366,000 yards of excess fill from the site and to grade a majority of the site. The Joint Venture has arranged a $500,000 secured line of credit with a commercial bank to pay for the Joint Venture's cost of these improvements which exceed fill sales. Borrowings under the line of credit will be repaid from future land sales. PART II Item 1. LEGAL PROCEEDINGS ----------------- As of June 30, 1999, there were no legal proceedings in process, nor to the knowledge of the general partner, threatened against the Partnership Item 6. EXHIBITS AND REPORTS ON FORM 8-K: -------------------------------- (A) Exhibits Second Quarter 1999 Report to Limited Partners (B) Reports on Form 8-K There were no reports of Form 8-K for the period ended June 30, 1999 9 CONDEV LAND FUND II, LTD. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned. CONDEV LAND GROWTH FUND `86, LTD. BY: Condev Associates, General Partner July 26, 1999 /s/ Robert N. Gardner - ------------------- --------------------------------- DATE Robert N. Gardner, Partner July 26, 1999 /s/ Joseph J. Gardner - ------------------- --------------------------------- DATE Joseph J. Gardner, Partner 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 0 6-MOS 6-MOS DEC-31-1999 DEC-31-1998 JAN-01-1999 JAN-01-1998 JUN-30-1999 JUN-30-1998 1.00 1.00 28,278 66,185 0 0 1,222 1,222 0 0 0 0 0 0 311,105 596,517 0 0 1,882,530 2,214,565 0 1,632 0 0 0 0 0 0 0 0 1,882,530 2,212,933 1,882,530 2,214,565 0 0 599 317,854 0 0 0 0 19,484 24,105 0 0 0 0 (18,885) 293,749 0 0 (18,885) 293,749 0 0 0 0 0 0 (18,885) 293,749 0 0 0 0
EX-99 3 SECOND QUARTER REPORT TO LTD PARTNERS July 26, 1999 Condev Land Growth Fund '86, Ltd. Second Quarter 1999 Dear Limited Partner: The financial statements of the Partnership for the second quarter of 1999 are on the reverse side hereof. There were no sales of property and no distributions to limited partners during the quarter. As of June 30, 1999, the net asset value (book value) per unit of limited partner interest was $250.63. The General Partner is making every reasonable effort to conclude the sale of the remaining partnership properties as soon as possible. In the case of the Titusville property, we have granted contract extensions to ---------- allow the contract holder time to finalize arrangements with his prospective tenant in the belief that having a user for the property will help assure that the property is sold. This strategy appears to be a correct one. As of the date of this report, the purchaser of the property has secured a commitment from his tenant, and has made a non-refundable deposit on the property. Engineering of the site has begun, and application for the required development permits is underway. With respect to the West Hwy 50, Lake County property, our strategy has been to ------------------------ complete certain improvements to the property, such as the extension of sewer and water service to the site, and construction of both on site and off site access improvements. Access improvements include not only the roadway access to the property, but also modifications to the turn lanes and medians along SR 50. We are working with the Florida Department of Transportation and Lake County in these endeavors. Because of the property's rolling terrain, we have made the decision to do some preliminary grading of the site to bring the ultimate development of the property closer to the market. We believe that these improvements will better position the property for sale by reducing the time and effort a potential buyer would have to undertake for development of the property. We believe the added expense will ultimately be recovered through a higher price for the land. Please feel free to contact the Investor Relations office if you have any questions or would like additional information concerning your investment. Sincerely yours, CONDEV ASSOCIATES -----END PRIVACY-ENHANCED MESSAGE-----