Gatew-1.1/PP-PS 891215& SAN'I?A YE'PACIFIC REAH¥
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- SANT A FE ACIIFIC REALTY
December 12, i989
- Vivyon Bowman
Asst. City Manager
P. O. Box 478
Coppell, Texas 75019
RE: Gateway Business Park
Dear Ms. Bowman'
Santa Fe Pacific Realty Corporation is proud to announce the pending
-- development of Gateway Business Park, a 225 acre mixed use business
park in Coppell, Texas.
.- For a number of years one of our prior affiliates, Southern Pacific
Industrial Development, owned the 104 acre tract bounded by Freeport
Parkway on the east, Cotton Road on the south, the St. Louis
._ Southwestern Railroad on the north, and the Thompson Property on the
west. On September 26, 1989, we purchased the 104 acre tract,
previously owned by Triland, from the Federal Depositors Insurance
Corporation and on September 2g, 198g, we purchased an adjacent 15.5
acre tract from the Stewart family. The combined property, with 1.25
miles of frontage on 1-635 and 1.5 miles of frontage along Freeport
Parkway, is owned by Santa Fe Pacific Realty Corporation, an
_ independent, non railroad, real estate investment and development
company.
The combined 225 acre parcel, to be known as Gateway Business Park,
will be developed as a phased, mixed use business park with the initial
phase being development of the northern portion of the property as
warehouse/distribution and light manufacturing facilities. Subsequent
development will include higher use industrial buildings and high tech
facilities transitioning to office development along 1-635. There is
also a site for potential hotel development.
We are presently finalizing our preliminary design plans for the first
phase of development and have authorized our engineers to proceed with
production drawings for streets and utilities. Initial meetings have
been held with city staff to apprise them of our project and we are
preparing submittals for review by Planning and Zoning Commission and
City Council.
Santa Fe Pacific Realty Corporation 5429 LBJ Freeway, Suite 600 Telephone 214 980-7707
Dallas, Texas 7524.0-2609 Facsimile 214 770-3272
Vivyon Bowman
Page Two
December 12, 1989
It goes without saying that we are excited about our project and, with
225 acres of prime property within the city limits of Coppell, we have
a vested interest in the growth and success of Coppell. Obviously we
must work together to bring growth to our park and to the community.
Although the past few years have crippled the Texas real estate
industry and the near future remains questionable for office
development; we think that the timing is good to start development of
the industrial sector of our park. However, we are committing
ourselves to invest substantial dollars in the development of our
property and we need your utmost support if we, and the community, are
to be successful in attracting industrial and office tenants. It is
imperative that we have the support and cooperation of city staff and
elected officials as we proceed with development and pursue new growth
and increased tax base for the City of Coppell.
We look forward to working with you in creating Gateway Business Park.
We need your help and support.
Let's work together to make Coppell grow!
(----~r. we 1 don Dav i s
.- Vice President of Development
TWD/trr
m RAIl. DRILL TRACK .
'"" ' ;""" """" ' '" "~'*' .... ~ - ' ~a'" ~'-'"~' "--~ '
~i :'"~ PHASE I ,"-"
% "/ '1 ,' LANDSCAPED
I I ........ /
GATEWAY BLVD. /
,.., . _ .- ...~..
,~-;.~:...,~.: -....~ . . .'..'.~
GATEWAY BUSINESS PARK
'%
.... ~ / ~' '~ 'r% ' ' --
LOCATION MAP
' DATA SUM M A RY .,,,. v,,.,,,,.
FREEWAY FRONTAGE
TOTAL SITE AC. 225.0 AC +/- ..
PHASE I ACRES 109.2AC.-* ,./
FUTURE PHASES 95.0 AC._-
/
TOTAL DEVELOPABLE 204.2 AC _* /
ROW. 11.1 AC._* l '
RAIL DRILL TRACK 1.5AC._~
GRAPEVINE CREEK 8.2 AC.*_
ADOtTIONAL ACREAGE FROM
ABANDONED COTTON ROAD IN PHASE I - 3.0 AC ~-
ALL ACREAGES ARE APPROXIMATE
GATEWAY BUSINESS PARK /.-"
Santa Fe Pacific Realty .,, '.-...~.? .
AN INTRODUCTION
TO
SANTA FE PACIFIC REALTY CORPORATION
Santa Fe Pacific Realty Corporation is, at the present time, a wholly owned
but independent subsidiary of Santa Fe Pacific Corporation. Through a recent
transaction, the corporate structure is taking a new form.
California Public Employees Retirement System (CALPERS), one of the world's
largest pension funds, has recently executed an agreement to purchase 207° of
the stock in Santa Fe Pacific Realty Corporation for $400,000,000.00. This
transaction becomes official on December 31, 1989. By January l, lg92, Santa
Fe Pacific Realty Corporation will become a separate corporation, totally
independent of Santa Fe Pacific Corporation. The major stockholders in the
new corporation will be CALPERS, owning 20% of it's stock, Olympia & York,
owning 17% of it's stock and Chicago flnanceer Sam Zell's Itel Corporation
owning 14~ of it's stock.
Santa Fe Pacific Realty Corporation has developed and owns more that ll
million square feet of industrial, office, hotel and retail facilities
nationwide. In addition to these developed properties, we have extensive land
holdings in prime growth markets throughout the nation, totalling 2.8 million
acres. We currently have over two million square feet of new facilities under
construction as well as current and pending development of business/industrial
parks. We have targeted 6,875 acres of prime property for development over
the next twenty years and plan to develop up to 80 million square feet of
industrial, office and residential facilities thereon.
Santa Fe Pacific Realty Corporation, through recent evolution in the ownership
and management of the company, has committed itself to be one of the nation's
most active and aggressive real estate developers in the coming years. To
fulfill our commitment; we must successfully be of service to the communities
and corporations we serve. Following are some of the advantages offered by
doing business with Santa Fe Pacific Realty Corporation:
Land Inventory: The geographic diversity, quality and relative low basis
of our land holdings provide a broad spectrum of location opportunities in
numerous growth markets throughout the nation.
Development Controh As the land owner, park developer and buildings
developer, we can determine and control the timing of development to meet
market demand and the type of development to meet the specific needs of
our tenants.
Long Term: We are an investment builder who builds, owns and maintains
our properties for the long term. We, therefore, create facilities
wherein design and construction offer long term benefits and which are
welcomed by communities wherein they are located.
Financial Strength: Santa Fe Pacific Realty Corporation is a publicly held
corporation with major stock interest owned by some of America's most
successful real estate investors. We have financial strength and staying
power matched by few other real estate developers.
Professional Staff: Our staff, from senior officers to project level,
consists of people who understand construction and real estate. From
local expertise, knowledgeable of their markets and building conditions,
to national support, providing sophisticated financial structuring, our
staff is committed to the successful development of our properties.
Cost Effective: We will combine our controlled land value, our
construction/development expertise and our financial capability to offer
the best combination of project location/quality/cost available.
Service: Service to the customer!
Regardless of all other benefits, without this attitude, we will not
create the long term repeat business relationships we need for long term
success; and we know that real estate is a long term business.
