SECURITIES AND EXCHANGE COMMISSION
                        Washington D.C.   20549



                               FORM 10-Q



              Quarterly Report Under Section 13 or 15(d)
                of the Securities Exchange Act of 1934




For the quarter ended March 31, 1997        Commission file #0-16976  




                       ARVIDA/JMB PARTNERS, L.P.
        (Exact name of registrant as specified in its charter)



                Delaware                    36-3507015                
      (State of organization)      (IRS Employer Identification No.)  



  900 N. Michigan Avenue., Chicago, IL        60611                   
 (Address of principal executive office)     (Zip Code)               




Registrant's telephone number, including area code 312/440-4800




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 such a shorter period that
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes   X     No      



<PAGE>


                           TABLE OF CONTENTS




PART I     FINANCIAL INFORMATION


Item 1.    Financial Statements . . . . . . . . . . . . . .      3


Item 2.    Management's Discussion and Analysis of 
           Financial Condition and Results of 
           Operations . . . . . . . . . . . . . . . . . . .     21




PART II    OTHER INFORMATION


Item 1.    Legal Proceedings. . . . . . . . . . . . . . . .     26

Item 6.    Exhibits and Reports on Form 8-K . . . . . . . .     30



<PAGE>


<TABLE>
PART I.  FINANCIAL INFORMATION

     ITEM 1.  FINANCIAL STATEMENTS

                                         ARVIDA/JMB PARTNERS, L.P.
                                          (A LIMITED PARTNERSHIP)
                                         AND CONSOLIDATED VENTURES

                                        CONSOLIDATED BALANCE SHEETS

                                   MARCH 31, 1997 AND DECEMBER 31, 1996

                                                (UNAUDITED)

                                                  ASSETS
                                                  ------

<CAPTION>
                                                                            MARCH 31,      DECEMBER 31,
                                                                               1997           1996     
                                                                          -------------    ----------- 
<S>                                                                       <C>             <C>          
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .      $  9,090,242     53,635,737 
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . .        12,379,516     11,833,522 
Trade and other accounts receivable (net of allowance for doubtful 
  accounts of $260,151 at March 31, 1997 and $261,326 at 
  December 31, 1996). . . . . . . . . . . . . . . . . . . . . . . . .         4,848,821      3,582,995 
Mortgages receivable, net . . . . . . . . . . . . . . . . . . . . . .           896,774      1,269,460 
Real estate inventories . . . . . . . . . . . . . . . . . . . . . . .       183,841,053    174,638,454 
Property and equipment held for disposition or sale . . . . . . . . .        41,793,972     41,279,342 
Property and equipment, net . . . . . . . . . . . . . . . . . . . . .        37,526,092     38,094,102 
Investments in and advances to joint ventures, net. . . . . . . . . .         2,741,424      2,739,842 
Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . .         5,274,732      5,457,880 
Amounts due from affiliates . . . . . . . . . . . . . . . . . . . . .         1,057,309      1,003,732 
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . .         7,826,672      7,105,077 
                                                                           ------------   ------------ 

          Total assets. . . . . . . . . . . . . . . . . . . . . . . .      $307,276,607    340,640,143 
                                                                           ============   ============ 



<PAGE>


                                         ARVIDA/JMB PARTNERS, L.P.
                                          (A LIMITED PARTNERSHIP)
                                         AND CONSOLIDATED VENTURES

                                  CONSOLIDATED BALANCE SHEETS (CONTINUED)

(UNAUDITED)

                                LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
                                ------------------------------------------

                                                                            MARCH 31,      DECEMBER 31,
                                                                               1997           1996     
                                                                          -------------    ----------- 
Liabilities:
  Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . .      $ 18,235,832     21,532,400 
  Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        19,471,473     17,287,325 
  Accrued expenses and other liabilities. . . . . . . . . . . . . . .        14,702,693     15,324,815 
  Notes and mortgages payable, net. . . . . . . . . . . . . . . . . .        30,739,331     36,843,778 
                                                                           ------------   ------------ 
  Commitments and contingencies 

          Total liabilities . . . . . . . . . . . . . . . . . . . . .        83,149,329     90,988,318 
                                                                           ------------   ------------ 

Partners' capital accounts:
  General Partner and Associate Limited Partners:
    Capital contributions . . . . . . . . . . . . . . . . . . . . . .            20,000         20,000 
    Cumulative net income . . . . . . . . . . . . . . . . . . . . . .        36,842,002     35,750,061 
    Cumulative cash distributions . . . . . . . . . . . . . . . . . .       (35,839,402)   (34,492,285)
                                                                           ------------   ------------ 
                                                                              1,022,600      1,277,776 
                                                                           ------------   ------------ 
  Limited Partners:
    Capital contributions, net of offering costs. . . . . . . . . . .       364,841,815    364,841,815 
    Cumulative net income . . . . . . . . . . . . . . . . . . . . . .        35,057,643     36,071,642 
    Cumulative cash distributions . . . . . . . . . . . . . . . . . .      (176,794,780)  (152,539,408)
                                                                           ------------   ------------ 
                                                                            223,104,678    248,374,049 
                                                                           ------------   ------------ 
          Total partners' capital accounts. . . . . . . . . . . . . .       224,127,278    249,651,825 
                                                                           ------------   ------------ 

          Total liabilities and partners' capital . . . . . . . . . .      $307,276,607    340,640,143 
                                                                           ============   ============ 

<FN>
                                The accompanying notes are an integral part
                                of these consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
                                         ARVIDA/JMB PARTNERS, L.P.
                                   CONSOLIDATED STATEMENTS OF OPERATIONS

                                THREE MONTHS ENDED MARCH 31, 1997 AND 1996

                                                (UNAUDITED)


<CAPTION>
                                                                                1997            1996    
                                                                            ------------    ----------- 
<S>                                                                        <C>             <C>          
Revenues:
  Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 32,769,964     50,060,078 
  Homesites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2,175,179      3,112,000 
  Land and property . . . . . . . . . . . . . . . . . . . . . . . . . . . .      458,560     13,120,661 
  Operating properties. . . . . . . . . . . . . . . . . . . . . . . . . . .    9,201,038      8,317,018 
  Brokerage and other operations. . . . . . . . . . . . . . . . . . . . . .    5,460,779      5,992,715 
                                                                             -----------     ---------- 
        Total revenues. . . . . . . . . . . . . . . . . . . . . . . . . . .   50,065,520     80,602,472 
                                                                             -----------     ---------- 
Cost of revenues:
  Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   28,576,922     42,905,140 
  Homesites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1,276,919      2,240,638 
  Land and property . . . . . . . . . . . . . . . . . . . . . . . . . . . .      243,013     10,570,116 
  Operating properties. . . . . . . . . . . . . . . . . . . . . . . . . . .    7,400,630      7,207,347 
  Brokerage and other operations. . . . . . . . . . . . . . . . . . . . . .    5,331,916      5,821,513 
                                                                             -----------     ---------- 
        Total cost of revenues. . . . . . . . . . . . . . . . . . . . . . .   42,829,400     68,744,754 
                                                                             -----------     ---------- 
Gross operating profit. . . . . . . . . . . . . . . . . . . . . . . . . . .    7,236,120     11,857,718 
Selling, general and administrative expenses. . . . . . . . . . . . . . . .   (7,100,669)    (5,226,233)
                                                                             -----------     ---------- 
        Net operating income. . . . . . . . . . . . . . . . . . . . . . . .      135,451      6,631,485 

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      827,917        412,528 
Equity in earnings (losses) of 
  unconsolidated ventures . . . . . . . . . . . . . . . . . . . . . . . . .       47,141        (33,813)
Interest and real estate taxes, net . . . . . . . . . . . . . . . . . . . .     (932,567)      (949,174)
                                                                             -----------     ---------- 


<PAGE>


                                         ARVIDA/JMB PARTNERS, L.P.

                             CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED



                                                                                1997            1996    
                                                                            ------------    ----------- 

        Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    77,942      6,061,026 
                                                                             ===========     ========== 

        Net income (loss) per Limited 
          Partnership Interest. . . . . . . . . . . . . . . . . . . . . . .  $     (2.51)         13.68 
                                                                             ===========     ========== 

        Cash distributions per 
          Limited Partnership 
          Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $     60.04          25.85 
                                                                             ===========     ========== 




























<FN>
          The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
                                         ARVIDA/JMB PARTNERS, L.P.
                                          (A LIMITED PARTNERSHIP)
                                         AND CONSOLIDATED VENTURES

                                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                                THREE MONTHS ENDED MARCH 31, 1997 AND 1996

                                                (UNAUDITED)

<CAPTION>
                                                                                1997            1996    
                                                                            ------------    ----------- 
<S>                                                                        <C>             <C>          
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $     77,942      6,061,026 
Charges (credits) to net income not requiring (providing) cash:
  Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . .    1,129,407      1,411,896 
  Equity in (earnings) losses of unconsolidated ventures. . . . . . . . . .      (47,140)        33,813 
  Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . .          301         (1,478)
  Loss (gain) on disposition of property and equipment. . . . . . . . . . .        --             2,695 
Changes in:
  Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (545,994)       394,879 
  Trade and other accounts receivable . . . . . . . . . . . . . . . . . . .   (1,266,127)    (9,536,285)
  Real estate inventories:
    Additions to real estate inventories. . . . . . . . . . . . . . . . . .  (37,637,367)   (52,292,564)
    Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30,096,854     55,715,894 
    Capitalized interest. . . . . . . . . . . . . . . . . . . . . . . . . .     (634,529)    (1,478,115)
    Capitalized real estate taxes . . . . . . . . . . . . . . . . . . . . .   (1,027,557)      (927,926)
  Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . . . .      183,148        298,805 
  Amounts due from affiliates . . . . . . . . . . . . . . . . . . . . . . .      (53,577)        35,953 
  Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . .     (778,374)       (58,160)
  Accounts payable, accrued expenses and other liabilities. . . . . . . . .   (3,873,132)    (3,492,152)
  Deposits and unearned income. . . . . . . . . . . . . . . . . . . . . . .    2,184,148        256,260 
                                                                            ------------    ----------- 

          Net cash used in operating activities . . . . . . . . . . . . . .  (12,191,997)    (3,575,459)
                                                                            ------------    ----------- 


<PAGE>


                                         ARVIDA/JMB PARTNERS, L.P.
                                          (A LIMITED PARTNERSHIP)
                                         AND CONSOLIDATED VENTURES

                             CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)



