United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report under Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarter ended March 31, 2017

Commission file #0-13545

JMB/245 PARK AVENUE ASSOCIATES, LTD.

(Exact name of registrant as specified in its charter)

Illinois

(State of organization)

36-3265541

(I.R.S. Employer Identification No.)

900 N. Michigan Ave., Chicago, Illinois

(Address of principal executive office)

60611

(Zip Code)

Registrant's telephone number, including area code: 312-915-1987

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 (the "Exchange Act") during the preceding 12 months (or for such a shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

	Large accelerated filer	[ ]		Accelerated filer	[ ]
	Non-accelerated filer	[ ]		Smaller reporting company	[ X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

Table of Contents

TABLE OF CONTENTS

Part I FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 4.	Controls and Procedures	12

Part II OTHER INFORMATION

Item 1.	Legal Proceedings	12

Item 1A.	Risk Factors	12

Item 6.	Exhibits	13

SIGNATURES		14

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

JMB/245 PARK AVENUE ASSOCIATES, LTD.

(A Limited Partnership)

and Consolidated Venture

Consolidated Balance Sheets

March 31, 2017 and December 31, 2016

	March 31, 2017 (Unaudited)		December 31, 2016
Assets
Current assets:
Cash and cash equivalents	$	--	$	5,871
Accounts receivable		31,889		62,748
Total assets	$	31,889	$	68,619

Liabilities and Partners’ Capital Accounts (Deficits)
Current liabilities:
Accounts payable	$	26,741	$	18,105
Demand note payable to an affiliate, including accrued interest of $1,350,213 at March 31, 2017 and $1,366,571 at December 31, 2016		6,989,497		6,975,855

Commitments and contingencies

Total liabilities		7,016,238		6,993,960

Partners’ capital accounts (deficits):
General partners:
Capital contributions		26,664,247		26,664,247
Cumulative cash distributions		(480,000)		(480,000)
Cumulative net losses		(10,987,585)		(10,984,044)
Total general partners’ capital account		15,196,662		15,200,203
Limited partners (891 interests at March 31, 2017 and December 31, 2016):
Capital contributions, net of offering costs		113,057,394		113,057,394
Cumulative cash distributions		(7,520,000)		(7,520,000)
Cumulative net losses		(127,718,405)		(127,662,938)
Total limited partners’ capital account		(22,181,011)		(22,125,544)

Total partners’ capital accounts (deficits)		(6,984,349)		(6,925,341)

Total liabilities and partners’ capital accounts (deficits)	$	31,889	$	68,619

See accompanying notes to consolidated financial statements.

Table of Contents

JMB/245 PARK AVENUE ASSOCIATES, LTD.

(a Limited Partnership)

and Consolidated Venture

Consolidated Statements of Operations

Three Months Ended March 31, 2017 and 2016

(Unaudited)

	Three Months Ended March 31,
	2017		2016
Income:
Annual preferred return	$	93,608	$	90,522

Expenses:
Interest to an affiliate		82,059		77,964
Professional services		45,900		67,095
General and administrative		24,657		24,491

Total expenses		152,616		169,550

Net loss	$	(59,008)	$	(79,028)

Net loss per limited partnership interests	$	(62)	$	(82)

See accompanying notes to consolidated financial statements.

Table of Contents

JMB/245 PARK AVENUE ASSOCIATES, LTD.

(a Limited Partnership)

and Consolidated Venture

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2017 and 2016

(Unaudited)

	2017		2016
Cash flows from operating activities:
Net loss	$	(59,008)	$	(79,028)
Changes in:
Accounts receivable		30,859		(1)
Accounts payable		(13,345)		(2,597)
Interest payable to an affiliate		(16,358)		55,553
Net cash used in operating activities		(57,852)		(26,073)

Cash flows from financing activities:
Bank overdraft included in accounts payable		21,981		22,842
Fundings of demand note payable		30,000		--
Net cash provided by financing activities		51,981		22,842

Net decrease in cash		(5,871)		(3,231)

Cash and cash equivalents, beginning of period		5,871		3,231

Cash and cash equivalents, end of period	$	0	$	0

Supplemental cash flow disclosure:
Cash paid for interest	$	98,418	$	22,411

See accompanying notes to consolidated financial statements.

