Shearson Union Square Associates Ltd Partnership – ‘10-K’ for 12/31/95

As of:  Monday, 4/1/96   ·   For:  12/31/95   ·   Accession #:  928790-96-65   ·   File #:  33-06678

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         13±    58K 
 2: EX-13       Annual or Quarterly Report to Security Holders        19±    75K 
 3: EX-27       Union Square Hotel Partners L.P. Financial Data        1      5K 
                          Schedule for 1995 Year-End 10-K                        

10-K   —   Annual Report
Document Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION                
Washington, D.C. 20549                                          

FORM 10-K                                                       

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE   
ACT OF 1934 (fee required)                                                      

For the fiscal year ended December 31, 1995                     
OR                                                                              

[  ] TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES        
EXCHANGE ACT OF 1934 (no fee required)                                          

Commission file number:  33-6678                                                

UNION SQUARE HOTEL PARTNERS, L. P.                              
Exact name of registrant as specified in its charter            

Delaware                                13-3389008                              
State or other jurisdiction                                                     
of incorporation or organization        I.R.S. Employer Identification No.      

ATTN:  Andre Anderson                                                           
3 World Financial Center, 29th Floor, New York, New York        10285           
Address of principal executive offices                          zip code        

Registrant's telephone number, including area code: (212) 526-3237              

Securities registered pursuant to Section 12(b) of the Act:  None               

Securities registered pursuant to Section 12(g) of the Act:                     

DEPOSITARY UNITS OF LIMITED PARTNERSHIP INTEREST                
Title of Class                                                  

Indicate by check mark whether the registrant (1) has filed all reports         
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of   
1934 during the preceding 12 months (or for shorter period that the registrant  
was required to file such reports), and (2) has been subject to such filing     
requirements for the past 90 days.                                              

Yes  X      No                                                  

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K is not contained herein, and will not be contained, to the    
best of the Registrant's knowledge, in definitive proxy or information          
statements incorporated by reference in Part III of this Form 10-K or any       
amendment to this Form 10-K.   (x)                                              

Documents Incorporated by Reference:                                            

Portions of Parts I, II, III and IV are incorporated by reference to the        
Partnership's Annual Report to Unitholders for the year ended December 31,      
1995, filed as an exhibit under Item 14.                                        

PART I                                                                          

Item 1.  Business                                                               

(a)     General Development of Business.                                        

Union Square Hotel Partners, L.P. (the "Partnership), formerly Shearson Union   
Square Associates L.P. (see Item 10.  "Certain Matters Involving Affiliates"),  
is a Delaware limited partnership formed in June 1986.  The general partner of  
the Partnership is Union Square/GP Corp. (the "General Partner"), formerly      
Shearson Union Square/GP Corp. (see Item 10.  "Certain Matters Involving        
Affiliates"), a Delaware corporation and an affiliate of Lehman Brothers Inc.   
("Lehman"), formerly Shearson Lehman Brothers Inc. (see Item 10.  "Certain      
Matters Involving Affiliates").  The Partnership was formed to acquire the      
Hyatt on Union Square (the "Property" or "Hotel") located in San Francisco,     
California and operated under a long-term lease (the "Operating Lease") by      
California Hyatt Corporation ("California Hyatt"), a subsidiary of Hyatt        
Corporation ("Hyatt").  The Hotel was renamed the Grand Hyatt San Francisco on  
February 1, 1990.  The Hotel is a 693-room hotel located on Stockton Street     
between Post Street and Sutter Street in the Union Square area of San           
Francisco.  The Hotel includes 22,000 square feet of meeting room, conference   
and banquet facilities and has two full service restaurants and one lounge.     
See Note 3 to the Financial Statements contained herein at Item 8 for           
additional information concerning the Hotel and the Operating Lease.            

Between September 24, 1986, the date of the initial closing, and March 26,      
1987, the date of the final closing, 7,174,100 depositary units of limited      
partnership interest ("Units", holders of Units are herein referred to as       
"Unitholders") were issued.  The net proceeds of the offering, after payment of 
offering and organization costs and acquisition fees, aggregated $67,650,091.   

