SEC Company Response from REEVES TELECOM LTD PARTNERSHIP (CIK 0000314741) — Sep 12, 2005
REEVES TELECOM LTD PARTNERSHIP (CIK 0000314741)
Date: Sept. 12, 2005 · CIK: 0000314741 · Accession: 0001144204-05-028506
AI Filing Summary & Sentiment
File numbers found in text: 000-09305
Letter
VIA EDGAR Division of Corporation Finance Securities and Exchange Commission Fifth Street, N.W. Washington, DC 20549 Mail Stop
Dear Mr. Bonilla:
RE:
Reeves Telecom Limited Partnership
Form 10-K for the year ended December 31, 2004
Forms 10-Q for the quarters ended March 31, 2005 and June 30,
File No. 000-09305
Grace Property Management, Inc. is the general partner of Reeves Telecom Limited Partnership (the “Partnership”). This letter is in response to your inquiry dated August 29, 2005 relating to the disclosures on Properties Held for Sale and Property and Equipment set forth in Note 3 to the Partnership’s audited annual financial statements for the year ended December 31, appearing on Page F-9 of the Partnership’s Form 10-K, and to the related disclosures in the Partnership’s unaudited interim financial statements included in the Partnership’s Forms 10-Q for the quarters ended March 31, 2005 and June 30, 2005.
RESPONSE TO ITEM 1.
As explained below, the Partnership does not expect to satisfy the criterion of Paragraph 30(d) of SFAS 144 that the land, classified as “property held for sale,” will be sold within one year.
As more fully set forth in Part I, Item 1 and Item 2 of the Partnership’s Form 10-K for the year ended December 31, 2004, the Partnership is principally engaged in the sale of real estate, primarily undeveloped land. The Partnership’s principal asset is its undeveloped land located within the City of Boiling Spring Lakes, NC. As of December 31, 2004, the Partnership’s holdings of land comprised approximately 924 acres, all that remains of the approximately 14,000-acre development established in 1962 by Reeves Telecom Corporation, the Partnership’s predecessor.
The Partnership does not, as a rule, “develop” land prior to sale by building homes or commercial buildings for resale, though in the past it did pursue a very limited pilot project of building, one at a time, a residential home on a lot, then marketing the developed lot; rather, the Partnership sells undeveloped land for residential or commercial use, with only basic infrastructure – usually only roads, mostly unpaved, and drainage ditches – put in place by the Partnership. The undeveloped land is classified on the Partnership’s balance sheet as “properties held for sale” in accordance with generally accepted accounting principles. The Partnership employs the caption “properties held for sale” to readily identify the undeveloped land as being held for sale at market prices to potential buyers, as opposed to, for example, land that is held for development prior to sale.
During the period from January 1, 2000 through the date of this letter, there have been three agreements relating to the sale of substantial portions of land owned by the Partnership. These agreements are as follows:
1.
Purchase Agreement I between the Partnership, as seller, and The Nature Conservancy, as purchaser, dated May 1, 2000 relating to the sale of tracts of wetlands and woodlands. Such agreement was filed as an exhibit to Form 8-K filed by the Partnership on June 21, 2000.
2.
Purchase Agreement II between the Partnership, as seller, and The Nature Conservancy, as purchaser, dated May 1, 2000 relating to the sale of certain individual lots and certain land suitable for commercial development. Such agreement was filed as an exhibit to Form 8-K filed by the Partnership on June 21, 2000.
3.
Purchase and Sale Agreement between the Partnership, as seller, and WW-Golf & Services, LLC, as purchaser, dated October 18, 2000, relating to the sale of the assets of Fox Squirrel Country Club. Such agreements and exhibits thereto was filed as an exhibit to Form 10-Q filed by the Partnership on November 14, 2000. Amendments No. 1 through 7 to such agreement, and related the Loan Agreement, Promissory Note, and Indemnification Agreement, were filed as exhibits to Form 10-K by the Partnership on March 29, 2001.
During the period from January 1, 2000 through the date of this letter, there has not been any other agreement or combination of agreements to sell all or substantially all of the Partnership’s land, whether within one year or otherwise. Had there been any such agreement or agreements, the Partnership would have made appropriate disclosure, as was done in each of the instances described above.