0043d/1-3
Cever photegraphs (from left):
Construction in ~mpe, Arizona ---
Site of planned Mission Bay development, San Franeisco, California
Padlic Design Center, Wed I~ollywood, Calih)rnia
Laid for industrial developlnent, Sparks, Nevada
Oeleft land, Utah
i'__
[ i-..'F~.q,: Fe Pacific Realty Corporation, a President's
subsidiary of Santa Fe Southern Pacific Message
L 'K~;r.' .. is a major U.S. property
,~ 'l,[.: -~,~u real estate development : Market
Flexibility
company. The firm owns approximately :
[~F,P: million acres of developed and
undeveloped land in 14 states in the
~l'.',~. Mid~w, est and Southwest. Its port.
11
million
· square feet of wholly-owned industrial, ,nd re:M: btii:di:~g~, plL;~.
~iiN:. and retail facilities, as well as ~ .... ~ ..... ~.~ ~-
joint venture partnerships in hotels, ofrice
[l~-~j.~,:,~-,~.. major center of the
..._.. ,~,,"~.-.1.,.~,'1..~1. ~.~.~;.'r,~ .~ ~ ~J~J~l~~ Planned ~..~_~ ~,cr~.~ u:~-wd
. . ,. Fe Pacific Realty is a full-sewice ~pac¢. m,_1:.1<:.%3: ]:2:k~. re:hi:
real estate firm that develops, owns and c, ,::re:re:it
[_~',,;,/,;~'n'~'~ its properties. It setacUvely
-. mefltS strategies for mature preperito& Joint pJJ.! n~-:-.h il,. !:7
Ventures i. ,:1':1 ',t'l:ltl;'~,'- Jlid ;"!.iii'
.ILlin ~J.. areas, Santa Fe Pacific
Realty has a staying power and market Land with ×carlv ~ ~.~, , ~crc_- ,:4 J::Jc,.'cJ-
[-
'"" "~state developers. Since itS establish- Industrial .IZ'c;l~' :]lJ[ l~C i[~ 9:',th- ~ '1- gn
.. 1[, 1984, after the combination of Development
Fe Industries and Southern Pacific Potential
Company, the company has moved
itS
itS
Mountain,
Desert
~ properties to their highest and best use and Agricultural :;1, ,uma.'n and d~-_-~-::
--. and shedding properties that do not fit Properties c,::t', ,rn::,. Lm!:
r'
Financials
[-
.llission Ba ~: tbeplanned lcate~J)'o~tt community that ice intettd to
derelof itt San Francisco. took a mq/or stepJbru'ard in 1.988 u'bel~ the
mom comprebe~tsit'e drqfl e~tt'iro~tmenlal impact report Dt San [-'rattcisc'o
bistot3' was issued. II'~, 6xpec't the EIR will be certified in 1989. leading
the iceO' lo ultit;iate approt'al (4['_llission Bet I' ~r l;ttblic ~lficials.
In s~tmmarizing o~tr actit'ities
,~n ::'dh,:.n,,,f S, 1988 1987 1986 1985 1984 ./bt tbepastfire3'ears, the chart
Sales s 2-6.1 51-9.9 s 164.1 s 16-.9 s 121 .- o~/bi5 page i[h~xtrales the
[)rogress ice bat'e made l¥1 meeling
(lilt'gO(Il& IH terms (4/"sqttal'e
Ren~-Commercial & 64.8 58.9 41 - 34 9 5 I. 1 ./bo/age. the btti/dD~gs tt'e
cord bat'e del'elc;ped bas increased
more than 150percent. and re~ts
I~me Be~o~ 2~6.- 190.5 1-2.1 16-.5 131.9 J)'om Oltl' leasing acticilies bat'e
Income Taxes
more/ban doubled.
Total Propeflies, 820. ] -94.5 6-6.8 551.8 48-.9
At Cost As rou read aDo/t/OllF pr~4/ects
to~d pla~lsJbr tbe years ahead, u'e
/J()~e )'ott se~lse the e.x'cgtement and
Buildings Owned l I. t 8.8 8.2 {8 q.~
(Millions ~ sq fl) promise of Santa 1-~, I-'ac/tic Realty.
I am prit'ileged to bat'e sert'ed ax
President p[ /be coml)at(r si,tce
1984 and (4/'one (4[ its predeces-
sors. Sou/bern Pac~[ic l_and Compa~O: fi)r 14years pr/or Santa Fe
Realtr is D/tilt upon a legaO' pf tu'o strong companies/hal plc(T'etl a r/Iai
role in settling the W[,st. Decisions on bou' best lo presert'e and iht'est
that legac? t~l' maximizing use ~' our lands bare guided my 38~l'ear
career I am l)leased /bat the cozo~'e we bare charted ii'ill be directed
the talented and experienced l [,rnon Schwartz. u'tu) succeeds me as
President and CEO.
It ix d~[J)'cult to capture the real spirit (~'an organization on tbe Dages
(4/'an annual re/~ort. Behind all/be mtmbe~, it ix act//alii' the people
Santa b~, Pac4/)'c Realtl' lcbo distingttisb oto'firm. Ottr properO' assets
are/'ah/able, b/t/it ix id/iron/ell' the collecth'e talenl, e/terg)' attd
commitment p/'ourpeoDle that determine our st/cc'ess.
Market Flexibility
:', ,1' illt;.t:'ti'i.l:. O.)llllllerci:.l], ,:' I't"aitk_'llll.il tl-f'.. '0. t' c.III IlL ,Id ?['C,l,crlit-- [; ,r ['tl:t;l't'
t'..:h:', ,rnia. Arizona. and >ui~t:rl:.:n t hic.Lg,,
r(') a J JoJ!d:l\ Io.n = ,;~ ~.m J'r.i:'t'i-c, ,'- J:J-Jit'rlll.ll~'- \\ !'.,irl'
· PlaP. lle¢l [:.t.\ ~.~ ;i-,!-.it-i i1 > ~..<.~2 .it Tk's \\ i:i: ?, .Ir'IH J.il !~L:ijd~ ,ill , H' -,, !1'..:Iii, ,::
· ,: . · .loll'Ir VCll[I. ll't'-: -t'~. t'll J'l', .It't rs I. ~:.lJill.'.Z' _~ :l~'.JJJ~ :1~. -LJLi,!I'L' ~L'L'[. :jl, \VJlIL'!~ , :.11
: ":- g I, a(..'l'L'>
Income Properties
~,~, ..;: l~ii~ Planned Developments
..~._~ -_
Other Land wi!h
"~:~ ~'~;~ 9eveiopmen~ Potent al
,¥,ountain. Desert, an~
'1
Dallas/Fort Worth
Income Properties
Since Santa Fc Pacific Realty was formed, our portfolio of buildings has expanded Square F00ta§e of
from apl)roximatcly 3.5 million square feet of primarily industrial [~leilities to Il.1 Buildin§s
Constructed,
milli(m square feet of industr ,'~. office and retail facilities through our aggressive 1984-1988
development, management and acqtLi$ilion )f properties From 1984 through :hr '1
1988 xt'c consmicted - million square t~et of new fhcilities, including 2.6 million
square feet undcr consLruction or ct)mpleted in 1988. 3000 __
In 1986. wc added 36-.!/00 scluarc feet to our re-tail portfolio through thc
acquisition ()f four shopping ¢:entcr~,. loc:tool in l.ivcrmorc and \'(bodland Hills. 2500 ._
Calitbrnia: Denver. Colorado: and Portland. Oreg()n. 2000
Since wc :irc an investment btlildcr that owm, and man:igc,; properties for the -
long term. we accept only thc t'nghest quality clcsign and materials. \XL' develop 1500
',pceulativcly a> well as for build-to-suit tcnant~, including firms such as Mieroage.
