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

                                   FORM 10-KSB

[X] Annual Report  Pursuant to Section 13 or 15 (d) of the  Securities  Exchange
  Act of 1934
For the fiscal year ended December 31, 2000
                                                         or
[ ]  Transition Report Pursuant to Section 13 or 15(d) of the
  Securities Exchange Act of 1934

For the transition period from                to

Commission File Number 33-24129

Historic  Preservation  Properties 1989 Limited Partnership (Exact name of small
business issuer in its charter)

          Delaware                                               04-3021042
(State or other jurisdiction                                 (I.R.S. Employer
    of incorporation or                                      Identification No.)
      organization)

45 Broad Street, 3rd Floor, Boston, Massachusetts            02109
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code: (617) 338-6900

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

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

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  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing  requirements  for the past 90 days.  Yes X No  Indicate by check mark if
disclosure of delinquent  filers  pursuant to Item 405 of Regulation  S-B is not
contained  herein,  and  will  not be  contained,  to the  best of  registrant's
knowledge,  in  definitive  proxy  or  information  statements  incorporated  by
reference in Part III of this Form 10-KSB or any  amendment to this Form 10-KSB.
[X]

Voting stock held by non-affiliates of the registrant:  Not Applicable.


<PAGE>




                                         DOCUMENTS INCORPORATED BY REFERENCE



Part of the Form 10-KSB            Document
into which Incorporated            Incorporated by Reference

 I                                 Prospectus of the  registrant  dated December
                                   19, 1988 (the "Prospectus").

III                                The Prospectus.



<PAGE>


            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP

                         2000 FORM 10-KSB ANNUAL REPORT

                                TABLE OF CONTENTS

                                                                      Sequential
                                                        Page No.       Page No.

PART I

     Item 1   Description of Business                     K- 3               4
     Item 2   Description of Properties,
              Investment Policies, and
              Interests in Persons Primarily
              Engaged in Real Estate Activities           K- 8               9
     Item 3   Legal Proceedings                           K- 8               9
     Item 4   Submission of Matters to a
                Vote of Unit Holders                      K- 8               9

PART II

     Item 5   Market for the Registrant's
                Units and Related Unit
                Holder Matters                            K- 9              10
     Item 6   Management's Discussion and
                Analysis or Plan of Operation             K-10              11
     Item 7   Financial Statements                        K-13              14
     Item 8   Changes In and Disagreements
                with Accountants on Accounting
                and Financial Disclosure                  K-13              14

PART III

     Item 9   Director and Executive
                Officer of the Registrant                 K-14              15
     Item 10  Executive Compensation                      K-15              16
     Item 11  Unit Ownership of Certain
                Beneficial Owners and
                Management                                K-15              16
     Item 12  Certain Relationships and
                Related Transactions                      K-16              17
     Item 13  Exhibits and Reports                        K-16              17

SIGNATURES                                                K-17              18

SUPPLEMENTAL INFORMATION                                  K-18              19


                                      K-2
<PAGE>



                                                      PART I

Item 1.  Description of Business

Historic Preservation Properties 1989 Limited Partnership (HPP'89, also referred
to as the Partnership),  a Delaware limited partnership, was organized under the
Delaware  Revised Uniform Limited  Partnership Act on September 1, 1988, for the
purpose  of  investing  in a  diversified  portfolio  of real  properties  which
qualified for rehabilitation tax credits  (Rehabilitation  Tax Credits) afforded
by Section 47 of the Internal  Revenue Code of 1986, as amended (the Code),  and
rehabilitating  such  properties (or acquiring such properties in the process of
rehabilitation  and  completing  such  rehabilitation)  in a manner  intended to
render the cost of such rehabilitation eligible for classification as "Qualified
Rehabilitation  Expenditures",  as such term is  defined  in the Code,  and thus
eligible  for  Rehabilitation   Tax  Credits.   The  Partnership  was  initially
capitalized  with  contributions  of $100 from its general partner and $100 from
each of three initial  limited  partners.  On September 2, 1988, the Partnership
filed  a  Registration  Statement  on  Form  S-11,  File  Number  33-24129  (the
Registration  Statement),  with the  Securities  and  Exchange  Commission  (the
Commission) with respect to the public offering of units of limited  partnership
interest (Units) in the Partnership.  The Registration  Statement,  covering the
offering  of up to  100,000  Units at a  purchase  price of $1,000  per Unit (an
aggregate of  $100,000,000),  was declared  effective on December 19, 1988.  The
offering of Units terminated on December 29, 1989, at which time the Partnership
had received gross offering proceeds of $26,588,000 from 2,505 investors.

The general  partner of the  Partnership  is Boston  Historic  Partners  Limited
Partnership (the General  Partner),  a Massachusetts  limited  partnership.  The
general  partners of the General  Partner are (i) Portfolio  Advisory  Services,
Inc. (PAS), a Massachusetts corporation organized for the purpose of acting as a
general  partner  of  the  General  Partner,   and  (ii)  Terrence  P.  Sullivan
(Sullivan).  Limited  partnership  interests in the General  Partner are held by
investors  unaffiliated  with the General Partner  (except for an  approximately
one-half percent limited partnership interest which is owned by Sullivan).

The Partnership does not have any employees.

On July 1, 1998,  HPP'89 engaged Gunn  Financial,  Inc.  (GFI),  an unaffiliated
Massachusetts Corporation, to provide asset management,  accounting and investor
services  for an annual  fee and  reimbursement  of all  operating  expenses  of
providing  such  services.  Through June 30, 2000 the annual fee was $63,000 and
effective  July 1, 2000 the annual fee was  reduced to  $54,000.  The  agreement
expires on the earlier of June 30, 2006 or the  liquidation of the  Partnership,
as defined.  The Partnership's only business is investing in real properties for
which the cost of rehabilitating  such properties  qualifies for  Rehabilitation
Tax Credits.  A  presentation  of  information  about  industry  segments is not
applicable and would not be helpful in understanding the Partnership's  business
taken as a whole.  The  Partnership's  investment  objectives  and  policies are
described  on  pages  28-36 of its  Prospectus  dated  December  19,  1988  (the
Prospectus)  under the  caption  "Investment  Objectives  and  Policies",  which
description is incorporated  herein by this reference.  The Prospectus was filed
with the Commission pursuant to Rule 424 (b) on January 5, 1989.

                                      K-3
<PAGE>

At  December  31,  2000,  the   Partnership   has  investments  in  two  limited
partnerships   (collectively,   the  "Investee  Partnerships")  through  general
partnership  interests  in the  Investee  Partnerships,  each of which  owned or
acquired  real   properties,   the   rehabilitation   of  which   qualified  for
Rehabilitation Tax Credits.  As discussed below, a third limited  partnership in
which the  Partnership  had invested in was  liquidated  December 31, 1999.  The
Partnership also has an investment in a limited  liability company (the Investee
Limited Liability Company) through a membership interest.

The Investee  Partnerships and the Investee Limited Liability Company are herein
collectively  referred  to as "the  Investee  Entities".  Each  of the  Investee
Entities'  agreements  is different,  but in general,  provides for a sharing of
management  duties and decisions  among HPP'89 and the respective  local general
partners or other managing members and certain priorities to HPP'89 with respect
to return  on and  return  of  invested  capital.  Significant  Investee  Entity
decisions  require the approval of both HPP'89 and the local general partners or
other  managing  members.  In addition,  each  Investee  Entity has entered into
various  agreements with its local general partners or an other member, or their
affiliates, to provide development, management and other services, for which the
local general partners, other member, or their affiliates,  are paid fees by the
respective  Investee  Entity.  All the  Investee  Entities  are subject to first
mortgage loans. See Management's  Discussion and Analysis of Financial Condition
or Plan of Operation  included as part of this Annual  report on Form 10-KSB for
further detail.

The  Investee  Entities of the HPP'89 are 402 Julia  Street  Associates  Limited
Partnership,  Portland  Lofts  Associates  Limited  Partnership,  Jenkins  Court
Associates Limited Partnership (liquidated effective December 31, 1999), and The
Cosmopolitan at Mears Park LLC.

402 Julia  Street  Associates  Limited  Partnership  (402  Julia) is a  Delaware
limited partnership formed on July 25, 1989 to acquire, construct, rehabilitate,
operate and manage a building with 24 residential units and approximately  3,900
net  rentable  square  feet of  commercial  space  located  thereon at 402 Julia
Street,  New  Orleans,  Louisiana.  HPP'89's  original  investment  in 402 Julia
represented  approximately  4% of the aggregate  funds  initially  available for
investment. The Partnership has a 65% ownership interest in 402 Julia.

 402 Julia has provided a mortgage note secured by the property with an original
 principal balance of $1,100,000,  bearing interest at 6.69% and amortizing over
 30 years. The mortgage note has a yield maintenance  prepayment penalty through
 May 2008.  As of  December  31,  2000,  the  balance of the  mortgage  note was
 $1,071,048.  The  mortgage  note  matures  in  August  2008 at  which  time the
 principal balance due will be $936,939.

                                      K-4

<PAGE>

The  property  is  located  in  a  competitive   downtown  market  with  several
residential  properties in the area.  For the year ended  December 31, 2000, 402
Julia  recorded an economic  occupancy of 97% for its  residential  units and an
economic  occupancy  of 100% for its  commercial  space for a combined  economic
occupancy  of 98%. For the year ended  December  31, 2000 the average  effective
annual income for the residential  space was  approximately  $9,300 per unit and
for the commercial space was approximately $10.20 per square foot.

The schedule of lease expirations for 402 Julia is as follows:
<TABLE>

<CAPTION>
<S>      <C>                   <C>                    <C>                 <C>                  <C>
                                  Number of              Square               Annual                 % of Gross
              Year                 Tenants               Footage               Rent                 Annual Rents
         ------------------    -------------------    ----------------    -----------------    -------------------------

              2001                    -                     -                   -                        -
              2002                    -                     -                   -                        -
              2003                    1                   2,000            $    11,060                  4.2%
              2004                    -                     -                   -                        -
              2005                    1                   1,900                 16,200                  6.2%
              2006
               thru
              2010                    -                     -                   -                        -
</TABLE>

Portland Lofts  Associates  Limited  Partnership  (Portland Lofts) is a Delaware
limited   partnership   formed  on  August  8,  1989  to   acquire,   construct,
rehabilitate, operate and manage three buildings containing 89 residential units
including  29,250  square feet of ground floor  commercial  space located at 555
Northwest  Park Avenue in Portland,  Oregon.  HPP'89's  original  investment  in
Portland Lofts  represented  approximately  21% of the aggregate funds initially
available  for  investment.  The  Partnership  has a 99%  ownership  interest in
Portland Lofts.

