SEC Company Response from FOX STRATEGIC HOUSING INCOME PARTNERS (CIK 0000800080) — Mar 23, 2005
FOX STRATEGIC HOUSING INCOME PARTNERS (CIK 0000800080)
Date: March 23, 2005 · CIK: 0000800080 · Accession: 0000950134-05-005799
AI Filing Summary & Sentiment
Referenced dates: March 3, 2005
Letter
FOX STRATEGIC HOUSING INCOME PARTNERS SCHEDULE TO-T/13E-3 FILED FEBRUARY 16, 2005 FILED BY AIMCO PROPERTIES LP, ET AL. CENTURY PROPERTIES FUND XIV, XV, XIX, AND CENTURY PROPERTIES GROWTH FUND XXII SCHEDULES TO-T/13E-3 FILED FEBRUARY 16, 2005 FILED BY AIMCO PROPERTIES LP, ET AL. DAVIDSON INCOME REAL ESTATE, L.P. SCHEDULE TO-T/13E-3 FILED FEBRUARY 16, 2005 FILED BY AIMCO PROPERTIES LP, ET AL. DAVIDSON GROWTH PLUS LP SCHEDULE TO-T/13E-3 FILED FEBRUARY 16, 2005 FILED BY AIMCO PROPERTIES LP, ET AL.
RE: NATIONAL PROPERTY INVESTORS III SCHEDULE TO-T/13E-3 FILED FEBRUARY 16, 2005 FILED BY AIMCO PROPERTIES LP, ET AL.
Dear Ms. Adams:
On behalf of AIMCO Properties, L.P. ("AIMCO OP"), we are responding to the Staff's comment letter, dated March 3, 2005, regarding the Tender Offer Statements and Rule 13e-3 Transaction Statements on Schedule TO referred to above. As we discussed, we are providing supplementally AIMCO OP's response letter to the Staff's comments and a blackline copy of the Offer to Purchase and Letter of Transmittal for National Property Investors III ("NPI III"), which
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Securities and Exchange Commission March 18, 2005 Page 2
have been marked to show changes against the version previously filed, as well as a blackline copy of the changed pages of the Offers to Purchase for Davidson Income Real Estate, L.P. and Fox Strategic Housing Income Partners. For your convenience in reviewing those sections of the NPI III Offer to Purchase that have been moved to different areas of the document, we are also providing a blackline showing those sections in the same order they appeared in the version previously filed. As requested, we have set forth below each of the Staff's comments and AIMCO OP's response to each comment.
SCHEDULE TO-T/13E-3
1. We note that two of the offers are for less than all units outstanding, such as the offer for Fox Strategic Housing Income Partners. You have indicated that Item 10 of Schedule TO is not applicable with respect to this offer. As the offer is for less than all the units outstanding, revise to provide the bidders' financial information as required by Item 10 (to the extent you have not done so) or tell us why this information is not material. Note that when financial information is incorporated by reference, you must include the information required by Item 1010(c) of Regulation M-A in the document disseminated to unit holders.
RESPONSE: We note the Staff's comment and respectfully submit that, pursuant to Instruction 2 of Item 10 of Schedule TO, the requested information is not considered material because the consideration offered consists solely of cash, the offers are not subject to any financing condition, and the offeror is a public reporting company that files reports electronically on EDGAR.
OFFER TO PURCHASE UNITS OF NATIONAL PROPERTY INVESTORS III
General
2. Revise to provide the legend required by Rule 13e-3(e)(1)(iii).
RESPONSE: We have revised the disclosure in response to this comment.
3. In any future dissemination of this offer document, and in future Rule 13e-3 filings, please be certain to provide the "Special Factors" disclosure required by Rule 13e-3(e)(1)(ii) in the front of the disclosure document.
RESPONSE: We have revised the disclosure in response to this comment, and AIMCO OP undertakes to provide the required disclosure in future Rule 13e-3 filings.