?,cantron. (;lobal Van kinc~,, and Norden S.x stems, subsidiary of f'nitcd 'FewllnO ogics. 100(1
\Xb ~eck tenants nationv, Jde and have attracted firm~ sueh as AT&T Inform:-
\ion Systems, Inc.. l loncvwell. Inc. and Crav Research. Inc. In 198-. we concluded 500
one of thc largcst off icc leases in the h 5tory of Santa Clara Coumv. when
McDonnell l)ouglas (Mrp. leased fi)ur building~ in our six-building. -~14.000- 1 O0
square-tbot office complex in North San Jose.
Our income propcrtic~ have a distinct advantage in the market place-- 0
1984 85 86 87 88
location. Situated near freeways and popu ation centers, they arc readily leased.
Thc ma oritv ()f our illeOl'llC properties arc located in three high-growth areas:
5, outhern California ii.os Angeles. (-)range. San Bcrnarclino. Riverside and San
l)icgo counties): Northern Califbrnia i the [?,:Lt' Area }: and Ari×ona Types of Income Pr0pedies
i P hocn i x. 'li~ m pc ~.
In burgeoning ()range C()unt.x: wc own near y two nilli(:m square feet of
indu,4rial, office and retail space, and we have another 242.00O square/~:'ct under
construction. IL1 I.o?? Angeles (.-Mtmty. our holding~ total 2.3 millJorl square fcct of Office 160'~
industrial and t)i:fice buildings, including 1.2 millit)n square t:ect dcvelc)ped since
198-t. \XL' are noxt looking cast to the faCt-growing Inland F. mpire---Rivet'sidc and "'~ Relail 4°,L
San 13erna[-dino c(:)t]ntJc? -whc[',,z we developed 5'55.OOO square fcct ol"space in 1988.
In 5,an [)iegk~ Coul]tX'. wc otv[] two n]Ldti-tenaT~Jt JndL]M]-ial parks. Ccnlerpoinle
:l]ld Kc:ii'ii\' _Mc-a. I]at c 3com])a:,> a u~tal 39¢ I f ~' -,cluar¢:/Det and have 100 te['latlts.
In Phoenix :tnt[ nearby 'lL-mpc. Arizona. xt c own fix c ineh_~btrial.-l:)usincss
parks covering approximately 800 :(?res. Since 1984. \x-e have acquired 320.(1¢)0
sqtLarc tbct and dcvelopc¢t approximately 85-.0~.)1 square l~et of industrial, office
and ['et:il SpaLCe. More than 401 0o0 square fi'ct wcrc completed in 1988.
[n Nortllcrn California. wc own two industrial parks in the heavily pc)pulatcd
Ea?,t Sa\' cities of Union City and l.ivcrmc)rc, where wc ha\'c developed
5cluarc feet ()f facilities.
Planned Developments
()fottr nc:trix -tt).()O0 acl'ch of land witil dcvclopme]~t po[cntJal, we hax'c targeted
q.392 ac['cs in California, Arizona. 'Iktxas and Illinois a~ having highest priority. PacifiCenter. a 123-acre, master-
(.)vcr till· llL'Xl 21) years, wc plan to develop up u) -i) ]llJllJo]l ~ClU:LrC feel of off icc, planned business park adjacent l0
industrial, retail and residential space, the Newpod Freeway in Santa Aha,
_%'ortberH (,~i[(fi)FiH'a: ]]1 thc Bav Al'Ca. we p[aB c eve opmc]I[~ iB Sari
California, will be a showcase 0f
[:ra[]cisL'o...Mban3. Fremont. l.ivcrmor¢ and I 'nigh City. %~' own 2()~ acrc~ aL
high-tech office. R&D and retail
.Mission Bay. Iocaled ;I[)()LII :1 mile ['rom 5an Frallcisc()'s financial district, where we
arc planning a new conmmnit~ of homes, commc]'eial and retail space, parks, space. McDonnell Douglas Corp.
open space, and a ~choo]. already has completed a 325.000-
()[1 our lq2-acrc' watcL'fro[3t site iL1 All3:I[%', wC ;Irc designing a mixcd-tls~ co1~1- square-foot office building, and we
inertial '['cMdcntial L'Om[llLmJtv. ][i [;remonL. wc [)lan to develop a ogo-acrc site ]k)r plan t0 break ground in Fall. 1989
co nmurcia ~dustr a a id ret:ti] usc~. In our industrial parks i~l [ -nigh CJI v :lnd Liver- 0n our fi~t buildino in Ihe park.
IllL)I'L' we liive close 1o l()() ;lL're~ WIlL*FL~ Wi' illtelld tO add
approXJlllatL'Jy ~ nlJJ]Joll ~qLI;II'C ['CL'[ t)F JlldLl~JrJa] ~j)ace.
RiverMdc aild ~:li1 Ber[lardJllO COLIIIIJC~. WC OWll [llOrC /'J"' ' "
[hall l.~()(J aCI'CS oJ' i)['illltt dc~clopal)lc land where we ,.?~-' '"" - .....
pJall [(1 develop illOrc [hall ]() IllJIIJoB ~qtlare ~c-c[ gl' .
oJTJce, retail m~d JI1dLIMI'i:ll l~K'JJJtJes.
wcqJ-~LIIJed [~lr Jlldtl~[fJaJ dCVLqOJllI1L'II[.
hl dL)~¥11[o~vn ~:JJl [)Je~o, %'[' ~[rc }i major OWllCf OF
Linde~ doped property lie';ir the w:ltcrfront. ~N~ pJ~lll R) ~~~' ~'
be~in dcvclopin~ our lO-acre ~Jlc %Llrl'OLlTld[ll~ the ~~
] sto['ic Sant;t Fe Depot wilh CO]IStrLICIion Of a )il?tory
oft'icc tower in 199~1. 'lkvo blocks ~outh of the Depot ~ .
property, wc intc[Kl to develop :t high-qu,dity rc~idcn-
ti:ti COlllpJex of-0il t]nit~.
..Irizoiia.- In our five nmster-pl::tnncd office, indt~s~ri:LI dcvch)pnaenls in
Phoenix :tnd 'IL'mpc wc own ~()(' acI'c3 ~-]'lcre %'C ifltcIld to dcvc]op in eNo'ess
O'2RII ')Ill <CJtlllrc fo'ct per year of i[ldListria[, office and retail spac'c over the
I'ICXI I kVt) decades.
7&x'as. In lt~c D:LIla~ and IOLLStOn arca~. ~c own -85 acres of duvclopable
pr,)pcrty: the A 45-icrc_Jul) tcr Road Park ~!ortJl of [)aBas. zoned tk)r mixud usc:
l{) I acres In CoppcJ]. IlO:Ir the l)a]]a5 Ft. XXk)rth ]]ltcrlqatiollal Airport. designated
K)r t)t'i'ic¢ show 'O0111 dcxcloplllellt: and ibc 3 t--acre IIobbv BLIsJ]Ics~ Park ill ~/'
JJt)usioIl.
(/t*JL'a,gO area.. On t)tH' 910-acre site ;It .krgt)lllle il'l I')uPage Cotlntk. we plall
commercial aild industrial dcx-clopmcnt Ihat ultimately will iotal more than 8
million square foci.
