FIRST DEARBORN INCOME PROPERTIES L.P.
154 West Hubbard Street, Suite 250
Chicago, IL 60610
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ........ to ........
Commission file number 0-16820
FIRST DEARBORN INCOME PROPERTIES L.P.
(Exact name of registrant as specified in its charter)
Delaware 36-3473943
(State of organization) (IRS Employer Identification No.)
154 West Hubbard Street, Suite 250, Chicago, IL 60610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 464-0100
Securities registered pursuant to Section 12(b) of the Act:
Names of each exchange
Title of each class on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP UNITS
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Not applicable.
PART 1
Item 1. Business
The registrant, First Dearborn Income Properties L.P. (the
"Partnership"), is a limited partnership formed in October 1986 under the
Revised Uniform Limited Partnership Act of the State of Delaware to
invest in income producing commercial real estate consisting principally
of existing shopping centers and office buildings. On February 25, 1987,
the Partnership commenced an offering of $10,000,000 of its limited
partnership interests (the "Units") (subject to increase by an additional
$5,000,000 of Units) pursuant to a Registration Statement on Form S-11
under the Securities Act of 1933 (File No. 33-10244). A total of
20,468.5 Units was sold to the public in the offering at $500 per Unit.
The holders of 10,991.5 Units were admitted to the Partnership in 1987
and the holders of 9,477 Units were admitted to the Partnership in 1988.
The offering terminated on November 15, 1988 (extended from its
originally scheduled termination date of February 25, 1988). Since
admission to the Partnership, no holder of Units (hereinafter, a "Limited
Partner") has made any additional capital contributions. The Limited
Partners of the Partnership share in the benefits of ownership of the
Partnership's real property investments in proportion to the number of
Units held.
Net of offering costs, Limited Partners have contributed a total of
$8,800,461 to the Partnership. The Partnership is engaged solely in the
business of real estate investment. It is the Partnership's objective to
realize cash flow from operations and appreciation in the value of the real
estate. The Partnership has entered into three joint venture agreements
with partnerships sponsored by affiliates of the General Partners.
Pursuant to such agreements, the Partnership has made capital
contributions aggregating $7,685,642 through December 31, 2000. The
Partnership has acquired, through these ventures, interests in two
shopping centers and an office building. No investments have been made
since 1990. On March 13, 2000, the Sycamore Mall property was deeded
to the lender in lieu of threatened foreclosure. As of December 31, 2000,
the Partnership had made the real property investments set forth in the
following table:
Name, Type of Property Date of Type of
and Location Size Purchase Ownership
Indian River Plaza 147,111 S.F. 11/30/86 99.9% interest in a
Shopping Center partnership that
has
Vero Beach, Florida fee ownership of
land
and
improvements(a)
Downers Grove Building 56,449 S.F. 02/01/88 66.7% interest in a
Office Building partnership that
has
Downers Grove, Illinois fee ownership of
land
and
improvements(a)
Sycamore Mall 240,206 S.F. 10/26/90 25.2% interest in a
Shopping Center disposition partnership that
had
Iowa City, Iowa March 2000 fee ownership of
land
and improvements
(a) Reference is made to Note 3 of Notes to Consolidated
Financial Statements filed with this annual report for the current
outstanding principal balance and a description of the long-term
mortgage indebtedness secured by the Partnership's real property
investments.
Note: "S.F." represents the amount of rentable square feet area in
each of the properties.
During the past five years, operations at two of the Partnership's three
properties have provided sufficient cash flow to meet the obligations of
the Partnership. Since the forth quarter of 1998, the Sycamore Mall
property had experienced significant vacancy. A larger shopping mall
opened in the market area and has made it difficult to find tenants for the
property. As a result of the inability to find new tenants, the property was
unable to meet its financial obligations and beginning in October of 1999,
payments to the lender were halted. This resulted in a default of the loan
terms and in March 2000, the property was deeded to the lender in lieu of
threatened foreclosure.
Indian River Plaza represents the most significant investment made by the
Partnership. A total of $4,710,642 has been invested by the Partnership
which represents 61% of the Partnership's real estate investments. Since
acquiring the Indian River Plaza investment in 1986, the Partnership has
received cash distributions of $1,446,028 from Indian River Plaza. The
Downers Grove building represents an investment of $1,900,000 or 25%
of the Partnership's real estate investments. Since acquiring the Downers
Grove investment in 1988, the Partnership has received distributions of
$1,757,143. Sycamore Mall accounted for $1,075,000 or 14% of the
Partnership's real estate investments. Since acquiring the Sycamore Mall
investment in 1990, the Partnership had received distributions of
$853,007.
The major tenants at Indian River Plaza are K Mart and Publix, which
occupy approximately 56% and 25%, respectively, of the property's net
leaseable area. As of December 31, 2000, the property has an occupancy
level of 98%. The first mortgage debt was refinanced in 1997, and it is
anticipated that the Vero Beach property will be able to produce enough
cash flow to meet its obligations.
The Downers Grove Building is a single tenant building with a lease to a
subsidiary of Amoco Oil, which expires in 2004. The original tenant at
Downers Grove vacated in 1994, however, it was replaced immediately.
It is anticipated that the Downers Grove property will be able to produce
enough cash flow to meet its obligations.
In March 2000, title to the Sycamore Mall property was transferred to the
lender in consideration of the entire mortgage balance including accrued
interest.
The Partnership's real property investments are subject to competition
from similar types of properties in the vicinities in which they are located.
Approximate occupancy levels for the Partnership's properties are set
forth on a quarterly basis in the table set forth in Item 2 below to which
reference is hereby made. The Partnership has no real property
investments located outside the United States.
Only two of the three Partnership's investments are consolidated for
financial reporting purposes. Information is presented below in order to
illustrate applicable information about each of the three properties
individually and does not relate to financial information presented about
the Partnership in Item 6 and Item 8.
Indian River Plaza,
Vero Beach, Florida 2000 1999 1998
Total revenue $ 789,623 806,117 747,490
Operating profit (loss) (213,575) (106,975) (207,583)
Total assets 5,281,025 5,528,643 5,827,472
Mortgage indebtedness 4,257,475 4,362,528 4,458,494
Downers Grove Building
Downers Grove, Illinois 2000 1999 1998
Total revenue 487,430 495,545 504,827
Operating profit (loss) (75,416) (88,053) (157,330)
Total assets 6,120,689 6,572,749 6,943,722
Mortgage indebtedness 3,282,367 3,542,821 3,823,915
Sycamore Mall,
Iowa City, Iowa 2000 1999 1998
Total revenue - 1,185,202 1,515,937
Operating profit (loss) - (2,136,404) (1,010,483)
Total assets - 4,266,654 6,484,454
Mortgage indebtedness - 4,258,224 4,408,025
The Partnership has no employees and is largely dependent on the
General Partners and their affiliates for services. A description of the
terms of transactions between the Partnership and affiliates of the General
Partners is set forth in Item 11 below to which reference is hereby made.
Vero Beach Associates
On November 30, 1986, the Partnership purchased an interest in Indian
River Plaza, a 147,111 gross leaseable square foot shopping center on
U.S. Highway 1 in Vero Beach, Florida. The Partnership's ownership of
Indian River Plaza was effected through its 1% partnership interest in
Vero Beach Associates (the "Operating Partnership") which holds fee title
to the property. An affiliate of the Managing General Partner purchased
the remaining 99% interest in the Operating Partnership. In May 1987,
upon the sale of a sufficient number of Units, the Partnership made an
additional capital contribution to increase its interest in the Operating
Partnership. At December 31, 2000, the Partnership had made capital
contributions aggregating $4,710,642 to the Operating Partnership. The
Partnership's interest in the cash distributions and allocations for Federal
income tax purposes of all losses of the Operating Partnership and of
profits of the Operating Partnership from the sale or refinancing of the
property is 99.9%, and its interest in the allocation of profits from
operations of the Operating Partnership for Federal income tax purposes
is 98%. The Partnership has consolidated the assets and operations of the
Vero Beach Associates as of and for the years ended December 31, 2000,
1999 and 1998.
The real estate market in general and the Vero Beach market more
specifically have experienced an oversupply of retail shopping centers
which have resulted in a soft market for rental rate increases. The
shopping center is located on U.S. Highway 1 in Vero Beach, Florida.
There is a large retail center adjacent to Indian River Plaza and there are
several other shopping centers in the immediate area. The area is a major
retail location and there is significant competition for tenants. Therefore,
the amount of cash flow generated from the property is less than
originally anticipated. As a result, the value of property has not
appreciated as had originally been anticipated. However, the property has
continued to operate at levels which have allowed it to meet its financial
obligations.
Downers Grove Building Partnership
The Partnership has contributed a total of $1,900,000 to, and owns a
66-2/3% interest in, Downers Grove Building Partnership (the "Building
Partnership"). The remaining 33-1/3% interest in the Building
Partnership is held by a non-affiliate of the General Partners. The
Building Partnership owns a 56,449 square foot two-story office and
laboratory building (the "Downers Grove Building"). The Partnership has
consolidated the assets and operations of the Building Partnership as of
and for the years ended December 31, 2000, 1999 and 1998.