                                                                                1997            1996    
                                                                            ------------    ----------- 
Cash flows from investing activities:
  Mortgages receivable. . . . . . . . . . . . . . . . . . . . . . . . . . .      372,686        (16,570)
  Acquisitions of property and equipment. . . . . . . . . . . . . . . . . .   (1,019,248)    (5,129,240)
  Proceeds from sales and disposals of property and equipment . . . . . . .        --             3,046 
  Joint venture distributions (contributions), net. . . . . . . . . . . . .        --            (3,277)
  Payments from (advances to) joint ventures. . . . . . . . . . . . . . . .        --         4,167,146 
  Proceeds from sale of joint venture interest. . . . . . . . . . . . . . .        --         6,111,440 
                                                                            ------------    ----------- 
          Net cash provided by (used in) investing activities . . . . . . .     (646,562)     5,132,545 
                                                                            ------------    ----------- 
Cash flows from financing activities:
  Proceeds from notes and mortgages payable . . . . . . . . . . . . . . . .      133,211     14,742,547 
  Payments of notes and mortgages payable . . . . . . . . . . . . . . . . .   (6,237,658)   (15,558,080)
  Distributions to General Partner and Associate Limited Partners . . . . .   (1,347,117)      (579,239)
  Distributions to Limited Partners . . . . . . . . . . . . . . . . . . . .  (24,255,372)   (10,444,416)
  Bank overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        --        (3,972,987)
                                                                            ------------    ----------- 
          Net cash used in financing activities . . . . . . . . . . . . . .  (31,706,936)   (15,812,175)
                                                                            ------------    ----------- 
Decrease in Cash and cash equivalents . . . . . . . . . . . . . . . . . . .  (44,545,495)   (14,255,089)

Cash and cash equivalents, beginning of year. . . . . . . . . . . . . . . .   53,635,737     20,171,289 
                                                                            ------------    ----------- 
Cash and cash equivalents, end of period. . . . . . . . . . . . . . . . . . $  9,090,242      5,916,200 
                                                                            ============    =========== 
Supplemental disclosure of cash flow information:
  Cash paid for mortgage and other interest, net of amounts capitalized . . $      --           112,888 
                                                                            ============    =========== 
  Non-cash investing and financing activities . . . . . . . . . . . . . . . $      --             --    
                                                                            ============    =========== 








<FN>
          The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


<PAGE>


                       ARVIDA/JMB PARTNERS, L.P.
                        (A LIMITED PARTNERSHIP)
                       AND CONSOLIDATED VENTURES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

                        MARCH 31, 1997 AND 1996

                              (UNAUDITED)

     Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1996,
which are included in the Partnership's 1996 Annual Report on Form 10-K
(File No. 0-16976) filed on March 31, 1997, as certain footnote disclosures
which would substantially duplicate those contained in such audited
financial statements have been omitted from this report.  Capitalized terms
used but not defined in this quarterly report have the same meanings as in
the Partnership's 1996 Annual Report.

GENERAL

     Capitalized Interest and Real Estate Taxes

     Interest, including the amortization of loan fees, of $634,529 and
$1,478,115 was incurred for the three months ended March 31, 1997 and 1996,
respectively, all of which was capitalized.  Interest payments, including
amounts capitalized, of $560,626 and $1,591,003 were made during the three
months ended March 31, 1997 and 1996, respectively.

     Real estate taxes of $1,958,124 and $1,877,100 were incurred for the
three months ended March 31, 1997 and 1996, respectively, of which
$1,025,557 and $927,926 were capitalized, respectively.  Real estate tax
payments of $112,643 and $202,171 were made during the three months ended
March 31, 1997 and 1996, respectively.  In addition, real estate tax
reimbursements totaling $244,706 and $165,682 were received from the
Partnership's escrow agent during the three months ended March 31, 1997 and
1996, respectively.  The preceding analysis of real estate taxes does not
include real estate taxes incurred or paid with respect to the Partner-
ship's club facilities and other operating properties as these taxes are
included in cost of revenues for operating properties. 

     Property and Equipment and Other Assets

     Depreciation expense of $1,072,628 and $1,326,740 was incurred for the
three months ended March 31, 1997 and 1996, respectively.  Amortization of
other assets, excluding loan fees, of $20,199 and $22,261 was incurred for
the three months ended March 31, 1997 and 1996, respectively.  Amortization
of loan fees, which is included in interest expense, of $36,580 and $62,895
was incurred for the three months ended March 31, 1997 and 1996,
respectively.

     Partnership Records

     During February 1997, the Partnership made a distribution for 1996 of
$24,240,000 to its Holders of Interests ($60.00 per Interest) and
$1,346,651 to the General Partner and Associate Limited Partners,
collectively.  In addition, during the first quarter of 1997, the
Partnership remitted each Holder's share of the 1996 North Carolina non-
resident withholding tax on behalf of each of the Holders of Interests. 
Such payments, which totaled $15,372 (approximately $.04 per Interest),
were deemed distributions to the Holders.  The Partnership also remitted
$466 to the North Carolina tax authorities during the first quarter of 1997
on behalf of the General Partners and Associate Limited Partners.  Such
payments were deemed distributions.  These distributions are the primary
cause for the decrease in Cash and cash equivalents at March 31, 1997 as
compared to December 31, 1996.



<PAGE>


     Reclassifications

     Certain reclassifications have been made to the 1996 financial
statements to conform to the 1997 presentation.

NOTES AND MORTGAGES PAYABLE

     At March 31, 1997, the Partnership's credit facility consists of a
term loan in the original amount of $85,252,520, a revolving line of credit
facility up to $20 million, an income property term loan in the original
amount of $18,233,326 and a $15 million letter of credit facility.  For the
three month period ended March 31, 1997, the effective interest rate for
the combined term loan, income property term loan and revolving line of
credit facility was approximately 8.9% per annum.

     Under the term loan agreement, the Partnership made scheduled
principal payments of $10 million in March 1994, February 1995 and February
1996 and $5 million principal payments in July 1995 and July 1996.  The
term loan agreement also provides for additional principal repayments based
upon a specified percentage of available cash flow and upon the sale of
certain assets.  During the year ended December 31, 1996, the Partnership
made such additional term loan payments totaling approximately $12.3
million.  In January 1997, the Partnership paid off the remaining principal
balance of $5,234,008 outstanding under the term loan.  Under the income
property term loan, principal payments of $0.1 million are required to be
paid monthly until maturity.  The terms of the Partnership's credit
facility require that upon satisfaction of the principal due under the term
loan, the additional term loan principal repayments described above will
now be applied to the principal outstanding under the income property term
loan.  Accordingly, the Partnership made such additional income property
term loan repayments totaling approximately $0.1 million during the three
months ended March 31, 1997.  The income property term loan and the
revolving line of credit were scheduled to mature in March 1996 and
December 1995, respectively.  During March 1996, the Partnership's lenders
reached an agreement with each other whereby one of the lenders purchased
the other's participating interest in the Partnership's credit facilities. 
In addition, during March 1996, the successor lender agreed to renew the
Partnership's revolving line of credit, income property term loan and
letter of credit facility through July 1997.  At March 31, 1997, the
balances outstanding on the revolving line of credit facility, the income
property term loan and the letter of credit facility are $0, $11,193,996
and $12,889,767, respectively.

     The Partnership currently anticipates that it will seek an extension
from its lender of its income property term loan upon maturity.  In
addition, the Partnership is currently in negotiations with Barnett Bank of
Broward County, N.A. ("Barnett") for a new credit facility.  During March
1997, the Partnership received a non-binding term sheet from Barnett for a
proposed $75 million term loan, a $20 million revolving line of credit and
a $5 million letter of credit facility (the "Barnett Financing").  Under
the term sheet, the Barnett Financing, if consummated, is expected to have
a term of four years with annual scheduled principal repayments of $12.5
million, as well as additional annual principal repayments based upon a
specified percentage of the Partnership's available cash.  The maximum
principal repayments, including the scheduled repayments, would not exceed
$18.75 million per annum.  The remaining outstanding balance on the Barnett
Financing would be due upon maturity.  Under the term sheet, the interest
rate on the Barnett Financing would be based, at the Partnership's option,
on the relevant LIBOR plus 2.25% per annum or Barnett's prime rate. 
Barnett will require the Partnership to have an interest rate swap or cap
in place for one-third of the projected outstanding balance of the term
loan.  It is expected that the Partnership would be required to pay a loan
fee of 1% of the total facility upon closing of the loan.  It is currently
anticipated that a portion of the proceeds from the Barnett Financing, if
consummated, would be used by the Partnership to make a distribution in the
amount of approximately $75 million, including a distribution of
approximately $175 per Interest to the Holders of Interests.  Consummation
of the Barnett Financing is subject to the negotiation and execution by the
parties of binding loan documents.  Such facility, if obtained, would, in


<PAGE>


part, replace the Partnership's existing revolving line of credit and
letter of credit facilities.  There can be no assurance that the Barnett
Financing will be consummated or, if consummated, that its terms will be
similar to those described above.  The proposed terms of the Barnett
Financing described above have been approved by a judge sitting on the
Circuit Court of Cook County, Illinois pursuant to the settlement order in
the Carlstrom action, as discussed in Commitments and Contingencies.

     During April 1996, the Partnership refinanced the loan on one of its
retail properties located in its Weston Community with a different lender.
The outstanding principal balance on such loan of approximately $8.0
million is included in Notes and mortgages payable at March 31, 1997.  In
addition, $3.0 million of subordinated debt attributable to the Cullasaja
Joint Venture is included in Notes and mortgages payable at March 31, 1997.

     The Partnership had a $24.0 million revolving construction line of
credit for the buildings and certain amenities within the Partnership's
condominium project on Longboat Key, Florida known as Arvida's Grand Bay. 
This line of credit bore interest at the lender's prime rate (8.50% at
March 31, 1997) plus 1/2% per annum, and was scheduled to mature in January
1997.  As of December 31, 1996, the Partnership had repaid the remaining
outstanding principal balance under this line of credit.  The Partnership
is currently in the process of negotiating a similar line of credit for one
of the remaining two buildings to be constructed within Arvida's Grand Bay.

     During January 1996, the Partnership executed a note for a $7.5
million construction loan for the construction and development of a second
retail shopping center located in its Weston Community.  This note
currently bears interest at the lender's prime rate (8.50% at March 31,
1997) plus 1/2% per annum, and matures in July 1997.  The Partnership may,
at its option, extend such loan upon its maturity.  The Partnership
currently anticipates that it will exercise this option.  At March 31,
1997, approximately $6.6 million was outstanding under this loan.  The
proceeds from such loan were the primary source of the funds required to
complete the shopping center.  Construction of the shopping center was
completed in November 1996.

INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

     During March 1996, the Partnership closed on the sale of its 20% joint
venture interest in Coto de Caza, including the related promissory note for
advances previously made to the joint venture, to unaffiliated third
parties for a cash sales price of $12 million.  This transaction is
reflected in Land and property revenues for the three months ended March
31, 1996 on the accompanying consolidated statements of operations and is
the primary cause for the decrease in Land and property revenues and cost
of revenues for the three months ended March 31, 1997 as compared to the
same period in 1996.

     On December 31, 1996, the Partnership purchased its joint venture
partner's 50% interest in the Arvida Boose Joint Venture for a purchase
price of approximately $1.8 million.  As a result of this transaction, the
Partnership changed from the equity method of accounting to the
consolidated method of accounting for the joint venture effective December
31, 1996.

TRANSACTIONS WITH AFFILIATES

     The Partnership, subject to certain limitations, may engage affiliates
of the General Partner for property management, insurance and certain other
administrative services to be performed in connection with the
administration of the Partnership and its assets.  The total of such costs
for the three months ended March 31, 1997 was approximately $37,600, all of
which was paid as of March 31, 1997.  The total of such costs for the three
months ended March 31, 1996 was approximately $17,800.  In addition, the


<PAGE>


General Partner and its affiliates are entitled to reimbursements for
salaries and salary-related costs relating to the administration of the
Partnership and the operation of the Partnership's properties.  Such costs
were approximately $131,700 and $24,700 for the three months ended March
31, 1997 and 1996, respectively, all of which were paid as of March 31,
1997.