Risk Factors, page 4
Our Offer Price May Not Represent Fair Market Value for Your Units, page 4
4. Revise the heading of this risk factor to clarify the risk discussed in the corresponding text. As the filing persons have provided fairness determinations with respect to this offer price, you should revise this risk factor to avoid the implication that you are disclaiming liability for the filing persons' fairness determinations.
RESPONSE: We have revised the disclosure in response to this comment.
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Securities and Exchange Commission March 18, 2005 Page 3
Continuation of Partnership; No Time Frame Regarding Sale of Property, page 5
5. Please revise your disclosure to discuss in greater detail and quantify, if practicable, the "changes in the local rental markets, the potential for appreciation in the value of a property and the tax consequences to [limited partners] on a sale of property" that the bidders believe weigh against the sale of any properties at this time.
RESPONSE: We have revised the disclosure in response to this comment to discuss in greater detail the factors the general partner considered in determining that a sale of the partnership's properties would not be advantageous at the current time.
Terms of the Offer; Expiration Date, page 8
6. Revise to clarify when payment will be made for tendered units and clarify how this date differs from the effective date of the transfer of ownership interests. For example, you state that you will pay for the tendered units promptly upon expiration of the offer. Tell us how many days after termination of the offer this payment will be made. We note that the transfer of partnership interests will not be effective until the first day of the calendar quarter in which the offer expires. Clarify how the payment date and transfer date correspond, if at all, or confirm that payment for tendered units will take place without respect to the date the actual transfer of ownership occurs in the partnership records. Finally, please clarify how the transfers will take place on the first date of the calendar quarter in which the offer expires. It appears that any transfer of units would be made retroactive to the beginning of the current quarter.
RESPONSE: We have revised the disclosure in response to this comment to clarify that AIMCO OP intends to pay for tendered units that have been accepted for payment as promptly as practicable, which it expects will be within three business days after expiration of the offer, and to clarify that payment for tendered units will take place without respect to the date that the actual transfer of ownership will be effective.
Acceptance for Payment and Payment for Units, page 8
7. In the last paragraph of this section you reserve the right to transfer or assign the right to purchase tendered units to one or more of your affiliates. Please be aware that any persons or entities to whom you transfer or assign such right must be included as a bidder in the offer. Each such person or entity added as a bidder (and possibly as a Schedule 13E-3 filing person) must independently satisfy the disclosure, dissemination and timing requirements of the tender offer and going private rules.
RESPONSE: We note the Staff's comment and confirm supplementally to the Staff that if AIMCO OP assigns its right to purchase the tendered units to one or more of its affiliates, such affiliates must comply with the requirements of the tender offer and going-private rules.
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Securities and Exchange Commission March 18, 2005 Page 4
Extension of the Tender Period; Termination; Amendment; No Subsequent Offering Period, page 13
8. We note the reference to governmental approvals required to consummate the offer. We are unable to locate disclosure regarding required governmental approvals on which you have conditioned the offer. Revise to provide this disclosure or eliminate this reference.
RESPONSE: We have revised the disclosure to delete this reference in response to this comment.
9. Revise the disclosure on page 13 to clarify that, if the offer is extended, you will issue a press release or other public announcement by 9 a.m. on the following business day, as required by Rule 14e-1(d). The current disclosure states that you may do so.
RESPONSE: We have revised the disclosure in response to this comment.
Valuation of Units, page 18
10. On page 18 you disclose that the court appointed appraiser determined the value of the partnership properties "in 2003." We note that the appraisal indicates the fair value of each of the properties as of May 28, 2003 and May 14, 2003. Revise to disclose the date of the appraiser's report. We note that you filed these reports, as well as an appraisal of a third unit held by the partnership as exhibits to your Schedule TO/13E-3. Revise to provide the reports as exhibits and revise page 27 to clarify that the reports are available on EDGAR as well. Also, it appears that you should discuss when the third property was sold, to whom (an affiliate or unrelated party?), how it compared to the prior valuation, and how this impacts the valuation amount or otherwise affects the partnership asset valuation. We note from page 48 that the property was sold on January 15, 2004 for a gross sale price of $14,825,000. We note from the appraisal filed as an exhibit to your November 7, 2003 Schedule TO/13E-3, as amended, that the property was appraised at $12,600,000.