The Partnership commenced operation on August 29, 1986 with the acquisition of  
the Hotel for a purchase price of $127,727,472.  The purchase price, related    
costs and establishment of initial reserve accounts were funded by the issuance 
of (1) a first mortgage loan (the "Mortgage Loan") for $70,000,000; (2) a loan  
payable secured by a second mortgage on the Hotel (the "Loan Payable") for      
$13,325,000; and (3) a note payable (the "Note Payable") for $55,000,000.  The  
Note Payable was issued by an affiliate of the General Partner to enable the    
Partnership to consummate the purchase of the Hotel and was repaid in full on   
January 13, 1987 from the proceeds of the offering.                             

Renovation Plan.  Incorporated by reference to Note 3 "Real Estate" of the      
Notes to the Financial Statements contained in the Partnership's Annual Report  
to Unitholders for the year ended December 31, 1995, filed as an exhibit under  
Item 14.                                                                        

The Restructuring.  Incorporated by reference to Note 4 "Restructuring          
Agreement" of the Notes to the Financial Statements contained in the            
Partnership's Annual Report to Unitholders for the year ended December 31,      
1995, filed as an exhibit under Item 14.                                        

(b)     Financial Information About Industry Segments.                          
The Partnership's sole business is to own and lease the Hotel that is operated  
by California Hyatt under the Operating Lease.  All of the Partnership's        
revenues and assets relate solely to such industry segment.                     

(c)     Narrative Description of Business.                                      
The Partnership's principal objectives were to (i) provide quarterly cash       
distributions, a portion of which were anticipated to be non-taxable due to     
depreciation deductions, (ii) preserve and protect capital and (iii) achieve    
long-term appreciation in the value of the Property for distribution upon sale. 
However, due to the poor economic conditions in the hospitality industry and    
the resulting decline in the Hotel's operations and Partnership operations      
(including recurring losses and interest accrued), objective (i) has not been   
achieved and it is unlikely that objectives (ii) and (iii) can be achieved.     

Competition.                                                                    
The Hotel operates in a highly competitive market.  The Partnership has         
identified 21 existing first-class and luxury properties with a total of        
approximately 12,885 guest rooms which are competitive with the Hotel in San    
Francisco.                                                                      

The Westin St. Francis, the Hyatt Regency, the Fairmont Hotel, the Ritz Carlton 
and the Sheraton Palace with a total of 3,485 guest rooms are considered by the 
Partnership to be primary competitors.  These hotels are considered primary     
competitors due to their size, meeting facilities and market mix relative to    
the Hotel.  The remaining 16 properties, with a total of approximately 9,400    
rooms, are considered by the Partnership to be secondary competitors which      
compete with the Hotel to a lesser degree.                                      

Eight hotels, the Ritz Carlton, the Sheraton Palace, the Mandarin Hotel, the    
Pan Pacific Hotel (formerly the Portman Hotel), the Nikko Hotel, the Park       
Hyatt, the San Francisco Marriott and the Hyatt Fisherman's Wharf opened after  
the Partnership commenced operations.  These hotels have a total of 4,110 rooms 
and compete in varying degrees with the Hotel.                                  

Information with respect to market conditions in the area where the Hotel is    
located is incorporated by reference to the section entitled Message to         
Investors of the Partnership's Annual Report to Unitholders for the year ended  
December 31, 1995, filed as an exhibit under Item 14.                           

Employees.                                                                      
The Partnership's business is managed by the General Partner, and the           
Partnership has no employees.  The Hotel's staff are employees of California    
Hyatt.                                                                          

Item 2.  The Property                                                           
Incorporated by reference to Note 3 "Real Estate" of the Notes to the Financial 
Statements and Contents page contained in the Partnership's Annual Report to    
Unitholders for the year ended December 31, 1995, filed as an exhibit under     
Item 14.                                                                        

Item 3.  Legal Proceedings                                                      

Incorporated by reference to Note 8 "Litigation" of the Notes to Financial      
Statements contained in the Partnership's Annual Report to Unitholders for the  
year ended December 31, 1995, filed as an exhibit under Item 14.                