     The Partnership receives reimbursements from or reimburses other
affiliates of the General Partner engaged in real estate activities for
certain general and administrative costs including, and without limitation,
salary and salary-related costs relating to work performed by employees of
the Partnership and certain out-of-pocket expenditures incurred on behalf
of such affiliates.  For the three month period ended March 31, 1997, the
amount of such costs incurred by the Partnership on behalf of these
affiliates totaled approximately $133,300.  At March 31, 1997, approxi-
mately $124,800 was owed to the Partnership, all of which was received as
of May 13, 1997.  For the three month period ended March 31, 1996, the
Partnership was entitled to reimbursements of approximately $71,400.

     Prior to June 1996, the Partnership and Arvida/JMB Partners, L.P.-II
(a publicly-held limited partnership affiliated with the General Partner)
each employed project related and administrative personnel who performed
services on behalf of both partnerships.  In addition, certain out-of-
pocket expenditures related to such services and other general and
administrative costs were incurred and charged to each partnership as
appropriate.  The Partnership receives reimbursements from Arvida/JMB
Partners, L.P.-II for these costs (including salary and salary-related
costs).  Subsequent to June 1996, Arvida/JMB Partners, L.P.-II no longer
employed any project-related or administrative personnel and incurred no
costs on behalf of the Partnership.  For the three month periods ended
March 31, 1997 and 1996, the Partnership was entitled to receive
approximately $31,100 and $589,200, respectively, from Arvida/JMB Partners,
L.P.-II.  At March 31, 1997, approximately $19,400 was owed to the
Partnership, of which approximately $11,100 was received as of May 13,
1997.  In addition, for the three month period ended March 31, 1996, the
Partnership was obligated to reimburse Arvida/JMB Partners, L.P.-II
approximately $68,300, all of which was paid as of March 31, 1997.

     Arvida Company ("Arvida"), pursuant to an agreement with the
Partnership, provides development, construction, management and other
personnel and services to the Partnership for all of its projects and
operations.  Pursuant to such agreement, the Partnership reimburses Arvida
for all of its salary and salary-related costs incurred in connection with
work performed on behalf of the Partnership, subject to certain
limitations.  The total of such costs for the three month periods ended
March 31, 1997 and 1996 were approximately $1,149,000 and $2,681,000,
respectively, all of which was paid as of March 31, 1997.  In addition,
Arvida owed the Partnership approximately $13,800 at March 31, 1997
resulting from an excess reimbursement, all of which was received as of May
13, 1997.

     The Partnership pays for certain general and administrative costs on
behalf of its equity clubs, homeowners associations and maintenance
associations (including salary and salary-related costs).  The Partnership
receives reimbursements from these entities for such costs.  For the three
month periods ended March 31, 1997 and 1996, the Partnership was entitled
to receive approximately $1,606,800 and $1,250,500, respectively, from
these entities.  At March 31, 1997, approximately $37,300 was owed to the
Partnership, of which approximately $24,700 was received as of May 13,
1997.  In addition, the Partnership owes its equity clubs for certain costs
incurred by the clubs which are obligations of the Partnership.  For the
three month periods ended March 31, 1997 and 1996, the Partnership was
obligated to reimburse its equity clubs approximately $6,200 and $6,800,
respectively.  At March 31, 1997, approximately $13,600 was unpaid
(including amounts owed from previous periods), of which approximately
$1,000 was paid as of May 13, 1997.



<PAGE>


     The Partnership, pursuant to an agreement, provides management and
other personnel and services to one of its equity clubs.  Pursuant to this
agreement, the Partnership is entitled to receive a management fee for the
services provided to the club.  For the three months ended March 31, 1997
and 1996, the Partnership was entitled to receive approximately $129,300
and $126,300.  At March 31, 1997, approximately $229,300 was unpaid
(including amounts owed from the previous year), none of which was received
as of May 13, 1997.

     The Partnership also funds certain capital expenditures and operating
deficits of its equity clubs, as well as operating deficits of its
homeowners associations, as required or deemed necessary.  The funding of
operating deficits is expensed by the Partnership.  Funding of capital
expenditures is expected to be reimbursed from future cash flows generated
by the equity clubs.  At March 31, 1997, the Partnership was owed
approximately $609,000 for such reimbursements, none of which was received
as of May 13, 1997.

     The Partnership periodically incurs salary and salary-related costs on
behalf of an affiliate of the General Partner of the Partnership.  The
Partnership was entitled to receive approximately $239,700 and $0 for such
costs for the three months ended March 31, 1997 and 1996, respectively, of
which approximately $37,300 was owed to the Partnership at March 31, 1997,
none of which was received as of May 13, 1997.

     In accordance with the Partnership Agreement, the General Partner and
Associate Limited Partners have deferred a portion of their distributions
of net cash flow from the Partnership totaling approximately $2,942,970 as
of March 31, 1997.  This amount does not bear interest and is expected to
be paid in future periods subject to certain restrictions contained in the
Partnership's credit facility agreement.

     All amounts receivable from or payable to the General Partner or its
affiliates do not bear interest and are expected to be paid in future
periods.

COMMITMENTS AND CONTINGENCIES

     As security for performance of certain development obligations, the
Partnership is contingently liable under standby letters of credit and
performance bonds for approximately $5,077,600 and $7,812,200, respec-
tively, at March 31, 1997.  In addition, certain joint ventures in which
the Partnership holds an interest are also contingently liable under
standby letters of credit and bonds for approximately $1,614,900 and
$1,029,600 at March 31, 1997.

     On June 24, 1996, a lawsuit entitled Irvin Weiss v. Arvida/JMB
Managers, Inc., Neil G. Bluhm, Lehman Brothers Inc. and Arvida/JMB
Partners, L.P. ("Weiss action") was filed in the County Department,
Chancery Division of the Circuit Court of Cook County, Illinois.  This
lawsuit is a purported class action lawsuit on behalf of Irvin Weiss and
all other Holders of Interests to bar (i) the General Partner and Mr. Bluhm
from taking any action to chill tender offers from non-affiliates, (ii) the
officers, directors and shareholders of the defendants from participating
in any special committee on tender offers, (iii) Lehman Brothers Inc. from
advising any such special committee, and (iv) defendants and their
affiliates from making tender offers.  On September 25, 1996, the claims of
Irvin Weiss were voluntarily dismissed.

     A second complaint was filed in the County Department, Chancery
Division of the Circuit Court of Cook County, Illinois on July 1, 1996, and
most recently amended on November 27, 1996, in connection with a court
ruling dismissing certain allegations, in the matter of Jack H. Carlstrom,
Lynne M. Carlstrom, Woneta Bellevue, Roger Lathbury and Begona Lathbury v.
Arvida/JMB Managers, Inc., Neil G. Bluhm, Ira J. Schulman, Burton E.
Glazov, Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, Judd D. Malkin,


<PAGE>


Lehman Brothers Inc., Starwood Capital Group I, L.P., Starwood/Florida
Funding, L.L.C., Starwood Opportunity Fund IV, L.P., BSS Capital II,
L.L.C., Barry Sternlicht, Walton Street Capital Acquisition Co. III and
Whitehall Street Real Estate Limited Partnership VII, and Arvida/JMB
Partners, L.P., nominal defendant ("Carlstrom action").  This complaint, as
amended, is brought derivatively on behalf of the Partnership and
individually on behalf of Jack H. Carlstrom, Lynne M. Carlstrom, Woneta
Bellevue, Roger Lathbury and Begona Lathbury and a purported class of all
other Holders of Interests (excluding the defendants, members of their
immediate families, affiliates, subsidiaries, agents, partners, members of
their current or former management or that of their affiliates, and any
participant in the alleged conspiracy).  The Carlstrom action challenged,
among other things, the Partnership's proposed $160 million term loan from
Starwood/Florida Funding, L.L.C. ("Starwood financing") and seeks, among
other things, to bar defendants from taking any action to chill tender
offers or offers for debt financing from non-affiliates; to cause
defendants to put the issue of the Starwood financing to a vote of
unitholders; to bar defendants from completing the Starwood financing; to
disband the Special Committee (the "Special Committee" of the Board of
Directors of Arvida/JMB Managers, Inc.) and allow the Holders of Interests
to vote on an "independent slate" of directors to compose a new special
committee; and to cause the Partnership and director defendants to auction
the Partnership.  The complaint, as amended, alleges, among other things,
that the General Partner breached its fiduciary duties owed plaintiffs and
members of the purported class by failing to negotiate for the financing
with other entities and entering into the Starwood financing in order to
entrench itself and maintain its control over the Partnership.  The
complaint, as amended, also alleges that the terms of the Starwood
financing are burdensome to the Partnership and allegedly will cause a
waste of the Partnership's assets.  The Carlstrom action has been
consolidated with the Weiss action and is brought as a four-count complaint
for breach of fiduciary duty on behalf of the class, breach of fiduciary
duty on behalf of the Partnership, conspiracy and collusion to breach
fiduciary duties on behalf of the class and the Partnership, and for an
injunction on behalf of the class and the Partnership.  In addition to the
relief described above, plaintiffs in the complaint, as amended, on behalf
of themselves and members of the purported class seek damages in a sum to
be determined at trial, attorneys' fees and costs, and such other relief as
the Court may deem just and proper.  On December 13, 1996, the Court
granted the plaintiffs' motion for a preliminary injunction to stop the
Starwood financing until a hearing on a permanent injunction.  The
Partnership, its General Partner, and members of the Special Committee have
appealed the order granting the preliminary injunction.  The appeal is
pending in the Appellate Court of Illinois, First Judicial District, Case
No. 97-0093.  In the appeal, the Partnership, its General Partner, and
members of the Special Committee, among other things, contend that the
wrong legal standard was applied by the trial court in the hearing on
plaintiffs' motion for preliminary injunction in requiring the Partnership
to prove the fairness of the Starwood financing.  In addition, and
alternatively, the Partnership contends that the adoption of the Starwood
financing, which an independent investment banker opined was commercially
reasonable and fair, satisfied the legal standard applied by the Court. 
The parties to the Carlstrom action engaged in mediation discussions
supervised by the Court which began on March 5, 1997.  The mediation effort
has resulted in a stipulation of settlement, which was preliminarily
approved by the trial court in a settlement hearing order dated April 1,
1997, as being fair, reasonable, adequate, and in the best interests of the
plaintiffs,  Holders of Interests and the Partnership.  The stipulation of
settlement provides, among other things:  (i) that the General Partner will
be able to pursue the Barnett Financing, as previously defined, for the
purposes of making a distribution and replacing certain of the
Partnership's current credit facilities; (ii) that the Partnership will not
pursue the Starwood financing; (iii) that the General Partner will choose
the option set forth in Section 5.5(J)(i)(c) of the Partnership Agreement
(i.e., to commence a liquidation phase on October 31, 1997, in which all of
the Partnership's remaining assets will be sold or disposed of by October
31, 2002; (iv) that, if the settlement is finally approved by the trial
court, the decision to choose the option set forth in Section 5.5(J)(i)(c)