RESPONSE: We have revised the disclosure in response to this comment. In addition, AIMCO OP will revise the Schedules TO/13E-3 for each of the offers to provide the appraisal reports as exhibits. We supplementally advise the Staff that the sale price of the property has not impacted the current partnership asset valuation.
11. In addition, tell us when the general partner, who is controlled by you, first determined to sell this property and the circumstances surrounding that decision and transaction. In doing so, tell us when the contract of sale was entered into and when it was executed. We note that your prior offer expired on December 30, 2003, and this property was sold on January 14, 2004. We also note that a Form 8-K was filed with respect to this transaction on January 30, 2004. Finally, we note from page 48 that you recognized gain from the sale in the quarter ended September 30, 2003. It appears that you were aware of this pending sale at the time of that offer and had a duty to disclose this fact and/or amend the tender offer and related documents to address the fact as a material change, as required by Rule 14d-3(b)(1), Rule 13e-3(d)(2) and Rule 14d-9(c)(1). Please provide us your detailed analysis regarding your compliance with the disclosure requirements in this regard. In addition, tell us how the proceeds from that sale were used and/or distributed and revise the current offer to disclose this information. For example, we assume from the distributions disclosed on page 49 that at least some portion of the proceeds were distributed to unit holders. Was the entire $12 million gain distributed to unit holders? When did the distributions take place? Did those who
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Securities and Exchange Commission March 18, 2005 Page 5
tendered in the tender offer (and whose units were accepted by you in the offer) have a right to receive the distribution?
As noted in our introductory comment, revise the remaining offers in accord with our comment, where applicable. For example, we note from page 46 of the Fox Strategic Housing Income offer that one of the two properties held by that partnership was sold on December 16, 2003 for gross proceeds of $10,100,000. We note that this property had been appraised at $9.4 million by AAA in connection with the litigation. We note that the general partner filed a Form 8-K reporting the transaction on December 16, 2003, that you amended the Schedule TO/13E-3 on December 17, 2003 and that the offer expired December 30, 2003; however, we are unable to locate any disclosure related to the sale or proposed sale in the initial offer document or any subsequent amendment.
RESPONSE: A contract relating to the sale of the third property (Summerwalk) was entered into as of November 7, 2003, at a purchase price of $15,200,000. The contract was amended, as of November 25, 2003, to extend the purchaser's inspection period from December 1, 2003 to December 15, 2003 and to set the closing date at January 13, 2004. The contract was amended again on December 15, 2003, to further extend the inspection period to December 17, 2003. On December 17, 2003, the purchaser terminated the contract. By amendment, dated December 18, 2003, the contract was reinstated with a reduced purchase price of $14,825,000. Effective as of January 12, 2004, an amendment changed the closing date to January 15, 2004, the date on which the sale actually closed.
AIMCO OP, which controls the general partner, was aware of the proposed sale of the property before the prior tender offer expired on December 30, 2003. The proposed sale was not deemed material to investors because of the probability that the sale would not ultimately close. As noted above, the contract was terminated at one point. In addition, the proposed sale was not deemed material in the context of the offering document, which included disclosure that:
o the independent appraiser determined that the Summerwalk property had a value of $12,600,000 as of May 28, 2003;
o AIMCO OP did not base its offer price on any third party valuation or the appraisal, nor did it derive the offer price from any arms-length negotiation;
o if the properties were sold at prices equal to their appraised value, limited partners would have received a liquidating distribution of $365.80 per unit, significantly in excess of the offer price of $153.85 per unit; and
o limited partners might receive more value if they retained their units until the partnership is liquidated; if the partnership's property were sold in the future and the net proceeds were distributed to the limited partners, t
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March 18, 2005
VIA HAND DELIVERY
Abby Adams, Esq.