At West 10 Crossroads. our 66-acre ' · ~ .... ' '-~-~ -.-,
site on Interstate 10 in Phoenix. we
plan a mixed-use developmenl of
office and retail buildings, restau-
ranis and a hotel. We plan lo break ~
ground in mid-1989 on the four-
building. 3,O.OOO-squar,.,oo, ~ ~: :;.....: ~fi~:::..:) ~ .:: '::
officelrelail complex shown in model. '
~ * ~ .~ ...... :..:'
~ i'. : .
~::: .,.¥ :
-;: ~'~ .. .~ , ~ .
Plans Ior Developing Major Holdings
Tofal Potential Estimaled
Gross Development Year of
Location Acres Type of Development ~:1i:1io:2 sq. rt. Completion
l.os Angeles Area
Orange County 300 Off'ice. Industrial O. 1 i 998
Mu~ti-tenant.-'Hotel
I_o> Angeles County 1 - 1 Industrial Muhi-tenant 2.6 1995
Rivcrside-'San Bernardino 850 Indur, trial. Muhi-tenant. 11.5 2014
(.','o u n t ms Retail 'Office
San Francisco Bay Area 1.850 Office. Retail. h~dustnal- 19.2 2013
Hotcl. Residential:R&D
San Diego Metropolitan Area 20 O ffiee'Resident,:al 'Retail 5.1 2o 14
Phoenix Metropolitan Area 5o0 Industrial:Office 6.5 2005
'Fcxa$ ~ l)allas:l louston i -85 Industri:tl:Office 10 - 2014
Chicago Metropolitan Area 910 Industrial. Office 8.3 2005
Total 5,392 70.0
11
Joint Ventures
Santa Fe Pacific Realty is a partner in seven joint vcflture dcvek)pmcnts, including
two major projects completed in 1988.
XX~ xvcrc tile development partner and have a 50 percent interest in ancw . .................
Embassy Suites Hotel that opened in August 1988 in downtown San Diego.
l,ocated adjacent to thc waterfront, this hotel includes 33- suites, a 12-stc)ry
atrium with a waterfall and reflecting pond. two restaurants, indoor swimming
pool. meeting rooms and a grand ballroom.
Also in 1988. a major cxpanMon was completed to the Pacific l)esign Center
in X~k~t t4ollvwood. California. XX~ own 4- percent of this highly ~uccessful.
architectural landmark that has become the hub of thc interior dcsign.'coiatract
showrooms, a theater, conlbrence center, meeting rooms, a restaurant and struc-
tured parking Phase I of thc Center. completed in 19-6 and fully leased, consists of
a dramatic, six-stor}; -50.O(}O-squarc-lbot design mart sheathed in cobalt blue glass. Embass~ Suites Hutel. San 0leg0. California
X% have a 25 percent interest in the International Rivercentcr in New Orleans.
a mixed-use complex comprised of thc 1600-room New Orleans 1 lilton Riverside
anO Towers. a cruise-ship passenger terminal and a festival markeq)lacc overlooking
thc Mississippi River. adjacent to the New Orleans International Trade Mart. A
related joint vent utc. New Orleans Rix crcentcr, in which we have 39 percent interest ~. ,.,
oxvn~ 12 acres of undeveloped land next to the International Rivercenter. ~'
XfL· own 50 percent of a downtown San Francisco office highrise building.
Spear Street 'Drracc. XX'e managed thc dex clopment of thi* 18-story. .... 000-
square-foot structure. Thc building was completed in 198; and is currently 94
percent leased.
XXb have a ~O percent merest in a complcx of off icc buildings in Torrance. · .,~:.~..
California called Park Del Arno that currently consists of two office bt fit mg~
totaling 26 ).0 )f ~quare feet and a third under construction, kX~ have entitlements
to build up to 850.~Kn) square feet of office space. Thc complex i5 surroundcc by
a successful c(')ndo~l~ num complex of 1.25~ units.
In downtown Dallas. we have a 24 percent interest in a 4--aci'¢ tract t)f land. Spear Street Terrace. San Francisco, California
located near thc Farmers Market and adiaccnt to thc central business district, that
we and our partQers plan to develop a5 the Dallas economy inlproves.
With the strong emphasis wc arc placing on development, wc intend to
pursue lllOre joint venture arrangements, particularly in areas where outside
expertise will enable us to) maximize thc value of our properties.
Other Land Vt/ith Commercial/Industrial
Development Potential -
IT~. addition to 5.392 acres of land targeted for development in urban and subur- : ·
ban areas. Santa Fc Pacific Realty owns 33 641 acres of undcvcl()pcd suburban and
rural land in 12 western, southwestern and plains states. Although not in our current
development plans, many of these properties are located in paths of growth t--':
where wc bclievc future opportunities lic. Thc maps at right indicate our properties : ~ 5 ~-~:-
X~ continuallv, update plans tbr these properties as growth patterns and market ,~ -,,.
projections change, and wc evaluate our options for their eventual deployment.
including retaining and developing them or replacing them with other properties
that augment our development portt~)lio.
In the central valleys of California.
we own nearly '.000 acres of land.
stretching from Fairfield in the north- ~ntral ~alif0rnia
~ _ central part of thc state, south to
Stockton. Tracy. Merced. and Fresno.
~ ~ ~ As thc coastal cities of California ' .
~~ become more crowded, population
-- groxvth is heading inland to the valleys. ~-~0
~:~ and our properties lic in some of thc ....
areas most likely to absorb this growth.
In the Reno:Sparks. Nevada area. we
own approxinaately 1-5 acres of land that is well-suited for industrial development.
In thc Dallas.-'Fort XXi)rth area of'Dxas, xvt own almost 2.000 acres, including
approximately 1.400 acrcs in thc towns of Wilmer and ttutchins in southeast
Houston. Texas
Dallas. This property consists of three major parcels astride Interstate ~5.
immcdiatclv outside the Interstate 635 loop. As industrial property in North Dallas
hccomes more expensive, we bclievc that large industrial st)ace uscrs will seek
Dss cxpensJv~ ~r~s s(.mth of Dallas.
In thc [ ]OtlSt()n arca. wc OWll more than I ~-5 acres, including an 8-macre
parcel in southwest I louston at Clodinc and 339 acres two miles south of
l louston's central industrial par~. These properties may provide future develop-
ment opportunities as Lilt Houston economy recovers.
In central Oregon. we own 22 parcels of land totaling 4~6 acres along thc
interstate 5 corridc)r, from thc Portland suburl~s south to Eugenc and Grants Pass.
ti'mt offer opportunities lbr industrial development.
The othcr states where we own land wittl potential for dcvclopmcflt arc ~(
Arizona. Arkansas. Colorado. Illinois. Kansas, New Mexico. Oklahoma and t.-tah.
~ntr~ 0m~0n
.Just outside of Reno and Sparks.
Nevada. we own 175 acres of land
well-suited for industrial develop-
ment (photo. above lefq.
Mountain, Deser! and
- Aoricultural Properties
Santa Fc Pacific Realty's extensive hind holdings include 59 000 acres of undevel-
oped mountain properties in Northern California and nearly 2.6 million acres of
: desert lands in Southern Cali/brnia. Nevada
' and t-tah. ~X~ also own 90.000 acres of
~ ~~¢~V~ :?g~m~ ~ agricultural property, in California.