<PAGE>


of the Partnership Agreement will be binding upon the Holders of Interests
and the General Partner, its affiliates, and any subsequent general
partner, whether or not affiliated with the General Partner; (v) that the
claims set forth in the Carlstrom action will be released; (vi) that the
Illinois appeal will be dismissed; and (vii) that the General Partner
and/or its affiliates will defer a portion of the proceeds from the Barnett
Financing otherwise distributable to them (subject to the right of the
General Partner and/or such affiliates to receive such deferred amount
after the Holders of Interests have received a specified amount of
distributions from the Partnership after July 1, 1996) and such deferred
distribution amount will be used to pay a portion of the legal fees and
expenses in the Carlstrom action.  In the preliminary settlement hearing
order, the trial court also vacated the preliminary injunction ruling,
established a procedure for notifying Holders of Interests of their rights
in connection with the settlement, and set the matter for a final hearing. 
On April 30, 1997, the court approved the plaintiff's application for
attorneys' fees and expenses in the approximate amount of $1.8 million,
which amount was mediated between the parties in a court supervised
mediation.  On May 13, 1997, a final hearing on the terms of the settlement
was held.  At the conclusion of the hearing, the trial court, among other
things, approved the settlement as fair, reasonable and adequate, and in
the best interests of the plaintiffs, Holders of Interests, and the
Partnership; ordered that the settlement be consummated by the parties in
accordance with its terms and conditions and the terms and conditions of
the stipulation of settlement; dismissed the action on the merits and with
prejudice; reserved jurisdiction over all matters relating to the
consummation and enforcement of the stipulation of settlement and the
settlement, and without limiting the generality of the foregoing, to the
enforcement on any replacement general partner of the commitment of the
General Partner in October 1997 to choose the option set forth in Section
5.5(J)(i)(c) of the Partnership Agreement; and permanently enjoined and
barred the Partnership, plaintiffs, and Holders of Interests from
instituting, commencing, asserting, prosecuting, or continuing any of the
released claims against any of the defendants in any jurisdiction.  While
the trial court considered any and all objections to the settlement in
entering the order, there is no assurance that an appeal from or in
connection with the final hearing order will not be taken.  The
accompanying consolidated financial statements reflect an accrual of
approximately $1.8 million for the plaintiffs attorneys' fees and expenses
to be paid by the Partnership as a result of the approved settlement.

     On or about September 27, 1996, a lawsuit entitled Vanderbilt Income
and Growth Associates, L.L.C. and Raleigh Capital Associates L.P.,
individually and derivatively on behalf of Arvida/JMB Partners, L.P. V.
Arvida/JMB Managers, Inc., Judd D. Malkin, Neil G. Bluhm, Burton E. Glazov,
Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, BSS Capital II, L.L.C.,
Starwood Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund, IV, L.P. and Barry Sternlicht, Defendants, and Arvida/JMB
Partners, L.P., nominal defendant, was filed in the Court of Chancery of
the State of Delaware in and for New Castle County, Civil Action No. 15238
("Raleigh action").  The Raleigh action was filed as a verified complaint
for declaratory and injunctive relief.  Plaintiffs claimed that the
defendants in entering into the financing commitment letter for the
Starwood term financing violated, or aided and abetted, or participated in
the violation of, fiduciary duties owned to the Partnership and the Holders
of Interests, and put their personal interests ahead of the interests of
the Partnership and the Holders of Interests.  In the first claim for
relief, plaintiffs sought a declaratory judgment that the terms of the
financing be declared null, void and unenforceable.  In the second claim
for relief, plaintiffs asserted a claim derivatively on behalf of the
Partnership alleging, among other things, that the financing commitment
letter was not the product of a valid exercise of business judgment.  In
addition to relief described above, plaintiffs sought to preliminarily and


<PAGE>


permanently enjoin any actions in furtherance of the financing commitment
letter, an award of compensatory damages, interest, costs and
disbursements, including reasonable attorneys' and experts' fees and such
other relief as the Court might deem just and proper.  The General Partner
and the Partnership filed a motion to dismiss the Raleigh action which was
granted on November 7, 1996.  In granting the motion, the Court held that
Raleigh was not a Limited Partner and did not have standing to file the
derivative claims.  The Court further determined that Raleigh did not have
the right to vote.  Plaintiffs asked the Court to reconsider its ruling,
but the Court denied the request to change its ruling.

     Plaintiffs appealed the November 7, 1996 dismissal order.  On December
12, 1996, the Delaware Supreme Court reversed the trial court order on a
procedural ground.  The Delaware Supreme Court concluded that the trial
court should not have considered matters outside of the pleadings in
dismissing the Raleigh action without providing the plaintiffs some limited
discovery.  Accordingly, the Delaware Supreme Court remanded the case back
to the trial court for further proceedings.

     On December 16, 1996, the Partnership filed a counterclaim against
Vanderbilt Income and Growth Associates, L.L.C. and Raleigh Capital
Associates L.P. ("Raleigh"), seeking a declaratory judgment that Raleigh
had no right to vote on Partnership matters.  On January 28, 1997, the
trial court granted plaintiffs leave to dismiss their own complaint
concerning the Starwood financing, leaving the Partnership's counterclaim
pending.

     By letter dated January 10, 1997, Raleigh requested admission as a
Substituted Limited Partner of the Partnership.  The Partnership referred
the request to the Special Committee.  On February 11, 1997, the Special
Committee denied the request.  Thereafter, the Partnership supplemented its
counterclaim, as amended, and sought a court declaration that Raleigh is
not entitled to be admitted as a Substituted Limited Partner.  On February
20, 1997, Raleigh filed a reply and counterclaim against the Partnership,
the General Partner, and the Special Committee.  The reply counterclaim
sought, among other things, a declaration that Raleigh has voting rights in
the Partnership and that defendants' breached their fiduciary duties by
failing to admit Raleigh as a Substituted Limited Partner.  The reply
counterclaim also sought to enjoin the Partnership, the General Partner,
and the Special Committee from refusing to admit Raleigh as a Substituted
Limited Partner, an award of damages, interest, fees, and costs.

     On or about February 28, 1997, Gladys Beasley, individually and as a
representative of a class of persons similarly situated, filed an
intervenor complaint for declaratory relief against the Partnership.  In
the intervenor complaint, plaintiff sought a declaration that purchasers
who obtained Interests in the Partnership in the public offering and
subsequent Holders of Interests in the Partnership by assignment from
original Holders have the same voting rights in the Partnership, among
other things, to remove and replace the General Partner.  In addition,
plaintiff Gladys Beasley, sought an order adjudging and decreeing that the
intervenor action was properly maintained as a class, an award of her costs
and expenses of the litigation, and such other relief as the Court deemed
appropriate.  The trial of all claims and the Raleigh action was held on
April 7 through April 9, 1997.  No decision has been rendered to date.

     The Partnership was named a defendant in a number of homeowner
lawsuits, certain of which purported to be class actions, that allegedly in
part arose out of or related to Hurricane Andrew, which on August 24, 1992
resulted in damage to a former community development known as Country Walk.

The homeowner lawsuits alleged, among other things, that the damage
suffered by the plaintiffs' homes and/or condominiums within Country Walk
was beyond what could have been reasonably expected from the hurricane
and/or was a result of the defendants' alleged defective design,
construction, inspection and/or other improper conduct in connection with
the development, construction and sales of such homes and condominiums,
including alleged building code violations.  The various plaintiffs sought


<PAGE>


varying and, in some cases, unspecified amounts of compensatory damages and
other relief.  In certain of the lawsuits injunctive relief and/or punitive
damages were sought.

     Several of these lawsuits alleged that the Partnership was liable,
among other reasons, as a result of its own alleged acts of misconduct or
as a result of the Partnership's alleged assumption of Arvida Corporation's
liabilities in connection with the Partnership's purchase of Arvida
Corporation's assets from Disney in 1987, which included certain assets
related to the Country Walk development.  Pursuant to the agreement to
purchase such assets, the Partnership obtained indemnification by Disney
for certain liabilities relating to facts or circumstances arising or
occurring prior to the closing of the Partnership's purchase of the assets.

Over 80% of the Arvida-built homes in Country Walk were built prior to the
Partnership's ownership of the Community.  Where appropriate, the
Partnership has tendered or will tender each of the above-described
lawsuits to Disney for defense and indemnification in whole or in part
pursuant to the Partnership's indemnification rights.  Where appropriate,
the Partnership has also tendered these lawsuits to its various insurance
carriers for defense and coverage.  The Partnership is unable to determine
at this time to what extent damages in these lawsuits, if any, against the
Partnership, as well as the Partnership's cost of investigating and
defending the lawsuits, will ultimately be recoverable by the Partnership
either pursuant to its rights of indemnification by Disney or under
contracts of insurance.

     One of the Partnership's insurance carriers has been funding
settlements of various litigation related to Hurricane Andrew.  In some,
but not all, instances, the insurance carrier has provided the Partnership
with written reservation of rights letters.  The aggregate amount of the
settlements funded to date by this carrier is approximately $8.0 million. 
The insurance carrier that funded these settlements pursuant to certain
reservations of rights has stated its position that it has done so pursuant
to various non-waiver agreements.  The carrier's position was that these
non-waiver agreements permitted the carrier to fund settlements without
barring the carrier from raising insurance coverage issues or waiving such
coverage issues.  On May 23, 1995, the insurance carrier rescinded the
various non-waiver agreements currently in effect regarding the remainder
of the Hurricane Andrew litigation, allegedly without waiving any future
coverage defenses, conditions, limitations, or rights.  For this and other
reasons, the extent to which the insurance carrier may recover any of these
proceeds from the Partnership is uncertain.  Therefore, the accompanying
consolidated financial statements do not reflect any accruals related to
this matter.