The Downers Grove Building has been 100% occupied for more than
the last five years. The current tenant is a subsidiary of Amoco Oil, and is
obligated under the lease until 2004. The Downers Grove Building was
originally leased to Reichhold Chemicals, Inc. ("Reichhold"), on a 15 year
triple net lease, which provided for bi-annual escalations of 8%, and
expiration on February 2, 2002. In November 1994, Reichhold vacated
the Downers Grove Building. In connection with the termination of its
lease, two annuity contracts were purchased by Reichhold in the amount
of $2,500,000. The annuity contracts were subsequently assigned to the
Building Partnership to collateralize payment of the lease termination fee.
The annuity contracts provide for payments beginning December 1, 1994,
through November 1, 2001. The total principal payments to be received
from the annuities in 2001 aggregate $218,502 and are included in rents
and other receivables. During 2000 and 1999, the Building Partnership
recognized $20,480 and $33,556, respectively, of interest income relating
to the annuity contracts. The total amount of the annuity contracts was
determined based on negotiations with Reichhold and the lender on the
property. Reichhold had been committed under a lease which lasted
through 2002, with a provision to terminate the lease early upon payment
of a lease termination penalty. Reichhold wanted to terminate the lease
and the parties had agreed to allow Reichhold to terminate the lease in
exchange for a total payment of $2,500,000. However, the funds were
utilized to purchase the annuity contracts. These annuities provide a
steady stream of cash flow to supplement the rental income. Together,
these amounts are adequate to service the mortgage obligations.
Income will be recognized from the payment of rent by the current
tenant, and interest earned on the balance of the annuity which has not
been paid out. Total payments from the annuity in 2000 and 1999 totaled
$245,563 and $245,563 respectively, of which $20,480 and $33,556
represented interest income in the respective years while the remainder
was treated as payment of rents receivable. The total payments in 2001
are expected to aggregate $225,100 of which $6,598 represents interest.
Scheduled monthly payments due under the lease are $42,423 through
November 2001 and $56,551 from December 2001 through November
2004.
The Downers Grove Building is managed by an unaffiliated entity
under an agreement which will continue in effect from year to year, unless
and until terminated, for a management fee of $13,000 per year.
The Downers Grove Building is located in the western suburbs of
Chicago. The west suburban office market contains over 15 million
square feet of office space which competes with the property. The
market had experienced vacancy rates of over 20% for most of the late
1980's and early 1990's. Market rental rates have been rising over the last
several years. The vacancy rate in the area is under 10%. Since the
Downers Grove Building has been occupied under long-term leases, the
improving market has not affected the current lease income.
Sycamore Mall Associates
On October 26, 1990, the Partnership contributed $1,075,000 to
acquire a 25.24% general partnership interest in Sycamore Mall
Associates, a general partnership formed to acquire the Sycamore Mall
Shopping Center in Iowa City, Iowa. The property, situated on an
approximate 21.2 acre site, includes a main building containing 213,206
square feet and an out parcel building containing 27,000 square feet. A
14,000 square foot parcel which contains a 4,590 square foot building is
under a ground lease. Sycamore Mall Associates acquired the property
on October 26, 1990 for a purchase price of $9,400,000. In October
1999, monthly payments to the lender were halted and the lender declared
the loan in default. In March 2000, the property was deeded to the lender
in lieu of threatened foreclosure.
First Dearborn Income Properties L.P. II, a public limited partnership
affiliated with the General Partners of the Partnership, and First Dearborn
Sycamore Associates Limited Partnership ("FDSALP"), a privately
offered limited partnership also affiliated with the General Partners, are
the joint venture partners in Sycamore Mall Associates and contributed a
total of $2,275,000 and $910,000 for 53.40% and 21.36% of the general
partner interests, respectively.
The Partnership had been unsuccessful in its efforts to find new
tenants for the property. Sycamore Mall is located in Iowa City, Iowa. A
new 1,000,000 square foot regional mall has opened, which created
additional competition for Sycamore Mall. As of December 31, 1999, the
property was 44% occupied. Management efforts to find replacement
tenants had been unsuccessful. In response to the uncertainty relative to
Sycamore Mall Associates ability to recover the net carrying value of
Sycamore Mall through future operations and sale, Sycamore Mall
Associates, as a matter of prudent accounting practices and for financial
reporting purposes, recorded a provision for value impairment in 1998 in
the amount of $1,100,000, of which the Partnership's share was
$278,000. In 1999, an additional provision for value impairment was
recorded in the amount of $1,890,000, of which the Partnership's share
was $477,650. In October 1999, the property was unable to meet its
obligations for payment under the terms of the first mortgage. The lender
declared the loan in default and began foreclosure proceedings. In March
2000, title to the property was transferred to the lender in consideration
of the entire mortgage balance including accrued interest.
Affiliated Transactions
A description of the terms of transactions between the Partnership and
affiliates of the General Partners is set forth in Item 11 below to which
reference is hereby made.
Item 2. Properties
The Partnership owns, through joint venture partnerships, the properties
referred to in Item 1. The three properties that the Partnership has an
interest in are described below:
Indian River Plaza
On November 30, 1986, the Partnership purchased an interest in Indian
River Plaza, a 147,111 gross leaseable square foot shopping center on
U.S. Highway 1 in Vero Beach, Florida. The Partnership's ownership of
Indian River Plaza was effected through its 1% partnership interest in
Vero Beach Associates (the "Operating Partnership") which holds fee title
to the property. An affiliate of the Managing General Partner purchased
the remaining 99% interest in the Operating Partnership. In May 1987,
upon the sale of a sufficient number of Units, the Partnership made an
additional capital contribution to increase its interest in the Operating
Partnership. The Partnership's interest in the cash distributions and
allocations for Federal income tax purposes of all losses of the Operating
Partnership and of profits of the Operating Partnership from the sale or
refinancing of the property is 99.9%, and its interest in the allocation of
profits from operations of the Operating Partnership for Federal income
tax purposes is 98%. At December 31, 2000, the Partnership had made
capital contributions aggregating $4,710,642 to the Operating
Partnership.
The property is subject to a first mortgage with an original amount of
$4,185,000, bearing interest at 8.31%, amortized over 30 years payable in
monthly installments of principal and interest of $31,617, until maturity
on November 11, 2027 when the remaining principal balance is payable;
secured by the real and personal property of Indian River Plaza. In
addition to the first mortgage, the property is also encumbered by a
second mortgage with an original principal amount of $365,000, bearing
interest at a floating rate which is 5% above the LIBOR rate. This loan is
payable in monthly installments of principal and interest, until maturity on
November 11, 2002.
The major tenants at Indian River Plaza are K Mart and Publix, which
occupy approximately 56% and 25%, respectively, of the property's net
leaseable area. Occupancy at Indian River Plaza had remained in the 96%
- - 100% range for over the past five years. The K Mart lease expires in
2004 and the annual rent is approximately $220,000. In January 2002, K-
Mart Corporation filed for Chapter 11 bankruptcy protection. K-Mart
has continued to pay rent on the premises but there is no way to
determine the future of this lease at this time. The Publix lease was to
expire in 1999 and the annual rent was approximately $125,000. A 5 year
extension of the lease was entered into which provides for a new
termination date of September 30, 2004 at an annual rental of
approximately $127,624. In January 2002, Publix gave notice that it
intends to vacate the store before the end of the lease term but that it
intends to thonor the lease payment terms through the lease termination
date. Average total rent received per square foot at the property during
the last three years were $5.31 in 2000, $5.48 in 1999 and $5.08 in 1998.
K- Mart disputed the calculation of amounts due for tenant charges,
under the lease. The total amount disputed from K-Mart was $123,952
as of December 31, 1999. The Partnership has begun legal proceedings
to collect the amounts due. As of December 31, 1999, the Partnership
had reserved $123,952 of the amount due from K-Mart. This amount has
been charged to operating expenses. During 2000, the dispute was
settled in favor of K-Mart. As of December 31, 2000 the Partnership
discharged the receivable and the reserve.
The following table illustrates the scheduled lease expirations for Indian
River Plaza, over the next ten years:
# of % of total
leases expiring square feet annual rent annual rent
2001 - - - -
2002 4 21,560 $ 149,740 23%
2003 3 5,440 $ 54,070 8%
2004 4 121,047 $ 429,653 66%
2005 1 3,200 $ 22,176 3%
2006 - - - -
2007 - - - -
2008 - - - -
2009 - - - -
2010 - - - -
Management believes that the Indian River Plaza property has adequate
insurance coverage.
Downers Grove Building
The Partnership has contributed a total of $1,900,000 to, and owns a 66-
2/3% interest in, Downers Grove Building Partnership (the "Building
Partnership"). The remaining 33-1/3% interest in the Building
Partnership is held by a non affiliate of the General Partners. The
Building Partnership owns a 56,449 square foot two-story office and
laboratory building (the "Downers Grove Building"). The Downers
Grove Building was leased to Reichhold Chemicals, Inc. ("Reichhold"),
on a 15 year triple net lease, which provided for bi-annual escalations of
8%, and expiration on February 2, 2002. The Partnership has
consolidated the assets and operations of the Building Partnership as of
and for the years ended December 31, 2000, 1999 and 1998.