Item 4.  Submission of Matters to a Vote of Security Holders                    

There were no matters submitted to the Unitholders for a vote during the fourth 
quarter of the Partnership's past fiscal year.                                  

PART II                                                                         

Item 5.  Market for the Partnership's Limited Partnership interests and         
Security Holder Matters                                                         

(a) Market Information.  There is no established trading market for the Units.  
The securities issued by the Partnership consist of Units of Limited            
Partnership interest.                                                           

(b) Holders.  The number of Unitholders as of December 31, 1995 was 5,771.      

(c) Dividends.  Beginning with the second quarter of 1988, the General Partner  
has deferred payment of distributions and will not resume payment until such    
time as the Hotel's cash flow reaches a sufficient level in excess of its debt  
service.  The terms of the First Mortgage Loan provide that at the time of any  
cash distribution, a cash flow to debt service ratio of not less than 1.2:1     
must have been met or exceeded for the four most recently completed quarters    
and that cash available for debt service immediately after such distributions   
must be not less than $3,500,000.                                               

Pursuant to the settlement of class actions against the Partnership and others  
(the "Settlement"), Shearson paid cash distributions to class member Limited    
Partners, in the amount of $.40 per Unit on February 12, 1993, $.30 per Unit on 
February 14, 1992 and $.10 per Unit on March 8, 1991.  Additional information   
about the Settlement is incorporated by reference to Note 8 "Litigation" of the 
Notes to the Financial Statements contained in the Partnership's Annual Report  
to Unitholders for the year ended December 31, 1995, filed as an exhibit under  
Item 14.                                                                        

Item 6.  Selected Financial Data                                                
Selected Partnership financial data for the five years ended December 31 is     
shown below.  This data should be read in conjunction with the Partnership's    
financial statements which are incorporated by reference to the Partnership's   
Annual Report to Unitholders for the year ended December 31, 1995, filed as an  
exhibit under Item 14.                                                          

             For the Years ending December 31,
  1995         1994         1993         1992         1991

Total Income $  9,051,456 $  7,005,899 $  5,412,650 $  4,255,525 $  2,841,245   

Net Loss       (9,717,080) (11,015,227  (12,404,566) (13,825,960) (15,257,829)  

Net Loss Per                                                                    
Unit(1)             (1.34)       (1.52)       (1.71)       (1.91)       (2.11)  

Long-term                                                                       
obligations                                                                     
(2)           135,589,637  130,684,497  126,508,947  122,783,001  111,644,711   

Total Assets  103,454,110  106,774,719  109,887,083  115,656,493  120,254,329   

Cash                                                                            
Distributions                                                                   
Per Unit (1)          .00          .00          .00          .40(3)       .30(3)

(1)     Based on 7,174,100 units outstanding.                                   

(2)     Accrued interest is not included in long-term obligations with the      
exception of interest accrued on the Loan Payable which, according to the       
original terms thereof, is not payable currently.  In addition, pursuant to the 
Restructuring, past due interest on the Mortgage Loan is being deferred and     
will be due and payable upon maturity of the Mortgage Loan.  Accordingly, such  
deferred interest is included as a long-term obligation.                        

(3)     Paid by Shearson pursuant to the Settlement.                            

Item 7.  Management's Discussion and Analysis of Financial Condition and        
Results of Operations                                                           

Liquidity and Capital Resources                                                 

The Partnership has suffered continuing losses, including losses incurred each  
year since the date of the Restructuring (as defined herein).  Although the     
Partnership has met the minimum debt service payments required by the           
Restructuring, income from the Hotel's operations has not been adequate to fund 
all accrued interest and other debt service obligations of the Partnership,     
resulting in losses and an increasing level of indebtedness for each of the     
years since the date of the Restructuring.                                      

As a result of these losses and increasing aggregate indebtedness, and the      
impending January 2, 1997 maturity date of the Partnership's principal secured  
Mortgage Loan, the financial statements presented with this 10-K Annual Report  
have been qualified by the Partnership's independent accountants, Cooper's &    
Lybrand, L.L.P., by rendering a "going concern" opinion.  The financial         
statements do not reflect any impact upon the Partnership's business or         
financial condition that would result from the Partnership's cessation of the   
active conduct of business as a going concern nor the occurrence of a           
bankruptcy filing or foreclosure proceeding.  The values reflected on the       
financial statements for the Hotel and other Partnership property and various   
other elements of the Partnership's financial condition would be adversely      
impacted by the cessation of business as a going concern.                       