Table of Contents

JMB/245 PARK AVENUE ASSOCIATES, LTD.

(a Limited Partnership)

and Consolidated Venture

Notes to Consolidated Financial Statements

March 31, 2017 and 2016

(Unaudited)

General

Readers of this quarterly report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, 2016, which are included in the Partnership's 2016 Annual Report on Form 10-K (File No. 0-13545) filed on March 15, 2017, as certain footnote disclosures which would substantially duplicate those contained in such audited financial statements have been omitted from this report. Capitalized terms used but not defined in this quarterly report have the same meanings as in the Partnership's 2016 Annual Report on Form 10-K.

JMB/245 Park Avenue Associates, Ltd. (the "Partnership"), through JMB 245 Park Avenue Holding Company, LLC ("245 Park Holding"), owned an approximate .5% general partner interest in Brookfield Financial Properties, L.P. ("BFP, LP"), formerly known as World Financial Properties, L.P. until December 29, 2014. The ownership was represented by 567.375 Class A Units. Business activities consisted primarily of rentals to a variety of commercial companies and the ultimate sale or disposition of such real estate. 245 Park Holding is a limited liability company in which the Partnership is a 99% member and BFP Property GP Corp. ("BFP GP"), which is an affiliate of the managing general partner of BFP, LP, is a 1% member.

On December 29, 2014, BFP, LP transferred 48.5% of the membership interests in BFP 245 Park Co., LLC, which owns an indirect interest in the property commonly known as 245 Park Avenue, New York, NY, to BFP-JMB 245 Park, L.P., a Delaware limited partnership (“BFP/JMB”). Immediately following such transfer, 245 Park’s Holdings’ interest in BFP, LP, as represented by the Class A Units in BFP, LP, was redeemed in exchange for an interest in BFP/JMB represented by Class J shares of BFP/JMB. 245 Park Holding no longer holds any interest in BFP, LP, and its primary asset now consists of its interest in BFP/JMB.

Upon execution of the limited partnership agreement of BFP/JMB, BFP, LP made a distribution to 245 Park Holding of approximately $2.53 million, which in turn distributed $2.5 million to the Partnership and $0.3 million to BFP, GP. BFP, LP owns all of the common shares and 245 Park Holding owns all of the Class J shares of BFP/JMB. 245 Park Holding has been deemed to have made a capital contribution and investment for the Class J shares of approximately $7.5 million. The Class J shares will accrue a cumulative annual preferred return of 5% which has a preference on any distributions by BFP/JMB to BFP, LP not attributable to a capital event. The unpaid preferred return and unpaid investment attributable to the Class J shares have a preference on any distributions by BFP/JMB to BFP, LP attributable to a capital event.

Table of Contents

BFP, LP can cause BFP/JMB to redeem all or any portion of the Class J shares held by 245 Park Holding at any time for a payment equal to any cumulative unpaid preferred return plus the proportionate remaining unpaid investment attributable to the Class J shares, plus, during the initial five years following the transaction, an additional payment as follows: (i) with respect to a redemption on or following December 29, 2016 and prior to December 29, 2017, $3,939,394, (ii) with respect to a redemption on or following December 29, 2017 and prior to December 29, 2018, $2,626,263, (iii) with respect to a redemption on or following December 29, 2018 and prior to December 29, 2019, $1,313,131 and (iv) with respect to a redemption on or following December 29, 2019, $0. At any time thereafter, 245 Park Holding can cause BFP/JMB to redeem all or any portion of the Class J shares at any time for a payment equal to any cumulative unpaid preferred return plus the proportionate remaining unpaid investment attributable to the Class J shares.

As previously disclosed, BFP, LP marketed for sale its interest in the 245 Park Avenue property. On May 5, 2017 the sale occurred.