Portland  Lofts has provided a mortgage  note  secured by the  property  with an
original principal balance of $5,625,000, bearing interest at 9% amortizing over
25 years. The mortgage note has a yield maintenance  prepayment  penalty through
its maturity date of July 2006 at which time the  principal  balance due will be
$4,654,082.

The property is located in a  competitive  downtown  market with  several  other
residential  properties in the area.  For the year ended  December 31, 2000, the
economic  occupancy of its residential units was 90% and the economic  occupancy
for its commercial space was 93% for a combined  economic  occupancy of 90%. For
the year ended  December 31, 2000, the average  effective  annual income for the
residential  space  was  $10,600  per  unit  and for the  commercial  space  was
approximately $10.80 per square foot.

                                      K-5

<PAGE>

The schedule of lease expirations for Portland Lofts is as follows:
<TABLE>
<CAPTION>
<S>   <C>                  <C>                      <C>                 <C>                    <C>
                               Number of              Square                Annual                   % of Gross
           Year                 Tenants               Footage                Rent                   Annual Rents
      -----------------    --------------------    ----------------    --------------------    -------------------------

           2001                    4                   3,765                     $24,109                1.9%
           2002                    4                   4,560                      32,266                2.7%
           2003                    3                   4,145                      39,983                3.2%
           2004                    2                   9,360                      55,445                4.4%
           2005                    1                   2,835                       7,363                0.6%
           2006
            thru
           2010                    -                     -                             -                 -
</TABLE>

Jenkins Court  Associates  Limited  Partnership  (Jenkins  Court) was a Delaware
limited partnership which was formed on December 20, 1988 to acquire, construct,
rehabilitate,  operate and manage a 144,000 net rentable  square foot five-story
building  and 30,000 net  rentable  square feet of new retail  space,  including
storage areas and parking  facilities,  located at Old York Road and Rydal Road,
Jenkintown Borough, Pennsylvania.  HPP'89's original investment in Jenkins Court
represented  approximately  36% of the aggregate funds  initially  available for
investment.

Jenkins Court filed for protection  under Chapter 11 federal  bankruptcy laws on
November 23, 1994. On August 31, 1995,  after  maximum  vesting of the remaining
Rehabilitation  Tax  Credits  had been  achieved  for 1995 and  considering  the
unlikelihood of a successful plan of  reorganization,  Jenkins Court  negotiated
with the  mortgage  holder to transfer the deed and title of the property to the
mortgage holder in lieu of foreclosure. Jenkins Court and its affiliates and the
developer and its  affiliates  entered into  agreements  for mutual  release and
agreed to liquidate Jenkins Court effective December 31, 1999.

The  Partnership  owns a 50% membership  interest in The  Cosmopolitan  at Mears
Park, LLC (TCAMP), a Delaware limited liability company,  formed to own, operate
and manage a building  containing 255 residential units and approximately  2,250
square feet of first floor  commercial space located at 250 East Sixth Street in
St. Paul,  Minnesota.  HPP'89's original investment in the Cosmopolitan property
represented  approximately  39% of the aggregate funds  initially  available for
investment.

TCAMP has  provided a mortgage  note  secured by the  property  with an original
principal  balance of $7,000,000,  bearing interest at 9.14% and amortizing over
25 years. The mortgage note has a yield maintenance  prepayment  penalty through
March 20, 2001.  From March 21, 2001 through March 20, 2002, and, from March 21,
2002 through  September 20, 2002, the prepayment  penalty is to be calculated at
2% and 1%,  respectively,  of the principal  balance of the mortgage  note.  The
mortgage note matures March 2003 at which time the principal balance due will be
$6,297,506.

The property is located in a  competitive  downtown  market with  several  other
residential  properties in the area.  For the year ended  December 31, 2000, the
economic  occupancy of TCAMP was 94%. For the year ended  December 31, 2000, the

                                      K-6
<PAGE>

average  effective  annual income for the  residential  space was  approximately
$10,400  per unit and for the  commercial  space was  approximately  $13.75  per
square foot.  TCAMP's commercial space consists of one office tenant whose lease
expires  March 2005.  The annual  rental  income for this lease in 2005 shall be
$9,496, (0.3% of gross annual rents).

The Partnership  believes that the properties owned by the Investee Entities are
adequately insured.

Information  regarding  the tax  depeciation  of the  properties  owned  by the
Investee Entities for the year ended December 31, 2000 is as follows:

<TABLE>
<CAPTION>
<S>                                         <C>                         <C>              <C>
                                                  Federal                                    Life
                                                 Tax Basis               Method             (Years)
                                            -----------------------    --------------    ----------------

       402 Julia
         Building and
         Improvements                                  $1,325,133          SL                31.5
                                            =======================

       Portland Lofts
         Building and
         Improvements                                  $3,070,699          SL                27.5
                                                           43,252          SL                31.5
                                                           83,715          SL                39.0
         Furniture and
         Fixtures                                         110,233          DDB                7.0
                                            -----------------------

                                                       $3,307,899
                                            =======================

       TCAMP
         Building                                    $ 13,330,155          ACC               19.0
         Improvements                                     369,301          SL                27.5
                                                          287,884          SL                31.5
                                                            4,299          SL                15.0
         Furniture and
         Fixtures                                         849,914          DDB                7.0
                                            -----------------------

                                                     $ 14,841,553
                                            =======================

</TABLE>


 Information  regarding  the real estate  taxes of the  properties  owned by the
 Investee Entities for the year ended December 31, 2000 is as follows:


                Property                 Rate                  Real Estate Tax

       402 Julia                   $ 185.59/1000                 $   7,147

       Portland Lofts               20.9511/1000                    16,452

       TCAMP                          35.60/1000                   349,266

                                      K-7

<PAGE>

The Investee  Entities are, and will continue to be, subject to competition from
existing and future projects in their respective  geographic  areas. The success
of the Partnership will depend on factors,  many of which are beyond the control
of the  Partnership  and which cannot be  predicted  at this time.  Such factors
include general economic and real estate market  conditions,  both on a national
basis  and in those  geographic  areas  where  the  projects  are  located,  the
availability  and cost of  borrowed  funds,  real  estate tax  rates,  operating
expenses,  energy costs and  government  regulations.  In addition,  other risks
inherent in real estate  investment  may influence  the ultimate  success of the
Partnership,  including  (i)  possible  reduction  of  rental  income  due to an
inability to maintain high occupancy  levels or adequate rental levels,  or (ii)
possible  adverse  changes in general  economic  conditions  and  adverse  local
conditions,  such as  competitive  overbuilding,  or a decrease in employment or
adverse  changes in real estate laws,  including  building codes. In particular,
changes in federal and state income tax laws affecting real estate  ownership or
limited partnerships could have a material and adverse effect on the business of
the Partnership.

The  Partnership is required to report with the Commission  annually form 10-KSB
and on a  quarterly  basis  forms  10-QSB.  The  public  may  read  and copy any
materials  the  Partnership  files  with  the  Commission  at the  SEC's  Public
Reference  Room at 450 Fifth St.,  NW,  Washington,  DC 20549 or by calling  the
Commission at 1-800-SEC-0330. The Partnership files its reports via electronical
with the Commission and the Partnership's  reports can be downloaded at web site
http://www.sec.gov.

Item 2.  Description  of  Properties,  Investment  Policies,  and  Interests in
Persons Primarily Engaged in Real Estate Activities

Information required by this item under Regulation S-B has been included in Item
1,  "Description  of  Business"  and in Item  6,  "Management's  Discussion  and
Analysis or Plan of Operation - Results of Operations".

Item 3.  Legal Proceedings

The  Partnership is not party to, to the best knowledge of the General  Partner,
any material pending legal proceedings.

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

No matters were submitted to a vote of Unit holders.

                                      K-8

<PAGE>

                                     PART II

Item 5.  Market for Registrant's Units and Related Unit Holder Matters.

(a)      There is no established  public market for the Units and no such market
         is expected to  develop.  Trading in the Units is limited and  sporadic
         and occurs solely through private transactions.

(b) As of March 15, 2001, there were 2,484 holders of Units.

The Amended and  Restated  Agreement  of Limited  Partnership  (the  Partnership
Agreement)  requires  that any Cash Flow (as  defined  therein)  be  distributed
quarterly  to the  investor  limited  partners  (Limited  Partners) in specified
proportions  and priorities  and that Sale or  Refinancing  Proceeds (as defined
therein) be distributed as and when available.  For the years ended December 31,
2000 and 1999, no  distributions  of Cash Flow or Sale or  Refinancing  Proceeds
were paid or accrued to the Limited Partners.

                                      K-9

<PAGE>



Item 6.  Management's Discussion and Analysis of Condition or Plan of Operation.

Special Note Regarding  Forward-Looking  Statements.  Certain statements in this
report may  constitute  "forward-looking  statements"  within the meaning of the
Private  Securities  Litigation Reform Act of 1995. Words  "believes,"  "seeks,"
"estimates,"   and  "should,"   and   variations  of  these  words  and  similar
expressions,  are intended to identify  these  forward-looking  statements.  The
Partnership's  actual results could differ  materially from those anticipated in
these  forward-looking  statements.  Limited Partners,  potential  investors and
other  readers are urged to consider  that factor and are cautioned not to place
undue  reliance  on  such   forward-looking   statements.   The  forward-looking
statements  included  herein  are  made as of the date of this  report,  and the
Partnership  undertakes no obligation  to publicly  update such  forward-looking
statements to reflect subsequent events or circumstances.

Liquidity and Capital  Resources.  The  Partnership  terminated  its offering of
Units on December 29, 1989, at which time Limited  Partners had purchased 26,588
Units,  representing  gross capital  contributions of $26,588,000.  Such amounts
originally  contributed  represent  approximately  100% of the Limited Partners'
capital contributions after deduction of selling commissions, organizational and
sales costs,  acquisition fees and reserves.  The Partnership does not expect to
make any additional investments in new real estate.