, .. ~ .... , ...... : Our scenic mountain properties lic in
44:~,,~'~' "~' ..... · Northern California. near the Oregon border
~ff' and in the Sierra mountains. XX~ currently
~.~i . ......
~ N~m UaH lease 462 acres to the Alpine Meadows ski
..' resort near l.akc ~ahoe and 640 acres t() thc
i M~. Shasta ski resort in Shasta County.
~ e[ImRNIA I)clicvc there will be future opportunities tbr
y5 -" recreational, residential and ctmlmcrcial
development of these properties
~ · through joint ventures.
Thc desert properties in Southern Calitbrnia. extending through
m · Imperial, Kern. Los Angeles. Riverside. San Bcrnardino and San Diego
~ '.. ' counties, of'{~r a number of possil)ilitics. As population densities con-
tinuc to increase in Southern California. the demand fbr housing and
.......... ,.ms.~ commercial development continually extends outward to rural areas.
..... '"-')~ Another emerging requirement is thc need to site waste disposal
{~cilitics and land fills, both requiring vast acreages in rural, undevek')pcd
areas. Recentlx: st)~Bc of our lands have been used as sites for alternatix'c energy
-- . ~0unlain, Dsssfl generation, and wc believe there is further
potcntial l~)r th s type of use. including wind and
solar power that require wide. open spaces.
A]ri~ulture ~U arc in thc process of selling to lhrmcrs all
of our agricult ural lands in the SanJoaquin X~lley
of California and currently have 90.000 acres '""~ : .~
remaining to bc sold. Of our original 151.000 ~ '
acres oflhrmland. 106.000 acres were located in . ,? ~
thc X%stlands X%tcr District. mo~t of which we ~
were required to sell under mandate of federal "~'~.
water reclamation law. In 1988 agric u tufa land ~ %..
sales represented about 20 pcrccnt of our overall i'
land sales program. The farmland salcs program :3~ ~ ~';"~'$
~ is expected to be completed by the end of 1990.
Alpine M~ad0~s Ski ~r~a.
~ Tahoe. ealil0rnia
Financial Overview
Santa t:c Pacific Realty reported $256.- million in pre-tax income lbr thc year end-
cd l)eccmber 31. 1988. Of this amount. 5223.9 million represented gains from
sales of 52-6 million t)f developable land, industrial and commercial buildings,
and agricuhural properties. Property sales tbr 1988 exceeded 198- sales by S96.2
million. For thc five-year period. 1984 througl~ 1988. our property sales totaled
approximately 5910 million. XX~ anticipate sales in Rtture years will decline
substantialh'.
Rental revenues lot:lied ~92.3 million fbr calendar year 1988. with S6q.8
million representing rents from industrial arid commercial buildings and from
ground Icascs. Our rental rcvcnucs from buildings and ground leases have more
than doubled in five years, climbing from S 31 million in 1984 to S6~,8 million in
1988. XX~' anticipate rents from these properties and from our on-going develop-
mcnt program to increase substamially in coming years.
Our agriculnmd properties, during thc five-year period from 198-t through
1988, provided rental revenue totaling 593.1 million. As we proceed with the
plam'~cd divestiture of all of our agricultural holdings, this source of revenue will
g['adually decline over thc next txvo years.
In December 1988. we concluded Sqq2 million i[q first-mortgage financing
ant] arranged a S 125 million bank revolving credit agreement Lo support our
on-going development of industrial and commercial buildings. As a rcsuh of our
current debt financing, proiccted debt financing for buildings wc are constructing
alld i]~cl'Casing dcprccialion expense, wc anticipat¢ pre-Lax income iff future x'cars
will decline substantiall} from previous levels. Our focus noxt is on creating value
from our operating properties alld ()n gcncratillg cash ~l{)kk' from operations anti
financings. XXE- also plan to divest oursch-cs of properties that do not fit our port-
K)lio in the long Term. kXk· believe this strategy will provide the greatest value
Cllhanccmcnt lO shareholders of our parent corporation.
Thc v:LluC Of properties that wc own. based {)n historical cost accountillg as
required by generally accepted accounting principles, totals more Than 5820 million
a~ of December 31. [988. This includes construction in progress as well as our
kLnd alld completed buildings. Since our property x alues arc based on historical
cost. it M~ould he recognized that the market value of these properties is
con>idcrably higher.
.3'Pti/or l'Jce l~resJ(tettt
(,'~J~?/' l-'JIlallc'Jal
Consolidated Balance Sheet
December 31, 1988
Assets
Developable properties 5305.886
Income producing properties 368.1 --
Surplus industrial.commercial properties 12-.084
Agricultural and other properties 18.912
.loi]lt venture investments -56
l.ess accumulated depreciation aFid amortization 49.098
Other assets and deferred charges 50.661
Note receivable from affiliate 25.00()
Notes receivable 9.38 ]
_~,c'cour~ts receivable, less allc)x&anccs 11286
(]ash and temporary investments, at cost \vhich ;tpproximates market 66.1 -t 1
Total 8934,186
Liabilities and stockholders' equity
Mortgage loans payable $-~62 23 l
Note payable LO affiliate 25. 103
Accounts payable arid accrued expenses 43 0~9
Deferred credits and other liabilities 18.638
1-)etkrred income taxes 156 485
Stockholders' equity
CoiIlrl'lOl] stock without par \ altle: Authorized a[ld issued. 1.0(1(1 shares 35.-13
Paid-in capitol 18- 528
Retained income 5.449
Total stockholders' equity 228.690
Total 8934,186
Consolidated Statement of Income
Year ended
December 31, 1988
Revenues
Property sales S2-6.053
Rental 92.320
Interest inconle 19.630
Other--net -.659
395.642
Costs and expenses
Cost of property sold 52.1 --
Operating and maintenance 2-.5O-
Depreciation and amortizati(m 12.3-8
(;cneral and administrative 23.593
Taxes other than iflCOIllC 19.86-
Interest expense 3 .-~ 18
] 38.940
Income before income taxes 2 -56,-02
Income taxes
Currcnt --.-08
[3eiYrred 19.22-~
96.992
Net income S 159,710
Consolidated Statement of Stockholders' Equity
Year ended --
December 31, 1988
Common Stock Paid-in Capital Retained income
Balance at December 51. 198- 555.- I:', $18-.51 -~ S 452.239
Cai)iud c(:mtriloution 1 -~
Ncr income 1-59.- 1 ¢)
l)ividcnds [)aid to stockholders ~606.'~ )0.
Bakmcc at December 51. 1988 $35,713 $187,528 $ 5,449
18
Consolidated Statement of Cash Flows
Year ended
December 31, 1988
Cash flows from operating activities:
Net income S 159.-10
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ] 2.3-8
Provision for losses on accounts receivable -.~-4
-- Rent concessions, net {6.281
Deferred profit recognized ~ 1 9801
Cost of property sold 52.1 --
Changes in assets and liabilities:
-- Increase in notes receivable (-~.259}
Increase in other assets and deferred charges (I 8 629)
Decrease in accounts payable and accrued expense>
_ Increase in clcfcrred income taxes 19.-32
Decrease in deferred credits and other liabilities {-.318..