As a consequence and under the terms of the December 29, 2014 Partnership Agreement, in a May 2, 2017 Redemption Notice, the Board of Managers of BFP/JMB issued a notice to 245 Park Holding directing BFP/JMB to redeem all of the outstanding Class J Units of 245 Park Holding. The Redemption Notice provided that on May 5, 2017 (the “Redemption Date”) the Board of Managers of BFP/JMB would cause BFP/JMB to redeem 7,481,180 Class J Units, as of May 2, 2017. The dollar amount of the unpaid preferred capital that will be redeemed pursuant to the redemption is equal to $7,481,180. On the Redemption Date, BFP/JMB distributed to 245 Park Holding the sum of (a) the Redemption Amount plus (b) the Unpaid Preferred Return from the date of its Redemption Notice through and including the Redemption Date on the Class J Units being redeemed. As a result, the Partnership received its 99% of the redemption amount of $7,481,180, plus an additional $3,939,394 or an approximate total of $11,400,000, which will be recognized as income for financial reporting purposes. Such funds are available, among other things, to retire its indebtedness, pay operating costs and those costs related to the termination of its affairs and pay a distribution to, or make any required tax withholding payments on behalf of, Holders.

As a result of the sale and redemption, it is expected that Holders of Interests will be allocated a substantial amount of gain for Federal and state income tax purposes. The amount of gain for Federal and state income tax purposes is expected to be, at a minimum, equal to all or most of the amount of such Holder’s deficit capital account, as of December 31, 2016, for tax purposes. For each Holder, such gain may be offset by suspended losses from prior years (if any) that have been allocated to the Holder of Interests. The Partnership cannot determine the ultimate tax liability of each such Holder and each Holder is encouraged to seek tax advice relative to its liability. The actual tax liability of each such Holder of Interests will depend on such Holder’s individual tax situation.

The accompanying consolidated financial statements include the accounts of the Partnership and its majority-owned limited liability company, 245 Park Holding. The effect of all transactions between the Partnership and its consolidated venture has been eliminated.

Table of Contents

The Partnership discontinued the application of the equity method of accounting, recorded its investment at zero, and no longer recognizes its share of earnings or losses from BFP, LP or BFP/JMB, because the Partnership has no future funding obligations to BFP, LP or BFP/JMB, and has no influence or control over the day-to-day affairs of BFP, LP or BFP/JMB.

The preparation of financial statements in accordance with GAAP requires the Partnership to make estimates and assumptions that affect the reported or disclosed amount of 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 these estimates.

Before the sale of the property, the Partnership's future liquidity and ability to continue as a going concern was dependent upon JMB for continued advances and the receipt of the cumulative annual preferred return on the Class J shares of BFP/JMB. JMB's advances, as well as consolidated balances from prior notes, are evidenced by a demand note (the "Demand Note"), dated December 1, 2004, which Demand Note is secured by the Partnership's indirect interest in BFP/JMB. JMB is under no obligation to make further advances and has the right to require repayment of the Demand Note together with accrued and unpaid interest at any time. This uncertainty and the fact that the Partnership has a net capital deficiency raised substantial doubt about the Partnership's ability to continue as a going concern. No adjustments to these consolidated financial statements for this uncertainty have been made.

Transactions with Affiliates

The operations of the Partnership since 2005 have been primarily funded by cash advances from JMB which totaled $2,157,000 as of March 31, 2017 (of which $30,000 was funded during the three months ended March 31, 2017) and which, together with the amount owed and rolled over from prior notes, are evidenced by the Demand Note. The Partnership made payments in the amount of $98,418 to the accrued interest on the Demand Note during the three months ended March 31, 2017. No additional payments were made to the accrued interest on the Demand Note and no additional cash advances were made by JMB under the Demand Note through May 10, 2017, the date this report was filed. The Demand Note, which had an outstanding balance of unpaid principal and accrued interest at March 31, 2017 of $6,989,497 accrues interest at prime plus 1 percent, 5.0% at March 31, 2017, with interest compounded quarterly and included in principal, and is secured by the Partnership's interest in BFP/JMB. JMB is under no obligation to make further advances and has the right to require repayment of the Demand Note together with accrued and unpaid interest at any time.