     Currently, the Partnership is involved in two subrogation lawsuits. 
On April 19, 1993, a subrogation claim entitled Village Homes at Country
Walk Master Maintenance Association, Inc. v. Arvida Corporation et al., was
filed in the 11th Judicial Circuit for Dade County.  Plaintiffs filed this
suit for the use and benefit of American Reliance Insurance Company
("American Reliance").  In this suit, as amended, plaintiffs seek to
recover damages and pre- and post-judgment interest in connection with
$10,873,000 American Reliance has allegedly paid, plus amounts it may have
to pay in the future, to the condominium association at Country Walk in the
wake of Hurricane Andrew.  Disney is also a defendant in this suit.  The
Partnership believes that the amount of this claim that allegedly relates
to units it built and sold is approximately $3,600,000.  Plaintiffs also
seek a declaratory judgment seeking to hold the Partnership and other
defendants responsible for amounts American Reliance must pay in the future
to its insured as additional damages beyond the $10,873,000 previously
paid.  The Partnership has filed motions directed to the complaint, as
amended, and the litigation is in the discovery stage.  The Partnership
intends to vigorously defend itself.  On or about May 10, 1996, a
subrogation claim entitled Juarez et al. v. Arvida Corporation et al. was
filed in the Circuit Court of the Eleventh Judicial Circuit in and for Dade


<PAGE>


County.  Plaintiffs filed this suit for the use and benefit of American
Reliance.  In this suit, plaintiffs seek to recover damages, pre-and post-
judgment interest, costs and any other relief the Court may deem just and
proper in connection with $3,200,000 American Reliance allegedly paid on
specified claims at Country Walk in the wake of Hurricane Andrew.  Disney
is also a defendant in this suit.  The Partnership is advised that the
amount of this claim that allegedly relates to units it sold is
approximately $350,000.  The Partnership intends to defend itself
vigorously in this matter.  The Partnership was also involved in a 
subrogation action brought by the Insurance Company of North America
("INA") arising out of a claim that INA allegedly paid on a single home in
Country Walk.  The Partnership has settled this claim for approximately
$45,600 with the settlement being funded by the Partnership's insurance
carrier.  The Metropolitan Property and Casualty Company ("Metropolitan")
has advised the Partnership of its intent to file a subrogation action
allegedly in connection with an unspecified number of Arvida-built homes.
Currently, Metropolitan has advised the Partnership of three claims,
totalling approximately $505,000.  The Partnership could be named in other
subrogation actions, and in such event, the Partnership intends to
vigorously defend itself in such actions.

     The Partnership has been advised by Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") that various investors have sought to
compel Merrill Lynch to arbitrate claims brought by certain investors of
the Partnership representing approximately 5% of the total of approximately
404,000 Interests outstanding.  Merrill Lynch has asked the Partnership and
its General Partner to confirm an obligation of the Partnership and its
General Partner to indemnify Merrill Lynch in these claims against all
loss, liability, claim, damage and expense, including without limitation
attorneys' fees and expenses, under the terms of a certain Agency Agreement
dated September 15, 1987 ("Agency Agreement") with the Partnership relating
to the sale of Interests through Merrill Lynch on behalf of the
Partnership.  These claimants have sought and are seeking to arbitrate
claims involving unspecified damages against Merrill Lynch based on Merrill
Lynch's alleged violation of applicable state and/or federal securities
laws and alleged violations of the rules of the National Association of
Securities Dealers, Inc., together with pendent state law claims.  The
Partnership believes that Merrill Lynch has resolved some of these claims
through litigation and otherwise, and that Merrill Lynch is defending other
claims.  The Agency Agreement generally provides that the Partnership and
its General Partner shall indemnify Merrill Lynch against losses occasioned
by any actual or alleged misstatements or omissions of material facts in
the Partnership's offering materials used in connection with the sale of
Interests and suffered by Merrill Lynch in performing its duties under the
Agency Agreement, under certain specified conditions.  The Agency Agreement
also generally provides, under certain conditions, that Merrill Lynch shall
indemnify the Partnership and its General Partner for losses suffered by
the Partnership and occasioned by certain specified conduct by Merrill
Lynch in the course of Merrill Lynch's solicitation of subscriptions for,
and sale of, Interests.  The Partnership is unable to determine the
ultimate investment of investors who have filed arbitration claims as to
which Merrill Lynch might seek indemnification in the future.  At this
time, and based upon the information presently available about the
arbitration statements of claims filed by some of these investors, the
Partnership and its General Partner believe that they have meritorious
defenses to demands for indemnification made by Merrill Lynch and intend to
vigorously pursue such defenses.  Although there can be no assurance
regarding the outcome of the claims for indemnification, at this time,
based on information presently available about such arbitration statements
of claims, the Partnership and its General Partner do not believe that the
demands for indemnification by Merrill Lynch will have a material adverse
effect on the financial condition of the Partnership.



<PAGE>


     On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, and amended on or about February 20,
1996, entitled Council of Villages, Inc. et al v. Arvida/JMB Partners,
Arvida/JMB Managers, Inc., Arvida/JMB Partners, Ltd., Broken Sound Club,
Inc., and Country Club Maintenance Association, Inc.  The multi-count
complaint, as amended, is brought as a class action, and individually, on
behalf of various residents of the Broken Sound Community, and alleges that
defendants engaged in various acts of misconduct in, among other things,
the establishment, operation, management and marketing of the Broken Sound
golf course and recreational facilities, as well as the alleged improper
failure to turn over such facilities to the Broken Sound homeowners on a
timely basis.  Plaintiffs seek, through various theories, including but not
limited to breach of ordinance, breach of fiduciary duty, fraud, unjust
enrichment and civil theft, damages in excess of $45 million, the
appointment of a receiver for the Broken Sound Club, other unspecified
compensatory damages, the right to seek punitive damages, treble damages,
prejudgment interest, attorneys' fees and costs.  The Partnership believes
that the lawsuit is without merit and intends to vigorously defend itself
in this matter.

     On or about July 30, 1996, Savoy v. Arvida/JMB Partners, Arvida/JMB
Managers, Inc., Arvida/JMB Partners, Ltd., and Broken Sound Club, Inc. was
filed against the Partnership and others in the Circuit Court of the 15th
Judicial Circuit, in and for Palm Beach County, Florida.  The lawsuit is
filed as a three-count complaint for dissolution of the Broken Sound Club,
Inc. ("Club"), and seeks, among other things, the appointment of a
custodian or receiver for the Club, a determination that certain acts be
deemed wrongful, the return to the Club of in excess of $2.5 million in
alleged "operating profits", an injunction against the charging of certain
dues, an injunction requiring the Club to produce certain financial
statements, and such other relief as the Court deems just, fair and proper.

The Partnership believes the lawsuit is without merit and intends to
vigorously defend itself.

     The Partnership owns a 50% joint venture interest in 31 commercial/
industrial acres in Pompano Beach, Florida, which is encumbered by a
mortgage loan in the principal amount of approximately $4 million at March
31, 1997.  During April 1992, as a result of the Partnership's previous
determination that the development of the land was no longer economically
profitable, the Partnership and its joint venture partner each tendered
payment in the amount of approximately $3.1 million to the lender for their
respective shares of the guarantee payment required under the loan
agreement and certain other holding costs, the majority of which reduced
the outstanding mortgage loan to its current balance.  The venture also
intended at that time to convey title to the property to the lender;
however, such conveyance is pending until resolution of certain general
development obligations of the venture as well as certain environmental
issues.  The Partnership had been negotiating with the lender regarding the
scope of the development work required to be done.   Negotiations with the
lender were unsuccessful, and the lender has filed a lawsuit with the
Broward County Circuit Court in which the lender asserts, among other
things, that the mortgage loan is with recourse to the joint venture
partners as a result of the partners' failure to perform in accordance with
the terms of the loan agreement.  The lender is demanding payment of the
outstanding loan balance plus interest thereon.  The Partnership believes
this claim is without merit and is vigorously defending the lawsuit.  With
respect to the environmental issues, the previous owner remains obligated
to undertake the clean-up pursuant to, among other things, a surviving
obligation under the purchase and sale agreement.  The clean-up began in
July 1994, and the first phase of the remedial action plan was completed in
October 1994.  Further action plans are now being discussed with state
environmental officials.  If the previous owner is unable to fulfill all
its obligations as they relate to this environmental issue, the venture and
ultimately the Partnership may be obligated for such costs.  Should this
occur, the Partnership does not anticipate the cost of this clean-up to be
material to its operations.



<PAGE>


     The Partnership is also a defendant in several actions brought against
it arising in the normal course of business.  It is the belief of the
General Partner, based on knowledge of facts and advice of counsel, that
the claims made against the Partnership in such actions will not result in
any material adverse effect on the Partnership's consolidated financial
position or results of operations.

     The Partnership may be responsible for funding certain other ancillary
activities for related entities in the ordinary course of business which
the Partnership does not currently believe will have any material adverse
effect on its consolidated financial position or results of operations.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     The Partnership adopted the Financial Accounting Standard's Board's
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of", effective January 1, 1995.  In
accordance with Statement No. 121, the Partnership has discontinued
recording depreciation on assets held for disposal.  The combined results
of operations for the Partnership's assets held for disposal totaled
approximately $1.8 million and $1.2 million for the three months ended
March 31, 1997 and 1996, respectively, and are included in operating
properties revenues and cost of revenues on the accompanying consolidated
statements of operations.  The Partnership requires no impairment losses or
other adjustments to be recorded as of March 31, 1997 as a result of the
application of this statement.


ADJUSTMENTS

     In the opinion of the General Partner, all adjustments (consisting
solely of normal recurring adjustments) necessary for a fair presentation
have been made to the accompanying consolidated financial statements as of
March 31, 1997 and December 31, 1996 and for the three months ended March
31, 1997 and 1996.





<PAGE>


PART I.  FINANCIAL INFORMATION

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Reference is made to the notes to the accompanying consolidated
financial statements ("Notes") contained in this report for additional
information concerning certain of the Partnership's investments.

     At March 31, 1997 and December 31, 1996, the Partnership had cash and
cash equivalents of approximately $8,965,000 and $53,636,000, respectively.

The decrease in Cash and cash equivalents at March 31, 1997 as compared to
December 31, 1995 is due primarily to distributions to partners and Holders
of Interests of approximately $25.6 million made in February 1997, and the
payoff of the outstanding balance of $5,234,008 outstanding under the
Partnership's term loan in January 1997.

     The Partnership's revolving line of credit, income property term loan
and letter of credit agreement are scheduled to mature in July 1997.  The
Partnership currently anticipates that it will seek an extension from its
lender of its income property term loan upon maturity.  In addition, the
Partnership is currently in negotiations with Barnett for a new credit
facility.  During March 1997, the Partnership received a non-binding term
sheet from Barnett for a proposed $75 million term loan, a $20 million
revolving line of credit and a $5 million letter of credit facility.  Under
the term sheet, the Barnett Financing, if consummated, is expected to have
a term of four years with annual scheduled principal repayments of $12.5
million, as well as additional annual principal repayments based upon a
specified percentage of the Partnership's available cash.  The maximum
principal repayments, including the scheduled repayments, would not exceed
$18.75 million per annum.  The remaining outstanding balance on the Barnett
Financing would be due upon maturity.  Under the term sheet, the interest
rate on the Barnett Financing would be based, at the Partnership's option,
on the relevant LIBOR plus 2.25% per annum or Barnett's prime rate. 
Barnett will require the Partnership to have an interest rate swap or cap
in place for one-third of the projected outstanding balance of the term
loan.  It is expected that the Partnership would be required to pay a loan
fee of 1% of the total facility upon closing of the loan.  It is currently
anticipated that a portion of the proceeds from the Barnett Financing, if
consummated, would be used by the Partnership to make a distribution in the
amount of approximately $75 million, including a distribution of
approximately $175 per Interest to the Holders of Interests.  Consummation
of the Barnett Financing is subject to the negotiation and execution by the
parties of binding loan documents.  Such facility, if obtained, would, in
part, replace the Partnership's existing revolving line of credit and
letter of credit facilities.  There can be no assurance that the Barnett
Financing will be consummated or, if consummated, that its terms will be
similar to those described above.  The proposed terms of the Barnett
Financing described above have been approved by a judge sitting on the
Circuit Court of Cook County, Illinois pursuant to the settlement order in
the Carlstrom action, as discussed in detail in Item 1.  of Part II - Legal
Proceedings.