Net cash provided by operating activities 1-0.228
Cash flows from investing activities:
Capital expenditures (81.0-i 1 )
Distributions from joint x-entures 8.403
Contributions to joint ventures ~259~
-- Payments received on notes receivable 10.692
Net cash used by investing activites ~62.205
Net cash provided by operating and investing activities 108.023
Consolidated Statement of Cash Flows
Year ended
December 31,1988
Net cash provided by operating and investing activities s lO8.0_,3
Cash flows from financing activities:
I~ritlcipa] paymcLqt of loilg term debt ~ l ().4-2)
Increase in long term debt 442.000
l)ix idcnds paid ,6~)6.'~00)
l)ecreasc in notc~ receivable fronl affiliates 12-.00 --
l')ccrcasc ill notes payable to affili:Hcs 13.631 )
Capital contribution 14
Net cash used in financing activities ~ 1 589)
Net increase in cash and cash equivalents ~6.4M
Cash and cash equivalents at beginning of period 9.-o-
Cash and cash equivalents at end of period $ 66?]4]
Supplemental disclosures of cash flow information:
Cash paid during thc year for: --
Intcrcsl i[lttt ofamol_lr'lt capitalized) $ 2.2(:,2
Income taxes 121 -35
Disclosure of accounting policy:
For purposc~, of thc statement of,._'.:tsh llov,'s, thc Company ccmsiders all highly
liquid investments with a mattlrilv of three month> or les> v,'hcn purchased to
bc cash equivalents. --
Notes to Financial Statements
(~tc~tersl;ip a~tdprinciples (¥co~tsolidalio~t--Santa Fe Pacific Realty Corporation
Note 1: iSFI>R) is owned 58.3% by Southern Pacific Company and 41.-% 13x- Saxlta Fc IB-
0wne~hip and Summa~ dust rio,. Inc.. both of which arc wholly-owned subsidiaries of Santa Fc Soulhcrn
0f Significant Accounting Principles Pacific Corporation ~SFSP~: thcrcfol'c, per sharc data arc no~ >l~own in thc l'inanci:Ll
~tatc[Bcnls. '['he 3ccompa[lying fina]'~cia] statcmClllS ii,elude thc accoLln[s
and cntitic~ ovcr ~()"o oxk ]lcd (thc Company) git a consolidated basis. ]nvc~m]cnt>
in 2()c',, to 50% owncd joint V~]ILLLrC'5 are accoLlntc'd fol' u]ldcr thc cquity method.
I'txJ[)erO' a~td dql~'rred costs~Rcal c>tatc is suited at thc l()wcr t)t' cost or estimated
ncr realizable value. Thc Compan5 capitalizc~ ct)nstrt~ction and development
co5t5. Cosls associated with financing or lca,ing of projects arc also capitalized
and deferred aq costs associated xx'itl] thc proiccts to I)e stll~scqt]eBt[5 amortized
ox-ur thc pcrtocl benefited by iht)sc expenditures.
Depreciation is computed t]~ing thc straight-line mcthotl. Buildings and imprt)x c-
mcnts arc depreciated using lives of between 20 a[ld 40 years. 'lknaLlt improve-
merits arc depreciated over thc primary terms of thc leases (generally 3-15 years}
while furniture and equipment arc depreciated rising lives ranging I:)ctxxccn 3 and
IO years.
Maintc[qancc and repair costs arc charged to operations as incurred, while signi-
l'icant i[llprt)VClllC[It5, rcplaccmclltS and [llaior rc[lovations al'c capitalized.
Real exlate sales~Thc Colllpa[~y follows 5tatcmcnl of Financial Accounling
Standards No. oo ~t%S O6k '5kcct)u[qti[~g for Sale5 t)f Real Estate." in determining thc
appropriate method for recording real csmtc sales transactions. Undo[' 1%5 oo.
profit i5 recognized in full on an accrual basi> when profit is dclc]'minablc, an
aclcquatc down paymcqll has been made. collcclibility of thc salc~ price is rcason-
al:)lv assured and the earnings proccs> is complete. Otherwise. all revenue o]' a
portion thereof i5 defcrrcd.
Dtcome taxes~Thc provision for estimated income tax expense
pre-lax financial statement iTICOI1~C, lncludcd ill the provision arc deferred i[lt'omc
taxes and cstinlatcd tax reductions attributable to ill(OlllC a[ld expense trans-
action> which arc reported in difK'rcnt pcrio(ls lbr income tax return and t'inancial
5tatcnl~[lt purposes.
In l)eccml:)cr 198-. btatemcnt of Financial Accounting Standards No. 90 [E-kS 9OI.
· Accounting for h~comc ]hxc5." xx as issued. Thc Statement requires adoption
the liability method of acc(ranting R)r iBcomc taxc-s. Thc ~exx' liability mcth()d
includes thc cI'f~cl of taxable assets and liabilities which arc rq:x)rtcd in different
pcriods for financial statement purposes than [()r irlcolnc tax returns. Thc 5talc-
mcnt must bc adopted in the Company's 1990 financial statement>, or carlic[ and
max bc apl>lied prospectively or retroactively in thc veal- k)f adoption. Managc-
nlc]ql pla]is to implc[i~cnt thc prox ision5 of F_kS 96 prospectively in thc Company'>
1989 financial >tateTncnts and estimates that the ctLmulativc' effect of thi~ change
in accounting principle will result in a 525 million increase in net incozllc. When
thc Statement is adopted, changes in lax laws. including rates of taxation, will bc
reported in thc period in x& hich thc change5 become effective rather than being
dcfcrrcd for financial reporting purposes under present generally accepted
accounting principles.
In Dcccmber of 1988. the Company conclt, ded a $-i¢ c~ million fir>t mortgage loan
N0I~ ~: agreement with Prudential Insurance Company of America { Prudential!. The k)an
M0flgage Loans ~yable is coll::Lteralized by a majority of the Compa[35 's incomc producing pr(:)pcrtic~.
Thc loan is in two parts: Scgment A for 5220 million at 9.893%, duc.lanuar~ '1.
199q and Segment B R)r 5180 million at 10.13%. duc January 1. 1996. The Com-
pany can borrow up to an additional 530 mill on providcd that certain conditions
set fi)rrb in thc loan agreement have bccn satisfied.
Mcmthly payments on Segment A include interest only from inception of thc loan
toJam~ary 1. 199-~ when thc entire principal portion of Segment A is payable.
Monthly payments on Segment B include interest only from the incct)tion of thc
loan through January 1. 199~. Thereafter. payments of principal and interest based
.
on a 4O year amortization schedule are clue monthly from Fcbruarv 1.
through January 1. 1996 when the remaining principal balance is payable i~q its entirety.
Future rental revenues on certain prc)pcrtics owtmd by the ('~()illpail} have [)ccn
assigned to Prudential as security in the event of default bx tt~c Company. In addi-
ticm. two unconditional, irrevocable lotto-rs of credit !54 millic)n and 514.8 milliom
wcrc provided to Prudential to bc used in thc event c)f ctcikmlt h5 thc Company or
upon certain operating shortfalls specified in thc loan agreement. Thc letters
credit expire on April 30. 1990 and are to hc renewed annually with the amounts
varying in accordance with certain operating criteria related to the respective
properties as set forth in thc loan agreement.
The Compan} also concluded a 542 million firs, mt)rtgagc loan agreement with
Security Pacific National Bank (security Pacific~ in December 1988. The k.)an is
collatcralized by eight completed real estate pro[c'cts. Future rental revenues on
these prc)jccls havc been assigned to Security Pacific as additional security in thc
,::vent of dcthult by the Company. 'l'hc intcrcst ratc tbr this Ioaxl. at the Company's
election as made from time to time. is ~ascd on Security Pacific's prime lending
rate or ()n a Certificate of l)eposit. 1.1BOR or I{urodt)llar ram. Monthly payments
on the lo:itl arc interest only from inceptioB to Deco nbcr 31. 1990 when thc
entire principal amount is due and payable.