As of December 31,  2000,  the  Partnership  had $627,615 of total cash and cash
equivalents.  HPP'89's cash is used primarily to fund general and administrative
expenses  of  managing  the  public  fund.  The  Partnership's  only  source  of
short-term liquidity is from distributions  received from Investee Entities. The
Partnership   expects  to  continue  to  fund  its   expenses   with  cash  flow
distributions from Portland Lofts and TCAMP.

The short-term  liquidity of the Investee  Entities  depends on their ability to
generate  sufficient  rental income to fund operating  expenses and debt service
requirements. TCAMP, Portland Lofts and 402 Julia have stabilized operations and
TCAMP and Portland  Lofts are expected to generate  cash flow.  The  Partnership
received  distributions  from  Portland  Lofts of $156,000 for each of the years
ended December 31, 2000 and 1999. The Partnership  received  distributions  from
TCAMP of $262,500 and $250,000,  respectively  for the years ended  December 31,
2000 and 1999.

Cash  flow  generated  from  the  Partnership's  investment  properties  and the
Partnership's share of the proceeds from the sale of such properties is expected
to be the source of future long-term liquidity.

Results of Operations. The Partnership accounts for its investments in its three
investee entities under the equity method.  In general,  under the equity method
of  accounting  for  investments,  the  investment  is  recorded at cost and the
current allocable portion of earnings (losses) of an Investee Entity is recorded
as income (loss) with a  corresponding  increase  (decrease)  to the  investment
account.  The allocable portion of losses of an Investee Entity are not recorded
after the  respective  investment  account  is reduced  to zero.  The  allocable

                                      K-10

<PAGE>

portion of earnings of an Investee  Entity are not recorded until all previously
unrecorded losses are absorbed.  The Partnership's  allocable share of operating
income and/or losses in investee entities range from 50% to 99%.

Distributions  received are recorded as  reductions to the  investment  account.
Distributions  received  from an Investee  Entity  whose  respective  investment
account has been reduced to zero are recorded as income.

For the year ended December 31, 2000,  402 Julia recorded an economic  occupancy
of 97% for its  residential  units  and an  economic  occupancy  of 100% for its
commercial  space  for a  combined  economic  occupancy  of 98%.  402  Julia has
benefited  from a relatively  strong New Orleans  market and continues to record
stable operations in recent years. 402 Julia rents units to residential tenants,
and at  December  31,  2000  approximately  half of which are  under  short-term
operating leases expiring within one year from signing with the remaining rented
under  month-to-month  arrangements.  For the year ended  December 31, 2000, 402
Julia recorded net income of approximately  $47,400 which included  depreciation
and amortization of approximately $43,800.

For the year ended  December  31,  2000,  Portland  Lofts  recorded  an economic
occupancy of 90% for its residential units and an economic  occupancy of 93% for
its commercial space for a combined  economic  occupancy of 90%.  Portland Lofts
rents space to residential tenants principally under month-to-month arrangements
and to commercial  tenants  under  operating  leases of varying  terms  expiring
through 2005. As of December 31, 2000, the  Partnership  had entered into twelve
commercial  leases with the remaining  commercial  tenants under  month-to-month
agreements.  Portland Lofts' largest  commercial  tenant  occupancies 23% of the
commercial  space at  December  31,  2000,  representing  only 5.8% of the total
square feet of the  property.  For the year ended  December 31,  2000,  Portland
Lofts recorded net income of approximately  $54,400 which included  depreciation
and amortization of approximately $286,800.

TCAMP operates in the  competitive  lowertown  district of St. Paul,  Minnesota.
TCAMP has achieved stable occupancy and had an economic occupancy of 94% for the
year ended  December  31,  2000.  TCAMP  recorded  net  income of  approximately
$591,300,  which included depreciation and amortization expense of approximately
$263,100, for the year ended December 31, 2000.

The  Partnership   recorded  net  income,   under  general  accepted  accounting
principles  of $210,715 for the year ended  December  31, 2000,  compared to net
income of  $277,932  for the year ended  December  31,  1999.  This  decrease is
primarily  due  to an  increase  in  operating  and  administrative  expense  of
approximately $57,700 and a decrease in equity in income of investee entities of
approximately  $26,400  offset by an increase in  interest  and other  income of
approximately $16,900.  Operating and administrative  expenses increased for the
year ended  December  31,  2000,  compared  to the same  period in 1999,  due to
increases in overhead  costs and  nonrecurring  third party  professional  fees.
Equity in income from investee entities  decreased mainly due to the proceeds of
$113,752  received in  September of 1999 from the  developer  of Jenkins  Court,
offset by increases in HPP'89's allocated net income from TCAMP of approximately

                                      K-11

<PAGE>

$62,400 and 402 Julia of approximately  $24,300.  The proceeds received from the
developer  of Jenkins  Court  represented  payment of the default loan which had
been provided by the Partnership  and secured by the developer's  interest in an
unaffiliated  limited  partnership.  In  October  1999,  Jenkins  Court  and its
affiliates  and the developer and its  affiliates  entered into  agreements  for
mutual  release and agreed to liquidate  Jenkins  Court by December 31, 1999. No
other  funds  will be paid  to the  partnership  from  Jenkins  Court.  HPP'89's
allocated net income from TCAMP increased due to increases in rental income,  as
a result of increased rental rates, and newly assessed parking income.  HPP'89's
allocated  net income from 402 Julia  increased  primarily due to an increase in
rental income, as a result of increased rental rates.

The  Partnership  recorded  net  income,  under  generally  accepted  accounting
principles,  of $277,932 for the year ended  December 31, 1999,  compared to net
income of $60,671 for the year ended  December  31, 1998.  This  increase in net
income is primarily due to the increase in equity in income of investee entities
of $236,885.  This increase in the Partnership's  share of equity in income from
investee  entities is due to the  increased  allocated net income from TCAMP and
402 Julia of approximately $99,000 and $24,000,  respectively,  and the $113,752
received from developer of Jenkins Court. TCAMP's allocated net income increased
primarily  due to an  increase  in rental  revenue as a result of higher  rental
rates.  402 Julia's  allocated net income  increased mainly due to a decrease in
amortization of which the 1998 activity is further discussed below. The proceeds
of $113,752 received from the developer of Jenkins Court,  represents payment on
the default loan which had been provided by the  Partnership  and secured by the
developer's interest in an unaffiliated  limited  partnership.  In October 1999,
Jenkins Court and its affiliates  and the developer and its  affiliates  entered
into  agreements  for mutual  release and agreed to liquidate  Jenkins  Court by
December 31, 1999. No other funds will be paid to the  Partnership  from Jenkins
Court.

Inflation and Other Economic Factors

Recent  economic  trends  have  kept  inflation  relatively  low,  although  the
Partnership  cannot  make any  predictions  as to  whether  recent  trends  will
continue.  The assets of the  Partnership,  principally  investments in Investee
Entities,  are highly leveraged in view of the fact that each Investee  property
is subject to a long-term  first  mortgage loan.  Operating  expenses and rental
revenue of each Investee property are subject to inflationary factors. Low rates
of inflation  could result in slower  rental rate  increases,  and to the extent
that these  factors are  outpaced by increases  in property  operating  expenses
(which  could  arise as a result of general  economic  circumstances  such as an
increase in the cost of energy or fuel, or from local  economic  circumstances),
the operations of the Partnership and its Investees could be adversely affected.
Actual  deflation in prices  generally  would, in effect,  increase the economic
burden of the mortgage debt service with a corresponding adverse effect.

High rates of inflation,  on the other hand,  raise the  operating  expenses for
projects,  and to the extent they cannot be passed on to tenants  through higher

                                      K-12

<PAGE>

rents,  such increases  could also  adversely  affect  Partnership  and Investee
operations. Although, to the extent rent increases are commensurable, the burden
imposed by the mortgage leverage is reduced with a favorable effect.  Low levels
of new  construction  of similar  projects and high levels of interest rates may
foster  demand for existing  properties  through  increasing  rental  income and
appreciation in value.

Item 7.  Financial Statements

See the Financial  Statements of the Partnership included as part of this Annual
Report on Form 10-KSB.

 Item 8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure.

         None.

                                      K-13

<PAGE>


                                    PART III

Item 9.  Director and Executive Officer of the Registrant.

         (a) and (b)  Identification of Director and Executive Officer.

The  following  table sets forth the name and age of the director and  executive
officer of PAS and the offices held by such person.

      Name                            Office                         Age

Terrence P. Sullivan           President and Director                 54

 Mr. Sullivan has served as a director and executive  officer of PAS, which is a
 general partner of the General Partner since November 1986. Since that time, he
 has also been a general  partner of the General  Partner.  He will  continue to
 serve in the  capacity  indicated  above  until his  successor  is elected  and
 qualified. Mr. Sullivan is also an executive officer of Boston Capital Planning
 Group, Inc. (Boston Capital Planning), a Massachusetts corporation.


                  (c)      Significant Employees.

                           None.

                  (d)      Family Relationships.

                           None.

                  (e)      Business Experience.

The background  and experience of the executive  officer and director of PAS and
Boston Capital Planning identified above in Items 9(a) and 9(b) is as follows:

Terrence P. Sullivan,  54, is the founder and sole shareholder of Boston Capital
Planning,  a financial  consulting  and real estate  syndication  firm,  and its
wholly-owned subsidiary,  Boston Bay Capital, Inc. (Boston Bay Capital). Founded
in 1979, Boston Bay Capital was an NASD-Registered broker/dealer specializing in
placement of interests in real estate  limited  partnerships  which own historic
and  restoration  properties.  From 1979 through  December 31, 1986,  Boston Bay
Capital  participated  in the placement of limited  partnership  interests in 98
real estate programs,  approximately 60 of which were historic rehabilitation or
restoration  partnerships,  placing  a total of  approximately  $140,000,000  in
equity.  In addition,  Boston Bay Capital served as dealer manager in connection
with the sale of Units of limited partnership interest in Historic  Preservation
Properties Limited Partnership,  Historic  Preservation  Properties 1988 Limited
Partnership, the Partnership, and Historic Preservation Properties 1990 L.P. Tax
Credit  Fund,  four public  programs  sponsored  by the  General  Partner and an
affiliate  of the General  Partner.  Such public  programs  sold an aggregate of
approximately $82 million of Units of limited partnership interest. From 1972 to
1978, Mr.  Sullivan was Tax Shelter  coordinator for the Boston office of White,

                                      K-14

<PAGE>

Weld & Co.,  Inc.,  an investment  banking firm.  Mr.  Sullivan  graduated  from
Worcester  Polytechnic  Institute  in 1968 with a Bachelor of Science  degree in
mechanical engineering.

