For the Fiscal Year Ended December 31,
1996 Commission File No. 015940
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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.
As of March 1, 1997, 30,000 units of limited
partnership interest of the registrant were outstanding and the
estimated aggregate market value of the units as of such date
(based on a 1996 appraisal of Partnership properties) held by
nonaffiliates was approximately $11,700,000.
See Item 14.
General Development of Business
Uniprop Manufactured Housing Communities
Income Fund, a Michigan Limited Partnership (the "Partnership"),
acquired, maintains, operates and ultimately will dispose of income
producing residential real properties consisting of four manufactured
housing communities (the "Properties"). The Partnership
was organized and formed under the laws of the State of Michigan
on May 16, 1985. Its principal offices are located at 280 Daines
Street, Birmingham, Michigan 48009 and its telephone number is
(248) 6459261.
The Partnership filed an S11 Registration
Statement (Registration No. 298180) in June 1985 which was
declared effective by the Securities and Exchange Commission on
September 24, 1985. The Partnership thereafter offered a maximum
of 30,000 units of limited partnership interest representing capital
contributions by the limited partners to the Partnership of $1,000
per unit (the "Units"). The sale of all 30,000 Units
was completed in March, 1986 generating $30 million of contributed
capital to the Partnership.
On February 10, 1986, the Partnership
acquired Aztec Estates, a 645space manufactured housing
community in Margate, Florida and Kings Manor, a 314space
manufactured housing community in Ft. Lauderdale, Florida. On
March 4, 1986, the Partnership acquired Old Dutch Farms, a 293space
manufactured housing community in Novi, Michigan. On March 27,
1986, the Partnership acquired The Park of the Four Seasons, a
572space manufactured housing community in Blaine, Minnesota.
The Partnership operates the Properties
as manufactured housing communities with the primary investment
objectives of: (1) obtaining net cash from operations; (2) obtaining
capital appreciation; and (3) preserving capital. There can be
no assurance that such objectives can be achieved.
Financial Information About Industry
Segment
The Partnership's business and only industry
segment is the operation of its four manufactured housing communities.
Partnership operations commenced in February 1986 upon the acquisition
of the first two Properties. The Partnership's first full year
of operations was the fiscal year ended December 31, 1987. For
a description of the Partnership's revenues, operating profit
and assets, please refer to Items 6 and 8.
Narrative Description of Business
The Properties were selected from 23 manufactured
housing communities then owned by affiliates of P.I. Associates
Limited Partnership, a Michigan limited partnership, the General
Partner (the "General Partner") of the Partnership.
The Partnership rents space in the Properties to owners of manufactured
homes thereby generating rental revenues. It was intended that
the Partnership would hold the Properties for extended periods
of time, originally anticipated to be seven to ten years after
their acquisition, although a Property may be disposed of later,
if in the opinion of the General Partner, it is in the best interest
of the Partnership to do so. The determination of whether a particular
Property should be disposed of will be made by the General Partner
only after consultation with Manufactured Housing Services Inc.
(the "Consultant") and after consideration of relevant
factors, including, current operating results of the particular
Property, prevailing economic conditions and with a view to achieving
maximum capital appreciation to the Partnership considering relevant
tax consequences and the Partnership's investment objectives.
The business of owning and operating residential
manufactured housing communities is highly competitive, and the
Partnership may be competing with a number of established companies
having greater financial resources. Moreover, there has been
a trend for manufactured housing community residents to purchase
(where zoning permits) their manufactured homesites on a collective
basis. This trend may result in increased competition with the
Partnership for tenants. In addition, the General Partner, its
affiliates or both, have participated, and may in the future participate,
directly or through other partnerships or investment vehicles
in the acquisition, ownership, development, operation and sale
of projects which may be in direct competition with one or more
of the Properties.
Each of the Properties competes with numerous
similar facilities located in its geographic area. The Margate/Fort
Lauderdale area contains approximately 10 communities offering
approximately 3,725 housing sites competing with Aztec Estates.
The Davie/Fort Lauderdale area contains approximately five communities
offering approximately 1,765 housing sites competing with Kings
Manor. Park of the Four Seasons competes with approximately 11
communities offering approximately 3,031 housing sites. Old Dutch
Farms competes with approximately six communities offering approximately
2,836 housing sites. The Properties also compete against other
forms of housing, including apartment and condominium complexes.
The Properties owned by the Partnership
are subject to certain state regulations regarding the conduct
of the Partnership operations. For example, the State of Florida
regulates agreements and relationships between the Partnership
and the residents of Aztec Estates and Kings Manor. Under Florida
law, the Partnership is required to deliver to new residents of
those Properties a prospectus describing the Property and all
tenant rights, Property rules and regulations, and changes to
Property rules and regulations. Florida law also requires minimum
lease terms, requires notice of rent increases, grants to tenant
associations certain rights to purchase the community if being
sold by the owner and regulates other aspects of the management
of such properties. The Partnership is required to give 90 days
notice to the residents of Florida properties of any rate increase,
reduction in services or utilities or change in rules and regulations.
