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loan was due in 18 months. According to the loan closing
statement, a reserve was established from the loan proceeds
for construction costs in the amount of $2,879,500. The
remaining proceeds of the loan, $1,820,500, were used to
purchase the property and to pay other costs. Petitioner
and Mr. Dixon both agreed to be personally liable for
repayment of the loan.
After the Moonlight Beach Property was acquired, Value
Plus, acting as the general contractor, commenced renova-
tion of the existing improvements and construction of
the six villas. The renovation and construction of the
improvements took approximately 1 year and was substan-
tially completed by the summer of 1985.
As mentioned above, Mr. Dixon initially contemplated
the formation of a Texas limited partnership which would
purchase the six villas and related land from the joint
venture and would sell 36 limited partnership interests
to the public. Each limited partnership interest would
entitle the holder to the use of a villa for 60 days per
year. That plan was described in a promotional booklet
that was prepared sometime before completion of the
construction phase of the project as follows:
Participating ownership in Moonlight Beach
Club will be offered in the form of a limited
partnership interest in a Texas limited part-
nership composed of 36 limited partners and
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