He  received  a  Masters  in  Business  Administration  from the  University  of
Massachusetts (Amherst) in 1971. Mr. Sullivan serves as a general partner of BBC
Restoration  Properties  II Limited  Partnership,  which  concluded its business
affairs  December 31, 1999. In addition,  an entity  controlled by Mr.  Sullivan
served  as  the  general  partner  of  Institutional   Credit  Partners  Limited
Partnership (ICP), a partnership  organized to invest in a diversified portfolio
of properties which qualify for low-income  housing tax credits,  Rehabilitation
Tax Credits,  or both. In 1989, ICP completed a private  placement of $5,790,000
of  limited  partnership   interest  to  corporations  and  other  institutional
investors. ICP concluded its business affairs December 31, 2000.

                  (f)      Involvement in Certain Legal Proceedings.

                           None.

Item 10.          Executive Compensation.

The director and executive  officer of PAS and Boston Capital Planning  receives
no remuneration from the Partnership.

Under the  Partnership  Agreement,  the General  Partner and its  affiliates are
entitled to receive  various fees,  expense  reimbursements,  commissions,  cash
distributions,  allocations  of taxable  income or loss and tax credits from the
Partnership.  The amounts of these items and the times at which they are payable
to the General Partner and its affiliates are described on pages 13-15 and 36-39
of the  Prospectus  under  the  captions  "Management  Compensation"  and  "Cash
Distributions and Net Profits and Net Losses", respectively,  which descriptions
are incorporated herein by this reference.

There were no expense  reimbursements  paid to or  accrued,  for the years ended
December 31, 2000 and 1999.

 For the years ended  December 31, 2000 and 1999, the  Partnership  allocated to
 the  General   Partner   unaudited   taxable   income  of  $1,675  and  $2,053,
 respectively.

Item 11.  Unit Ownership of Certain Beneficial Owners and Management.

          (a)  Unit Ownership of Certain Beneficial Owners.

No person or group is known by the  Partnership  to be the  beneficial  owner of
more  than 5% of the  outstanding  Units  at March  15,  2001.  Pursuant  to the
Partnership  Agreement,  the voting  rights of the Limited  Partners are limited
and, in some circumstances, are subject to the prior receipt of certain opinions
of counsel or judicial decisions.

Under  the  Partnership  Agreement,  the  right to manage  the  business  of the
Partnership is vested solely in the General  Partner,  although the consent of a
majority in interest  of the  Limited  Partners is required  for the sale at one
time of all or substantially all of the Partnership's assets and with respect to
certain other matters. See Item 1 above for a description of the General Partner
and its general partners.

           (b)     Unit Ownership of Management.

No  director  or  executive  officer of PAS,  Boston  Capital  Planning or their
affiliates had any beneficial  ownership of Units as of March 15, 2001. However,
a former Vice President of Boston Capital Planning  purchased 20 Units ($20,000)
in the Partnership  during 1989. No officer or director of PAS or Boston Capital
Planning,  nor any  general  partner of the  General  Partner,  nor any of their
respective affiliates, possesses the right to acquire Units.

           (c)     Change in Control.

There exists no arrangement  known to the Partnership  which may at a subsequent
date result in a change in control of the Partnership.

Item 12.   Certain Relationships and Related Transactions.

           None

Item 13.   Exhibits and Reports on Form 8-K.

     (a)   The following documents are filed as part of this report:

           1. Exhibits - The Exhibits listed on the accompanying Index to
           Exhibits  are  filed  as  part  of  this  Annual   Report  and
           incorporated in this Annual Report as set forth in said Index.

     (b)   Reports on Form 8-K - The  Partnership  did not file any current
           reports on Form 8-K during the fourth quarter of 2000.

                                      K-15


<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                               HISTORIC PRESERVATION PROPERTIES 1989
                               LIMITED PARTNERSHIP

                               By:      Boston Historic Partners Limited
                                         Partnership, General Partner

                                        By:   Portfolio Advisory Services,
                                              Inc., General Partner

Date:  March 15, 2001                         By: /s/Terrence P. Sullivan
                                                  Terrence P. Sullivan,
                                                  President

                                        and

Date:  March 15, 2001                         By: /s/Terrence P. Sullivan
                                                  Terrence P. Sullivan,
                                                  General Partner


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following  persons on behalf of the Registrant and in the
capacities and on the dates indicated.

Signature                      Title


                               Individual General Partner of Boston
                               Historic Partners Limited
/s/Terrence P. Sullivan        Partnership and President, Principal
Terrence P. Sullivan           Executive Officer and Director of
                               Portfolio Advisory Services, Inc.,
Date: March 15, 2001           General Partner of Boston Historic
                               Partners Limited Partnership.

                               Principal Financial and Principal
                               Accounting Officer of Portfolio
/s/Terrence P. Sullivan        Advisory Services, Inc., General
Terrence P. Sullivan           Partner of Boston Historic Partners
                               Limited Partnership
Date: March 15, 2001

                                      K-16


<PAGE>



Supplemental  Information to be Furnished with Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act.

An annual report will be furnished to unit holders  subsequent to filing of this
Form 10-KSB.

                                      K-17


                     SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

            Historic Preservation Properties 1989 Limited Partnership




                                                      EXHIBITS


<PAGE>



            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP

                                Index to Exhibits

Exhibit No.                                          Title of Documents

 3(a)          Certificate  of  Limited  Partnership  of  Historic  Preservation
               Properties 1989 Limited  Partnership  dated as of August 30, 1988
               (filed as an exhibit to the Partnership's  Registration Statement
               of Form S-11, File No. 33-24129,  and incorporated herein by this
               reference).

 3(b)          Agreement  of  Limited   Partnership  of  Historic   Preservation
               Properties 1989 Limited  Partnership  dated as of August 30, 1988
               (filed as an exhibit to the Partnership's  Registration Statement
               on Form S-11, File No. 33-24129,  and incorporated herein by this
               reference).

 3(c)          Amended and Restated Agreement of Limited Partnership of Historic
               Preservation  Properties  1989  Limited  Partnership  dated as of
               December 19, 1988, as currently in effect,  other than amendments
               thereto which  provide  solely for the admission or withdrawal of
               investors  as limited  partners of the  Partnership  (filed as an
               exhibit to the Partnership's Registration Statement of Form S-11,
               File No. 33-2419, and incorporated herein by this reference).

 4(a)          See Exhibits 3(a), 3(b) and 3(c).

 10(a)         Sales Agency Agreement between Historic  Preservation  Properties
               1989  Limited  Partnership  and Boston Bay Capital,  Inc.,  dated
               December   19,  1989   (filed  as  Exhibit   No.   10(a)  to  the
               Partnership's  Form 10-K as of December 31, 1989 and incorporated
               herein by this reference).



                                Index to Exhibits

                                   (Continued)

Exhibit No.                                         Title of Documents


 10(b)         Escrow Deposit Agreement between Historic Preservation Properties
               1989 Limited  Partnership  and Wainwright  Bank and Trust Company
               dated  December  19,  1989  (filed as  Exhibit  No.  10(b) to the
               Partnership's  Form 10-K as of December 31, 1989 and incorporated
               herein  by  this  reference).

 10(c)         Documents  relating to the  acquisition of a general  partnership
               interest in Jenkins Court Associates  Limited  Partnership (filed
               as part of  Post-Effective  Amendment No. 1 to the  Partnership's
               Registration  Statement  of Form  S-11,  File No.  33-24129,  and
               incorporated herein by this reference).

 10(d)         Documents  relating to the  acquisition of a general  partnership
               interest in Portland Lofts Associates Limited  Partnership (filed
               as part of  Post-Effective  Amendment No. 2 to the  Partnership's
               Registration  Statement  on Form  S-11,  File No.  33-24129,  and
               incorporated herein by this reference).

 10(e)         Documents  relating to the  acquisition of a general  partnership
               interest  in 402  Julia  Street  Associates  Limited  Partnership
               (filed  as a  part  of  Post-Effective  Amendment  No.  2 to  the
               Partnership's  Registration  Statement  on Form  S-11,  File  No.
               33024129, and incorporated by this reference).

 10(f)         Documents   relating  to  the  acquisition  of  the  Cosmopolitan
               Building, St. Paul, Minnesota.

                    I.   Purchase and Sale Agreement between Historic  Landmarks
                         Realty Growth Fund: The Cosmopolitan (the "Seller"), as
                         Seller,  and  Historic  Preservation   Properties  1989
                         Limited  Partnership  (the  "Partnership"),  as  Buyer,
                         dated  as  of  July  14,   1989   (filed   as  part  of
                         Post-Effective  Amendment  No.  2 to the  Partnership's
                         Registration Statement on Form S-11, File No. 33-24129,
                         and incorporated herein by this reference).

                    II.  Amendment   to  Purchase  and  Sale   Agreement   dated
                         September, 1989, between the Seller and the Partnership
                         (filed as Exhibit No. 10(f) to the  Partnership's  Form
                         10-K as of December 31, 1989 and incorporated herein by
                         this reference).

                    III. Loan  Agreement  dated  December  18, 1989  between the
                         Partnership  and Meritor Savings Bank (filed as Exhibit
                         No. 10(f) to the Partnership's Form 10-K as of December
                         31, 1989 and incorporated herein by this reference).

                    IV.  Allonge to First  Loan Note and Second  Loan Note dated
                         December 18, 1989,  between the Partnership and Meritor
                         Savings  Bank  (filed  as  Exhibit  No.  10(f)  to  the
                         Partnership's  Form 10-K as of  December  31,  1989 and
                         incorporated herein by this reference).

                    V.   Mortgage,     Security     Agreement,     Modification,
                         Consolidation  and Amendment  Agreement  dated December
                         18, 1989,  between the  Partnership and Meritor Savings
                         Bank (filed as Exhibit No.  10(f) to the  Partnership's
                         Form  10-K as of  December  31,  1989 and  incorporated
                         herein by this reference).