The Partnership's liquidity and capital resources were substantially impacted   
by the funding of the Renovation Plan which was completed in January 1990 (the  
"Renovation Plan") and extensive borrowing subsequent to the initial offering.  
Combined with poor hotel market conditions and weak results from operations     
since 1989, these factors led to a default by the Partnership on its January 2, 
1992 debt service payment with respect to its $70 million first mortgage loan   
(the "Mortgage Loan").  This default created other defaults under the           
Partnership's subordinate financings.  Effective June 30, 1992, a restructuring 
of the Partnership's indebtedness and property leasing arrangements (the        
"Restructuring") was successfully executed resulting in the waiver or cure of   
each of the Partnership's defaults.                                             

There can be no assurance that the Partnership's Hotel will generate sufficient 
cash flow to enable the Partnership to satisfy its future debt service          
obligations.  On April 27, 1993, an affiliate of the General Partner, Lehman    
Brothers Holdings Inc. ("Lehman"), elected not to renew the Guaranty of the     
minimum pay rate under the restructured Mortgage Loan for the year commencing   
July 4, 1993.  The Partnership made its quarterly debt service payments, due on 
January 2, 1995, April 2, 1995, July 3, 1995 and October 2, 1995, as well as    
the quarterly debt service payment due on January 2, 1996, to the Bank of Nova  
Scotia ("BNS") with cash flow from operations.  In addition, on July 3, 1995, a 
payment of $2,193,025 was made to BNS representing the excess of rents received 
by the Partnership less disbursements for the period from July 1, 1994 through  
June 30, 1995, as defined in the Amended and Restated Promissory Note Secured   
by the Deed of Trust dated June 30, 1992.  This payment was applied toward      
reducing BNS's portion of the accrued interest on the Partnership's first       
mortgage.  Pursuant to the terms of the Restructuring, the pay rate for the     
minimum interest payment increased from 8.5% to 9.699% effective January 2,     
1996.  Other interest continues to accrue.  The General Partner currently       
expects that the Partnership's cash flow should be sufficient to meet the       
minimum payment due on April 2, 1996 under the restructured terms of the        
Mortgage Loan.  However, there can be no assurance that cash flow will continue 
to be sufficient to satisfy future payments, and the General Partner is         
prepared to request financial support from Lehman to supplement cash flow from  
the Hotel should the need arise.  Lehman has indicated that it would evaluate   
the need for additional funding on a quarterly basis.  Lehman is not            
contractually committed to provide any cash funding or other financial support  
for the Partnership or the Hotel, and may or may not elect to provide financial 
support, based upon prevailing business conditions or any other considerations  
at the time any request is made.  Thus, the General Partner can provide no      
assurances whatsoever with respect to Lehman's willingness to provide any cash  
funding or any other form of financial support in the future.                   