In accordance with the Partnership Agreement, JMB Park Avenue, Inc., the Corporate General Partner, and its affiliates are entitled to receive payment or reimbursement for salaries and salary-related expenses of its employees, certain of its officers, and other direct expenses relating to the administration of the Partnership and the operation of the Partnership's real property investments. Additionally, the Corporate General Partner and its affiliates are entitled to reimbursements for portfolio management, legal and accounting services. The Partnership incurred costs of $8,183 and $7,991 for the three months ended March 31, 2017 and 2016, for these services. The Partnership owed the Corporate General Partner and its affiliates $2,604 and $2,789 for these services at March 31, 2017 and December 31, 2016, respectively.

Any reimbursable amounts currently payable to the Corporate General Partner and its affiliates do not bear interest.

Table of Contents

Subsequent Events

As previously disclosed, BFP, LP marketed for sale its interest in the 245 Park Avenue property. On May 5, 2017 the sale occurred.

Adjustments

In the opinion of the Corporate General Partner, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation (assuming the Partnership continues as a going concern) have been made to the accompanying financial statements as of March 31, 2017 and December 31, 2016, and for the three months ended March 31, 2017 and 2016.

Table of Contents

Part I. Financial Information

Item 2.

Management’s Discussion and Analysis of Financial Condition and of Operations

Liquidity and Capital Resources

Capitalized terms used herein but not defined have the same meanings as in the Partnership's 2016 Annual Report on Form 10-K.

Before the sale of the property, the Partnership's future liquidity and ability to continue as a going concern was dependent upon JMB for continued advances and the receipt of the cumulative annual preferred return on the Class J shares of BFP/JMB. This uncertainty and the fact that the Partnership has a net capital deficiency raise substantial doubt about the Partnership's ability to continue as a going concern. The operations of the Partnership since 2005 have been primarily funded by cash advances from JMB which totaled $2,157,000 as of March 31, 2017 (of which $30,000 was funded during the three months ended March 31, 2017) and which, together with the amount owed and rolled over from prior notes, are evidenced by the Demand Note. The Partnership made payments in the amount of $98,418 to the accrued interest on the Demand Note during the three months ended March 31, 2017. No additional payments were made to the accrued interest on the Demand Note and no additional cash advances were made by JMB under the Demand Note through May 10, 2017, the date that this report was filed. The Demand Note, which had an outstanding balance of unpaid principal and accrued interest at March 31, 2017 of $6,989,497, accrues interest at prime plus 1 percent, 5.0% at March 31, 2017, with interest compounded quarterly and included in principal, and is secured by the Partnership's interest in BFP/JMB. JMB is under no obligation to make further advances and has the right to require repayment of advances previously made together with accrued and unpaid interest at any time. These conditions raise substantial doubt about the Partnership's ability to continue as a going concern.

Under certain circumstances, the Partnership may have obligations for Federal or state withholding or estimated tax payments on behalf of certain Holders of Interests. Notwithstanding any such obligations, the Partnership believes that the Holders of Interests have the ultimate responsibility for the timely filing of state and Federal tax returns and the payment of all related taxes, including the reimbursement to the Partnership of all withholding tax payments or estimated tax payments made on their behalf.

Table of Contents

The outstanding balance of the Demand Note at March 31, 2017 is approximately $7,000,000, and continues to accrue interest and be increased in principal amount by additional advances from JMB. It is unlikely that the Holders of Interests will ever receive any significant portion of their original investment. However, it is expected that Holders of Interests will be allocated a substantial amount of gain for Federal and state income tax purposes as a result of the sale of the 245 Park Avenue property.

