SECOND AMENDMENT TO OPERATING AGREEMENT
                            OF PARK AT HIGHLANDS LLC

     THIS SECOND AMENDMENT TO OPERATING AGREEMENT OF PARK AT HIGHLANDS LLC (this
"Second Amendment") is made as of the 31st day of December,  1997 by and between
AL FELD, an individual ("Feld"),  and WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation ("WPHC").

                                    RECITALS

     A.  Feld  and  WPHC  constitute  all  of  the  members  (collectively,  the
"Members") of Park at Highlands LLC, a Colorado limited  liability  company (the
"Company"),  which is governed by that  certain  Operating  Agreement of Park at
Highlands  LLC dated as of April 27, 1995, as amended by First  Amendment  dated
December 29, 1995 (the "Operating Agreement").

     B. The Members now desire to further amend the  Operating  Agreement as set
forth herein.

     C.  Capitalized   terms  not  otherwise   defined  herein  shall  have  the
definitions set forth in the Operating Agreement.


     NOW,  THEREFORE,  for and in  consideration of the above recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged,  Feld and WPHC hereby  agree to amend the  Operating  Agreement as
follows:

1.   No Acceleration of Incentive Fee. In  consideration of the early funding of
     the  Final  Closing  Capital  Contribution  and the  early  payment  of the
     Construction Loan by WPHC, Feld agrees, for himself and his heirs, personal
     representatives,  successors  and  assigns,  that the  acceleration  of the
     payment  of a  portion  of the  Incentive  Fee and the  calculation  of the
     Incentive  Fee as equal to the Target Fee, all as provided for in Paragraph
     4 of Exhibit P to the Operating Agreement, are hereby irrevocably waived by
     Feld. Accordingly, Feld and WPHC agree that Paragraph 4 of Exhibit P to the
     Operating Agreement is hereby deleted in its entirety and shall be void.



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2.   Single-Member  LLC.  Feld and WPHC hereby agree that,  notwithstanding  any
     provisions  to the contrary in the Operating  Agreement,  the Company shall
     continue  in  existence  and its  business  shall be  continued  after  the
     transfer to WPHC of all of Feld's  interest in the Company  pursuant to the
     Call  Option.  The  Articles  of  Organization  shall be  amended to permit
     continuation of the Company as a single- member limited  liability  company
     and,  upon such  amendment to the Articles of  Organization,  the Operating
     Agreement shall be and hereby is amended to conform thereto.

3.   Full Force and Effect.  The Operating  Agreement,  as specifically  amended
     herein,  is hereby  ratified by the Members and shall  remain in full force
     and effect.

4.   Counterparts. This Amendment may be executed in any number of counterparts,
     each of which  shall be deemed  to be an  original  and all of which,  when
     taken  together,  shall  constitute  one  agreement  binding on the parties
     hereto,  notwithstanding  that all the parties may not have signed the same
     counterpart.  Signature  pages  from one  counterpart  may be  removed  and
     attached to another counterpart to create one fully- executed document.

                            [SIGNATURE PAGE FOLLOWS]


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     IN WITNESS  WHEREOF,  the parties  hereto,  being all of the Members of the
Company, have executed this Amendment as of the date first written above.

By:      /s/ Al Feld
         --------------------
         Al Feld

WELLSFORD PARK HIGHLANDS CORP.,
a Colorado corporation

By:      /s/ David M. Strong
         ------------------------
         David M. Strong, Vice President


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