     As further discussed in Item 1. of Part II - Legal Proceedings, on May
13, 1997, a final hearing on the terms of the settlement of the Carlstrom
action was held.  At the conclusion of the hearing, the trial court, among
other things, approved the settlement as fair, reasonable and adequate, and
in the best interests of the plaintiffs, Holders of Interests and the
Partnership.  In accordance with the terms of this settlement, the General
Partner will choose the option set forth in Section 5.5(J)(i)(c) of the
Partnership Agreement (i.e. to commence a liquidation phase on October 31,
1997, in which all of the Partnership's remaining assets will be sold or
disposed of by October 31, 2002).



<PAGE>


     During June and July of 1996, the Holders of Interests received
several unsolicited offers to purchase their Interests in the Partnership. 
The General Partner of the Partnership established a special committee (the
"Special Committee") to review such offers and make a recommendation to the
Holders of Interests with respect to the offers.  In addition, the
Partnership engaged Lehman Brothers Inc. ("Lehman") as a financial advisor
to assist the Special Committee in evaluating and responding to the offers.

Lehman was asked to render its estimate of the present discounted value
("Estimated Liquidation Value") of an Interest based on the assumption that
the Partnership commences an orderly liquidation in October 1997 and
completes that liquidation by October 2002.  Lehman arrived at an Estimated
Liquidation Value as of July 2, 1996 ranging from $565 to $610 per
Interest.  This Estimated Liquidation Value relied upon the Partnership's
estimate of the gross cash distributions that a Holder of Interests would
receive through the assumed liquidation period, discounted to reflect the
present value of such distributions.  Certain assumptions and other
factors, including risk factors, that should be considered when analyzing
the projected budgets which are the basis of such estimate of gross
distributions can be found in the Partnership's Schedule 14D-9 dated July
3, 1996, as amended, which was filed with the Securities and Exchange
Commission.  Reference to such Schedule 14D-9 is hereby made for a
discussion of such assumptions and other factors.

     Based on its analysis and its consultation with its advisors, the
Special Committee determined that, with respect to the Holders of Interests
who have the expectation of retaining their Interests through an
anticipated orderly liquidation of the Partnership's assets by October 2002
and who have no current or anticipated need for liquidity, these offers
were inadequate and not in the best interests of such Holders of Interests.

The Special Committee recommended that such Holders reject these offers and
not tender their Interests pursuant to these offers.  With respect to all
other Holders of Interests, the Special Committee expressed no opinion and
remained neutral with respect to these offers.

     One offer for Interests in the Partnership was made by Raleigh Capital
Associates L.P. ("Raleigh") commencing in June 1996.  Raleigh's offer was
for up to 185,000 Interests, which represents approximately 46% of the
outstanding Interests.  Raleigh's offer had a final price of $461 per
Interest and expired on August 1, 1996.  Raleigh acquired a total of 79,696
Interests pursuant to such offer, which represents approximately 19.7% of
the total outstanding Interests.

     Lehman updated its Estimated Liquidation Value as of October 1, 1996
(the "October Estimated Liquidation Value").  In arriving at the Revised
Estimated Liquidation Value, Lehman relied upon the Partnership's estimate
of the gross cash distributions that the Holders would receive through the
assumed liquidation period.  These estimated gross distributions were then
discounted to reflect the present value of such distributions as of October
1, 1996, which ranged from $595 to $640 per Interest, depending on the
different discount rates used.

     During October 1996, Raleigh and certain of its affiliates commenced
another unsolicited offer to acquire up to 100,000 Interests, which
represents approximately 24.8% of the outstanding Interests in the
Partnership, at a purchase price of $500 per Interest, which amount, under
the terms of the offer, was to be reduced by distributions made by the
Partnership during the period of the offer.  Such offer was amended on
April 16, 1997.  Raleigh's amended offer reflected a modification in the
purchase price for the Interests to provide for $400 per Interest (which
reflects an adjustment in the purchase price for the $60 per Interest
distribution made by the Partnership in February 1997) to be paid upon
closing of the offer, and an additional $40 per Interest to be paid should
a certain lawsuit currently pending in the Court of Chancery of the State
of Delaware result in a determination that Raleigh has voting rights with
respect to Interests it had previously acquired.  As of the date of this
report, such lawsuit has not been decided.  Raleigh's amended offer expired
on April 29, 1997.  Raleigh has reported that it acquired a total of 26,405
Interests pursuant to such amended offer, which represents approximately


<PAGE>


6.5% of the total outstanding Interests.  As a result of the Interests
acquired pursuant to both its original offer and its amended offer, Raleigh
has reported ownership of a total of 106,747 Interests, representing
approximately 26.4% of the total outstanding Interests.

     Based on its analysis and its consultation with its advisors, the
Special Committee determined that with respect to Holders of Interests who
have the expectation of retaining their Interests through an anticipated
orderly liquidation of the Partnership's assets by October 2002 and who
have no current or anticipated need for liquidity, the second Raleigh offer
was inadequate and not in the best interest of such Holders.  The Special
Committee recommended that such Holders reject the second Raleigh offer and
not tender their Interests pursuant to such offer.  However, the Special
Committee recommended to those Holders of Interests who have a current need
or desire for liquidity that such Holders tender their Interests in the
offer.

     During April 1997, Smithtown Bay, L.L.C. ("Smithtown") commenced an
offer to acquire up to 17,000 Interests, which represents approximately
4.2% of the outstanding Interests in the Partnership. Smithtown's offer has
a purchase price of $475 per Interest and is scheduled to expire on May 30,
1997.  In connection with the Smithtown offer, Lehman updated its Estimated
Liquidation Value as of March 31, 1997 (the "March Estimated Liquidation
Value").  In arriving at the March Estimated Liquidation Value, Lehman
relied upon the Partnership's estimate of the gross cash distributions that
the Holders of Interests would receive through the assumed liquidation
period.  These estimated gross distributions were then discounted to
reflect the present value of such distributions as of March 31, 1997, which
ranged from $540 to $585 per Interest, depending on the different discount
rates used.

     Based on its analysis and its consultation with its advisors, the
Special Committee has determined that with respect to Holders of Interests
who have the expectation of retaining their Interests through an
anticipated orderly liquidation of the Partnership's assets by October 2002
and who have no current or anticipated need for liquidity, the Smithtown
offer is inadequate and not in the best interests of such Holders of
Interests.  Accordingly, the Special Committee recommends that such Holders
of Interests reject the Smithtown offer and not tender their Interests
pursuant to such offer.  However, the Special Committee recommends that
Holders of Interests who have a current need or desire for liquidity tender
their Interests to Smithtown.

     The Partnership began incurring significant expenditures in connection
with the various unsolicited tender offers for Interests during the third
quarter of 1996, and may incur significant additional costs in the future
in connection therewith.

RESULTS OF OPERATIONS

     The results of operations for the three months ended March 31, 1997
are primarily attributable to the development and sale or operation of the
Partnership's assets.

     For the three months ended March 31, 1997, the Partnership (including
its consolidated ventures and its unconsolidated ventures accounted for
under the equity method) closed on the sale of 174 housing units, 24
homesite lots and approximately one acre of developed land.  This compares
to closings in the first quarter of 1996 of 255 housing units, 46 homesite
lots and the sale of the Partnership's 20% joint venture interest in Coto
de Caza.  Outstanding contracts ("backlog") as of March 31, 1997 were for
650 housing units, 31 homesites and an approximate six acre developed land
tract.  This compares to a backlog as of March 31, 1996 of 847 housing
units, 33 homesites and approximately 36 acres of developed and undeveloped
land tracts.



<PAGE>


     The Partnership's Communities are in various stages of development,
with estimated remaining build-outs ranging from one to nine years.  The
Weston Community, located in Broward County, Florida, is the Partnership's
largest Community and is in its mid-stage of development.  Also in their
mid stages of development are the River Hills Country Club in Tampa,
Florida; the Water's Edge Community in Atlanta, Georgia; The Cullasaja
Club, near Highlands, North Carolina and the Partnership's condominium
project on Longboat Key, Florida known as Arvida's Grand Bay.  The
Partnership's Jacksonville Golf & Country Club Community in Florida is in
its late stage of development.  All of the remaining units in the
Partnership's Sawgrass Country Club and Dockside Communities in
Jacksonville, Florida and Atlanta, Georgia, respectively, closed during
1996.  In addition, the Broken Sound Community, located in Boca Raton,
Florida, had its final closings in 1995; however, the Partnership still has
equity memberships in the Broken Sound Club to sell.  Future revenues will
be impacted to the extent that there are lower levels of inventories
available for sale as the Partnership's remaining Communities approach or
undertake their final phases.

     Historically, a substantial portion of the Partnership's housing
revenues during the first six months of a given year are generated from the
closing of units contracted in the prior year.  The decrease in housing
revenues for the period ended March 31, 1997 as compared to the same period
in 1996 is due primarily to a lower volume of units closed in Weston, which
is the direct result of a decrease in unit backlog at December 31, 1996 as
compared to December 31, 1995.  The unfavorable revenue variance is also
due to decreased revenue recognition on the condominiums at Arvida's Grand
Bay.  The Partnership recognized substantial revenues from three of the
buildings at Arvida's Grand Bay in 1996, and expects to recognize the
remaining revenues from these buildings in 1997.  There are two buildings
still to be constructed at Arvida's Grand Bay.  The Partnership anticipates
beginning construction on one of these buildings during 1997.  However, no
revenues are expected to be recognized for this building until 1998.  The
closings of the remaining units in Sawgrass Country Club in Jacksonville
and Dockside in Atlanta in 1996, as well as the close out of several
projects in Jacksonville Golf & Country Club also contributed to the
decrease in revenues.

     The decrease in homesite revenues for the period ended March 31, 1997
as compared to the same period in 1996 is due to fewer lot closings in the
Partnership's Weston and Water's Edge Communities.  The decrease in lot
closings in Weston is due primarily to the close out and substantial close
out of certain of the products within the Community which are not being
replaced with similar product lines.  The number of closings decreased at
Water's Edge due primarily to the timing of lot closings within the
Community.

     The increase in the operating profit margin from homesite activities
for the three months ended March 31, 1997 as compared to the same period in
1996 is due primarily to the recognition of deferred income in 1997 for
sales recorded in previous years which did not yet meet the requirements
for income recognition.

     The decrease in land and property revenues for the three months ended
March 31, 1997 as compared to the same period in 1996 is due primarily to
the sale of the Partnership's 20% joint venture interest in the Coto de
Caza Joint Venture in March 1996 for a cash sales price of $12 million.

     The increase in operating properties revenues for the three months
ended March 31, 1997 as compared to the same period in 1996 is due to
rental income generated at the Partnership's new retail shopping plaza in
Weston, which opened in the fourth quarter of 1996.  In addition, revenues
from the Partnership's club operations increased in 1997 as compared to
1996 due primarily to an overall increase in dues and golf revenues at the
Partnership's country clubs in Weston and River Hills, and increased
revenues from the restaurant operations at one of the Partnership's clubs
in Jacksonville, Florida.