The property is owned fee simple by the Building Partnership. It is
subject to a first mortgage in the amount of $3,823,915, bearing interest
at 9.125%, payable in monthly installments of principal and interest of
$55,170 from March 1, 1996 through August 1, 1998; and principal and
interest of $49,731 from September 1, 1998 until August 1, 2005 when
the remaining principal balance is due; secured by the real and personal
property of the Downers Grove Building.
The Downers Grove Building is a single tenant building. The property
has been 100% occupied for over five years. The current tenant is a
subsidiary of Amoco Oil, and is obligated under the lease until 2004.
Management believes that the Downers Grove property has adequate
insurance coverage.
Sycamore Mall Associates
The property is a retail shopping center located in Iowa City, Iowa, and is
situated on an approximate 21.2 acre site. It includes a main building
containing 213,206 square feet and an out parcel building containing
27,000 square feet. A 14,000 square foot parcel which contains a 4,590
square foot building is under a ground lease. As a result of the inability
to find new tenants, the property was unable to meet its financial
obligations and beginning in October of 1999, payments to the lender
were halted. This resulted in a default of the loan terms and on March
13, 2000, title to the land buildings and improvements as well as the other
assets and liabilities of the property was transferred to the lender in
consideration of a discharge of the mortgage loan. In 1999, Sycamore
Mall Associates recorded a total provision for value impairment of
$2,990,000, of which $1,100,000 was recorded in 1998 and $1,890,000
was recorded in 1999.
The following is a list of approximate occupancy levels by quarter for
the Partnership's investment properties:
1999 2000
at at at at at at at at
03/31 06/30 09/30 12/31 03/31 06/30 09/30 12/31
Indian River Plaza
Vero Beach,
Florida 98% 99% 100% 98% 98% 98% 98% 98%
Downers Grove Building
Downers Grove,
Illinois 100% 100% 100% 100% 100% 100% 100% 100%
Sycamore Mall
Iowa City,
Iowa 47% 44% 44% 44% 44% n/a n/a n/a
Item 3. Legal Proceedings
The Partnership is not aware of any material pending legal proceedings
to which it or its properties are subject.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
As of December 31, 2000, there were 1,288 Limited Partners holding
20,468.5 Units. There is no public market for Units and it is not
anticipated that a public market for Units will develop. Pursuant to the
terms of the Limited Partnership Agreement of the Partnership (the
"Partnership Agreement"), there are restrictions on the ability of the
Limited Partners to transfer their Units. In all cases, the General Partners
must consent to the substitution of a Limited Partner.
Distributions to Limited Partners, through December 31, 2000, have
totaled $3,358,904 since the Partnership's formation. This is
approximately $164.10 of cash distributions per Unit. Each Unit
originally sold for $500 and the offering was closed on November 15,
1988. Reference is made to Item 6 herein for a summary of annual cash
distributions, per Unit, made to the Limited Partners.
Item 6. Selected Financial Data
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
December 31, 2000, 1999, 1998, 1997 and 1996
(000's) except per share info
(not covered by Independent Auditors' Report)
2000 1999 1998 1997 1996
Total revenues $ 1,285 1,310 1,254 1,306 1,360
Operating income (loss) $ (385) (283) (473) (746) (383)
Partnership's share of operations of
unconsolidated venture 11 (539) (255) 56 96
Venture partners' share of
consolidated ventures' operations 25 29 52 19 35
Net income (loss) $ (349) (793) (676) (671) (287)
Net income (loss) per Unit (a) $ (16.89) (38.34) (32.68) (32.44) (12.19)
Total assets $12,063 12,688 13,960 15,169 16,317
Long-term debt $ 7,113 7,518 7,929 8,250 4,102
Cash distributions per Unit (a) $ 0.00 0.00 6.59 7.48 7.50
The above selected financial data should be read in conjunction
with the Consolidated Financial Statements and the related notes
appearing elsewhere in this annual report.
(a) The net income (loss) per Unit and cash distributions per Unit are
based on the number of Units outstanding at the end of each period
(20,468.5.)
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources:
On February 25, 1987 the Partnership commenced a public offering of
$10,000,000 of Units (subject to increase to $15,000,000 of Units)
pursuant to a Registration Statement on Form S-11 under the Securities
Act of 1933, with the offering terminating November 15, 1988. A total
of 20,468.5 Units were issued to the public in the offering, resulting in
gross proceeds of $10,234,250 and net proceeds of $8,800,461 after the
deduction of offering costs. No additional Units are to be offered.
At December 31, 2000, the Partnership had cash and cash equivalents
of $267,249 as compared to $230,685 as of December 31, 1999. The
increase in cash and cash equivalents is primarily a result of cash flow
used by financing activities and used by investment activities not
exceeding cash provided from operations. During 1998, distributions to
limited partners were $18,071 ($0.89 per Unit). Distributions to limited
partners have been suspended since 1999.
Currently the Vero Beach property is subject to a first mortgage with
an original amount of $4,185,000, bearing interest at 8.31%, amortized
over 30 years payable in monthly installments of principal and interest of
$31,617, until maturity on February 11, 2027 when the remaining
principal balance is payable; secured by the real and personal property of
Indian River Plaza. In addition to the first mortgage, the property is also
encumbered by a second mortgage with an original principal amount of
$365,000, bearing interest at a floating rate which is 5% above the
LIBOR rate. This loan is payable in monthly installments of principal and
interest, until maturity on November 11, 2002.
In November 1994, Reichhold vacated the Downers Grove Building.
In connection with the termination of its lease, two annuity contracts
were purchased by Reichhold in the amount of $2,500,000. The annuity
contracts were subsequently assigned to the Building Partnership to
collateralize payment of the lease termination fee. The annuity contracts
provide for payments beginning December 1, 1994 through November 1,
2001. The total principal payments to be received from the annuities in
2000 aggregate $218,502 and are included in rents and other receivables.
During 2000 and 1999, the Building Partnership recognized $20,480 and
$33,556, respectively, of interest income relating to the annuity contracts.
As the Partnership intends to distribute all "net cash receipts" and
"sales proceeds" in accordance with the terms of the Partnership
Agreement, and does not intend to reinvest any such proceeds, the
Partnership is intended to be self-liquidating in nature. The Partnership's
future source of liquidity and distributable capital is expected to come
from cash generated by the Partnership's investment properties and from
the sale and refinancing of such properties. To the extent a property does
not generate adequate cash flow to meet its working capital requirements,
the Partnership may (i) withdraw funds from the working capital reserve
it maintains, (ii) fund such shortfall from excess cash generated by other
properties owned by it, or (iii) pursue outside financing sources.
However, the Partnership may decide not to, or may not be able to,
commit additional funds to certain of its investment properties.
Nonetheless, it is anticipated that the current and future capital resources
of the Partnership will be adequate to fund currently anticipated short and
long-term requirements of its investment portfolio taken as a whole.
As of October 1, 1997, the Downers Grove property was considered
to be held for sale and depreciation was suspended. As of October 1,
1998, the Partnership no longer considered the property held for sale and
recorded an adjustment to expense previously suspended depreciation.
There are certain risks and uncertainties associated with the
Partnership's investments made through joint ventures, including the
possibility that the Partnership's joint venture partners in an investment
might become unable or unwilling to fulfill their financial or other
obligations, or that such joint venture partners may have economic or
business interests or goals that are inconsistent with those of the
Partnership.
In response to the U.S. economy in general and the problems being
experienced at the Sycamore Mall property in particular, the Partnership
is taking steps to preserve its working capital. Therefore, the Partnership
carefully scrutinizes possible discretionary expenditures, particularly as
such expenditures relate to the amount of working capital reserves the
Partnership has available. By conserving working capital, the Partnership
expects to be in a better position to meet future needs of its properties
without having to rely on external financing sources.
Results of Operations:
The results of operations for the years ended December 31, 2000,
December 31, 1999 and December 31, 1998 reflect the consolidated
operations of the Partnership and its consolidated ventures, Vero Beach
Associates (the "Vero Partnership") and Downers Grove Building
Partnership (the "Building Partnership") and its equity investment in
Sycamore Mall Associates (the "Sycamore Partnership"). The results of
operations of the Vero Partnership reflect the operations of the Indian
River Plaza Shopping Center. The results of operations of the Building
Partnership reflect the operations of the Downers Grove Building. The
equity investment in the Sycamore Partnership reflects the Partnership's
share of the operations of the Sycamore Mall Shopping Center.
Changes from 1999 to 2000:
In 2000, the Partnership had a net loss of $349,248 as compared to a
net loss of $792,764 in 1999. In 1999 the Partnership recognized an
impairment loss of from its investment in Sycamore Mall of $477,650. In
2000 the Partnership disposed of its interest in Sycamore Mall.
The Partnership's interest income decreased $6,715 (18%) from
$37,598 in 1999 to $30,883 in 2000. The decrease is primarily
attributable to the decrease in interest earned on the annuity contracts
relating to the Downers Grove property. As the annuity contracts have
been paid down, the interest income has been reduced on the reduced
principal amounts remaining.