RESPONSE TO ITEM 2.
The amount reported on the balance sheet, $350,177 as of December 31, 2004, is the lower of (a) the Partnership’s cost basis in the land held for sale, or (b) the estimated realizable value net of estimated selling costs, pursuant to Paragraph 34 of SFAS 144. Such reported amount is net of a valuation allowance of $548,240.
The valuation allowance was established to reflect the fact that appraisals obtained subsequent to the creation of the development in 1962 valued the Partnership’s land at substantially less than the then-reported book value. This was due principally to changes in the Brunswick County, NC health code that, effectively, precludes the installation of individual on-site septic systems on large portions of the Partnership’s land. The valuation allowance was increased most recently in 1988. As the Partnership sells or otherwise disposes of land that is not suitable for the installation of an individual on-site septic system, the valuation allowance is reduced.
From time to time, approximately every two years, the Partnership obtains an updated appraisal to ensure that the reported book value of the land, net of the applicable valuation allowance, does not exceed the estimated realizable value of the land less the estimated sales cost. As more fully described in each appraisal report, the appraised value as set forth in such appraisal report reflects the estimated sales cost of the Partnership’s land. Each appraisal has been filed as an exhibit to an annual or interim filing with the Commission. The most recent appraisal was filed as Exhibit 99.1 to Form 10-K for the year ended December 31, 2003. We expect that an updated appraisal will be obtained as of the end of the current year.
In connection with the response set forth above, as it may be amended or supplemented, to your inquiry, Reeves Telecom Limited Partnership acknowledges that:
a.
The Partnership is responsible for the adequacy and accuracy of the disclosure in the filings;
b.
Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and
c.
the Partnership may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
Please contact me at your earliest convenience should you wish for further information on the Partnership’s disclosures on the above described matter or if you have any further questions.
Very
truly yours,
REEVES
TELECOM LIMITED PARTNERSHIP
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CORRESP
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filename1.htm
September
12, 2005
VIA
EDGAR
Mr.
Jorge
Bonilla
Senior
Staff Accountant
Division
of Corporation Finance
Securities
and Exchange Commission
450
Fifth
Street, N.W.
Washington,
DC 20549
Mail
Stop
4561
Dear
Mr.
Bonilla:
RE:
Reeves
Telecom Limited Partnership
Form
10-K
for the year ended December 31, 2004
Forms
10-Q for the quarters ended March 31, 2005 and June
30,
2005
File
No.
000-09305
Grace
Property Management, Inc. is the general partner of Reeves
Telecom Limited Partnership (the “Partnership”). This letter
is
in response to your inquiry dated August 29, 2005 relating
to the disclosures on Properties Held for Sale and Property
and Equipment set forth in Note 3 to the Partnership’s audited
annual financial statements for the year ended December 31,
2004
appearing on Page F-9 of the Partnership’s Form 10-K, and
to
the related disclosures in the Partnership’s unaudited interim
financial statements included in the Partnership’s Forms 10-Q
for
the quarters ended March 31, 2005 and June 30, 2005.
RESPONSE
TO ITEM 1.
As
explained below, the Partnership does not expect to satisfy
the criterion of Paragraph 30(d) of SFAS 144 that the land,
classified as “property held for sale,” will be sold within one
year.
As
more
fully set forth in Part I, Item 1 and Item 2 of the Partnership’s
Form 10-K for the year ended December 31, 2004, the Partnership
is principally engaged in the sale of real estate, primarily
undeveloped land. The Partnership’s principal asset is its
undeveloped land located within the City of Boiling Spring Lakes,
NC. As of December 31, 2004, the Partnership’s holdings of
land
comprised approximately 924 acres, all that remains of the
approximately 14,000-acre development established in 1962 by Reeves
Telecom Corporation, the Partnership’s predecessor.
1
The
Partnership does not, as a rule, “develop” land prior to sale
by
building homes or commercial buildings for resale, though in
the
past it did pursue a very limited pilot project of building,
one at a time, a residential home on a lot, then marketing
the developed lot; rather, the Partnership sells undeveloped
land for residential or commercial use, with only basic
infrastructure – usually only roads, mostly unpaved, and drainage
ditches – put in place by the Partnership. The undeveloped
land is classified on the Partnership’s balance sheet as
“properties held for sale” in accordance with generally accepted
accounting principles. The Partnership employs the caption
“properties held for sale” to readily identify the undeveloped
land as being held for sale at market prices to potential
buyers, as opposed to, for example, land that is held for
development prior to sale.