<PAGE>


     The decrease in revenues from brokerage and other operations for the
period ended March 31, 1997 as compared to March 1996 is due primarily to
decreased resale brokerage activity resulting from the closing of certain
of the Partnership's Palm Beach County sales offices, as well as the
Partnership's sale of its resale operation located in Longboat Key near
Sarasota, Florida in October 1996.  Also contributing to the unfavorable
variance are decreased commissions earned from the sales of builders' homes
within the Partnership's Weston Community due to a decrease in the number
of builder units closed in the first quarter of 1997 as compared to the
first quarter of 1996.

     The increase in selling, general and administrative expenses for the
three months ended March 31, 1997 as compared to the same period in 1996 is
due primarily to the approximate $1.8 million charge recorded as of March
31, 1997 to accrue certain attorneys' fees and expenses to be paid by the
Partnership as a result of the approved settlement in the Carlstrom action
as discussed in detail in Item 1. of Part II - Legal Proceedings.  In
addition, the Partnership began incurring significant expenditures in the
third quarter of 1996 in connection with the various unsolicited tender
offers made for Partnership Interests.  Such expenditures incurred during
the period ended March 31, 1997 also contributed to the increase in
selling, general and administrative expenses as compared to the same period
in 1996.  These unfavorable variances are partially offset by reduced
project administrative overheads and marketing costs incurred during the
three month period ended March 31, 1997 as compared to the same period in
1996, due to the late stages of development and close-outs of certain of
the Partnership's communities.

     The increase in interest income for the three month period ended March
31, 1997 as compared to the same period in 1996 is due to an increase in
the average balances invested in interest bearing accounts during 1997.




<PAGE>


PART II - OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS

     Reference is made to the Commitments and Contingencies Section of
Notes for a detailed discussion regarding certain lawsuits which allegedly
in part arose out of or related to Hurricane Andrew, which on August 24,
1992 resulted in damage to a former community development known as Country
Walk.

     On June 24, 1996, a lawsuit entitled Irvin Weiss v. Arvida/JMB
Managers, Inc., Neil G. Bluhm, Lehman Brothers Inc. and Arvida/JMB
Partners, L.P. ("Weiss action") was filed in the County Department,
Chancery Division of the Circuit Court of Cook County, Illinois.  This
lawsuit is a purported class action lawsuit on behalf of Irvin Weiss and
all other Holders of Interests to bar (i) the General Partner and Mr. Bluhm
from taking any action to chill tender offers from non-affiliates, (ii) the
officers, directors and shareholders of the defendants from participating
in any special committee on tender offers, (iii) Lehman Brothers Inc. from
advising any such special committee, and (iv) defendants and their
affiliates from making tender offers.  On September 25, 1996, the claims of
Irvin Weiss were voluntarily dismissed.

     A second complaint was filed in the County Department, Chancery
Division of the Circuit Court of Cook County, Illinois on July 1, 1996, and
most recently amended on November 27, 1996, in connection with a court
ruling dismissing certain allegations, in the matter of Jack H. Carlstrom,
Lynne M. Carlstrom, Woneta Bellevue, Roger Lathbury and Begona Lathbury v.
Arvida/JMB Managers, Inc., Neil G. Bluhm, Ira J. Schulman, Burton E.
Glazov, Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, Judd D. Malkin,
Lehman Brothers Inc., Starwood Capital Group I, L.P., Starwood/Florida
Funding, L.L.C., Starwood Opportunity Fund IV, L.P., BSS Capital II,
L.L.C., Barry Sternlicht, Walton Street Capital Acquisition Co. III and
Whitehall Street Real Estate Limited Partnership VII, and Arvida/JMB
Partners, L.P., nominal defendant ("Carlstrom action").  This complaint, as
amended, is brought derivatively on behalf of the Partnership and
individually on behalf of Jack H. Carlstrom, Lynne M. Carlstrom, Woneta
Bellevue, Roger Lathbury and Begona Lathbury and a purported class of all
other Holders of Interests (excluding the defendants, members of their
immediate families, affiliates, subsidiaries, agents, partners, members of
their current or former management or that of their affiliates, and any
participant in the alleged conspiracy).  The Carlstrom action challenged,
among other things, the Partnership's proposed $160 million term loan from
Starwood/Florida Funding, L.L.C. ("Starwood financing") and seeks, among
other things, to bar defendants from taking any action to chill tender
offers or offers for debt financing from non-affiliates; to cause
defendants to put the issue of the Starwood financing to a vote of
unitholders; to bar defendants from completing the Starwood financing; to
disband the Special Committee (the "Special Committee" of the Board of
Directors of Arvida/JMB Managers, Inc.) and allow the Holders of Interests
to vote on an "independent slate" of directors to compose a new special
committee; and to cause the Partnership and director defendants to auction
the Partnership.  The complaint, as amended, alleges, among other things,
that the General Partner breached its fiduciary duties owed plaintiffs and
members of the purported class by failing to negotiate for the financing
with other entities and entering into the Starwood financing in order to
entrench itself and maintain its control over the Partnership.  The
complaint, as amended, also alleges that the terms of the Starwood
financing are burdensome to the Partnership and allegedly will cause a
waste of the Partnership's assets.  The Carlstrom action has been
consolidated with the Weiss action and is brought as a four-count complaint
for breach of fiduciary duty on behalf of the class, breach of fiduciary
duty on behalf of the Partnership, conspiracy and collusion to breach
fiduciary duties on behalf of the class and the Partnership, and for an
injunction on behalf of the class and the Partnership.  In addition to the
relief described above, plaintiffs in the complaint, as amended, on behalf
of themselves and members of the purported class seek damages in a sum to
be determined at trial, attorneys' fees and costs, and such other relief as


<PAGE>


the Court may deem just and proper.  On December 13, 1996, the Court
granted the plaintiffs' motion for preliminary injunction to stop the
Starwood financing until a hearing on a permanent injunction.  The
Partnership, its General Partner, and members of the Special Committee have
appealed the order granting the preliminary injunction.  The appeal is
pending in the Appellate Court of Illinois, First Judicial District, Case
No. 97-0093.  In the appeal, the Partnership, its General Partner, and
members of the Special Committee, among other things, contend that the
wrong legal standard was applied by the trial court in the hearing on
plaintiffs' motion for preliminary injunction in requiring the Partnership
to prove the fairness of the Starwood financing.  In addition, and
alternatively, the Partnership contends that the adoption of the Starwood
financing, which an independent investment banker opined was commercially
reasonable and fair, satisfied the legal standard applied by the Court. 
The parties to the Carlstrom action engaged in mediation discussions
supervised by the Court which began on March 5, 1997.  The mediation effort
has resulted in a stipulation of settlement, which was preliminarily
approved by the trial court in a settlement hearing order dated April 1,
1997, as being fair, reasonable, adequate, and in the best interests of the
plaintiffs,  Holders of Interests and the Partnership.  The stipulation of
settlement provides, among other things:  (i) that the General Partner will
be able to pursue the Barnett Financing, as previously defined, for the
purposes of making a distribution and replacing certain of the
Partnership's current credit facilities; (ii) that the Partnership will not
pursue the Starwood financing; (iii) that the General Partner will choose
the option set forth in Section 5.5(J)(i)(c) of the Partnership Agreement
(i.e., to commence a liquidation phase on October 31, 1997, in which all of
the Partnership's remaining assets will be sold or disposed of by October
31, 2002; (iv) that, if the settlement is finally approved by the trial
court, the decision to choose the option set forth in Section 5.5(J)(i)(c)
of the Partnership Agreement will be binding upon the Holders of Interests
and the General Partner, its affiliates, and any subsequent general
partner, whether or not affiliated with the General Partner; (v) that the
claims set forth in the Carlstrom action will be released; (vi) that the
Illinois appeal will be dismissed; and (vii) that the General Partner
and/or its affiliates will defer a portion of the proceeds from the Barnett
Financing otherwise distributable to them (subject to the right of the
General Partner and/or such affiliates to receive such deferred amount
after the Holders of Interests have received a specified amount of
distributions from the Partnership after July 1, 1996) and such deferred
distribution amount will be used to pay a portion of the legal fees and
expenses in the Carlstrom action.  In the preliminary settlement hearing
order, the trial court also vacated the preliminary injunction ruling,
established a procedure for notifying Holders of Interests of their rights
in connection with the settlement, and set the matter for a final hearing. 
On April 30, 1997, the court approved the plaintiff's application for
attorneys' fees and expenses in the approximate amount of $1.8 million,
which amount was mediated between the parties in a court supervised
mediation.  On May 13, 1997, a final hearing on the terms of the settlement
was held.  At the conclusion of the hearing, the trial court, among other
things, approved the settlement as fair, reasonable and adequate, and in
the best interests of the plaintiffs, Holders of Interests, and the
Partnership; ordered that the settlement be consummated by the parties in
accordance with its terms and conditions and the terms and conditions of
the stipulation of settlement; dismissed the action on the merits and with
prejudice; reserved jurisdiction over all matters relating to the
consummation and enforcement of the stipulation of settlement and the
settlement, and without limiting the generality of the foregoing, to the
enforcement on any replacement general partner of the commitment of the
General Partner in October 1997 to choose the option set forth in Section
5.5(J)(i)(c) of the Partnership Agreement; and permanently enjoined and
barred the Partnership, plaintiffs, and Holders of Interests from
instituting, commencing, asserting, prosecuting, or continuing any of the
released claims against any of the defendants in any jurisdiction.  While


<PAGE>


the trial court considered any and all objections to the settlement in
entering the order, there is no assurance that an appeal from or in
connection with the final hearing order will not be taken.  The
accompanying consolidated financial statements reflect an accrual of
approximately $1.8 million for the plaintiffs attorneys' fees and expenses
to be paid by the Partnership as a result of the approved settlement.

     On or about September 27, 1996, a lawsuit entitled Vanderbilt Income
and Growth Associates, L.L.C. and Raleigh Capital Associates L.P.,
individually and derivatively on behalf of Arvida/JMB Partners, L.P. V.
Arvida/JMB Managers, Inc., Judd D. Malkin, Neil G. Bluhm, Burton E. Glazov,
Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, BSS Capital II, L.L.C.,
Starwood Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund, IV, L.P. and Barry Sternlicht, defendants, and Arvida/JMB
Partners, L.P., nominal defendant, was filed in the Court of Chancery of
the State of Delaware in and for New Castle County, Civil Action No. 15238
("Raleigh action").  The Raleigh action was filed as a verified complaint
for declaratory and injunctive relief.  Plaintiffs claimed that the
defendants in entering into the financing commitment letter for the
Starwood term financing violated, or aided and abetted, or participated in
the violation of, fiduciary duties owned to the Partnership and the Holders
of Interests, and put their personal interests ahead of the interests of
the Partnership and the Holders of Interests.  In the first claim for
relief, plaintiffs sought a declaratory judgment that the terms of the
financing be declared null, void and unenforceable.  In the second claim
for relief, plaintiffs asserted a claim derivatively on behalf of the
Partnership alleging, among other things, that the financing commitment
letter was not the product of a valid exercise of business judgment.  In
addition to relief described above, plaintiffs sought to preliminarily and
permanently enjoin any actions in furtherance of the financing commitment
letter, an award of compensatory damages, interest, costs and
disbursements, including reasonable attorneys' and experts' fees and such
other relief as the Court might deem just and proper.  The General Partner
and the Partnership filed a motion to dismiss the Raleigh action which was
granted on November 7, 1996.  In granting the motion, the Court held that
Raleigh was not a Limited Partner and did not have standing to file the
derivative claims.  The Court further determined that Raleigh did not have
the right to vote.  Plaintiffs asked the Court to reconsider its ruling,
but the Court denied the request to change its ruling.