Property operating expenses increased $95,681 (31%) to $402,413 in
2000 from $306,732 in 1999, primarily due to increases in expenses at
theVero Beach property. Bad debt expenses in 2000 at Vero Beach
totaled $51,457. This relates to receivables which were deemed to be
uncollectable.
Interest expense decreased $29,948 (4%) from $712,155 in 1999 to
$682,207 in 2000. The decrease is a result of the reduction in mortgage
indebtedness in the amount of $365,507 which occurred throughout the
year.
General and administrative expense decreased $2,943 (3%) from
$95,381 in 1999 to $92,438 in 2000. This decrease resulted from a
decrease in overhead expenses charged from an affiliate of the General
Partner.
The Partnership's share of operations of unconsolidated venture
resulted in a gain of $10,873 in 2000 compared to a loss of $539,228 in
1999. The improvement is attributable to a provision for value
impairment which was recorded at Sycamore Mall in 1999. The
Sycamore Mall property was deeded to the lender in 2000 in lieu of
threatened foreclosure.
Changes from 1998 to 1999:
In 1999, the Partnership had a net loss of $792,764 as compared to a
net loss of $675,686 in 1998. This significant increase in net loss is
attributable to the Partnership's recognition of losses from its investment
in Sycamore Mall Associates. The Sycamore Mall property recorded an
additional $1,890,000 value impairment loss due to its continued inability
to attract new tenants, of which the Partnership's share was $477,650.
The $61,677 increase in rental income and the $7,068 increase in
tenant charges for the year ended December 31, 1999 as compared to the
year ended December 31, 1998 primarily resulted from an increase in
occupancy at the Vero Beach property. The Vero Beach occupancy
averaged 99% during 1999 as compared to 97% in 1998.
The Partnership's interest income decreased from $50,112 in 1998 to
$37,598 in 1999. The decrease is primarily attributable to the decrease in
interest earned on the annuity contracts relating to the Downers Grove
property. As the annuity contracts have been paid down, the interest
income has been reduced on the reduced principal amounts remaining.
Property operating expenses decreased $19,894 (6%) to $306,732 in
1999 from $326,626 in 1998, primarily as a result of a write down of
accounts receivable at the Vero Beach property, during 1998. An
allowance for doubtful accounts was established in the amount of
$83,519 for expense reimbursements from a tenant. The tenant is
disputing the calculation of amounts due to be reimbursed under the
lease. Management is continues to evaluate legal action against the
tenant.
Interest expense decreased $30,117 (4%) from $742,272 in 1998 to
$712,155 in 1998. The decrease is a result of the reduction in mortgage
indebtedness in the amount of $377,060 which occurred throughout the
year.
Depreciation expense decreased from $543,322 in 1998 to $464,046
in 1999. As of October 1, 1997, the Downers Grove property was
considered to be held for sale. In accordance with SFAS 121, no
depreciation expense relative to the property was recorded by the
Partnership from October 1, 1997 through December 31, 1997. During
1998, the property was no longer considered held for sale and an
adjustment was made to record the 1997 deferred depreciation expense.
General and administrative expense decreased $4,818 (5%) from
$100,199 in 1998 to $95,381 in 1999. This decrease resulted in a
decrease in administrative costs charged by an affiliate of the General
Partner.
The Partnership's share of losses from unconsolidated venture
increased $284,183 (111%) from $255,045 in 1998 to $539,228 in 1999.
This increased loss is attributable to an increase in a provision for value
impairment recorded at Sycamore Mall.
Inflation:
The Partnership has completed its thirteenth full year of operations.
During the last twelve years the annual inflation rate has ranged from
2.0% to 5.4% with an average of 3.6%. The effect which inflation has
had on income from operations has been minimal.
Inflation in future periods may increase rental income levels (from
leases to new tenants or renewals of existing leases) in accordance with
normal market conditions. Such increases in rental income should offset
most of the adverse impact that inflation has on property operating
expenses with little effect on operating income. Continued inflation may
also tend to cause capital appreciation of the Partnership's investment
properties over a period of time as rental rates and replacement costs of
properties continue to increase.
Item 7a. Quantitative and Qualitative Disclosures about Market
Rate
The Partnership has identified interest rate changes as a potential
market risk. However, as a majority of the Partnership's long-term debt
bears interest at a fixed rate, the Partnership does not believe that it is
exposed to market risk relative to interest rate changes.
Item 8. Financial Statements and Supplementary Data
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
INDEX
Page (s)
Independent Auditors' Report 12
Consolidated Balance Sheets, December 31, 2000 and 1999 13 thru 14
Consolidated Statements of Operations, years ended
December 31, 2000, 1999 and 1998 15
Consolidated Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 2000, 1999 and 1998 16
Consolidated Statements of Cash Flows,
years ended December 31, 2000, 1999 and 1998 17
Notes to Consolidated Financial Statements 18 thru 26
Schedule
Consolidated Real Estate and Accumulated Depreciation III
Schedules not filed:
All schedules other than those indicated in the index have been omitted as
the required information is inapplicable or the information is presented in
the financial statements or the related notes.
Independent Auditors' Report
The Partners
First Dearborn Income Properties L.P.:
We have audited the accompanying consolidated balance sheet of First
Dearborn Income Properties L.P. (a limited partnership) and consolidated
ventures as of December 31, 2000, and the related consolidated
statements of operations, Partners' capital accounts (deficits) and cash
flows for the year then ended. In connection with our audit of the
consolidated financial statements, we also have audited the financial
statement schedule as listed in the accompanying index. These
consolidated financial statements and the financial statement schedule are
the responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audit. The
consolidated balance sheet of First Dearborn Income Properties L.P. and
consolidated ventures at December 31,1999 and the related consolidated
statements of operations, Partners Capital accounts (deficits) and cash
flows for the years ended December 31,1999 and 1998, were audited by
other auditors whose report dated April 14, 2000, expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with U. S. 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 the
General Partners of the Partnership, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of First
Dearborn Income Properties L.P. and consolidated ventures as of
December 31, 2000 and the results of their operations and their cash
flows for the years then ended, in conformity with U. S. generally
accepted accounting principles. Also in our opinion, the related financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
Altschuler, Melvoin and Glasser LLP
Deerfield, Illinois
July 9, 2001
(Except for Note 9, as to which the date is February 11, 2002)
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Consolidated Balance Sheets
December 31, 2000 and 1999
Assets
2000 1999
Current assets:
Cash and cash equivalents $ 284,184 230,685
Rents and other receivables 410,155 420,962
Due from affiliates 19,071 17,193
Prepaid expenses 12,091 8,454
Total current assets 725,501 677,294
Investment properties:
Land 2,233,114 2,233,114
Buildings and improvements 15,503,056 15,407,591
17,736,170 17,640,705
Less accumulated depreciation (7,239,264) (6,760,373)
Total properties held for investment 10,496,906 10,880,332
Investment in unconsolidated venture,
held for disposition, at equity - (9,828)
Deferred rents receivable 648,768 933,974
Deferred loan costs 191,785 206,531
Total assets $ 12,062,960 12,688,303
See accompanying notes to Consolidated Financial Statements.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Consolidated Balance Sheets - Continued
December 31, 2000 and 1999
Liabilities and Partners' Capital Accounts (Deficits)
2000 1999
Current liabilities:
Accounts payable and accrued expenses $ 162,514 125,108
Due to affiliates 400,302 375,986
Accrued interest 44,035 39,539
Unearned revenue 71,647 -
Current portion of long-term debt 426,444 387,476
Total current liabilities 1,104,942 928,109
Long-term liabilities:
Long-term debt 7,113,398 7,517,873
Venture partners' equity in consolidated ventures 1,065,575 1,117,020
Deposits 21,761 18,769
Total long-term liabilities 8,200,734 8,653,662
Total liabilities 9,305,676 9,581,771
Partners' capital accounts (deficits):
General partners - cumulative net loss (26,917) (23,425)
Total general partner capital (deficit) (26,917) (23,425)
Limited partners (20,468.5 units):
Capital contributions 8,800,461 8,800,461
Cumulative net loss (2,657,356) (2,311,600)
Cumulative cash distributions (3,358,904) (3,358,904)
Total limited partner capital 2,784,201 3,129,957
Total partners' capital accounts 2,757,284 3,106,532
Total liabilities and partners' capital $ 12,062,960 12,688,303
See accompanying notes to Consolidated Financial Statements.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Consolidated Statements of Operations
Years ended December 31, 2000, 1999, and 1998
2000 1999 1998
Revenues:
Rental income $ 1,125,145 1,179,430 1,117,753
Tenant charges 129,194 93,163 86,095
Interest income 30,883 37,598 50,112
Total revenues 1,285,222 1,310,191 1,253,960
Expenses:
Property operating expenses 402,413 306,732 326,626
Interest 682,207 712,155 742,272
Depreciation 478,891 464,046 543,322
Amortization 14,746 14,746 14,621
General and administrative expenses 92,438 95,381 100,199
Total expenses 1,670,695 1,593,060 1,727,039
Operating loss (385,473) (282,869) (473,079)
Partnership's share of operations
of unconsolidated venture 10,873 (539,228) (255,045)
Venture partners' share of consolidated
ventures' operations 25,352 29,322 52,438
Net loss (349,248) (792,764) (675,686)
Net loss per limited partnership unit $ (16.89) (38.34) (32.68)
Cash distribution
per limited partnership unit $ 0.00 0.00 6.59
See accompanying notes to Consolidated Financial Statements.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Consolidated Statements of Partners' Capital Accounts (Deficits)