                    VI.  Security  Agreement dated December 18, 1989 between the
                         Partnership  and Meritor Savings Bank (filed as Exhibit
                         No. 10(f) to the Partnership's Form 10-K as of December
                         31, 1989 and incorporated herein by this reference).

                    VII. Assignment of Leases,  Consolidation  and  Modification
                         Agreement   dated   December   18,  1989   between  the
                         Partnership  and Meritor Savings Bank (filed as Exhibit
                         No. 10(f) to the Partnership's Form 10-K as of December
                         31, 1989 and incorporated herein by this reference).

                    VIII.Assignment of Depository  accounts  dated  December 18,
                         1989 between the  Partnership  and Meritor Savings Bank
                         (filed as Exhibit No. 10(f) to the  Partnership's  Form
                         10-K as of December 31, 1989 and incorporated herein by
                         this reference).

                    IX.  Assignment and  Subordination of Management and Leasing
                         Consolidation and Modification Agreement dated December
                         18, 1989 between the  Partnership  and Meritor  Savings
                         Bank (filed as Exhibit No.  10(f) to the  Partnership's
                         Form  10-K as of  December  31,  1989 and  incorporated
                         herein by this reference).

                    X.   Management  and Leasing  Agreement  dated as of October
                         17, 1989 between the Partnership and McKenna Management
                         Associates (filed as Exhibit 10(f) to the Partnership's
                         Form  10-K as of  December  31,  1989 and  incorporated
                         herein by this reference).

 10(g)         Documents  relating to $400,000 loan to Portland Lofts Associated
               Limited Partnership

                    I.   Promissory Note, dated December 29, 1989,  delivered by
                         Portland  Lofts  Associates   Limited   Partnership  to
                         Capital  Consultants,  Inc.  (filed as Exhibit 10(g) to
                         the Partnership's Form 10-K as of December 31, 1989 and
                         incorporated herein by this reference).

                    II.  Deed of Trust and Security Agreement dated December 29,
                         1989,   between  Portland  Lofts   Associates   Limited
                         Partnership  and Capital  Consultants,  Inc.  (filed as
                         Exhibit No. 10(g) to the Partnership's  Form 10-K as of
                         December  31,  1989  and  incorporated  herein  by this
                         reference).

                    III. Assignment   of  Surplus   dated   December  29,  1989,
                         delivered  by Joseph W.  Angel II and Lynne I. Angel to
                         Capital  Consultants,  Inc. (filed as Exhibit No. 10(g)
                         to the Partnership's  Form 10-K as of December 31, 1989
                         and incorporated herein by this reference).

                    IV.  Guaranty of Note and Deed of Trust dated  December  29,
                         1989,  delivered  by Joseph W.  Angel II and  Dennis M.
                         Gilman to Capital  Consultants,  Inc. (filed as Exhibit
                         No. 10(g) to the Partnership's Form 10-K as of December
                         31, 1989 and incorporated herein by this reference).

 10(h)         Management Agreement dated August 20, 1989 between Portland Lofts
               Associates  Limited  Partnership and Great  Northwest  Management
               (filed as Exhibit No. 10(h) to the Partnership's  Form 10-K as of
               December 31, 1989 and incorporated herein by this reference).

 10(i)         Documents  relating to Settlement of Fleet  National Bank Loan to
               Jenkins Court  Associates  Limited  Partnership  (all dated as of
               February 7, 1991).

                    I.   Settlement   Agreement   between  Fleet  National  Bank
                         ("Fleet")   and  Jenkins   Court   Associates   Limited
                         Partnership  ("Jenkins  Court")  (filed as Exhibit  No.
                         10(i) to the Partnership's Form 10-K as of December 31,
                         1991 and incorporated herein by this reference).

                    II.  Agreement  between  Fleet and Jenkins  Court  (filed as
                         Exhibit No. 10(i) to the Partnership's  Form 10-K as of
                         December  31,  1991  and  incorporated  herein  by this
                         reference).

                    III. $250,000  Promissory  Note of Jenkins  Court  (filed as
                         Exhibit No. 10(i) to the Partnership's  Form 10-K as of
                         December  31,  1991  and  incorporated  herein  by this
                         reference).

                    IV.  $20,820,000  Amended and  Restated  Promissory  Note of
                         Jenkins  Court  (filed  as  Exhibit  No.  10(i)  to the
                         Partnership's  Form 10-K as of  December  31,  1991 and
                         incorporated herein by this reference).

                    V.   Open End Mortgage Modification  Agreement between Fleet
                         and Jenkins  Court  (filed as Exhibit No.  10(i) to the
                         Partnership's  Form 10-K as of  December  31,  1991 and
                         incorporated herein by this reference).

                    VI.  Assignment  Modification  Agreement  between  Fleet and
                         Jenkins  Court  (filed  as  Exhibit  No.  10(i)  to the
                         Partnership's  Form 10-K as of  December  31,  1991 and
                         incorporated herein by this reference).

 10(j)         Documents relating to Amended Settlement of Fleet Loan to Jenkins
               Court (all dated as of January 29, 1992).

                    I.   First Amended and Restated Settlement Agreement between
                         Fleet and Jenkins  Court (filed as Exhibit No. 10(j) to
                         the Partnership's Form 10-K as of December 31, 1991 and
                         incorporated herein by this reference).

                    II.  First Allonge to Amended and Restated  Promissory  Note
                         of Jenkins  Court  (filed as Exhibit  No.  10(j) to the
                         Partnership's  Form 10-K as of  December  31,  1991 and
                         incorporated herein by this reference).

                    III. Open End Mortgage Modification  Agreement between Fleet
                         and Jenkins  Court  (filed as Exhibit No.  10(j) to the
                         Partnership's  Form 10-K as of  December  31,  1991 and
                         incorporated herein by this reference).

                    IV.  Assignment  Modification  Agreement  between  Fleet and
                         Jenkins  Court  (filed  as  Exhibit  No.  10(j)  to the
                         Partnership's  Form 10-K as of  December  31,  1991 and
                         incorporated herein by this reference).

                    V.   Closing  Letter  between Fleet and Jenkins Court (filed
                         as Exhibit No. 10(j) to the Partnership's  Form 10-K as
                         of December  31, 1991 and  incorporated  herein by this
                         reference).

 10(k)         Agreementfor  Extension  of  Debt  and  Related  Matters  between
               Security Pacific Bank Oregon,  Portland Lofts Associates  Limited
               Partnership  and Joseph W. Angel,  II dated May 7, 1991 (filed as
               Exhibit No. 10(k) to the  Partnership's  Form 10-K as of December
               31, 1991 and incorporated herein by this reference).

 10(l)         Documentsrelated  to the Second Amended  Settlement of Fleet Loan
               to Jenkins Court dated as of July 2, 1992.

                    I.   Second  Amended  and  Restated   Settlement   Agreement
                         between  Fleet and Jenkins  Court (filed as Exhibit No.
                         10(l) to the Partnership's Form 10-K as of December 31,
                         1992 and incorporated herein by this reference).

 10(m)         Documents relating to the Amended $6,800,000 Construction Loan to
               Portland Lofts  Associates  Limited  Partnership (all dated as of
               March 31, 1992).

                    I.   Promissory  Note of Portland Lofts to Security  Pacific
                         Bank Oregon  (Security  Pacific)  (now Bank of America)
                         (filed as Exhibit No. 10(m) to the  Partnership's  Form
                         10-K as of December 31, 1992 and incorporated herein by
                         this reference).

                    II.  Deed of Trust and Security  Agreement  between Portland
                         Lofts and Security  Pacific (filed as Exhibit No. 10(m)
                         to the Partnership's  Form 10-K as of December 31, 1992
                         and incorporated herein by this reference).

                    III. Assignment  of Leases  and  Conditional  Assignment  of
                         Rentals by Portland Lofts to Security Pacific (filed as
                         Exhibit No. 10(m) to the Partnership's  Form 10-K as of
                         December  31,  1992  and  incorporated  herein  by this
                         reference).

                    IV.  Guarantees of Note and Deed of Trust  delivered by East
                         Bank Development,  Inc., Joseph W. Angel, II, Dennis M.
                         Gilman and Martin J. Soloway to Security Pacific (filed
                         as Exhibit No. 10(m) to the Partnership's  Form 10-K as
                         of December  31, 1992 and  incorporated  herein by this
                         reference).

                    V.   Arbitration   Agreement   between  Portland  Lofts  and
                         Security  Pacific  (filed as Exhibit  No.  10(m) to the
                         Partnership's  Form 10-K as of  December  31,  1992 and
                         incorporated herein by this reference).

 10(n)         Management  Agreement dated April 1, 1992 between  Portland Lofts
               Associates Limited Partnership and C & R Realty (filed as Exhibit
               No. 10(n) to the Partnership's  Form 10-K as of December 31, 1992
               and incorporated herein by this reference).

 10(o)         Documents  relating  to the  sale  of a  portion  of the  general
               partnership  interest  in 402  Julia  Street  Associates  Limited
               Partnership (all dated September 16, 1993)

                    I.   Second Amendment to the Amended and Restated  Agreement
                         of Limited  Partnership of 402 Julia Street  Associates
                         Limited  Partnership (filed as Exhibit No. 10(o) to the
                         Partnership's  Form 10-K as of  December  31,  1993 and
                         incorporated herein by this reference).

                    II.  Assignment   and  Assumption   Agreement   between  the
                         Partnership,  and Henry M.  Lambert  and R. Carey Bond.
                         (filed as Exhibit No. 10(o) to the  Partnership's  Form
                         10-K as of December 31, 1993 and incorporated herein by
                         this reference).

                    III. Security Agreement between the Partnership, and Lambert
                         and  Bond   (filed  as   Exhibit   No.   10(o)  to  the
                         Partnership's  Form 10-K as of  December  31,  1993 and
                         incorporated herein by this reference).

 10(p)         Agreement  for Extension of Loan from Fleet Bank to Jenkins Court
               Associates Limited Partnership (dated as of June 15, 1993) (filed
               as  Exhibit  No.  10(p)  to the  Partnership's  Form  10-K  as of
               December 31, 1993 and incorporated herein by this reference).