During
the period from January 1, 2000 through the date of this
letter, there have been three agreements relating to the sale
of
substantial portions of land owned by the Partnership. These
agreements are as follows:
1.
Purchase
Agreement I between the Partnership, as seller, and The
Nature Conservancy, as purchaser, dated May 1, 2000 relating
to the sale of tracts of wetlands and woodlands. Such
agreement was filed as an exhibit to Form 8-K filed by the
Partnership on June 21, 2000.
2.
Purchase
Agreement II between the Partnership, as seller, and
The Nature Conservancy, as purchaser, dated May 1, 2000 relating
to the sale of certain individual lots and certain land
suitable for commercial development. Such agreement was
filed as an exhibit to Form 8-K filed by the Partnership on
June 21, 2000.
3.
Purchase
and Sale Agreement between the Partnership, as seller,
and WW-Golf & Services, LLC, as purchaser, dated October
18, 2000, relating to the sale of the assets of Fox Squirrel
Country Club. Such agreements and exhibits thereto was
filed as an exhibit to Form 10-Q filed by the Partnership
on November 14, 2000. Amendments No. 1 through 7
to such agreement, and related the Loan Agreement, Promissory
Note, and Indemnification Agreement, were filed as
exhibits to Form 10-K by the Partnership on March 29, 2001.
During
the period from January 1, 2000 through the date of this
letter, there has not been any other agreement or combination
of agreements to sell all or substantially all of the Partnership’s land,
whether within one year or otherwise. Had there
been any such agreement or agreements, the Partnership would
have made appropriate disclosure, as was done in each of the
instances described above.
2
RESPONSE
TO ITEM 2.
The
amount reported on the balance sheet, $350,177 as of December
31, 2004, is the lower of (a) the Partnership’s cost basis
in
the land held for sale, or (b) the estimated realizable value
net
of estimated selling costs, pursuant to Paragraph 34 of SFAS
144.
Such reported amount is net of a valuation allowance of
$548,240.
The
valuation allowance was established to reflect the fact that
appraisals obtained subsequent to the creation of the development
in 1962 valued the Partnership’s land at substantially
less than the then-reported book value. This was due
principally to changes in the Brunswick County, NC health code
that, effectively, precludes the installation of individual on-site
septic systems on large portions of the Partnership’s land.
The
valuation allowance was increased most recently in 1988.
As
the Partnership sells or otherwise disposes of land that
is
not suitable for the installation of an individual on-site septic system,
the
valuation allowance is reduced.
From
time
to time, approximately every two years, the Partnership
obtains an updated appraisal to ensure that the reported
book value of the land, net of the applicable valuation allowance,
does not exceed the estimated realizable value of the land
less
the estimated sales cost. As more fully described in each
appraisal report, the appraised value as set forth in such appraisal
report reflects the estimated sales cost of the Partnership’s
land. Each appraisal has been filed as an exhibit to
an
annual or interim filing with the Commission. The most recent
appraisal was filed as Exhibit 99.1 to Form 10-K for the year
ended December 31, 2003. We expect that an updated appraisal
will be obtained as of the end of the current year.
In
connection with the response set forth above, as it may be
amended or supplemented, to your inquiry, Reeves Telecom Limited
Partnership acknowledges that:
a.
The
Partnership is responsible for the adequacy and accuracy of
the disclosure in the filings;
3
b.
Staff
comments or changes to disclosure in response to staff comments
do not foreclose the Commission from taking any action
with respect to the filings; and
c.
the
Partnership may not assert staff comments as a defense in
any proceeding initiated by the Commission or any person under
the federal securities laws of the United
States.
Please
contact me at your earliest convenience should you wish
for
further information on the Partnership’s disclosures on the
above
described matter or if you have any further questions.
Very
truly yours,
REEVES
TELECOM LIMITED PARTNERSHIP
By:
Grace Property Management, Inc.
General
Partner
By:
/S/
Davis P. Stowell
Davis
P. Stowell
President
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