Years ended December 31, 2000, 1999 and 1998
General Partners LimitedPartners
Contributions, Cash
Net income net of Net income distrib-
(loss) offering costs (loss) utions Total
Balance (deficit)
at 12/31/1997 (8,740) 8,800,461 (857,835) (3,223,957) 4,718,669
Net loss (6,757) - (668,929) - (668,929)
Cash distributions - - - (134,947) (134,947)
Balance (deficit)
at 12/31/1998 (15,497) 8,800,461 (1,526,764) (3,358,904) 3,914,793
Net loss (7,928) - (784,836) - (784,836)
Cash distributions - - - - -
Balance (deficit)
at 12/31/1999 (23,425) 8,800,461 (2,311,600) (3,358,904) 3,129,957
Net loss (3,492) - (345,756) - (345,756)
Cash distributions - - - - -
Balance (deficit)
at 12/31/2000 $(26,917) 8,800,461 (2,657,356) (3,358,904) 2,784,201
See accompanying notes to Consolidated Financial Statements.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Consolidated Statements of Cash Flows
Years ended December 31, 2000, 1999 and 1998
2000 1999 1998
Cash flows from operating activities:
Net loss $ (349,248) (792,764) (675,686)
Items not requiring cash or cash equivalents:
Depreciation 478,891 464,046 543,322
Amortization 14,746 14,746 14,621
Partnership's share of operations of
unconsolidated venture (9,828) 539,228 361,032
Venture partners' share of consolidated
ventures' operations (25,352) (29,322) (52,438)
Changes in:
Rents and other receivables 10,807 (49,332) 51,237
Due from affiliates (1,878) (10,259) (605)
Prepaid expense (3,637) 313 5,435
Deferred rents receivable 285,206 277,862 264,805
Accounts payable and accrued expenses 37,406 (103,344) 13,303
Due to affiliates 24,316 69,343 25,461
Accrued interest 4,496 (9,677) (5,159)
Unearned revenue 71,647 - -
Deposits 2,992 1,002 4,336
Net cash provided by operating activities 540,564 371,842 549,664
Cash flows from investing activities-
Additions to investment properties (95,818) (32,138) (53,636)
Cash flows from financing activities:
Payment of deferred loan costs - (125) 2,343
Venture partners' distributions
from consolidated ventures (25,740) (30,334) (16,609)
Distributions to limited partners - - (134,947)
Principal payments on long-term debt (365,507) (377,060) (366,942)
Net cash used in financing activities (391,247) (407,519) (516,155)
Net increase (decrease) in
cash and cash equivalents 53,499 (67,815) (20,127)
Cash and cash equivalents
at beginning of year 230,685 298,500 318,627
at end of year $ 284,184 230,685 298,500
Supplemental disclosure of cash flow information-
cash paid for interest $677,711 721,832 747,431
See accompanying notes to Consolidated Financial Statements.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(1) Organization and Basis of Accounting
The Partnership was formed under the Delaware Revised Uniform
Limited Partnership Act by the recording of a Certificate of Limited
Partnership as of October 1, 1986. The Initial Limited Partner (an
affiliate of the Managing General Partner) contributed $1,000 and
withdrew as a Limited Partner upon the admission of the first additional
Limited Partners on May 21, 1987 when the initial closing of the offering
was consummated. The Agreement of Limited Partnership authorized
the issuance of up to 20,000 additional Units (subject to increase by an
additional 10,000 Units) at $500 per Unit. A total of 20,468.5 Units
were subscribed for and issued between February 25, 1987 and
November 15, 1988. The offering terminated on November 15, 1988.
For the years ended December 31, 2000, 1999 and 1998, the
accompanying Consolidated Financial Statements include the accounts of
the Partnership and its Consolidated Ventures - Vero Beach Associates
and Downers Grove Building Partnership, and its equity investment in
Sycamore Mall Associates. The Partnerships policy is to consolidate the
operations of ventures in which it controls more than 50% of the equity
interest. The equity method is used to account for ventures in which it
controls 50% or less of the equity interest. The effect of all transactions
between the Partnership and the Consolidated Ventures has been
eliminated.
The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying Consolidated Financial Statements have been prepared
from such records after making appropriate adjustments, where
applicable, to present the Partnership's accounts in accordance with
generally accepted accounting principles (GAAP). Such adjustments are
not recorded on the books of the Partnership. The net effect of these is
as follows:
(unaudited) (unaudited)
2000 2000 1999 1999
GAAP Tax GAAP Tax
Basis Basis Basis Basis
Total assets $ 12,062,960 2,992,051 12,688,303 4,110,579
Partners' capital accounts (deficits):
General partners (26,917) (47,587) (23,425) (36,186)
Limited partners 2,784,201 2,703,372 3,129,957 3,832,076
Net loss:
General partners (3,492) (11,401) (7,928) (3,801)
Limited partners (345,756) (1,128,704) (784,836) (376,252)
Net loss per
limited partnership unit $ (16.89) (55.14) (38.34) (18.38)
The net loss per limited partnership unit presented is based on the
limited partnership units outstanding at the end of each period (20,468.5).
All distributions to partners through December 31, 2000 have been
considered to be a return of capital.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
The Partnership's distributions from its unconsolidated venture are
considered cash flow from operating activities to the extent of the
Partnership's cumulative share of net income. In addition, the Partnership
records amounts held in U.S. Government obligations, commercial paper
and certificates of deposit at cost which approximates market. For the
purposes of these statements, the Partnership's policy is to consider all
such investments, with an original maturity of three months or less ($0
and $18,810 at December 31, 2000 and 1999, respectively), as cash
equivalents.
Deferred offering costs were charged to the partners' capital accounts
upon consummation of the offering. Deferred loan costs are amortized
over the terms of the related agreements using the straight-line method.
Depreciation on the investment properties acquired has been provided
over the estimated useful lives of 5 to 30 years using the straight-line
method.
Although certain leases of the Partnership provide for tenant
occupancy during periods for which no rent was due and/or increases in
minimum lease payments over the term of the lease, the Partnership
accrues rental income for the full period of occupancy on a straight-line
basis.
No provision for Federal income taxes has been made as any liability
for such taxes would be that of the partners rather than the Partnership.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partners 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.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 ("SFAS 121") "Accounting for the Impairment of Long-Lived
Assets and for Long Lived Assets to be Disposed Of", on January 1,
1996. SFAS 121 requires that the Partnership record an impairment loss
on its property held for investment whenever the property's carrying
value cannot be fully recovered through estimated undiscounted cash
flows from its operations and sale. The amount of the impairment loss to
be recognized would be the difference between the property's carrying
value and the property's estimated fair value. In addition, SFAS 121
provides that a property may not be depreciated while being held for sale.
In response to the uncertainty relative to Sycamore Mall Associates
ability to recover the net carrying value of Sycamore Mall through future
operations and sale, Sycamore Mall Associates, as a matter of prudent
accounting practices and for financial reporting purposes, recorded a
provision for value impairment in 1998 in the amount of $1,100,000, of
which the Partnership's share was $278,000. During 1999, an additional
$1,890,000 provision for value impairment was recorded at the Sycamore
Mall property, of which the Partnerships share was $477,655. On March
13, 2000, the Sycamore Mall property was deeded to the Mortgage
lender in lieu of foreclosure. See discussion in Note 7.
The Partnership has adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." The Partnership
defines each of its property investments as an individual operating
segment and has determined such property investments exhibit
substantially identical economic characteristics and meet the other criteria
specified by SFAS No. 131 which permits the property investments to be
aggregated into one reportable segment. The Partnership assesses and
measures operating results based on net operating income (rental income
less property operating expenses). With the exception of interest
expense, professional services and general and administrative expenses,
substantially all other components of net earnings (loss) of the Partnership
relate to property investments. With the exception of cash and cash
equivalents, substantially all other assets of the Partnership relate to
property investments.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(2) Venture Agreements
(a) General
The Partnership has entered into three joint venture agreements with
partnerships sponsored by affiliates of the General Partners. Pursuant to
such agreements, the Partnership has made capital contributions
aggregating $7,685,642 through December 31, 2000. The Partnership
has acquired, through these ventures, interests in two shopping centers
and an office building.
(b) Vero Beach Associates
On November 30, 1986, the Partnership purchased an interest in
Indian River Plaza, a 147,111 gross leaseable square foot shopping center
on U.S. Highway 1 in Vero Beach, Florida. The Partnership's ownership
of Indian River Plaza was effected through its 1% partnership interest in
Vero Beach Associates (the "Operating Partnership") which holds fee title
to the property. An affiliate of the Managing General Partner purchased
the remaining 99% interest in the Operating Partnership. In May 1987,
upon the sale of a sufficient number of Units, the Partnership made an
additional capital contribution to increase its interest in the Operating
Partnership. The Partnership's interest in the cash distributions and
allocations for Federal income tax purposes of all losses of the Operating
Partnership and of profits of the Operating Partnership from the sale or
refinancing of the property is 99.9%, and its interest in the allocation of
profits from operations of the Operating Partnership for Federal income
tax purposes is 98%. At December 31, 2000, the Partnership had made
capital contributions aggregating $4,710,642 to the Operating
Partnership.