     Plaintiffs appealed the November 7, 1996 dismissal order.  On December
12, 1996, the Delaware Supreme Court reversed the trial court order on a
procedural ground.  The Delaware Supreme Court concluded that the trial
court should not have considered matters outside of the pleadings in
dismissing the Raleigh action without providing the plaintiffs some limited
discovery.  Accordingly, the Delaware Supreme Court remanded the case back
to the trial court for further proceedings.

     On December 16, 1996, the Partnership filed a counterclaim against
Vanderbilt Income and Growth Associates, L.L.C. and Raleigh Capital
Associates L.P. ("Raleigh"), seeking a declaratory judgment that Raleigh
had no right to vote on Partnership matters.  On January 28, 1997, the
trial court granted plaintiffs leave to dismiss their own complaint
concerning the Starwood financing, leaving the Partnership's counterclaim
pending.

     By letter dated January 10, 1997, Raleigh requested admission as a
Substituted Limited Partner of the Partnership.  The Partnership referred
the request to the Special Committee.  On February 11, 1997, the Special
Committee denied the request.  Thereafter, the Partnership supplemented its
counterclaim, as amended, and sought a court declaration that Raleigh is
not entitled to be admitted as a Substituted Limited Partner.  On February
20, 1997, Raleigh filed a reply and counterclaim against the Partnership,
the General Partner, and the Special Committee.  The reply counterclaim
sought, among other things, a declaration that Raleigh has voting rights in


<PAGE>


the Partnership and that defendants' breached their fiduciary duties by
failing to admit Raleigh as a Substituted Limited Partner.  The reply
counterclaim also sought to enjoin the Partnership, the General Partner,
and the Special Committee from refusing to admit Raleigh as a Substituted
Limited Partner, an award of damages, interest, fees, and costs.

     On or about February 28, 1997, Gladys Beasley, individually and as a
representative of a class of persons similarly situated, filed an
intervenor complaint for declaratory relief against the Partnership.  In
the intervenor complaint, plaintiff sought a declaration that purchasers
who obtained Interests in the Partnership in the public offering and
subsequent Holders of Interests in the Partnership by assignment from
original Holders have the same voting rights in the Partnership, among
other things, to remove and replace the General Partner.  In addition,
plaintiff Gladys Beasley, sought an order adjudging and decreeing that the
intervenor action was properly maintained as a class, an award of her costs
and expenses of the litigation, and such other relief as the Court deemed
appropriate.

     On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, entitled Council of Villages, Inc.
et al v. Arvida/JMB Partners, Arvida/JMB Managers, Inc., Arvida/JMB
Partners, Ltd., Broken Sound Club, Inc., and Country Club Maintenance
Association, Inc. The multi-count lawsuit, as amended, is brought as a
class action, and individually, on behalf of various residents of the
Broken Sound Community, and alleges that defendants engaged in various acts
of misconduct in, among other things, the establishment, operation,
management and marketing of the Broken Sound golf course and recreational
facilities, as well as the alleged improper failure to turn over said
facilities to the Broken Sound homeowners on a timely basis.  Plaintiffs
seek, through various theories, including but not limited to breach of
ordinance, fiduciary duty, fraud, and civil theft, damages in excess of $45
million, the appointment of a receiver for the Broken Sound Club, other
unspecified compensatory damages, the right to seek punitive damages,
treble damages, prejudgment interest, attorneys' fees and costs.  The
Partnership believes that the lawsuit is without merit and intends to
vigorously defend itself in this matter.

     On or about July 30, 1996, Savoy v. Arvida/JMB Partners, Arvida/JMB
Managers, Inc., Arvida/JMB Partners, Ltd., and Broken Sound Club, Inc. was
filed against the Partnership and others in the Circuit Court of the 15th
Judicial Circuit, in and for Palm Beach County, Florida.  The lawsuit is
filed as a three-count complaint for dissolution of the Broken Sound Club,
Inc. ("Club"), and seeks, among other things, the appointment of a
custodian or receiver for the Club, a determination that certain acts be
deemed wrongful, the return to the Club of in excess of $2.5 million in
alleged "operating profits", an injunction against the charging of certain
dues, an injunction requiring the Club to produce certain financial
statements, and such other relief as the Court deems just, fair and proper.

The Partnership believes the lawsuit is without merit and intends to
vigorously defend itself.

     Other than as described above, the Partnership is not subject to any
material pending legal proceedings, other than ordinary routine litigation
incidental to the business of the Partnership.  However, reference is made
to the Commitments and Contingencies Section of the Notes for a discussion
of certain claims asserted by Merrill Lynch for indemnification by the
Partnership and the General Partner in connection with claims for
arbitration filed by certain investors in the Partnership.



<PAGE>


     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

    3.1.   Amended and Restated Agreement of Limited Partnership.*

    3.2.   Assignment Agreement by and among the General Partner, the
Initial Limited Partner and the Partnership.*

    4.1.   Various mortgages and other security interests dated October
7, 1992 related to the assets of Arvida/JMB Partners, Center Office
Partners, Center Retail Partners, Center Hotel Limited Partnership, Weston
Hills Country Club Limited Partnership which secure loans under the Amended
and Restated Credit Agreement referred to in Exhibit 4.1 are herein
incorporated by reference to Exhibit No. 4.7 of the Partnership's Report on
Form 10-Q (File number 0-16976) dated November 11, 1992.

    4.2.   Second Amended and Restated Credit Agreement dated November
29, 1994, among Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast
Florida Holdings, Inc., Center Office Partners, Center Retail Partners,
Center Hotel Limited Partnership, Weston Hills Country Club Limited
Partnership and Chemical Bank and Nationsbank of Florida, N.A. ***

    4.3.   Affirmation and Amendment of Security Documents dated November
29, 1994, among Arvida/JMB Partners, Arvida/JMB Partners, L.P., Southeast
Florida Holdings, Inc., Center Office Partners, Center Retail Partners,
Center Hotel Limited Partnership, Weston Hills Country Club Limited
Partnership and Chemical Bank. ***

    4.4.   Modification of Mortgage and Security Agreement and Other loan
Documents dated November 29, 1994, among Arvida/JMB Partners, Weston Hills
Country Club Limited Partnership and Chemical Bank. ***

    4.5.   Modification of First Mortgage and Security Agreement and
Other Loan Documents dated November 29, 1994, among Arvida/JMB Partners,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership and Chemical Bank. ***

    4.6.   Credit Agreement extension dated July 28, 1995 made by
Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings,
Inc., Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership, Weston Hills Country Club Limited Partnership and Chemical
Bank is incorporated by reference to the Partnership's Report for June 30,
1995 on Form 10-Q (File No. 0-16976) dated August 9, 1995.

    4.7.   Letter Agreement dated January 17, 1996, among Arvida/JMB
Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings, Inc.,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership, Weston Hills Country Club Limited Partnership and Chemical
Bank and Nationsbank of Florida, N.A. regarding the release of a certain
parcel from the lender's lien is herein incorporated by reference to
Exhibit 4.15 to the Partnership's report for December 31, 1995 on Form 10-K
(File No. 0-16976) dated March 25, 1996.

    4.8.   Letter Agreement dated March 1, 1996 regarding the sale of the
Partnership's interest in the Coto de Caza Joint Venture and the extension
of the maturity date of the revolving line of credit facility and the
income property term loan is incorporated herein by reference to Exhibit
4.16 to the Partnership's report for December 31, 1995 on Form 10-K (File
No. 0-16976) dated March 25, 1996.



<PAGE>


    4.9.   Commitment for a term loan by and between Starwood/Florida
Funding, L.L.C. and Arvida/JMB Partners, L.P. dated September 12, 1996 is
incorporated herein by reference to Exhibit 4.1 to the Partnership's Report
on Form 8-K (File No. 0-16976) dated September 12, 1996.

    4.10.  Commitment letter dated March 12, 1997, from Barnett Bank of
Broward County, N.A. is incorporated herein by reference to Exhibit 4.10 of
the Partnership's Report for December 31, 1996, as amended, on Form 10-K
(File No. 0-16976) dated May 1, 1997.

    10.1.  Agreement between the Partnership and The Walt Disney Company
dated January 29, 1987 is hereby incorporated by reference to Exhibit 10.2
to the Partnership's Registration Statement on Form S-1 (File No. 33-14091)
under the Securities Act of 1933 filed on May 7, 1987.

    10.2.  Management, Advisory and Supervisory Agreement is hereby
incorporated by reference to Exhibit 10.2 to the Partnership's report for
December 31, 1990 on Form 10-K (File No. 0-16976) dated March 27, 1991.

    10.3.  Letter Agreement, dated as of September 10, 1987, between the
Partnership and The Walt Disney Company, together with exhibits and related
documents.**

    10.4.  Joint Venture Agreement dated as of September 10, 1987, of
Arvida/JMB Partners, a Florida general partnership. **

    10.5.  Stipulation of settlement dated April 1, 1997, filed in the
Circuit Court of Cook County, Illinois, Chancery Department is incorporated
herein by reference to Exhibit 16.5 of the Partnership's Report for
December 31, 1996, as amended, on Form 10-K (File No. 0-16976) dated May 1,
1997.

    27.    Financial Data Schedule

           ------------------------------

           *  Previously filed with the Securities and Exchange
Commission as Exhibits 3. and 4.0, respectively, to the Partnership's Form
10-K Report (File No. 0-16976) filed on March 27, 1990 and incorporated
herein by reference.

           **   Previously filed with the Securities and Exchange
Commission as Exhibits 10.4 and 10.5, respectively, to the Partnership's
Registration Statement (as amended) on Form S-1 (File No. 33-14091) under
the Securities Act of 1933 filed on September 11, 1987 and incorporated
herein by reference.

           *** Previously filed with the Securities and Exchange
Commission as Exhibits 4.10, 4.11, 4.12 and 4.13, respectively, to the
Partnership's Form 10-K Report (File No. 0-16976) filed on March 27, 1995
and hereby incorporated herein by reference.

       (b)   No reports on Form 8-K were filed during the quarter ended
March 31, 1997.




<PAGE>


                              SIGNATURES



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


                ARVIDA/JMB PARTNERS, L.P.

                BY:   Arvida/JMB Managers, Inc.
                      (The General Partner)




                      By:   GAILEN J. HULL
                            Gailen J. Hull, Vice President
                      Date: May 13, 1997


     Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.




                            GAILEN J. HULL
                            Gailen J. Hull, Principal Accounting Officer
                      Date: May 13, 1997