INVESTMENTS IN JOINT VENTURES

6 Months Ended

Jun. 30, 2011

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments Disclosure [Text Block]

6.  INVESTMENT IN JOINT VENTURE

The Company has a joint venture investment with Lightstone and David Lichtenstein in IATG (as further described below).  At December 31, 2010, prior to the adoption of the liquidation basis of accounting, the net carrying value of the investment in IATG was $1,762,225.

Upon the adoption of the liquidation basis of accounting on January 1, 2011, the Company’s investment in the IATG joint venture was recorded at its estimated fair value less costs to sell.  As a result of the adoption of the Plan of Liquidation, the Company’s time frame to market its 50% interest in the joint venture has been greatly reduced which resulted in a reduction of the Company’s investment in IATG to $750,000.

As part of the February 27, 2009 Settlement Agreement, the Company received a 50% ownership interest in IATG, the Lightstone affiliate that owns The Las Piedras Industrial Complex, an industrial property located in Las Piedras, Puerto Rico consisting of approximately 68 acres of land and 380,800 square feet of rentable space contained in several buildings in the complex.  At December 31, 2010, the occupancy rate at the property was approximately 18%.  The property is managed by a Lightstone affiliate and Lightstone has agreed to advance funds to pay any negative cash flow from the operations of the property until a sale can be accomplished and has agreed that if it does not do so, it will transfer its remaining 49% interest in the property to Presidential.

In 2009, the Company obtained an independent appraisal of the property owned by IATG and based on the appraised value of $6,500,000 and the terms of the limited liability agreement of IATG, the Company estimated the value of its 50% ownership interest in the IATG property to be $3,250,000 on its consolidated financial statements.  While management believed at the time that the $6,500,000 appraised value of the IATG property was a reasonable value, there can be no assurance that if and when the property is sold, it can be sold for its appraised value. Prior to the adoption of the liquidation basis of accounting, the Company accounted for its investment in the IATG joint venture using the equity method.  At December 31, 2010, the carrying value of the original $3,250,000 investment in IATG was $1,762,225, after the Company had recorded its share of the losses of IATG since February 27, 2009.  During the three months and six months ended June 30, 2010, the Company’s 50% share of the loss of IATG was $214,771 and $409,369, respectively.

The summary financial information for IATG was as follows:

	December 31,
	2010
	(Amounts in thousands)
Condensed Balance Sheets
Net real estate	$	5,330
Cash and cash equivalents		27
Accounts receivable		57
Deferred expenses		176
Prepaid expenses		81
Total Assets	$	5,671
Note payable (1)	$	8,878
Other liabilities		2,894
Total Liabilities		11,772
Members’ Deficit		(6,101	)
Total Liabilities and Members’ Deficit	$	5,671

(1) The note payable is payable to an affiliate of Lightstone and payment thereof is subordinate to the Company’s right to receive its share of any proceeds of a sale or refinancing.

	Three			Six
	Months			Months
	Ended			Ended
	June 30,			June 30,
	2010			2010
	(Amounts in thousands)
Condensed Statements of Operations
Revenues	$	224		$	460
Interest on note payable		(243	)		(478	)
Other expenses		(356	)		(694	)
Loss before depreciation and amortization		(375	)		(712	)
Depreciation and amortization		(55	)		(107	)
Net Loss	$	(430	)	$	(819	)