The General Partner anticipates the need for continued interest accruals and    
deferrals pursuant to the Restructuring for the foreseeable future.  This       
accrual of interest may affect the Partnership's ability to refinance and/or    
sell the Hotel at a price which enables the repayment of the Partnership's      
restructured debt, including accrued and deferred interest.  There are no       
assurances that the Partnership's debt may be restructured to provide a         
maturity date beyond its current maturity date of January 2, 1997.  Nor is      
there any assurance that if the debt is restructured to provide an extended     
maturity date, the restructured debt will continue to provide for the accrual   
of interest.  In order for Limited Partners to receive any additional cash      
distributions, the net proceeds from a sale of the Hotel will need to be in     
excess of all Partnership debt, including accrued interest, by either the       
January 2, 1997 maturity date for that debt or any extended maturity date that  
may result from an y restructuring of that debt.  A number of factors           
including, without limitation, general economic conditions, factors affecting   
the hotel industry in the San Francisco Bay area, and natural disasters have in 
the past and may in the future affect the value of the Hotel.  Although the     
Hotel's business has improved on a relative basis in recent years, there is no  
assurance whatsoever that the Hotel will have a value in the future sufficient  
to either restructure the debt to extend its maturity or to enable the Hotel to 
be sold for an amount that would be in excess of the debt in order to provide   
any surplus for distribution to the Limited Partners.  The General Partner is   
currently investigating all viable alternatives with respect to the impending   
maturity of the Partnership's debt in January 1997.  These options include      
possibly selling the Hotel, negotiating a suitable restructuring or extension   
of the existing mortgages or refinancing a portion of the existing mortgages    
and restructuring the remaining Partnership indebtedness.  However, there can   
be no assurance that any of these will be achieved, or in the event the         
Partnership is unable to implement a satisfactory solution, that the lenders    
will not initiate foreclosure proceedings.  Should the Partnership be faced     
with a foreclosure of the Hotel, the General Partner will make a determination  
as to whether it is in the best interest of the Partnership to file for         
protection under Chapter 11 of the United States Bankruptcy Code.               

At December 31, 1995, the Partnership had cash and cash equivalents, which are  
held in an interest-bearing account, of $3,378,174 compared to $2,668,685 at    
December 31, 1994.  The increase is due primarily to an increase in rental      
income from operations for 1995.                                                

A reserve account has been established on behalf of the Partnership to cover    
certain costs for replacement of furniture and equipment at the Hotel and is    
noted as "Replacement reserve receivable" on the Partnership's balance sheet.   
Replacement reserve receivable increased from $89,506 at December 31, 1994 to   
$500,440 at December 31, 1995, largely due to additions to the reserve          
exceeding expenditures for furniture, fixtures and equipment ("FF&E").  Rent    
receivable increased by $124,382 from December 31, 1994 to $318,626 at December 
31, 1995, due to the increase in rent from operations and the timing of         
payments.                                                                       

Accounts payable and accrued expenses decreased to $41,645 at December 31, 1995 
compared with $66,420 at December 31, 1994, primarily due to the accrual of     
professional fees during 1994, and the taxes due to the City of San Francisco   
which were accrued for at December 31, 1994.  Accrued interest increased to     
$13,104,156 at December 31, 1995 compared with $11,580,105 at December 31,      
1994.  The change primarily represents the net of accrued interest expense for  
the period less the minimum interest payments made on January 3, 1995, April 3, 
1995, July 3, 1995 and October 2, 1995, as well as the additional interest      
payment made on July 3, 1995.  Deferred interest increased from $8,020,283 at   
December 31, 1994 to $8,800,319 at December 31, 1995 and Notes and Loans -      
Affiliate increased from $48,891,636 at December 31, 1994 to $53,016,740 at     
December 31, 1995.  These accounts have increased due to compounding of unpaid  
interest on the principal balances.                                             

Results of Operations                                                           

1995 versus 1994                                                                
While operations have improved, the Hotel still operates in a competitive       
environment which continues to keep Hotel profits and Partnership rental income 
reduced from pre-1988 levels.  The average occupancy rate and average room rate 
for the year ended December 31, 1995 were 81.3% and $142.25, respectively,      
compared to 75.5% and $141.17, respectively, for 1994.                          

For the year ended December 31, 1995, the Partnership incurred a net loss of    
$9,717,080, compared to a net loss of $11,015,227 for the year ended December   
31, 1994.  The decrease in the Partnership's net loss is primarily attributable 
to an increase in rental income and interest income, which was partially offset 
by an increase in interest expense.                                             

For the year ended December 31, 1995, rental income included operating income   
of $7,677,616, compared to $5,816,107 for the same period in 1994.  The         
improvement for the year ended December 31, 1995 is largely due to improved     
Hotel operating results.  Operating results were positively impacted by higher  
average occupancy and room rates at the Hotel during 1995 compared to 1994,     
which resulted in increases in room sales, food and beverage sales,             
telecommunication sales and other rental income for 1995.  Interest income for  
the year ended December 31, 1995 was $123,210, compared with $39,454 for the    
same period in 1994.  The increase in 1995 is due primarily to the higher cash  
balances being maintained by the Partnership and higher interest rates.         