Office of Mergers and Acquisitions
Division of Corporate Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0303
RE: NATIONAL PROPERTY INVESTORS III
SCHEDULE TO-T/13E-3 FILED FEBRUARY 16, 2005
FILED BY AIMCO PROPERTIES LP, ET AL.
FOX STRATEGIC HOUSING INCOME PARTNERS
SCHEDULE TO-T/13E-3 FILED FEBRUARY 16, 2005
FILED BY AIMCO PROPERTIES LP, ET AL.
CENTURY PROPERTIES FUND XIV, XV, XIX, AND
CENTURY PROPERTIES GROWTH FUND XXII
SCHEDULES TO-T/13E-3 FILED FEBRUARY 16, 2005
FILED BY AIMCO PROPERTIES LP, ET AL.
DAVIDSON INCOME REAL ESTATE, L.P.
SCHEDULE TO-T/13E-3 FILED FEBRUARY 16, 2005
FILED BY AIMCO PROPERTIES LP, ET AL.
DAVIDSON GROWTH PLUS LP
SCHEDULE TO-T/13E-3 FILED FEBRUARY 16, 2005
FILED BY AIMCO PROPERTIES LP, ET AL.
Dear Ms. Adams:
On behalf of AIMCO Properties, L.P. ("AIMCO OP"), we are responding to
the Staff's comment letter, dated March 3, 2005, regarding the Tender Offer
Statements and Rule 13e-3 Transaction Statements on Schedule TO referred to
above. As we discussed, we are providing supplementally AIMCO OP's response
letter to the Staff's comments and a blackline copy of the Offer to Purchase and
Letter of Transmittal for National Property Investors III ("NPI III"), which
<PAGE>
Securities and Exchange Commission
March 18, 2005
Page 2
have been marked to show changes against the version previously filed, as well
as a blackline copy of the changed pages of the Offers to Purchase for Davidson
Income Real Estate, L.P. and Fox Strategic Housing Income Partners. For your
convenience in reviewing those sections of the NPI III Offer to Purchase that
have been moved to different areas of the document, we are also providing a
blackline showing those sections in the same order they appeared in the version
previously filed. As requested, we have set forth below each of the Staff's
comments and AIMCO OP's response to each comment.
SCHEDULE TO-T/13E-3
1. We note that two of the offers are for less than all units
outstanding, such as the offer for Fox Strategic Housing Income
Partners. You have indicated that Item 10 of Schedule TO is not
applicable with respect to this offer. As the offer is for less than
all the units outstanding, revise to provide the bidders' financial
information as required by Item 10 (to the extent you have not done
so) or tell us why this information is not material. Note that when
financial information is incorporated by reference, you must include
the information required by Item 1010(c) of Regulation M-A in the
document disseminated to unit holders.
RESPONSE: We note the Staff's comment and respectfully submit that,
pursuant to Instruction 2 of Item 10 of Schedule TO, the requested
information is not considered material because the consideration
offered consists solely of cash, the offers are not subject to any
financing condition, and the offeror is a public reporting company
that files reports electronically on EDGAR.
OFFER TO PURCHASE UNITS OF NATIONAL PROPERTY INVESTORS III
General
2. Revise to provide the legend required by Rule 13e-3(e)(1)(iii).
RESPONSE: We have revised the disclosure in response to this comment.
3. In any future dissemination of this offer document, and in future Rule
13e-3 filings, please be certain to provide the "Special Factors"
disclosure required by Rule 13e-3(e)(1)(ii) in the front of the
disclosure document.
RESPONSE: We have revised the disclosure in response to this comment,
and AIMCO OP undertakes to provide the required disclosure in future
Rule 13e-3 filings.
Risk Factors, page 4
Our Offer Price May Not Represent Fair Market Value for Your Units, page 4
4. Revise the heading of this risk factor to clarify the risk discussed
in the corresponding text. As the filing persons have provided
fairness determinations with respect to this offer price, you should
revise this risk factor to avoid the implication that you are
disclaiming liability for the filing persons' fairness determinations.