Loan fccs and ()thor costs in the amount of 51-.4 million are being amortized
over the terms of thc Prudential and Security Pacific loans, l)uring the year ended
December 31. 1988. thc amount of such fees anti costs charged to operations was
not sig[~i ficant.
In addition to thc Prudential and Security Pac:ific loans, thc Company had various
other mortgage loans payable which totaled S2{: 2 million at December 31. 1988.
(_)tqe loan bears iiltcrest at prime plus 1 .?~,. thc renlainder arc at inlcrcst rates
ranging from 8.0% to 11.0%. Thc~c loan~ mature from 1989 1998.
Thc annual maturities of all mortgage 1(")11~1s payable as of l)cccml)cr 31. 1988
arc sttmmarizcd as fo[low s ~in thot~sands):
1989 S I .486
199o q-.956
1991 1-8
1992 1 (¢ ~
I ) ).. 12-~
Thereafter ~02.324
$ 462,231
Interest costs incurred during 1988 relating to mortgage loan~, payable amounted
52.5 million of which $2.2 million ',,.'as capitalized. In addition, other interest cost,,
of 51.2 million v`'crc incurred primarily fi)r assessment district improvement honds.
all of which war, capitalized.
The (;omi)any has entered a hank revoMng crcdit agreement v`-ith Security Pacific
for a illaximum alXlOUl'lt of 5125 million. L-rider thc terms of thc agreement, v, hich
expires on l)cccmbcr 31, 1990. the funds are to bc used to finance various real
estate projects. The total amount borrov,'cd for each project iR duc ()~1 the earlier of
Decemhcr 31. 1992 or tv,-() ,,'ears after the date (m which the trust deed is recorded.
The interest ram for this revolving credit agreement, at the Company's election as
made from time to time. will be based on Security Pacific's prime lending rate or on
a Certificate of Deposit. I.[BOR, or ['.'urodollar rate. At December 31. 1988. there
were no borrowings under this credit line.
The Company is included in the consolidated federal iD_come tax return of SFSE
[10t0 ~: The Company's liability for federal income taxes iR determined using the separate
Income Taxes return method cstahlbhed by a 'lhx Allocatiof~ Agreement v`'ith SFSE
The/k-deral income tax statutory talc is reconciled t(.) thc ComparLv's effective rate
:ts fbllow.-.:
Sunutorx rate 3 t.0'%
State income taxes, net of 0ederal benefit 4.0
Other ~.t.2 ~
Effective rate 37.8'%
Income taxes include ~,tate income tax expense of S 15.- million in 1988.
The sources and tax effects of timing differences rcsulting in dcfcrrcd income taxes
:irc summarized belov`' (in thousa~]ds):
Deferred g:tins on involuntary conversions $21.990
Recognition of previously dcl:c,'red gains (5.633}
Stare income taxes, tact of fcdcral benefit 2.38 I
OTher t 1.51-}}
Provision for deferred income taxes $19,224
Property and capitalized property co.,ts at l)eccinbcr 31. 1988 consisted of thc
Note 4: follovcing tin thousandsl:
Property
I.and and improven'K'nts $410.$11
Buildings 243.896
Construction in progress ~8.29 ~
Capitalized interest anti' property taxes -5.688
Other 25.6-0
820.0~,9
Less accumulated depreci:ttion _
:md amortization (-49.0981
$*.O,961
Thc COIItp:III~.' is involved in a variety of real estate oriented ioint venture activi-
Note 5: ties. These currcnth- nc ude two hotels, an office building and a 1.2 million
Joint Venture Investments sqttare lbot trade mart center ff)r the contract and home furn sh ng industries in
Los Angeles. Califl)rnia.
Equity in earnings of joint venture investments Ibr thc year ended l)eccmber 31.
1988 was 51.8 million. Ecluity in tl~e ncl assets of the joint ventures
Company's invcsuncnts by S3..t million at December 31. 1988. Such excess, result-
ing primarily from It~e differences between thc carrying value of properties con-
rribulcd tc~ ~cx'cral joint ventures and tlqc agreed valuations for joint vcmurc
ptlrposcs, will bc recognized as other revemlc whel] thc related properties are
sold.
The Company. as lessee, has entered into noncancelablc operating leases expiring
~0tfl fi: at various dates through _0_~L Rcmal expense and related sublease income under
[~$~8 these leases totaled S8.1 million and 33.9 million, respectively, in 1988. Future
miImnum lease payments and sublease income as t)f l)eccmber 31. 1988 arc sum-
marizcd as follows tin thousands~:
~inimum 8uhl~as~
~a~m~n~ ine0m~
1989 S 6.2q- S 3.418
1990 q.-O-t 2.966
1991 5.046 ' -~-
1992 -t .981 2
1993 2 63- 2.08q
-I'he rca fte r 3.2 ~- 6.968
$27,872 $20,840
Thc Company. as lessor, has entered into noncancelabl¢ operatic, g leases expiring
various date~, thr<mgh 2040. Rental rev<nuts, excluding :,ublca:,¢ income, totaled
588.-4 million in 1988 which included $10.3 million of contingent rental revmmes.
Future nlininlum rei'lta] revenue> ils o1- Deceml')cr 31, 1')88 :Irc 5UlTlmal'ize(l a5 [-ol-
lows tin thousands.~:
1989 $ qtLgqq
1990 41 .-2 l
1991 33.8. t-
1992 29.-05
1993 2-.(5-2
Thereafter 282,355
$466,255
The Company. ;ts le.,:,or, ti;id property, including ct)nstruction in progress, capital-
izod inter<st and capitalized property taxes, under opcrating leases or held ik)r rcm
as of December 31. 1988 in thc following amounts
-- Buildings 53o5,609
l_arld and imprt)ven~ents -~. I
3-8.-63
l.es~ ac<unrelated depreciation ~ qq.026~
$334,73~
I)uring 1988 thc Company acquired real c~tatc from affiliates with an agreed upon
N01~ T: value of 51 .~ million. Additionalh-. thc Company sold property to a 50% oxx ned
Transa~ti0n8 ~ilh partnership as a result of this affi]ialc exercising an option to put'chase this
A~ilial~a property for S-? million. 'l'he partnership subscquontly sold the real est:itc to a
third party during 1988. Rental revenues for 1988 included rents received from
~ affiliates of 51 {).3 million. Operating and maintenance expense incurred during
1988 included S.5 million paid to affiliates.
At l)ecembcr 31, 1988 accounts receivable included 52.2 million receivable from
affiliates and accounts payable included S3.6 million due a(filiated companies.
The not< receivable from an affiliate
above thc monthly average o( the daih' Effective Federal Funds Rate. During 1988.
the interest rat< paid ranged between -.6% and 9. i9o and inter<st income ifldud<d
512.5 million received from thc affiliate.