If a majority of the residents object to such changes as unreasonable,
the matter must be submitted to the Florida Department of Business
Regulations for mediation prior to any legal adjudication of the
matter. In addition, if the Partnership seeks to sell Florida
Properties to the general public, it must notify any homeowners
association for the residents, and the association shall have
the right to purchase the Property for the price, terms and conditions
being offered to the public within 45 days of notification by
the owner. If the Partnership receives an unsolicited bona fide
offer to purchase the Property from any party that it is considering
or negotiating, it must notify any such homeowners association
that it has received an offer, state to the homeowners association
the price, terms and conditions upon which the Partnership would
sell the Property, and consider (without obligation) accepting
an offer from the homeowners association. The Partnership has,
to the best of its knowledge, complied in all material respects
with all requirements of the States of Florida, Michigan and Minnesota,
where its operations are conducted.
The
Partnership employs three parttime employees to perform
Partnership management and investor relations services. The Partnership
retains an affiliate, Uniprop, Inc., as the property manager for
each of its Properties. Uniprop, Inc. is paid a fee equal to
the lesser of 5% of the annual gross receipts from each of the
Properties or the amount which would be payable to unaffiliated
third parties for comparable services. Uniprop, Inc. retains
local managers on behalf of the Partnership at each of the Properties.
Salaries and fringe benefits of such local managers are paid
by the Partnership and are not included in any property management
fee payable to Uniprop, Inc. Local managers are employees of
the Partnership and are paid semi-monthly. The yearly salaries
and expenses for local managers range from $20,000 to $40,000.
Local managers have no direct management authority, make no decisions
regarding operations and act only in accordance with instructions
from the property manager. They are utilized by the Partnership
to provide onsite maintenance and administrative services.
Uniprop, Inc., as property manager, has overall management authority
for each Property.
The
Partnership purchased all four manufactured housing communities
for cash and the Properties are unencumbered, except for normal
zoning, building and use restrictions for properties of that kind.
Each of the Properties is a modern manufactured housing community
containing lighted and paved streets, sidebyside offstreet
parking and complete underground utility systems. The Properties
consist of only the underlying real estate and improvements, not
the actual homes themselves. Each of the Properties has a community
center which includes offices, meeting rooms and game rooms.
Each of the Properties, except Old Dutch Farms, has a swimming
pool and tennis courts.
Overall, as illustrated in the table below,
the Properties reported, as of December 31, 1996, a combined occupancy
of 97.0% and an average monthly homesite rent of $373.
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| Aztec Estates
Sundial Circle Margate, FL | 94.3% | |||||
| Kings Manor
State Road 84 & Flamingo Road Ft. Lauderdale, FL | 96.8 | |||||
| Park of the Four
Seasons University Avenue Blaine, MN | 99.3 | |||||
| Old Dutch Farms
Novi Road Novi, MI | 99.0 | |||||
| Total on
12/31/96 12/31/95 |
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| 97.0% 95.1% |
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In
the opinion of the Partnership and its legal counsel, there are
no material legal proceedings pending except such ordinary routine
matters as are incident to the kind of business conducted by the
Partnership. To the knowledge of the Partnership and its counsel,
no legal proceedings have been instituted or are being contemplated
by any governmental authority against the Partnership.
ITEM 4. SUBMISSION OF MATTERS
TO A VOTE OF SECURITY HOLDERS
The
voting privileges of the limited partners are restricted to certain
matters of fundamental significance to the Partnership. The Limited
Partners must approve certain major decisions of the General Partner
if the General Partner proposes to act without the approval of
the Consultant. The Limited Partners also have a right to vote
upon removal and replacement of the General Partner, dissolution
of the Partnership, material amendments to the partnership agreement
and the sale or other disposition of all or substantially all
of the Partnership's assets, except in the ordinary course of
the Partnership's disposing of the Properties. Such matters must
be approved by Limited Partners, as a group, holding more than
50% of the then outstanding Units.
On December 4, 1996, a Notice of Special
Meeting of the Limited Partners and Proxy Statement were sent
to the Limited Partners.
On February 6, 1997, the Special Meeting
of the Limited Partners was held at the offices of the Partnership.
The following proposals, each of which was described in the
Proxy Statement, were submitted to a vote of the Limited Partners
at the Special Meeting:
1. To authorize the Partnership to enter
into a financing (the "Financing"), whereby the Partnership
would borrow between $33,000,000 and $34,000,000, secure the borrowing
with mortgages on its properties, and return in full the Limited
Partners' capital contributions, and to make various changes to
the Agreement of Limited Partnership of the Partnership, as amended
(the "Partnership Agreement") to accommodate the Financing.
16,727 votes were cast for this
proposal, 4,679 votes were cast against it, 8,003
votes were withheld, and 591 votes abstained.
2. To amend the Partnership Agreement
to permit the Partnership to undertake the Financing notwithstanding
that it may reduce Net Cash from Operations (as defined in the
Partnership Agreement) distributed to the Limited Partners in
the year in which the Financing occurs below $3,000,000.
16,522 votes were cast for this
proposal, 4,806 votes were cast against it, 8,003
votes were withheld, and 669 votes abstained.
3. To authorize the Partnership to pay,
on an ongoing basis, a distribution to the General Partner equal
to one-fourth of 1% quarterly of the appraised value of the properties
of the Partnership, as determined from time to time.
15,782 votes were cast for this
proposal, 5,445 votes were cast against it, 8,003
votes were withheld, and 770 votes abstained.
4. To authorize the Partnership to pay
a fee out of the net proceeds of the Financing equal to 1% of
the gross proceeds of the Financing to an affiliate of the General
Partner for its services in arranging the Financing.
15,742 votes were cast for this
proposal, 5,501 votes were cast against it, 8,003
votes were withheld, and 754 votes abstained.