 10(q)         Agreement for Extension of Loan from Capital Consultants, Inc. to
               Portland Lofts Associates  Limited  Partnership (dated January 3,
               1994) (filed as Exhibit No. 10(q) to the Partnership's  Form 10-K
               as  of  December  31,  1993  and  incorporated   herein  by  this
               reference).

 10(r)         Documentsrelating   to  the  $15,000   loan  to  Portland   Lofts
               Associates Limited Partnership (all dated March 2, 1992)

                    I.   Rehabilitation  Loan Agreement  between  Portland Lofts
                         and the City of  Portland  (acting by and  through  the
                         Portland Development  Commission) (filed as Exhibit No.
                         10(r) to the Partnership's Form 10-K as of December 31,
                         1993 and incorporated herein by this reference).

                    II.  Promissory Note between  Portland Lofts and the City of
                         Portland   (acting   by  and   through   the   Portland
                         Development  Commission) (filed as Exhibit No. 10(r) to
                         the Partnership's Form 10-K as of December 31, 1993 and
                         incorporated herein by this reference).

                    III. Trust  Deed  between  Portland  Lofts  and the  City of
                         Portland   (acting   by  and   through   the   Portland
                         Development  Commission) (filed as Exhibit No. 10(r) to
                         the Partnership's Form 10-K as of December 31, 1993 and
                         incorporated herein by this reference).

 10(s)         Documents  relating to the settlement of amounts  payable between
               Portland Lofts and Richard E. Ragland, AIA

                    I.   Letter  of  agreement  signed  by  Portland  Lofts  and
                         Ragland  (dated  March 17,  1994) (filed as Exhibit No.
                         10(s) to the Partnership's Form 10-K as of December 31,
                         1993 and incorporated herein by this reference).

                    II.  Promissory  Note  between  Portland  Lofts and  Ragland
                         (dated  February  22, 1994) (filed as Exhibit No. 10(s)
                         to the Partnership's  Form 10-K as of December 31, 1993
                         and  incorporated  herein  by  this  reference).   III.
                         Release of Claims  between  Portland  Lofts and Ragland
                         (dated  February  22, 1994) (filed as Exhibit No. 10(s)
                         to the Partnership's  Form 10-K as of December 31, 1993
                         and incorporated herein by this reference).

                    III. Release of Claims  between  Portland  Lofts and Ragland
                         (dated February 22, 1994)(filed as Exhibit No. 10(s) to
                         the Partnership's Form 10-K as od December 31, 1993 and
                         incorporated herein by this reference).

                    IV.  Release  of All Claims  between  Ragland  and  Portland
                         Lofts (dated March 1, 1994) (filed as Exhibit No. 10(s)
                         to the Partnership's  Form 10-K as of December 31, 1993
                         and incorporated herein by this reference).

 10(t)         Documents  relating to the  amendment  of loan  documents  by and
               between Historic Preservation Properties 1989 Limited Partnership
               and Mellon Bank,  N.A. (all dated December 28, 1994, but executed
               January 4, 1995),  (filed as Exhibit  10(t) to the  Partnership's
               Form 10-K as of December 31, 1994 and incorporated  herein by the
               reference).

                    I.   First  Amendment  to Note  Mortgage and  Assignment  of
                         Leases.

                    II.Second Amendment to Loan Agreement

                    III. Letter Agreement on Payment of Legal Fees

 10(u)         Letter Agreement on Management  Functions by and between Historic
               Preservation  Properties  1989  Limited  Partnership  and Jenkins
               Court Investors  Limited  Partnership  (dated September 8, 1994),
               (filed  as  Exhibit  10(u) to the  Partnership's  Form 10-K as of
               December 31, 1994 and incorporated herein by this reference).

 10(v)         Stipulation  of Settlement,  and Transfer Deed,  dated August 31,
               1995, by and among Jenkins Court Associates Limited  Partnership,
               Miles S. Katzen, Jenkins Court Investors Limited Partnership, MSK
               Associates,  Inc.,  Jane  Katzen,  Frank  Seidman,  the  Jane  II
               Corporation and Jenkins Court Pennsylvania L.P, (filed as Exhibit
               10(v) to the Partnership's  Form 10-K as of December 31, 1995 and
               incorporated herein by this reference).

 10(w)         Asset Management  Agreement,  dated October 1, 1995, by and among
               Historic  Preservation  Properties Limited Partnership,  Historic
               Preservation   Properties  1988  Limited  Partnership,   Historic
               Preservation   Properties  1989  Limited  Partnership,   Historic
               Preservation  Properties  1990 L.P. Tax Credit Fund and Claremont
               Management   Corporation,   (filed  as   Exhibit   10(w)  to  the
               Partnership's  Form 10-K as of December 31, 1995 and incorporated
               herein by this reference).

 10(x)         Property  Management  Agreement,  dated  November 1, 1995, by and
               between Historic Preservation  Properties 1989 L.P. and Claremont
               Management   Corporation,   (filed  as   Exhibit   10(x)  to  the
               Partnership's  Form 10-K as of December 31, 1995 and incorporated
               herein by this reference).

 10(y)         First  Amendment to Loan  Documents,  dated June 1, 1995,  by and
               between Portland Lofts Associates Limited Partnership and Capital
               Consultants,  Inc.,  (filed as Exhibit 10(y) to the Partnership's
               Form 10-K as of December 31, 1995 and incorporated herein by this
               reference).

 10(z)         Documents  relating to the  organization  and  management  of The
               Cosmopolitan  at Mears Park, LLC. 1996 (filed as Exhibit 10(z) to
               the  Partnership's   Form  10-K  as  of  December  31,  1996  and
               incorporated herein by this reference).

                    I.   Operating  Agreement of the Cosmopolitan at Mears Park,
                         LLC,  dated March 15,  1996 (filed as Exhibit  10(z) to
                         the Partnership's Form 10-K as of December 31, 1996 and
                         incorporated herein by this reference).

                    II.  Management  Agreement between The Cosmopolitan at Mears
                         Park, LLC and Claremont Management  Corporation,  dated
                         March  20,  1996  (filed  as  Exhibit  10  (z)  to  the
                         Partnership's  Form 10-K as of  December  31,  1996 and
                         incorporated herein by this reference).

 10(aa)        Documents  relating to the  refinancing  of The  Cosmopolitan  at
               Mears Park, LLC Mortgage  Debt.  (filed as Exhibit 10 (aa) to the
               Partnership's  Form 10-K as of December 31, 1996 and incorporated
               herein by this reference).

                    I.   Promissory Note between the Cosmopolitan at Mears Park,
                         LLC and Heller  Financial,  Inc.,  dated March 20, 1996
                         (filed as  Exhibit  10 (aa) to the  Partnership's  Form
                         10-K as of December 31, 1996 and incorporated herein by
                         this reference).

                    II.  Mortgage,  Assignment  of Rents and Security  Agreement
                         between the  Cosmopolitan at Mears Park, LLC and Heller
                         Financial, Inc., dated March 20, 1996 (filed as Exhibit
                         10 (aa) to the  Partnership's  Form 10-K as of December
                         31, 1996 and incorporated herein by this reference).

                    III. Letter  Agreement  between  Patrick  Carney  and Heller
                         Financial  regarding  Personal Liability for carve-outs
                         to non-recourse language dated March 20, 1996 (filed as
                         Exhibit  10 (aa) to the  Partnership's  Form 10-K as of
                         December  31,  1996  and  incorporated  herein  by this
                         reference).

 10(bb)        Settlement Agreement of the Amended Construction Loan to Portland
               Lofts  Associates,  L.P.,  (Amended  Construction  Loan Agreement
               filed as Exhibit No. 10(m) to the  Partnership's  Form 10-K as of
               December 31, 1992) (filed as Exhibit 10 (bb) to the Partnership's
               Form 10-K as of December 31, 1996 and incorporated herein by this
               reference).

 10(cc)        Documents  relating  to the  refinancing  of the  Portland  Lofts
               Associates, L.P. Mortgage Debt, (all dated as of June 20, 1996).

                    I.   Promissory Note between Portland Lofts Associates, L.P.
                         and Bank of  America  Oregon  (filed as Exhibit 10 Form
                         10-K as of December 31, 1996 and incorporated herein by
                         this reference).

                    II.  The Standing  Loan  Agreement  between  Portland  Lofts
                         Associates,  L.P. and Bank of America  Oregon (filed as
                         Exhibit  10 (cc) to the  Partnership's  Form 10-K as of
                         December  31,  1996  and  incorporated  herein  by this
                         reference).

                    III. The Deed of Trust,  with Assignment of Rents,  Security
                         Agreement and Fixture  Filing  between  Portland  Lofts
                         Associates,  L.P. and Bank of America  Oregon (filed as
                         Exhibit  10 (cc) to the  Partnership's  Form 10-K as of
                         December  31,  1996  and  incorporated  herein  by this
                         reference).

                    IV.  The Payment  Guaranty  between Joseph W. Angel,  II and
                         Bank of America Oregon (filed as Exhibit 10 (cc) to the
                         Partnership's  Form 10-K as of  December  31,  1996 and
                         incorporated herein by this reference).

                    V.   The Payment Guaranty between Lynne I. Angel and Bank of
                         America  Oregon  (filed  as  Exhibit  10  (cc)  to  the
                         Partnership's  Form 10-K as of  December  31,  1996 and
                         incorporated herein by this reference).

 10(dd)        Promissory Note between Portland Loft Associates, L.P. and Joseph
               Angel and Lynne Angel,  dated December 18, 1996 (filed as Exhibit
               10 (dd) to the  Partnership's  Form 10-K as of December  31, 1996
               and incorporated herein by this reference).

 10(ee)        Forbearance  Agreement between Historic  Preservation  Properties
               1989, L.P. and East Bank Angel Joint Venture,  dated July 1, 1997
               (filed as  Exhibit  10(ee) to the  Partnership's  Form 10-K as of
               December 31, 1997 and incorporated herein by this reference).

 10(ff)        Asset  Management   agreement   between   Historic   Preservation
               Properties 1989, L.P. and Gunn Financial Incorporated, dated July
               1, 1998 (filed as Exhibit 10 (ff) to the Partnership's  Form 10-K
               as  of  December  31,  1998  and  incorporated   herein  by  this
               reference).

 10(gg)        Documents  relating  to  the  refinancing  of  402  Julia  Street
               Associates,  L.P.'s  Mortgage Debt,  dated July 9, 1998 (filed as
               Exhibit 10 (gg) to the Partnership's Form 10-K as of December 31,
               1998 and incorporated herein by this reference).