RESPONSE: We have revised the disclosure in response to this comment.
<PAGE>
Securities and Exchange Commission
March 18, 2005
Page 3
Continuation of Partnership; No Time Frame Regarding Sale of Property,
page 5
5. Please revise your disclosure to discuss in greater detail and
quantify, if practicable, the "changes in the local rental markets,
the potential for appreciation in the value of a property and the tax
consequences to [limited partners] on a sale of property" that the
bidders believe weigh against the sale of any properties at this time.
RESPONSE: We have revised the disclosure in response to this comment
to discuss in greater detail the factors the general partner
considered in determining that a sale of the partnership's properties
would not be advantageous at the current time.
Terms of the Offer; Expiration Date, page 8
6. Revise to clarify when payment will be made for tendered units and
clarify how this date differs from the effective date of the transfer
of ownership interests. For example, you state that you will pay for
the tendered units promptly upon expiration of the offer. Tell us how
many days after termination of the offer this payment will be made. We
note that the transfer of partnership interests will not be effective
until the first day of the calendar quarter in which the offer
expires. Clarify how the payment date and transfer date correspond, if
at all, or confirm that payment for tendered units will take place
without respect to the date the actual transfer of ownership occurs in
the partnership records. Finally, please clarify how the transfers
will take place on the first date of the calendar quarter in which the
offer expires. It appears that any transfer of units would be made
retroactive to the beginning of the current quarter.
RESPONSE: We have revised the disclosure in response to this comment
to clarify that AIMCO OP intends to pay for tendered units that have
been accepted for payment as promptly as practicable, which it expects
will be within three business days after expiration of the offer, and
to clarify that payment for tendered units will take place without
respect to the date that the actual transfer of ownership will be
effective.
Acceptance for Payment and Payment for Units, page 8
7. In the last paragraph of this section you reserve the right to
transfer or assign the right to purchase tendered units to one or more
of your affiliates. Please be aware that any persons or entities to
whom you transfer or assign such right must be included as a bidder in
the offer. Each such person or entity added as a bidder (and possibly
as a Schedule 13E-3 filing person) must independently satisfy the
disclosure, dissemination and timing requirements of the tender offer
and going private rules.
RESPONSE: We note the Staff's comment and confirm supplementally to
the Staff that if AIMCO OP assigns its right to purchase the tendered
units to one or more of its affiliates, such affiliates must comply
with the requirements of the tender offer and going-private rules.
<PAGE>
Securities and Exchange Commission
March 18, 2005
Page 4
Extension of the Tender Period; Termination; Amendment; No Subsequent Offering
Period, page 13
8. We note the reference to governmental approvals required to consummate
the offer. We are unable to locate disclosure regarding required
governmental approvals on which you have conditioned the offer. Revise
to provide this disclosure or eliminate this reference.
RESPONSE: We have revised the disclosure to delete this reference in
response to this comment.
9. Revise the disclosure on page 13 to clarify that, if the offer is
extended, you will issue a press release or other public announcement
by 9 a.m. on the following business day, as required by Rule 14e-1(d).
The current disclosure states that you may do so.
RESPONSE: We have revised the disclosure in response to this comment.
Valuation of Units, page 18
10. On page 18 you disclose that the court appointed appraiser determined
the value of the partnership properties "in 2003." We note that the
appraisal indicates the fair value of each of the properties as of May
28, 2003 and May 14, 2003. Revise to disclose the date of the
appraiser's report. We note that you filed these reports, as well as
an appraisal of a third unit held by the partnership as exhibits to
your Schedule TO/13E-3. Revise to provide the reports as exhibits and
revise page 27 to clarify that the reports are available on EDGAR as
well. Also, it appears that you should discuss when the third property
was sold, to whom (an affiliate or unrelated party?), how it compared
to the prior valuation, and how this impacts the valuation amount or
otherwise affects the partnership asset valuation. We note from page
48 that the property was sold on January 15, 2004 for a gross sale
price of $14,825,000. We note from the appraisal filed as an exhibit
to your November 7, 2003 Schedule TO/13E-3, as amended, that the
property was appraised at $12,600,000.