Currently Indian River Plaza is subject to a first mortgage with an
original amount of $4,185,000, bearing interest at 8.31%, amortized over
30 years payable in monthly installments of principal and interest of
$31,617, until maturity on November 11, 2027 when the remaining
principal balance is payable; secured by the real and personal property of
Indian River Plaza. In addition to the first mortgage, the property is also
encumbered by a second mortgage with an original principal amount of
$365,000, bearing interest at a floating rate which is 5% above the
LIBOR rate. This loan is payable in monthly installments of principal and
interest, until maturity on November 11, 2002.
The property is managed by an affiliate of the seller under a
management agreement that provides for a fee equal to 3% of operating
income, payable on a monthly basis. Management fees deferred pursuant
to a previous management agreement aggregate $105,952 at December
31, 2000 and 1999.
(c) Downers Grove Building Partnership
The Partnership has contributed a total of $1,900,000 to, and owns a
66-2/3% interest in, Downers Grove Building Partnership (the "Building
Partnership"). The remaining 33-1/3% interest in the Building
Partnership is held by a non-affiliate of the General Partners. The
Building Partnership owns a 56,449 square foot two-story office and
laboratory building (the "Downers Grove Building").
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
The Downers Grove Building was originally leased to Reichhold
Chemicals, Inc. ("Reichhold"), on a 15 year triple net lease, which
provided for bi-annual escalations of 8%, and expiration on February 2,
2002. In November 1994, Reichhold vacated the Downers Grove
Building. In connection with the termination of their lease, two annuity
contracts were purchased by Reichhold in the amount of $2,500,000.
The annuity contracts were subsequently assigned to the Building
Partnership to collateralize payment of the lease termination fee. The
annuity contracts provide for payments beginning December 1, 1994,
through November 1, 2001. The total principal payments to be received
from the annuities in 2001 aggregate $218,502 and is included in rents
and other receivables on the consolidated balance sheet, and is expected
to be received in 2001. During 2000 and 1999, the Building Partnership
recognized $20,480 and $33,556, respectively, of interest income relating
to the annuity contracts.
In November 1994, the Downers Grove Building was leased to Vysis,
Inc. under a 10-year operating lease. The lease includes a rent abatement
from December, 1994 through October 1996. The initial monthy rental
amount is $37,701 and will increase to $56,551 by the end of the lease
term. Vysis, Inc. has the option to terminate this lease as of November
30, 2001 for a payment of $600,000. This lease can be extended for up
to 10 years.
The Downers Grove Building is managed by an unaffiliated entity
under a management agreement that will continue in effect from year to
year, unless and until terminated, for a management fee of $13,000 per
year.
(d) Sycamore Mall Associates
On October 26, 1990, the Partnership contributed $1,075,000 to
acquire a 25.24% general partnership interest in Sycamore Mall
Associates, a general partnership formed to acquire the Sycamore Mall
Shopping Center in Iowa City, Iowa. The property, situated on an
approximate 21.2 acre site, includes a main building containing 213,206
square feet and an out parcel building containing 27,000 square feet. A
14,000 square foot parcel which contains a 4,590 square foot building is
under a ground lease. Sycamore Mall Associates acquired the property
on October 26, 1990 for a purchase price of $9,400,000, subject to a
purchase money note of $5,140,000 bearing interest at 10% payable
interest only until maturity on October 26, 1995. On August 8, 1991,
Sycamore Mall Associates obtained a first mortgage in the amount of
$5,140,000 which bore interest at a rate of 9.625% payable in monthly
installments of principal and interest of $45,355 commencing October 1,
1991 for 60 months until September 30, 1996. The proceeds of this first
mortgage were used to repay the original purchase money note. In
October 1995, the first mortgage loan was modified. The terms of the
modification reduced the interest rate to 8.125%, reduced the monthly
payments of principal and interest to $44,375 and extended the maturity
to March 1, 2002. In October 1999, monthly payments to the lender
were halted and the lender declared the loan in default. In March 2000,
the property was deeded to the lender in lieu of threatened foreclousure.
First Dearborn Income Properties L.P. II, a public limited partnership
affiliated with the General Partners of the Partnership, and First Dearborn
Sycamore Associates Limited Partnership ("FDSALP"), a privately
offered limited partnership also affiliated with the General Partners, are
the joint venture partners in Sycamore Mall Associates and contributed a
total of $2,275,000 and $910,000 for 53.40% and 21.36% of the general
partner interests, respectively.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(3) Long-Term Debt
Long-term debt consists of the following
at December 31, 2000 and 1999:
2000 1999
$4,185,000 mortgage note, bearing interest
at 8.31%, amortized over 30 years payable
in monthly installments of principal and interest
of $31,617 until February 11, 2007. If the
remaining principal balance is not paid; the
interest rate will increase to the greater of
13.31% or the Treasury Rate, as defined, for
the remaining term of the loan, until maturity
on November 11, 2027. The loan is secured
by the real and personal property of Indian
River Plaza. 4,091,435 4,100,000
$365,000 floating rate note, bearing interest
at LIBOR plus 5%, payable in monthly
installments of principal and interest until
maturity on November 11, 2002. The loan
is secured by the real and personal property
of Indian River Plaza. 166,040 262,528
$4,586,044 mortgage note, bearing interest
at 9.125%, payable in monthly installments
of interest only of $34,873 from August 1,
1995 through February 1, 1996; principal
and interest of $55,170 from March 1, 1996
through August 1, 1998; and principal and
interest of $49,731 from September 1, 1998
until August 1, 2005 when the remaining
principal balance is due; secured by the real
and personal property of the Downers
Grove Building. 3,282,367 3,542,821
Total debt 7,539,842 7,905,349
Less current portion of long-term debt 426,444 387,476
Total long-term debt $7,113,398 7,517,873
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
Five year maturities of long-term debt are as follows:
2001 426,444
2002 464,436
2003 414,497
2004 452,643
2005 1,904,202
(4) Partnership Agreement
Pursuant to the terms of the Partnership Agreement, net profits or
losses of the Partnership for Federal income tax purposes from operations
generally will be allocated 99% to the Limited Partners and 1% to the
General Partners. Net profits for Federal income tax purposes from the
sale or refinancing of properties will be allocated as follows: (i) first, to
the Partners who have a deficit capital account balance in an amount
equal to their deficit balance; (ii) second, to the Limited Partners in an
amount equal to their contributed capital plus a stipulated return thereon;
and (iii) thereafter, 85% to the Limited Partners and 15% to the General
Partners. Net losses from the sale or refinancing of properties will be
allocated as follows: (i) first, to the Partners who have a positive capital
account balance in an amount equal to their positive balance; and (ii)
thereafter, 99% to the Limited Partners and 1% to the General Partners.
Operating Cash Flow, as defined in the Partnership Agreement, prior
to the date the public offering terminated, was distributed 100% to the
Limited Partners. Operating Cash Flow subsequent to termination of the
public offering will be distributed during the first five years, 99% to the
Limited Partners and 1% to the General Partners and, thereafter, 90% to
the Limited Partners and 10% to the General Partners subject to certain
limitations. Sale or refinancing proceeds will be distributed 100% to the
Limited Partners until the Limited Partners have received their
contributed capital plus a stipulated return thereon. Any remaining sale
or refinancing proceeds will then be distributed 85% to the Limited
Partners and 15% to the General Partners.
For financial reporting purposes, net profits or losses from operations
are allocated 99% to the Limited Partners and 1% to the General
Partners. The General Partners are not required to make any capital
contributions except under certain limited circumstances upon dissolution
and termination of the Partnership.
(5) Leases
At December 31, 2000, the Partnership and its Consolidated Ventures'
principal assets are a shopping center and an office building. The
Partnership has determined that all leases relating to the properties are
properly classified as operating leases; therefore, rental income is reported
when earned and the cost of the property, excluding the cost of the land,
is depreciated over the estimated useful life of the property. Leases with
tenants range in term from one to ten years and provide for fixed
minimum rent and partial to full reimbursement of operating costs. In
addition, substantially all leases with shopping center tenants provide for
additional rent based upon percentages of tenants' sales volume.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
Cost and accumulated depreciation of the leased assets are summarized as
follows at December 31, 2000:
Shopping center:
Cost $ 9,592,447
Accumulated depreciation (4,337,991)
5,254,456
Office building:
Cost 8,143,723
Accumulated depreciation (2,901,273)
5,242,450
Total $10,496,906
Minimum lease payments, including amounts representing executory
costs (e.g. taxes, maintenance, insurance) and any related profit, to be
received in the future under the operating leases are as follows:
2001 1,178,842
2002 1,246,721
2003 1,172,020
2004 928,538
2005 1,848
Thereafter -
$ 4,527,969
Percentage rents (based on tenants' sales volume) included in rental
income were $4,413, $64,410 and $24,859 for the years ended December
31, 2000, 1999 and 1998, respectively. In addition, the Partnership's
Consolidated Ventures recognize income on a straight-line basis over the
life of the related leases. Included in deferred rents receivable and rents
and other receivables at December 31, 2000 and 1999 is $715,685 and
$768,463, respectively, which represents rental income due from tenants
in future periods.