                    I.   Multifamily  Note between 402 Julia Street  Associates,
                         L.P. and Investment Property Mortgage, L.L.C. (filed as
                         Exhibit  10 (gg) to the  Partnership's  Form 10-K as of
                         December  31,  1998  and  incorporated  herein  by this
                         reference).

                    II.  Multifamily Mortgage,  Assignment of Rents and Security
                         Agreement  between  402  Julia  Street  and  Investment
                         Property  Mortgage L.L.C.  (filed as Exhibit 10 (gg) to
                         the Partnership's Form 10-K as of December 31, 1998 and
                         incorporated herein by this reference).

 10(hh)        First Amendment to Forbearance  Agreement between Historic
               Preservation Properties 1989, L.P. and East Bank Angel Joint
               Venture, dated June 21, 2000.

 10(ii)        Second Amendment to Forbearance  Agreement between Historic
               Preservation  Properties 1989, L.P. and East Bank Angel Joint
               Venture, dated September 27, 2000.

 10(jj)        Third Amendment to Forbearance  Agreement between Historic
               Preservation Properties  1989,  L.P. and East Bank Angel Joint
               Venture,  dated December 18, 2000.

 22            List of  Investee  Partnerships  (filed as Exhibit  No. 22 to the
               Partnership's  Form 10-K as of December 31, 1989 and incorporated
               herein by this reference).

 28(ii)(a)     Pages  13-25,  28-36  and 36-39 of the  Partnership's  Prospectus
               dated  December 19, 1988 (filed with the  Commission  pursuant to
               Rule  424(b) on January 5, 1989 and  incorporated  herein by this
               reference).

 28(ii)(b)     Supplement No. 1 to the  Partnership's  Prospectus  dated January
               20, 1989 (filed as a part of  Post-Effective  Amendment  No. 1 to
               the Partnership's  Registration  Statement on Form S-11, File No.
               33-24129, and incorporated herein by this reference).

 28(ii)(c)     Supplement No. 2 to the  Partnership's  Prospectus dated June 30,
               1989  (filed  as part of  Post-Effective  Amendment  No. 2 to the
               Partnership's  Registration  Statement  on Form  S-11,  File  No.
               33-24129 and incorporated herein by this reference).

 28(ii)(d)     Supplement No. 3 to the  Partnership's  Prospectus dated July 25,
               1989 (filed as a part of  Post-Effective  Amendment  No. 2 to the
               Partnership's  Registration  Statement  on Form  S-11,  File  No.
               33-24129, and incorporated herein by this reference).

 28(ii)(e)     Supplement No. 4 to the Partnership's  Prospectus dated September
               13, 1989 (filed as a part of  Post-Effective  Amendment  No. 2 to
               the Partnership's  Registration  Statement on Form S-11, File No.
               33-24129, and incorporated herein by this reference).

 28(ii)(f)     Supplement No. 5 to the Partnership's  Prospectus dated September
               19, 1989 (filed as a part of  Post-Effective  Amendment  No. 2 to
               the Partnership's  Registration  Statement on Form S-11, File No.
               33-24129, and incorporated herein by this reference).


<PAGE>
    HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                              FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999





<PAGE>






                          ANNUAL REPORT ON FORM 10-KSB

                                     Item 7


                          INDEX TO FINANCIAL STATEMENTS


                                                                          Page
Financial Statements of Historic Preservation
   Properties 1989 Limited Partnership

     Independent Auditors' Repor                                           F-3
     Balance Sheet as of December 31, 2000                                 F-4
     Statements of Operations for the Years Ended December 31, 2000
       and 1999                                                            F-5
     Statements of Changes in Partners' Equity (Deficit) for the Years
       Ended December 31, 2000 and 1999                                    F-6
     Statements of Cash Flows for the Years Ended December 31, 2000
       and 1999                                                            F-7
     Notes to Financial Statements                                         F-8


                                       F-2


<PAGE>


                          INDEPENDENT AUDITORS' REPORT


The Partners
Historic Preservation Properties 1989 Limited Partnership
Boston, Massachusetts

We  have  audited  the  accompanying  balance  sheet  of  Historic  Preservation
Properties 1989 Limited  Partnership (the  Partnership) as of December 31, 2000,
and the related  statements of operations,  partners'  equity (deficit) and cash
flows for each of the years in the  two-year  period  ended  December  31, 2000.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  financial  position  of  Historic   Preservation
Properties  1989 Limited  Partnership as of December 31, 2000 and the results of
its operations  and its cash flows for each of the years in the two-year  period
ended  December 31, 2000 in  conformity  with  accounting  principles  generally
accepted in the United States.


Lefkowitz, Garfinkel, Champi & DeRienzo P.C.



Providence, Rhode Island
February 13, 2001



                                       F-3

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                                  BALANCE SHEET
                                DECEMBER 31, 2000


                                     ASSETS


INVESTMENTS IN INVESTEE ENTITIES                                $     652,905

CASH AND CASH EQUIVALENTS                                             627,615
NOTE RECEIVABLE                                                        60,500
                                                                ---------------
                                                                $   1,341,020
                                                                ==============
LIABILITIES AND PARTNERS' EQUITY

LIABILITIES
     Accounts payable and accrued expenses                      $      41,628
                                                                --------------

              Total liabilities                                        41,628
                                                                --------------

COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)

PARTNERS' EQUITY
     Limited Partners' Equity - Units of  Investor Limited
         Partnership Interest, $1,000 stated value
         per Unit-Issued and outstanding 26,588 units               1,517,734
     General Partner's Deficit                                       (218,342)
                                                                --------------
              Total partners' equity                                1,299,392
                                                                --------------

                                                                $   1,341,020
                                                                ==============

 The accompanying notes are an integral part of these financial statements.

                                       F-4

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                   2000               1999
                                              ---------------    ---------------

REVENUE:
     Interest and other income                  $   24,855         $    7,943
                                              ---------------    ---------------
EXPENSES:
     Operating and administrative                  294,131            236,421
                                              ---------------    ---------------

LOSS FROM OPERATIONS                              (269,276)          (228,478)

EQUITY IN INCOME
     OF INVESTEE ENTITIES                          479,991            506,410
                                              ---------------    ---------------

NET INCOME                                      $  210,715         $  277,932
                                              ===============    ===============

NET INCOME  ALLOCATED
     TO GENERAL PARTNER                         $    2,107         $   2 ,779
                                              ===============    ===============

NET INCOME  ALLOCATED
     TO LIMITED PARTNERS                        $  208,608         $  275,153
                                              ===============    ===============

NET INCOME PER UNIT OF INVESTOR LIMITED
     PARTNERSHIP INTEREST, BASED ON
     26,588 UNITS ISSUED AND OUTSTANDING        $     7.85         $    10.35
                                              ===============    ===============



 The accompanying notes are an integral part of these financial statements.

                                       F-5

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


<TABLE>

<CAPTION>
<S>                                                 <C>                    <C>                <C>                 <C>
                                                        Units of
                                                        Investor            Investor
                                                        Limited             Limited            General
                                                      Partnership          Partners'          Partner's
                                                        Interest             Equity            Deficit               Total
                                                     ---------------     ---------------   -----------------    -----------------


BALANCE, December 31, 1998                                   26,588         $ 1,033,973         $ (223,228)          $  810,745

  Net Income                                                      -             275,153              2,779              277,932
                                                     ---------------     ---------------   -----------------    -----------------

BALANCE, December 31, 1999                                   26,588           1,309,126           (220,449)           1,088,677

  Net Income                                                      -             208,608              2,107              210,715
                                                     ---------------     ---------------   -----------------    -----------------

BALANCE, December 31, 2000                                   26,588         $ 1,517,734         $ (218,342)         $ 1,299,392
                                                     ===============     ===============   =================    =================

</TABLE>


 The accompanying notes are an integral part of these financial statements.

                                       F-6

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>


<S>                                                                                        <C>                    <C>
                                                                                                  2000                1999
                                                                                            -----------------    ----------------

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                                                  $   210,715          $ 277,932
     Adjustments to reconcile net income to
       net cash provided by operating activities:
         Equity in income of investee entities (over) under
           distributions received                                                                    (61,491)            13,342
         Decrease in note receivable and other assets                                                  3,500              9,350
         Increase (decrease) in accounts payable and
           accrued expenses                                                                           (2,058)             5,344
                                                                                            -----------------    ----------------
             Net cash provided by operating activities                                               150,666            305,968
                                                                                            -----------------    ----------------

NET INCREASE IN CASH
         AND CASH EQUIVALENTS                                                                        150,666            305,968

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                         476,949            170,981
                                                                                            -----------------    ----------------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                           $   627,615         $  476,949
                                                                                            =================    ================
</TABLE>


 The accompanying notes are an integral part of these financial statements.

                                       F-7



<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


(1)      Organization and General Partner - BHP

         Historic Preservation  Properties 1989 Limited Partnership (HPP'89) was
         formed on September 1, 1988 under the Delaware  Revised Uniform Limited
         Partnership  Act.  The purpose of HPP'89 is to invest in a  diversified
         portfolio of real properties for which certain costs of  rehabilitation
         have  qualified  for  rehabilitation  tax credits  (Rehabilitation  Tax
         Credits).

         Boston Historic  Partners  Limited  Partnership  (BHP), a Massachusetts
         limited  partnership,  is the general partner of HPP'89. BHP was formed
         in  November  1986  for the  purpose  of  organizing,  syndicating  and
         managing  publicly  offered real estate  limited  partnerships  (Public
         Rehabilitation  Partnerships).   As  of  December  31,  2000,  BHP  had
         established  three such  partnerships,  including  HPP'89.  Officers of
         Boston Capital Planning Group,  Inc. (BCPG),  an affiliate of BHP, were
         the initial limited  partners of HPP'89.  The initial limited  partners
         withdrew  as limited  partners  upon the first  admission  of  Investor
         Limited Partners (Limited Partners).  Prior to admission of the Limited
         Partners,  all costs  incurred  by HPP'89  were paid by BHP.  On May 3,
         1989, the first Limited Partners were admitted to HPP'89 and operations
         commenced.