'l'he not< payable to an affiliate bcar~ interest at I 1% and requires annual principal
payments as follows fin thousands
1989 5 1.031
~ 1990
1991 ~.966
1992 5.513
1993 6.119
$25,103
Interest expense paid ti) al't'i!i;~tcs was $11. I millic)n for 1988. of xvbich 58.0 ,~illion
was capitalized. Thc amount paid includes intcrcst on a nc)to theft was fully retired
during 1988 and interest t)n a note to an affiliated ct)n~pany that was sold during thc
VC;t[. h~[~[ lilt C()lll]~a~¥ xYaS ~()]d ;:lnd ceased [~) qualify ;lb an affilia[c.
transferred to mortgage loans payable and thc related interest expense was record-
cd as a tl~ird parly transaction.
The Company is a participant in the Santa Fc Southern Pacific Retirement Plan ~the
Note 8: Plan). a trusteed noncontributory plan. whicta fully cc)ml)lies witt~ tt~c l(m[)loycc
Pen$i0n and Empl0~ee Retirement ncomc Security Act (ERISA) Thc Plan covers st bstantiallv all of fit-ers
Benefit Plans and salaricd employees of thc Comp:m3: Benefits payable UlaClcr ttlc Plan arc based
t)n years of service and compc'nsatiora during the sixty highest paid conscctttive
illontb5 of service' during thc- ten years immediately prccecling retirement. SFSt"s
fundi[lg policy is to contribute annually aL a rate that matct~cs pcnsit)]~
accruccl, but not less tba[~ thc ERISA ~]iIliIlltlB]. alld not lll()rC [tlan tb~ lll~IXill]LITI1
ilIIlC)Llnt deductible for incon]c tax i)urposes.
'l~)ml pension inct)mc, including charges related to other pl~tns. I~)r SI:5P anti it> sub-
sidiarics applicable to continuing operations of 5.9 million was recognized by SFSI'
in 1988. Tc)tal pension cxpcnse fc)r thc Company was S., million i~q 1988.
Since thc Company is included with certain other SFSP affiliates, most Plan infor-
marion ~i)r ttae Company is commingled with information relating to other SFSP
affiliates. Thereii)rc. the ti)llowing table sets forth thc components of SFSP's con-
golidatcd pensi(')n (inc()~lei expense applicable to thc Plan li)r 1988 tin ttiot~sands~:
Service cost S I
Interest cost
Actual return otl Plan assets 119.2t)t~
Ncc amortization and deferral 1212.8~)t~1
s(~0,so0)
Thc date used to measure Plan a',scts and liabilitic:, x~ a5 September 3t 1988 Thc
Plan's funded stattt~, amounts recognized in SI:SP's consolidated b:dancc sheet at
Dcccm ~er 31. 1988 ~tnd ma~or :tssL~mption~ u~cd It) dctcrmi~le thc'~c amotmts ;~rc
shown below { dollars in thousands }:
Plan as~cts at fi{ir value, primarily
-- inx'cstcd in CO[IIIIlOII stocks. ['.S. Bonds
and corporate bonds $q ~3.90')
Acluaria] present value of
-- proiected benefit obligations:
Accumulated benefit obligations:
~388
Nonx csted
Provision for future salary incrcascs
Excess of Plan assets over proiccted
benefit obligations 28.q¢
~ L'nrecognizcd net loss from past experience
different from that assumed and cl'l~ct5 of
('h~lngc5 iR :tssumptiolls 4.{ ~{ 1{ )
['nrccognizcd net assets being rccognizccl
over 16 x-cars
~ Prepaid pension cost $ 15,800
Mak)r assumptkms at year-end
l)~scount rate
Ram of increase in compcns:~tion levels
Expected long-term rate of return
on Plai1 asset~ 12.5'~.
The C()mpany also proviclcs health care and lit~' insurance Benefits for certain
FL'tired Clllplt)yccs. ']'hc costs of these benefits arc rec:t)gnizcd
claims are paid: however, actuariallv clctermincd accruals are used t~)r some life
insurance benefits. Expenses recognized hy the Company for these plans in 1')88
ainounted to S.3 million.
The Coxnpany. as a partner in certain joint vcmures, has made certain financing
~0tfl ~: guarantees which do not individually or collectively represent a material com-
~ ~0mmitm~nls and mitment.
~0~ti~giS$ Thc Company is a party to a number of legal actions arising in the ordinary course
of 1)~Mncss. While thc final outcome of thc'sc proceedings cannot bc prcclictccl
~ with certainty, considering thc substantial legal defenses avail:al)lc, it is the opinion
of thc Compax'~y'~ management that none t)f these actions, when finally rcsolvc-d.
will have a material adverse el'fL'ct on thc ctmsolidatcd financial position of the
C ()Ill D:I
11l Oltt' f)[)[ll[OII.
Repofl of Independent Accountants consolidated Y/tttc'l*lt'ilts ,{/'iiIUOtHU.
./?tlr(l: i~t all material res/wcls. Ibe./i*/a~/cictl /~r,sili(>n (4'.~'anla I-~, P~zt'~'/)'c lit'aliT'
~tltdil Q['l~t~st~ SI(II~'DICHIS i~t ac'corda~lce tt'ilb ,~C?lU?'(l[(l' (tcc'¢¥1lcd ttitclitDl,q .~Ifl?l-
{tSSIIIYIII('t? (t[)Oltl
San l-';w~tcisco. (.'al(/brttia
h:'brttat~l' IZ 1989
CotlJo~e. Office Co,porto Officers
Santa Fc Pacific Realty Corporation O.G. Linde
201 Mis$ion Street President and Chief Executive Officer
San Francisco, California 94105
Vernon B. Schwartz
(415) 974-4500
President and Chief Executive Officer
(effective April 1, 1989)
~[~ {}[1[~ Kenneth L. Tibbetts
201 Mission Street Senior Vice President and
San Francisco, California 94105 Chief Financial Officer
(415) 974-4585 Vice Presidents:
3230 East Imperial David G. Baldwin
Suite 100 W. X~'illiam Ehri
Brea, California 92621 Jeffrey K. Gwin
(714) 993-9000 James G. O'Gara
12850 Spurling Drive Larry W. Telford
Suite I00 General Counsel
Dallas, Texas 75230
Susan P. Saltzer
(214) 980-7707
Director, Government & Public Relations
Project Offices
1262 Ketmer Boulevard
San Diego, California 92101
(619) 231-8963
5110 East Clinton \Vay
Suite 117
Fresno, California 93727
(209) 251-0377
3200 East Camelback Road
Suite 275
Phoenix, Arizona 85018
(602) 224-7550
250 S. Rock Boulevard
Suite 100
Reno, Nevada 89502
(702) 329-9144
Design-
Thc GN[ Group. Sausahto. CA
Photography..
.serial Pho~ Bank. Lewis Bench,, Richard Bums. Ron Moore.
Bo[~ Morris. Larry Prosor M~chal %nera
RAIL DRILL TRACK
~ '} ~ SERVICE CAPAB~ITY ~: .................
GATEWAY BOULEVARD ~
~'~
24.2 A~
GATEWAY BUSINESS PARK
LOCATION ~AP
DATA S U M M A RY
TOTAL SITE AC 225.0 AC +-'-
PHASE 1 ACRES 109.2AC -
FUTURE PHASES 95.0 AC ·
TOTAL DEVELOPABLE ?04 2 AC.z
RAIL DRILL TRACK I 5AC *
GRAPEVINE CREEK 8.2 AC.~ ,.
ADO'TIONAL ACREAGE FROM
GATEWAY BUSINESS PARK
225 ACRES-COPPELL, TEXAS
Santa Fe Pacific Realty