Total expenses were $18,768,536 for the year ended December 31, 1995, compared  
to $18,021,126 for the year ended December 31, 1994.  The increase primarily is 
due to higher interest expense resulting from the compounding of interest on    
the principal debt balance and an increased prime rate during 1995.  This       
increase was partially offset by lower depreciation and amortization.           

1994 versus 1993                                                                
Operations during the year ended December 31, 1994, while improved over results 
for the corresponding period in 1993, continued to be affected by a combination 
of reduced travel and strong competition in the San Francisco hotel market.     

The average occupancy rate and average room rate for the year ended December    
31, 1994 were 75.45% and $141.17, respectively,  compared to 71.42% and         
$138.43, respectively, for the corresponding period in 1993.                    

For the year ended December 31, 1994, the Partnership incurred a net loss of    
$11,015,227 compared to a net loss of $12,404,566 for the year ended December   
31, 1993.  The decrease in the Partnership's net loss was primarily             
attributable to an increase in income from operations and a decrease in         
depreciation and amortization due to a portion of personal property becoming    
fully depreciated, which was partially offset by an increase in interest        
expense.                                                                        

For the year ended December 31, 1994, rental income included operating income   
of $5,816,107 compared to $4,045,593 for the same period in 1993.  The          
improvement for the year ended December 31, 1994 was largely due to improved    
Hotel operating results.  Operating results were positively impacted by         
increases in room sales, telecommunication sales and other rental income,       
resulting from higher average occupancy and room rates at the Hotel during 1994 
compared to 1993.  Also contributing was the reduction of room, food and        
beverage, and telecommunications expenses.  Miscellaneous income decreased by   
$253,887 to $2,765 in 1994 reflecting the one-time receipt of real estate tax   
abatements in 1993.                                                             

Total expenses were $18,021,126 for the year ended December 31, 1994, compared  
to $17,817,216 for the year ended December 31, 1993.  The increase primarily    
was due to a larger interest expense resulting from the accrual of interest on  
the principal debt balance and an increase in the prime rate in 1994, partially 
offset by a decrease in depreciation and amortization expense.                  

Item 8.  Financial Statements and Supplementary Data                            

Incorporated by reference to the Partnership's Annual Report to Unitholders for 
the year ended December 31, 1995, filed as an exhibit under Item 14 and         
Schedule III.                                                                   

Item 9.  Changes in and Disagreements with Accountants on Accounting and        
Financial Disclosure                                                            

None.                                                                           

PART III                                                                        

Item 10.  Directors and Executive Officers of the Registrant                    

The Partnership has no officers or directors.  The General Partner, Union       
Square/GP Corp., formerly Shearson Union Square/GP Corp., is an affiliate of    
Lehman, and has offices at the same location as the Partnership.  The General   
Partner manages and controls substantially all of the Partnership's affairs and 
has general responsibility and ultimate authority in all matters affecting the  
Partnership business.  All of the officers and directors of the General Partner 
are also officers and employees of Lehman.                                      

Certain officers of the General Partner are now serving (or in the past have    
served) as officers or directors of entities which act as general partners of a 
number of real estate limited partnerships which have sought relief under the   
United States Bankruptcy Code.  The partnerships which have filed bankruptcy    
petitions own real estate which has been adversely affected by the economic     
conditions in the markets in which that real estate is located and,             
consequently, the partnerships sought the protection of the bankruptcy laws     
primarily to protect the partnerships' assets from loss through foreclosure.    

