SecProbe.io

CORRESP
1
filename1.htm

      EPLP Supplemental Information 2004 10-K

        June
          9,
          2005

        Cicely
          D.
          Luckey

        Branch
          Chief

        Securities
          and Exchange Commission

        Division
          of Corporate Finance

        450
          Fifth
          Street, N.W.

        Washington,
          D.C. 20549

        Re:   Essex
          Portfolio L.P.

               Form
          10-K for the year December 31, 2004

          File
          No.
          33-44467-01

        Dear
          Ms.
          Luckey:

        On
          behalf
          of Essex Portfolio L.P. (the “Company” or “Essex”) we, as counsel to the
          Company, submit this letter in response to a comment from the staff (the
          “Staff”) of the Securities and Exchange Commission (the “SEC”) received by
          facsimile, dated May 27, 2005, relating to the above filing.

        In
          this
          letter, we have recited the comment from the Staff in italicized, bolt
          type and
          have followed with the Company’s response in regular type.

        Form
          10-K for the year ended December 31, 2004

        Note
          (2) Summary of Critical and Significant Accounting Policies, (b) Principles
          of
          Consolidation, page F-10, Note (3) Real Estate (c ) Investments, page
          F-16

                1.

                  Explain
                    to us how you evaluated FIN 46(R) in determining whether Fund
                    II is a
                    variable interest entity, and if so how you concluded that you
                    are not the
                    primary beneficiary of this entity. In addition, how did you
                    evaluate your
                    general partnership interest in this entity when determining
                    whether
                    consolidation was appropriate under SOP
                    78-9?

        The
          Company advises the Staff that under our FIN 46R analysis for Fund II,
          the
          Company determined that Fund II is not a variable interest entity (VIE).
          Specifically under paragraph 5(a) of FIN 46R, Fund II by design, has sufficient
          equity to permit it to finance its activities without additional subordinated
          financial support provided by any parties, including equity holders. Limited
          partners’ equity is approximately 35% percent of the total dollars invested with
          approximately 65% provided by third party lenders. Under paragraph 5(b)
          of FIN
          46R the equity holders as a group have rights to make decisions that have
          a
          significant impact on the success of Fund II and are contractually obligated
          to
          absorb losses and receive residual returns. Under paragraph 5(c) of FIN
          46R the
          activities of Fund II are performed on behalf of the equity investors.
          The
          investors in Fund II are sophisticated pension/corporate entities with
          extensive
          experience in investing in real estate and all have active real estate
          investment programs. The Company concluded that Fund II is not a VIE and,
          accordingly, a primary beneficiary determination was not required.

        The
          evaluation also considered whether the Company’s general partnership interest in
          Fund II required consolidation under SOP 78-9. Section 8.4(b) of the Fund
          II
          limited partnership agreement gives the limited partners the following
          rights:

        “8.4
          Removal of General Partner

        b.
          The
          General Partner may be removed without Cause (“Removal Without Cause”) at any
          time upon the written consent of Limited Partners whose aggregate Capital
          Commitments represent a minimum of 66 2/3% of the Aggregate Capital
          Commitments of all Limited Partners, excluding the Capital Commitments
          of the
          General Partner in its capacity as a Limited Partner and any Limited Partner
          which is an Essex Affiliate so long as the General Partner is an Essex
          Affiliate… Such a Removal Without Cause shall be effective immediately upon such
          consent. For the avoidance of doubt, it is the intent of the Partners that,
          following Removal Without Cause of the General Partner, the Partnership
          shall
          dissolve as provided in Section 10.3 and be liquidated in accordance with
          Article 11.”

        Fund
          II’s
          partnership agreement provides for a specific scope and substantially restricts
          the authority of the general partner to acquire properties and how they
          are
          financed outside of the predefined scope. Operating outside the predefined
          scope
          of the partnership agreement requires the consent of 3 out of 4 members
          of the
          Advisory Board. The Advisory Board is comprised of the Limited Partners
          that
          have the most committed capital and are not affiliated with the general
          partner.
          The existence of the Advisory Board significantly restricts the ability
          of the
          Company to control Fund II.

        The
          Company concluded that the limited partners rights to remove Essex as the
          General Partner and the existence of the Advisory Board meet the criteria
          of
          important rights under paragraph .09 of SOP 78-9 and as such, Essex as
          the
          general partner does not control Fund II.

        ***

        In
          connection with this response to the Staff’s comment and on behalf of the
          Company, the Company hereby acknowledges that:

                ·

                  the
                    Company is responsible for the adequacy and accuracy of the disclosure
                    in
                    Form 10-K for the fiscal year ended December 31,
                    2004

                ·

                  the
                    Staff comments or changes to disclosure in response to Staff
                    comments do
                    not foreclose the Commission from taking any action with respect
                    to the
                    filing; and

                ·

                  the
                    Company 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
          direct any questions or additional comments to the undersigned.

        Sincerely,

        /s/
          Stephen J. Schrader

        Stephen
          J. Schrader

        cc:
          Kelly
          McCusker