RESPONSE: We have revised the disclosure in response to this comment.
In addition, AIMCO OP will revise the Schedules TO/13E-3 for each of
the offers to provide the appraisal reports as exhibits. We
supplementally advise the Staff that the sale price of the property
has not impacted the current partnership asset valuation.
11. In addition, tell us when the general partner, who is controlled by
you, first determined to sell this property and the circumstances
surrounding that decision and transaction. In doing so, tell us when
the contract of sale was entered into and when it was executed. We
note that your prior offer expired on December 30, 2003, and this
property was sold on January 14, 2004. We also note that a Form 8-K
was filed with respect to this transaction on January 30, 2004.
Finally, we note from page 48 that you recognized gain from the sale
in the quarter ended September 30, 2003. It appears that you were
aware of this pending sale at the time of that offer and had a duty to
disclose this fact and/or amend the tender offer and related documents
to address the fact as a material change, as required by Rule
14d-3(b)(1), Rule 13e-3(d)(2) and Rule 14d-9(c)(1). Please provide us
your detailed analysis regarding your compliance with the disclosure
requirements in this regard. In addition, tell us how the proceeds
from that sale were used and/or distributed and revise the current
offer to disclose this information. For example, we assume from the
distributions disclosed on page 49 that at least some portion of the
proceeds were distributed to unit holders. Was the entire $12 million
gain distributed to unit holders? When did the distributions take
place? Did those who
<PAGE>
Securities and Exchange Commission
March 18, 2005
Page 5
tendered in the tender offer (and whose units were accepted by you in
the offer) have a right to receive the distribution?
As noted in our introductory comment, revise the remaining offers in
accord with our comment, where applicable. For example, we note from
page 46 of the Fox Strategic Housing Income offer that one of the two
properties held by that partnership was sold on December 16, 2003 for
gross proceeds of $10,100,000. We note that this property had been
appraised at $9.4 million by AAA in connection with the litigation. We
note that the general partner filed a Form 8-K reporting the
transaction on December 16, 2003, that you amended the Schedule
TO/13E-3 on December 17, 2003 and that the offer expired December 30,
2003; however, we are unable to locate any disclosure related to the
sale or proposed sale in the initial offer document or any subsequent
amendment.
RESPONSE: A contract relating to the sale of the third property
(Summerwalk) was entered into as of November 7, 2003, at a purchase
price of $15,200,000. The contract was amended, as of November 25,
2003, to extend the purchaser's inspection period from December 1,
2003 to December 15, 2003 and to set the closing date at January 13,
2004. The contract was amended again on December 15, 2003, to further
extend the inspection period to December 17, 2003. On December 17,
2003, the purchaser terminated the contract. By amendment, dated
December 18, 2003, the contract was reinstated with a reduced purchase
price of $14,825,000. Effective as of January 12, 2004, an amendment
changed the closing date to January 15, 2004, the date on which the
sale actually closed.
AIMCO OP, which controls the general partner, was aware of the
proposed sale of the property before the prior tender offer expired on
December 30, 2003. The proposed sale was not deemed material to
investors because of the probability that the sale would not
ultimately close. As noted above, the contract was terminated at one
point. In addition, the proposed sale was not deemed material in the
context of the offering document, which included disclosure that:
o the independent appraiser determined that the
Summerwalk property had a value of $12,600,000 as of
May 28, 2003;
o AIMCO OP did not base its offer price on any third
party valuation or the appraisal, nor did it derive the
offer price from any arms-length negotiation;
o if the properties were sold at prices equal to their
appraised value, limited partners would have received a
liquidating distribution of $365.80 per unit,
significantly in excess of the offer price of $153.85
per unit; and
o limited partners might receive more value if they
retained their units until the partnership is
liquidated; if the partnership's property were sold in
the future and the net proceeds were distributed to the
limited partners, t