The Officers and/or Directors of the General Partner are as follows:            

Name                    Office                                  

       Jeffrey C. Carter       President, Director and Chief Financial Officer
Rocco F. Andriola       Director and Vice President             
Joseph Donaldson        Vice President                          

There is no family relationship among any of the foregoing directors or         
officers.  All of the foregoing directors have been elected to serve one-year   
terms.  The business experience during the past five years of each of the       
directors and officers of the General Partner of the Partnership is detailed    
below.                                                                          

Jeffrey C. Carter, 50, is a Senior Vice President of Lehman Brothers in the     
Diversified Asset Group.  Mr. Carter joined Lehman Brothers in September 1988.  
From 1972 to 1988, Mr. Carter held various positions with Helmsley-Spear        
Hospitality Services, Inc. and Stephen W. Brener Associates, Inc. including     
Director of Consulting Services at both firms.  From 1982 through 1987, Mr.     
Carter was President of Keystone Hospitality Services, an independent hotel     
consulting and brokerage company.  Mr. Carter received his B.S. degree in Hotel 
Administration from Cornell University and an M.B.A. degree from Columbia       
University.                                                                     

Rocco F. Andriola, 37, is a Senior Vice President of Lehman Brothers in its     
Diversified Asset Group.  Since joining Lehman Brothers in 1986, Mr. Andriola   
has been involved in a wide range of restructuring and asset management         
activities involving real estate and other direct investment transactions.      
From 1986-89, Mr. Andriola served as a Vice President in the Corporate          
Transactions Group of Shearson Lehman Brothers' office of the general counsel.  
Prior to joining Lehman Brothers, Mr. Andriola practiced corporate and          
securities law at Donovan Leisure Newton & Irvine in New York.  Mr. Andriola    
received a B.A. degree from Fordham University, a J.D. degree from New York     
University School of Law, and an LL.M degree in Corporate Law from New York     
University's Graduate School of Law.                                            

Joseph Donaldson, 32, serves as a Vice President of Lehman Brothers in its      
Diversified Asset Group and has held such position since November 1990.  From   
October 1988 to October 1990, Mr. Donaldson held the position of Assistant      
Manager with the Internal Audit Department of Citibank's Investment Bank.       
Prior to that, Mr. Donaldson was employed with Price Waterhouse and Company.    
Mr. Donaldson received a B.B.A. in accounting from the University of Georgia    
and is a Certified Public Accountant.                                           

Certain Matters Involving Affiliates                                            
On July 31, 1993, Shearson Lehman Brothers Inc. ("Shearson") sold certain of    
its domestic retail brokerage and asset management businesses to Smith Barney,  
Harris Upham & Co. Incorporated ("Smith Barney").  Subsequent to this sale,     
Shearson changed its name to Lehman Brothers Inc.  The transaction did not      
affect the ownership of the Partnership or the Partnership's General Partner.   
However, the assets acquired by Smith Barney included the name "Shearson."      
Consequently, effective October 21, 1993, the General Partner changed its name  
to Union Square/GP Corp., and effective December 29, 1993, the Partnership      
changed its name to Union Square Hotel Partners, L.P. to delete any reference   
to "Shearson."                                                                  

Item 11.  Executive Compensation                                                

All of the directors and executive officers of the General Partner are          
employees of Lehman Brothers Inc.  They do not receive any salaries or other    
compensation from the Partnership.                                              

Item 12.  Security Ownership of Certain Beneficial Owners and Management        

(a)     Security ownership of certain beneficial owners                         

To the knowledge of the General Partner, no person owned more than 5% of the    
outstanding Units as of December 31, 1995.                                      

(b)     Security ownership of management                                        

As of December 31, 1995, none of the officers and directors of the General      
Partner owned any Units.                                                        

(c)     Changes in control                                                      

None.                                                                           

Item 13.  Certain Relationships and Related Transactions                        

All of the officers and directors of the General Partner are employees of       
Lehman Brothers Inc.  Information regarding transactions with affiliates is     
incorporated by reference to Note 6 "Transactions with Related Parties" of the  
Notes to Financial Statements contained in the Partnership's Annual Report to   
Unitholders for the year ended December 31, 1995, filed as an exhibit under     
Item 14.                                                                        