As previously disclosed, BFP, LP marketed for sale its interest in the 245 Park Avenue property. On May 5, 2017 the sale occurred.

Table of Contents

Results of Operations

The operations of the Partnership since 2005 have primarily been funded by cash advances from JMB which totaled $2,157,000 as of March 31, 2017 (of which $30,000 was funded during the three months ended March 31, 2017) and which, together with the amount owed and rolled over from Replacement Note 1, are evidenced by the Demand Note at March 31, 2017.

The increase in demand note payable to an affiliate at March 31, 2017 as compared to December 31, 2016 and related increase in interest expense for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016 is due to interest of approximately $82,059 offset by payments of approximately $98,418 made in 2017.

The decrease in professional services for the three months ended March 31, 2017 as compared to the same period in 2016 is due to the timing of billings on accounting services.

Item 4. Controls and Procedures

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-15(e) of the Securities Exchange Act of 1934 promulgated thereunder, the principal executive officer and the principal financial officer of the Partnership have evaluated the effectiveness of the Partnership's disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and the principal financial officer have concluded that the Partnership's disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in this report was recorded, processed, summarized and reported within the time period specified in the applicable rules and form of the Securities and Exchange Commission for this report.

Changes in Internal Control over Financial Reporting

There were no significant changes to our internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) of the Securities Exchange Act of 1934) during the three months ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

The Partnership is not subject to any material pending legal proceedings.

Item 1A. Risk Factors

There has been no known material changes from risk factors as previously disclosed in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2016.

Table of Contents

Item 6. Exhibits

a.	Exhibits.

	3.1.	Amended and Restated Agreement of Limited Partnership of the Partnership is hereby incorporated herein by reference to the Partnership's Report for June 30, 2002 on Form 10-Q (File No. 0-13545) dated August 21, 2002.

	3.2.	Amendment to the Amended and Restated Agreement of Limited Partnership of JMB/245 Park Avenue Associates, Ltd. by and between JMB Park Avenue, Inc. and Park Associates, L.P. dated January 1, 1994 is hereby incorporated herein by reference to Exhibit 3-B to the Partnership's Report for March 31, 1995 on Form 10-Q (File No. 0-13545) dated May 11, 1995.

	4.1.	Security Agreement, dated May 7, 2001, by JMB/245 Park Avenue Associates, Ltd. in favor of JMB Realty Corporation is hereby incorporated herein by reference to the Partnership's Report for September 30, 2004 on Form 10-Q (File No. 0-13545) dated November 10, 2004.

	4.2.	Promissory Note, payable on demand, dated December 1, 2004, is hereby incorporated herein by reference to the Partnership's Report for December 1, 2004 on Form 8-K (File No. 0-13545), dated December 7, 2004.

	10.4	Limited Partnership Agreement of BFP-JMB 245 Park, L.P. dated as of December 29, 2014 is hereby incorporated by reference to Exhibit 10.1 on Form 8-K (File No. 0-13545) filed on December 31, 2014.

	10.5	Assignment and Redemption Agreement between Brookfield Financial Properties, L.P. and JMB 245 Park Avenue Holding Company, LLC dated December 29, 2014 is hereby incorporated herein by reference to Exhibit 10.2 on Form 8-K (File No. 0-13545) filed on December 31, 2014.

	31.1.	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities and Exchange Act of 1934, as amended, is filed herewith.

	31.2.	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities and Exchange Act of 1934, as amended, is filed herewith.

	32	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith.

Table of Contents

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 thereunto duly authorized.

	JMB/245 PARK AVENUE ASSOCIATES, LTD.

	By:	JMB Park Avenue, Inc. Corporate General Partner

		GAILEN J. HULL
	By:	Gailen J. Hull, Vice President
	Date:	May 10, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person in the capacities and on the date indicated.

GAILEN J. HULL

By:

Gailen J. Hull, Chief Financial Officer

and Principal Accounting Officer

Date:

May 10, 2017

JMB 245 PARK AVENUE ASSOCIATES LTD 10-Q