(6) Transactions with Affiliates
In connection with the evaluation, investigation, negotiation, selection
and purchase of the Partnership's investment properties, affiliates of the
General Partners were entitled to receive acquisition fees from the
Partnership, equal to 4.85% of the gross proceeds from the offering of
Units. As of December 31, 2000, the aggregate amount of acquisition
fees earned by affiliates of the General Partners was $496,361, all of
which was paid.
Affiliates of the General Partners are entitled to an annual non-
accountable expense reimbursement, subordinated to the Limited
Partners' receipt of distributions of Operating Cash Flow equal to 6% per
annum, in connection with the management of the Partnership in an
amount equal to the greater of .25% of the gross proceeds of the offering
or $25,000. Beginning in 1999, the partnership stopped accruing for this
expense. It is not anticipated that 6% per annum yield will be obtained by
the Limited Partners and therefore it is not likely that this fee will be
earned and payable. As of December 31, 2000, the partnership continues
to carry a $305,527 payable, related to the accruals for this liability in
years prior to 1999. It is doubtful that this amount will be earned and
paid.
The Managing General Partner and its affiliates are entitled to
reimbursement for salaries and direct expenses of officers and employees
of the Managing General Partner and its affiliates relating to the
administration of the Partnership.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
Fees, commissions and other expenses required to be paid by the
Partnership to affiliates of the General Partners for the years ended
December 31, 2000, 1999 and 1998 are as follows:
Unpaid at
2000 1999 1998 12/31/00
Non-accountable
expense reimbursement - - 25,588 305,257
Reimbursement (at cost)
for administrative services 9,787 5,343 1,336 9,787
$9,787 5,343 26,924 315,314
(7) Investment in Unconsolidated Venture
Summary financial information for Sycamore Mall Associates as of
December 31, 2000 and 1999 is as follows:
2000 1999
Current assets $ 0 180,595
Current liabilities 0 (4,591,382)
Working capital (deficit) 0 (4,410,787)
Deferred expenses 0 30,637
Venture partners' equity 0 246,735
Investment property, net 0 4,055,409
Long-term liabilities 0 (5,430)
Partnership's capital $ 0 (83,436)
Represented by:
Invested capital 1,075,000 1,075,000
Cumulative cash distributions (853,032) (853,032)
Cumulative income (loss) (221,968) 233,824
$ 0 455,792
Total revenues $ 0 1,185,202
Total expenses 0 3,321,606
Net income (loss) $ (0) (2,136,404)
The total revenues, expenses and net loss for the above venture for the
year ended December 31, 1998 were $1,515,937, $2,526,420 and
$1,010,483, respectively.
The Partnership's investment in Sycamore Mall Associates differs from
the Partnership's capital primarily due to acquisition costs incurred by the
Partnership which were not reimbursed by Sycamore Mall Associates and
were being amortized over 30 years.
As a result of the inability of the Sycamore Mall Property to find new
tenants, the property was unable to meet its financial obligations.
Beginning in October of 1999, payments to the lender were halted. This
resulted in a default of the loan terms and on March 13, 2000, title to the
land, buildings and improvements as well as the other assets and liabilities
of the property was transferred to the lender in consideration of a
discharge of the mortgage loan. This resulted in a taxable loss of
approximately $2,900,000. There will be no distributable cash as a result
of this transaction.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(8) Financial Instruments
The carrying values and fair values of First Dearborn Income Properties
L.P.'s financial instruments at December 31 wre derived as follows:
Cash and Cash Equivalents, Other Current Assets and Short-Term Debt:
The carrying amounts approximate fair value because of the short tem
maturity of the instruments.
Noncurrent Receivables: The fair value of the noncurrent receivables is
based on anticipated cash flows and approximate carrying values.
Long-Term Debt: The fair value is based on interest rates that are
currently available to First Dearborn Income Properties, LP for issuance
of debt with similar terms and remaining maturities.
(9) Subsequent Events
In January 2002, K-Mart Corporation filed for Chapter 11 bankruptcy
protection. K-mart Corporation is a tenant of Vero Beach Associates
with a store that occupies 56% of the space at the shopping center.
Presently, K-Mart has been paying their rental payments timely.
Management of Vero Beach Associates has received no notices from K-
Mart that they intend to terminate the lease. However, this could change
in the future.
In January 2002, Publix Super Market, Inc., a tenant which occupies 25%
of the space at the Vero Beach shopping center, gave notice to
management they they will be vacating their leased premises prior to the
end of their lease term, which expires on September 30, 2004. Publix
Super Markets has indicated that they will honor the lease payment terms
of the lease.
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
December 31, 2000
Schedule III
Consolidated Real Estate and Accumulated Depreciation
(a)
Initial Cost to Partnership Additions
Building & Building &
Encumbrance Land Improvements Improvements
Shopping Center
Vero Beach, FL $4,257,475 891,905 8,172,052 499,442
Office Building
Downers Grove, IL 3,282,367 1,312,161 6,728,640 102,922
Total $7,539,842 2,204,066 14,900,692 602,364
(b)
Gross amount of asset at period end
Building & Accumulated
Land Improvements Total Depreciation
Shopping Center
Vero Beach, FL 920,953 8,671,494 9,592,447 4,337,991
Office Building
Downers Grove, IL 1,312,161 6,831,532 8,143,723 2,901,273
Total 2,233,114 15,503,056 17,736,170 7,239,264
Date of Date Depreciable
Construction Acquired Lives
Shopping Center
Vero Beach, FL 1979 11/30/86 5-30 years
Office Building 1983
Downers Grove, IL 1987 2/1/88 5-30 years
The initial cost represents the original purchase price of the properties
reduced by any provision for value impairment.
(b) The aggregate cost of the above real estate at December 31, 2000 for
Federal income tax purposes is $16,643,203.
2000 1999 1998
(c) Reconciliation of real estate owned
Balance at beginning of period $ 17,640,705 17,608,567 17,554,931
Additions 95,465 32,138 53,636
Balance at end of period 17,736,170 17,640,705 17,608,567
(d) Reconciliation of accumulated depreciation
Balance at beginning of period 6,760,373 6,296,327 5,753,005
Depreciation expense 478,891 464,046 543,322
Balance at end of period $7,239,264 6,760,373 6,296,327
Item 9. Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure
None
Part III
Item 10. Directors and Executive Officers of the Registrant
The General Partners of the Partnership are:
FDIP, Inc., an Illinois corporation, Managing General Partner; and FDIP
Associates, an Illinois general partnership, Associate General Partner.
FDIP, Inc., the Managing General Partner, is a corporation formed under
the laws of the State of Illinois. Its issued and outstanding shares are owned
by Messrs. Bruce H. Block and Robert S. Ross. The officers of the Managing
General Partner are Robert S. Ross, President, and Bruce H. Block, Vice
President and Secretary. Messrs. Block and Ross are its sole directors.
FDIP Associates, the Associate General Partner, was formed under the laws
of the State of Illinois and has a nominal net worth. Its constituent partners
are First Dearborn Partners, an Illinois Limited Liability Company, whose
members are Messrs. Block and Ross, and Hampshire Syndications, Inc., a
New Hampshire corporation. Hampshire Syndications, Inc. is wholly owned
by Jefferson-Pilot Investments, Inc., a North Carolina corporation, which is a
wholly-owned subsidiary of Jefferson-Pilot Corporation. The officers and
directors of Hampshire Syndications, Inc. are Ronald Angarella, President and
Director, Charles C. Cornelio, Vice President and Director, Sheri J. Lease,
Secretary, Dennis R. Glass, Executive Vice President and Director, John C.
Ingram, Executive Vice President and Director, John A. Weston, Treasurer.
Messrs. Block and Ross are not affiliated with Jefferson Pilot Securities
Corporation, except that each is affiliated with the Associate General Partner.
The persons listed below occupy key management position with the
General Partners:
Mr. Bruce H. Block, age 63, has been a principal in numerous real estate
ventures which own, have an interest in, or have owned various types of
property that have included apartment and office buildings, shopping centers
and vacant land. Mr. Block is an Illinois licensed attorney, a certified
public accountant and a licensed real estate broker in the State of Illinois.
Mr. Block practiced corporate and real estate law in Chicago for over
20 years and is a shareholder in the Chicago law firm of Ross & Block, P.C.
Mr. Robert S. Ross, age 63, has been a principal in many real estate ventures
which own, have an interest in, or have owned various types of property
including apartment and office buildings, shopping centers and vacant land.
Mr. Ross is an Illinois licensed attorney, a licensed real estate broker in the
State of Illinois and is an affiliate member of Real Estate Securities and
Syndication Institute. He also practiced general and real estate law in the
Chicago area for over 22 years and is a shareholder in the Chicago law firm of
Ross & Block P.C.