PART IV                                                                         
Item 14.  Exhibits, Financial Statements, and Reports on Form 8-K               

(a)(1)          Financial Statements:                           

           Report of Independent Public Accountants                (1)

           Balance Sheets - At December 31, 1995 and 1994          (1)

Statements of Operations - For the years ended  
            December 31, 1995, 1994 and 1993                       (1)

     Statements of Partners' Capital - For the years ended
            December 31, 1995, 1994 and 1993                       (1)

Statements of Cash Flows - For the years ended  
            December 31, 1995, 1994 and 1993                       (1)

           Notes to Financial Statements                           (1)

    (1)  Incorporated by reference to the Partnership's Annual Report to
      Unitholders for the year ended December 31, 1995, which is filed as an
exhibit under Item 14.                                          

       (a)     Financial Statement Schedules:  Independent Accountant's Report
on Schedule III - Real Estate and Accumulated Depreciation.     

      All other schedules for which provision is made in the
       applicable accounting regulations of the Securities and
            Exchange Commission have been omitted as (1) the information
           required is disclosed in the financial statements and notes
             thereto; (2) the schedules are not required under the related
    instructions; or (3) the schedules are inapplicable.

Exhibits:  See Exhibit Index contained herein.  

      (b)     Reports on Form 8-K:  No reports on form 8-K were filed in the
fourth quarter of the calendar year 1995.                       

Exhibit Index                                                   

Exhibit Number                                                                  

3.a     Amended and restated Agreement of Limited Partnership of
   Shearson Union Square Associates dated August 18, 1986 (included in
      Amendment No. 2 to registration Statement No. 33-6678) incorporated by
reference.*                                                     

       10.a    Stipulation and Agreement of Compromise and Settlement filed in
    the Court of Chancery of the State of Delaware in and for New Castle
County in June 8, 1990.*                                        

   10.b    Documents for Restructuring of Indebtedness Encumbering the
     Grand Hyatt Union Square Hotel among Shearson Union Square Associates
       Limited Partnership, as Borrower, and The Bank of Nova Scotia, as First
    Lien Holder, Capital Growth Mortgage Investors, L.P., as Second Lien
     Holder, Hyatt Corporation, as Third Lien Holder, and California Hyatt
Corporation, as Hotel Manager dated June 30, 1992.*             

    13.1    Annual Report to Unitholders for the year ended December 31,
1995.                                                           

27.1    Financial Data Schedule                                 

______________________                                          

*Previously filed.                                                              

SIGNATURES                                                      

Pursuant to the requirements of the Securities Exchange Act of 1934, the        
Registrant has duly caused this report to be signed on its behalf by the        
undersigned, thereunto duly authorized.                                         

                                 UNION SQUARE HOTEL PARTNERS, L.P.

                             BY:     Union Square GP/Corp.
                               General Partner

Date:  March 29, 1996                                                           
                            BY:     s/Jeffrey C. Carter/
                         Name:   Jeffrey C. Carter
                               Title:  President, Director and
                                       Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, the        
Registrant has duly caused this report to be signed on its behalf by the        
undersigned, thereunto duly authorized.                                         

                     UNION SQUARE/GP CORP.
               General Partner

Date:  March 29, 1996                                                           
                            BY:     s/Jeffrey C. Carter/
                         Name:   Jeffrey C. Carter
                               Title:  President, Director and
                                       Chief Financial Officer

Date:  March 29, 1996                                                           
                            BY:     s/Rocco F. Andriola/
                         Name:   Rocco F. Andriola
                                   Title:  Director and Vice President

Date:  March 29, 1996                                                           
                           BY:     s/Joseph Donaldson/
                        Name:   Joseph Donaldson
                      Title:  Vice President

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K’ Filing		Date		Other Filings
		1/2/97
		4/2/96
Filed on:		4/1/96
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		1/2/96
For Period End:		12/31/95
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		7/3/95
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		12/31/94		10-K
		7/1/94
		12/31/93		10-K
		12/29/93
		10/21/93
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		6/30/92
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		1/2/92
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