10-Q/A 1 a2025344z10-qa.txt FORM 10-Q/A FORM 10Q/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED COMMISSION FILE JUNE 30, 2000 NO. 0-11980 VENETIAN PARK ASSOCIATES (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA 95-3887496 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 3250 OCEAN PARK BLVD., STE. 380 SANTA MONICA, CA 90405 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 450-6866 ------------------------------------- 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. YES /X/ NO / /. INDICATE THE NUMBER OF SHARES (UNITS) OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF COMMON STOCK (UNITS) AS OF THE LATEST PRACTICABLE DATE (APPLICABLE ONLY TO CORPORATE ISSUER) 6,041 LIMITED PARTNERSHIP UNITS ISSUED AND OUTSTANDING. VENETIAN PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2000 INDEX

2 PART I. FINANCIAL INFORMATION VENETIAN PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS ASSETS

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 3 VENETIAN PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS LIABILITIES AND PARTNERS' EQUITY

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 4 VENETIAN PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS (UNAUDITED)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 5 VENETIAN PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS (UNAUDITED)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 6 VENETIAN PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENT OF PARTNER'S EQUITY (UNAUDITED)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 7 VENETIAN PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS (UNAUDITED)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 8 VENETIAN PARK ASSOCIATES, LTD. NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED JUNE 30, 2000 1) BASIS OF PRESENTATION SEE THE FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 FOR APPROPRIATE DISCLOSURE TO THE FINANCIAL STATEMENTS. THE FINANCIAL STATEMENTS INCLUDED IN THE 10-Q OMIT SUBSTANTIALLY ALL DISCLOSURES. 2) ADJUSTING ENTRIES ALL ADJUSTMENTS WHICH ARE NECESSARY FOR A FAIR PRESENTATION OF THE FINANCIAL STATEMENTS HAVE BEEN MADE TO THE FINANCIAL STATEMENTS PRESENTED. ALL SUCH ADJUSTMENTS ARE OF A NORMAL RECURRING NATURE. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS GENERAL Operating income for the six months ended June, 2000 was $945,483 vs. $819,402 during the corresponding period last year, a hike of $126,081 or 15.39%. Net spendable this year through June 30 was a negative cash flow of $125,809 vs. a negative cash flow of $98,046 during the first six months of 1999, an increase in negative cash flow of $103,791 due to the $111,720 building exterior painting. The scheduled monthly rent roll for June, 2000 was $166,403 vs. $160,380 at the same time last year, an increase of $6,023 or 3.76%. Additional rent increases are ongoing as leases expire and "street rents" have recently been increased by approximately 10%. Rental losses (vacancies, net delinquencies and rental discounts) have been slashed by $84,285 or 53.5% on a year-to-year basis: $73,242 this year through June 30 vs. $157,527 last year through the same date, a good measure of rapidly improving rental conditions and results of the project's restoration. Operating expenses during the 2000 first half were $1,071,292 vs. $917,448 during the corresponding period last year, an increase of $153,844. Although utility costs declined by $4,919, repairs and maintenance were up by $109,248 during the first half of this year compared to the same period last year due to the building exterior painting cost of $111,720. Utilities declined because of a gas credit of $4,000 in May due to an overcharge in estimated billing. Variable expenses were reduced due to decreases in advertising, accounting fees and landscaping work. Repairs and maintenance were cut mainly due to decreases in plumbing expenses and carpentry supplies. Fixed expenses increased this year because of payroll and property insurance costs. Management fees were higher because rental income increased. Replacements went up due to carpet/flooring replacements and three new air conditioner unit replacements. On June 30, 2000 the Property's cash accounts stood at $268,439 (including $101,066 in tenant refundable security deposits). As noted above, the Property's first trust deed holder is holding $634,419 of our money in a repair escrow account (such funds are released only when each job or phase of each job is complete). Therefore, cash plus the interest bearing escrow account containing our funds amounts to $903,054. Of this amount, as of June 30, 2000, our payables for roof work in progress, the balance of the paving contract and accounts payables were $300,274. This would leave us with cash accounts of $576,445 provided we have paid for all work completed and the balance of the repair escrow funds were in our own bank account. Frustrating at this time is the fact that Reilly Mortgage Company, the loan servicing agent, drags its feet for two weeks or longer before they release funds with which we reimburse the Partnership for monies expended for the rehabilitation work. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (Continued) Presently, the following major jobs have been completed: Complete exterior painting, 90% of the paving, 100% of the maintenance shop and rental office addition, 90% of the redecoration of the rental office and club house and 35.6% of the roof replacement, a total of 105 units completed. Because of delays in replacement of air conditioning ducts on the roof (not originally budgeted for) and the City of Stockton's requirement that certain metal ladders on the roofs be replaced (not originally budgeted for) the roof replacement program is only 35.6 % complete. If the roofing contractor remains on schedule, it is anticipated that the job will be completed during August of this year. TOTAL WORK INITIALLY BUDGETED AMOUNTED TO $666,368; HOWEVER, WE WILL BE OVER BUDGET BY $46,308, THE INCREASE ATTRIBUTABLE TO UNEXPECTED REQUIREMENTS BY THE CITY OF STOCKTON AND THE MANDATORY AIR CONDITIONING DUCT REPLACEMENTS. IT IS FAIR TO MENTION, THOUGH, THAT THE AMOUNT OVER BUDGET WOULD'VE BEEN MORE HAD WE NOT SAVED $53,034 IN PAVING AND PAINTING COSTS. As anticipated, the renewal of the Property's aesthetic appearance by virtue of the painting and repaving has put a brake on move-outs and enabled us to reduce our vacancy factor for the year-to-year date to 7.41%. When I visited the Property on July 12, 2000, only 12 apartments (approximately 4% of the total) were available for rent. LIQUIDITY AND CAPITAL RESOURCES Although we have booked a cash flow this year in excess of $21,211 (excluding depreciation & amortization expenses) of which more than 70% was generated in the second quarter, the Partnership's accountants suggest that we delay distributions until the end of third quarter at which time the extensive roof replacement job will be complete. The reason for this is that the lender, who is holding $634,419 of our refinancing proceeds until the job is complete, requires that we pay for the roof work as invoices are submitted which is BEFORE they release our funds. To place this in better perspective, we pay the roofers by the number of units completed, but the lender will only release funds based on BUILDINGS completed. There are 40 buildings in the project and 12 are completed. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 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. 11 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS NOT APPLICABLE ITEM 2. CHANGES IN SECURITIES NOT APPLICABLE ITEM 3. DEFAULTS UPON SENIOR SECURITIES NOT APPLICABLE ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NOT APPLICABLE ITEM 5. OTHER INFORMATION NOT APPLICABLE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K A) EXHIBITS EXHIBITS OTHER THAN THOSE LISTED HAVE BEEN OMITTED BECAUSE THEY ARE NONEXISTENT, INAPPLICABLE OR BECAUSE THE REQUIRED INFORMATION IS GIVEN IN THE FINANCIAL STATEMENTS OR NOTES THERETO. B) REPORTS ON FORM 8-K NOT APPLICABLE 12 SIGNATURE 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 IN THE CITY OF SANTA MONICA OF CALIFORNIA. VENETIAN PARK ASSOCIATES, LTD. (A CALIFORNIA LIMITED PARTNERSHIP) DATED: SEPTEMBER 11, 2000 BY /s/ NORMAN JACOBSON -------------------------------------- NORMAN JACOBSON GENERAL PARTNER 13

VENETIAN PARK ASSOCIATES LTD 10-Q/A