Mr. Ronald R. Angarella, age 43, has served as President and Director of
Hampshire Syndications, Inc. since October 23, 1995. His principal
occupation is President, Chairman and Director of Jefferson Pilot Securities
Corporation and Hampshire Funding, Inc. He also is Senior Vice President of
Jefferson Pilot Financial Insurance Company. In addition, he currently serves
as an officer and/or director of various affiliated entities.
Mr. Angarella also serves as President and Director of Jefferson Pilot
Variable Fund, Inc.
Mr. Charles C. Cornelio, age 41, has served as Vice President of Hampshire
Syndications, Inc. since June 4, 1993, and Director since May 7, 1990. Mr.
Cornelio served as Secretary of Hampshire Syndications, Inc. from May 17,
1990, until May 13, 1997. Mr. Cornelio is also Vice President, Secretary and
Director of Jefferson Pilot Securities Corporation. His principal occupation
is Senior Vice President of Jefferson Pilot Securities Corporation and
Executive Vice President of various insurance company subsidiaries. He
also serves as an officer and/or director of other various affiliated
entities. Mr. Cornelio also is General Counsel and Vice President of
Jefferson Pilot Variable Fund, Inc.
Shari J. Lease, age 46, has served as Secretary of Hampshire Syndications,
Inc. since May 13, 1997 and previously served as Assistant Secretary
beginning on May 9, 1994. Ms. Lease is also currently Secretary of
Hampshire Funding, Inc. and Assistant Secretary of Jefferson Pilot Securities
Corporation. Her principal occupation since April 1995 has been as Assistant
Vice President and Counsel of Jefferson Pilot Financial Insurance Company
until her election as Vice President and Counsel in February 1998. She also
currently serves as an officer of other various affiliated entities and is
Secretary of Jefferson Pilot Variable Fund, Inc.
John Weston, age 41, has served as Treasurer of Hampshire Syndications, Inc.
since July 19, 1991. He also currently serves as Treasurer of Jefferson Pilot
Securities Corporation, Hampshire Funding, Inc., Jefferson Pilot Variable
Fund, Inc. and Jefferson Pilot Advisory Corporation. His principal occupation
since April 1995, has been as Assistant Vice President of Jefferson Pilot
Financial Insurance Company until his election as Vice President in February
1999. Mr. Weston also currently serves as an officer of other various
affiliated entities.
Dennis R. Glass, age 51, was elected Executive Vice President and Director
of Hampshire Syndications, Inc. on May 13, 1997. Mr. Glass is also a
Director of Hampshire Funding, Inc. Since October 1993, his principal
occupation has been as Executive Vice President, Chief Financial Officer and
Treasurer of Jefferson-Pilot Corporation. He also currently serves as an
officer and/or director of various entities affiliated with Jefferson Pilot
Corporation.
John C. Ingram, age 57, was elected Executive Vice President and Director of
Hampshire Syndications, Inc. on May 3, 1999. Mr. Ingram is also a Director
of Hampshire Funding, Inc. Since September 1999, Mr. Ingram's principal
occupation has been as Senior Vice President and Chief Investment Officer of
Jefferson Pilot Corporation and Executive Vice President and Chief
Investment Officer of its insurance company subsidiaries. Prior to that date
he served as Senior Vice President and Manager-Security Department for more
than ten years. Mr. Ingram is also an officer and/or director of various
entities affiliated with Jefferson-Pilot Corporation.
Item 11. Executive Compensation
The Partnership has no officers or directors and instead is managed by
FDIP, Inc., its Managing General Partner.
Officers and directors of the Managing General Partner receive no direct
remuneration in such capacities from the Partnership. In addition, the
Partnership is a registrant that qualifies as a small business issuer as
defined in Item 10(a)(1) of Regulation S-B. Accordingly, certain of
the disclosures typically required by Item 402 are not applicable to
the Partnership and the information set forth herein has been
appropriately modified.
The Partnership is required to pay certain fees to the General Partners or
their affiliates and the General Partners are entitled to receive a share of
cash distributions, when and as cash distributions are made to the Limited
Partners, and a share of profits or losses as described under the caption
"Compensation Table" at pages 9-10 of the Prospectus, a copy of which
descriptions is filed herewith and is hereby incorporated herein by reference.
Reference is also made to Note 4 of Notes to Consolidated Financial Statements
filed with this annual report for a description of such distributions and
allocations.
Certain compensation has accrued to the General Partners and their
affiliates for services rendered on behalf of the Partnership. In connection
with the evaluation, investigation, negotiation, selection and purchase of the
Partnership's investment properties, affiliates of the General Partners were
entitled to receive acquisition fees from the Partnership, equal to 4.85% of
the gross proceeds from the offering of Units. As of December 31, 1997, the
aggregate amount of acquisition fees earned by affiliates of the General
Partners was $496,361, all of which was paid.
Affiliates of the General Partners are entitled to an annual
non-accountable expense reimbursement, subordinated to the Limited
Partners' receipt of distributions of Operating Cash Flow equal to 6% per
annum, in connection with the management of the Partnership in an amount
equal to the greater of .25% of the gross proceeds of the offering or $25,000.
The Managing General Partner and its affiliates are entitled to
reimbursement for salaries and direct expenses of officers and employees of
the Managing General Partner and its affiliates relating to the administration
of the Partnership.
Fees, commissions and other expenses required to be paid by the Partnership
to affiliates of the General Partners for the years ended December 31, 2000,
1999 and 1998 are as follows:
Unpaid at
2000 1999 1998 12/31/00
Non-accountable
expense reimbursement - - 25,588 305,257
Reimbursement (at cost)
for administrative services 9,787 5,343 1,336 9,787
$9,787 5,343 26,924 315,314
There are no compensatory plans or arrangements regarding termination of
employment or change of control.
Item 12. Security ownership of certain Beneficial Owners and
Management
(a) No person or group is known by the Partnership to own beneficially
more than 5% of the outstanding Units of the Partnership.
(b) The following table sets forth information regarding the beneficial
ownership of Units as of December 31, 2000 by directors and/or general
partners of the General Partners, and by all officers, directors and for
general partners of the General Partners as a group:
Amount and
Title Name and address of nature of Percent
Class Beneficial Owner Ownership of Class
Limited Robert S. Ross 0 Units 0%
Partnership 154 W. Hubbard
Units Chicago, Illinois
Limited Bruce H. Block 4 Units less than 1%
Partnership 154 W. Hubbard
Units Chicago, Illinois
Limited Jefferson Pilot 380 Units(1) 1.9%
Partnership Securities Corporation
Units One Granite Place
Concord, NH
Limited All officers 399 Units (2) 1.9%
Partnership directors, and
Units general partners
as a group
(1) During 1993, Jefferson Pilot Securities Corporation, an affiliate of
Hampshire Syndications, Inc., acquired 280 Units pursuant to an agreement
with the Partnership. During 1998, Jefferson Pilot Securities Corporation
acquired 100 additional units. Hampshire Syndications, Inc. is a partner of
the Associate General Partner of the Partnership and because it is an
affiliate of Jefferson Pilot Securities Corporation, could be deemed to
have a beneficial interest in such Units. Accordingly, such Units are
included in this table.
(2) Includes 15 units owned by the immediate family of one of the
officers of a general partner of the Associate General Partner.
Item 13. Certain Relationships and Related Transactions
There were no significant transactions or business relationships with the
Managing General Partner, affiliates, or other management other than those
described in Item 10 and 11 above, and Note 6 to the Consolidated Financial
Statements.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K
(a) (1)(2) See Index to Financial Statements and Financial Statement
Schedules on page 15.
(3) Exhibits
(3-A) The Prospectus of the Partnership dated February 25, 1987
as supplemented April 2, 1987, February 5, 1988, April 15, 1988 and May 6,
1988, filed pursuant to Rule 424(b) under the Securities Act of 1933 as
amended (File No. 33-10244), is hereby incorporated herein by reference.
(3-B) Amended Agreement of Limited Partnership set forth as
Exhibit A to the Prospectus, pursuant to Rule 424(b) under the Securities Act
of 1933 as amended (File No. 33-10244), is hereby incorporated herein by
reference.
(b) No reports on Form 8-K were filed in the last quarter of 2000.
(c) An annual report for the fiscal year 2000 will be sent to the Limited
Partners subsequent to this filing and the Partnership will furnish copies of
such report to the Securities and Exchange Commission at that time.
(d) Exhibits - See Item 14(a) - (3).
(e) Financial Statement Schedules. See Index to Financial Statements and
Financial Statement Schedules on page 14.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST DEARBORN INCOME PROPERTIES L.P.
(Registrant)
BY: FDIP, Inc.
(Managing General Partner)
Date: March 18, 2002 BY: _______ Robert S. Ross
Its: President
BY: FDIP Associates
(Associate General Partner)
BY: First Dearborn Partners LLC, a Partner
Date: March 18, 2002 BY: ________ Robert S. Ross
a 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.
Signatures Title Date
/s/ Robert S. Ross President and Director March 18, 2002
Robert S. Ross of FDIP, Inc. (Principal
Executive Officer)
/s/ Bruce H. Block Secretary and Director March 18, 2002
Bruce H. Block of FDIP, Inc. (Principal
Financial Officer)