         The Amended and Restated Agreement of Limited Partnership  (Partnership
         Agreement)  of HPP'89  generally  provides  that all net  profits,  net
         losses,  tax  credits  and cash  distributions  of HPP'89  from  normal
         operations  subsequent  to  admission  of  Limited  Partners  shall  be
         allocated  99% to the Limited  Partners  and 1% to BHP.  Proceeds  from
         sales or refinancings generally will be distributed 100% to the Limited
         Partners  until they have  received an amount  equal to their  Adjusted
         Capital  Contributions (as defined in the Partnership  Agreement) plus,
         priority returns and additional  incentive priority returns for certain
         Limited  Partners  admitted to HPP'89 on or prior to certain  specified
         dates.

(2)      Summary of Significant Accounting Policies

         Investments in Investee Entities

         HPP'89  accounts for its  investments  in its three  investee  entities
         (Investee  Entities)  under the equity  method.  In general,  under the
         equity method of accounting for investments, the investment is recorded
         at cost and the current  allocable  portion of earnings  (losses) of an
         Investee  Entity is  recorded  as income  (loss)  with a  corresponding
         increase (decrease) to the investment account. The allocable portion of
         losses of an  Investee  Entity are not  recorded  after the  respective
         investment  account  is  reduced  to zero.  The  allocable  portion  of
         earnings of an Investee  Entity are not recorded  until all  previously
         unrecorded losses are absorbed.

         Distributions  received are recorded as  reductions  to the  investment
         account.   Distributions   received  from  an  Investee   Entity  whose
         respective  investment account has been reduced to zero are recorded as
         income.

         Expenditures attributable to HPP'89's investments (primarily evaluation
         and acquisition fees and interest expense incurred during  construction
         periods) are treated as additional  investment  basis and are amortized
         on a straight-line basis over the estimated life of the investee assets
         (40 years).

         Use of Estimates

         The  preparation of financial  statements in conformity with accounting
         principles  generally accepted in the United States requires management
         to make estimates and assumptions  that affect the reported  amounts of
         assets  and  liabilities  and  disclosure  of  contingent   assets  and
         liabilities  at the date of the financial  statements  and the reported
         amounts of revenue and expenses  during the  reporting  period.  Actual
         results could differ from those estimates.

                                      F-8

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


(2)      Summary of Significant Accounting Policies (Continued)

         Cash, Cash Equivalents and Concentration of Credit Risk

         HPP'89 considers all highly liquid investments with a maturity of three
         months or less when purchased to be cash  equivalents.  At December 31,
         2000, cash equivalents totaled $518,056.

         At December 31, 2000, HPP'89 had approximately $60,028 of cash and cash
         equivalents  on deposit  in a bank in excess of amounts  insured by the
         Federal  Deposit  Insurance  Corporation.  Also at December  31,  2000,
         HPP'89 had $468,056 of Massachusetts municipal money market funds which
         are not insured or guaranteed.

         Income Taxes

         No   provision   (benefit)   for  income  taxes  is  reflected  in  the
         accompanying  financial  statements  of HPP'89.  Partners of HPP'89 are
         required  to report  on their  tax  returns  their  allocable  share of
         income,  gains,  losses,  deductions  and credits  determined  on a tax
         basis.

(3)      Investments in Investee Entities; Commitments and Contingencies

         HPP'89 has general  partnership  interests in two Investee Entities and
         is a managing member in another Investee Entity.

         HPP'89's current allocable percentage of operating income and/or losses
         in the Investee  Entities  ranges from 50% to 99%. Each of the Investee
         Entities'  agreements  is  different  but, in general,  provides  for a
         sharing  of  management  duties  and  decisions  among  HPP'89  and the
         respective  local  general  partners  or other  managing  members,  and
         certain  priorities  to HPP'89 with  respect to return on and return of
         invested  capital.  Significant  Investee Entity decisions  require the
         approval  of both  HPP'89  and the  local  general  partners  or  other
         managing  members.  In addition,  each Investee Entity has entered into
         various agreements with its local general partners or members, or their
         affiliates, to provide development,  management and other services, for
         which  the  local   general   partners  or  other   members  (or  their
         affiliates), are paid fees by the respective Investee Entity.

         Following is a summary of information  regarding the Investee  Entities
         and HPP'89's investments therein:

         Jenkins Court  Associates  Limited  Partnership  (Jenkins  Court) was a
         Delaware limited  partnership  which was formed on December 20, 1988 to
         acquire,  construct,  rehabilitate,  operate  and manage a 144,000  net
         rentable square foot five-story building and 30,000 net rentable square
         feet  of  new  retail  space,   including  storage  areas  and  parking
         facilities,  located  at Old  York  Road  and  Rydal  Road,  Jenkintown
         Borough, Pennsylvania.  HPP'89 contributed $6,563,064 to the capital of
         Jenkins  Court  through the date of Jenkins  Court's  Chapter 11 filing
         (see below) and had a general  partnership  interest therein.  HPP'89's
         investment  in  Jenkins  Court  represented  approximately  36%  of the
         aggregate funds initially available for investment.

         On November 23, 1994,  Jenkins  Court filed a petition for relief under
         Chapter 11 of the federal  bankruptcy laws in United States  Bankruptcy
         Court for the jurisdiction of the Eastern District of Pennsylvania.  On
         August 31, 1995,  considering the  unlikelihood of a successful plan of
         reorganization,  Jenkins Court and the mortgage  holder  entered into a
         settlement agreement under which Jenkins Court transferred the deed and
         title of the  property to the  mortgage  holder.  The  mortgage  holder
         released Jenkins Court and its guarantors for the entire  indebtedness.
         As of August 31, 1995, 98.4% of the Limited  Partners' tax credits were
         vested prior to the loss of the  property.  Although  Jenkins  Court no
         longer  owned  investment  property or had  property  operations  after
         August 31, 1995,  the Jenkins Court  partnership  remained in existence
         until  December  31,  1999 to resolve  certain  partnership  assets and
         liabilities.  In September  1999,  HPP'89  collected  $113,752 from the
         proceeds of the collateral  securing  HPP'89's  default loan receivable
         from  Jenkins  Court.  The  $113,752  received  during  the year  ended
         December 31, 1999 is included in equity in income of investee entities.
                                       F-9

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


 (3)     Investments  in  Investee  Entities;   Commitments  and  Contingencies
         (Continued)

         402  Julia  Street  Associates  Limited  Partnership  (402  Julia) is a
         Delaware  limited  partnership  formed  on July  25,  1989 to  acquire,
         construct,  rehabilitate, operate and manage a 24 residential units and
         approximately  3,900  net  rentable  square  feet of  commercial  space
         building located thereon at 402 Julia Street,  New Orleans,  Louisiana.
         For the year ended  December 31, 2000,  402 Julia  recorded an economic
         occupancy of 97% for its residential units and an economic occupancy of
         100% for its commercial space for a combined economic  occupancy of 98%
         (occupancy percentages unaudited).

         HPP'89 originally  contributed $775,000 to the capital of 402 Julia and
         owns  a  general  partnership   interest  therein.   HPP'89's  original
         investment in 402 Julia  represented  approximately 4% of the aggregate
         funds initially available for investment. On September 16, 1993, HPP'89
         sold one-third of its general partnership  interest in 402 Julia to the
         developer general partner for $185,000. HPP'89's percentage of interest
         in 402 Julia was thereby reduced from 98% to 65%. The terms of the sale
         require  annual  payments of $3,500 through 2016 and a final payment of
         $4,500  in 2017.  At  December  31,  2000,  the  remaining  uncollected
         payments  total  $60,500  which are secured by the interest sold to the
         developer  general  partner.  The sale transaction did not generate any
         Investment Tax Credit recapture.

         Rehabilitation  Tax  Credits  generated  by 402  Julia  and  previously
         allocated to HPP'89 Limited  Partners totaled $248,796 since inception.
         As of March 31, 1995, 100% of these credits were fully vested.

         HPP'89 recorded net income from the 402 Julia Investment of $30,959 and
         $6,634  for the  years  ended  December  31,  2000  and 1999 as well as
         amortization  of $3,252 for each of the years ended  December  31, 2000
         and 1999.

         Portland Lofts  Associates  Limited  Partnership  (Portland Lofts) is a
         Delaware  limited  partnership  formed on  August  8, 1989 to  acquire,
         construct,  rehabilitate, operate and manage three buildings containing
         89  residential  units and 29,250  square  feet of ground  floor  space
         useable as either commercial space or as home/studio space for artists,
         located at 555 Northwest Park Avenue in Portland,  Oregon. For the year
         ended  December 31, 2000,  the  economic  occupancy of its  residential
         units was 90% and the economic  occupancy for its commercial  space was
         93% for a combined  economic  occupancy of 90%  (occupancy  percentages
         unaudited).

         HPP'89 contributed  $3,820,000 through December 31, 2000 to the capital
         of  Portland  Lofts and owns a general  partnership  interest  therein.
         HPP'89's  investment in Portland Lofts represents  approximately 21% of
         the aggregate funds initially available for investment.

         Rehabilitation Tax Credits generated by Portland Lofts and allocated to
         HPP'89's  Limited Partners  totaled  $1,775,571 since inception.  As of
         April 1, 1996, 100% of these tax credits were fully vested.

         During 1997,  HPP'89's investment in Portland Lofts was reduced to zero
         due to allocated  losses and  distributions  received.  At December 31,
         1999, HPP'89 had cumulative unrecorded losses totaling $40,201 relating
         to the Portland Lofts investment.

         For the years ended  December 31, 2000 and 1999,  HPP'89 was  allocated
         net income of $53,847 and $50,786,  respectively,  from Portland Lofts,
         thereby  allowing  HPP'89 to record all  cumulative  unrecorded  losses
         relating to Portland Lofts investment as of December 31, 2000.

         For each of the years ended December 31, 2000 and 1999, HPP'89 received
         distributions   of  $156,000  from  the  Portland   Lofts   investment.
         Distributions  received of $143,000  and  $156,000  for the years ended
         December 31, 2000 and 1999,  respectively,  were  recorded as equity in
         income of investee entities.

                                      F-10

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


 (3)     Investments  in  Investee  Entities;   Commitments  and  Contingencies
         (Continued)

         The  Cosmopolitan  at Mears Park,  LLC (TCAMP) On  December  18,  1989,
         HPP'89 acquired the  Cosmopolitan  Building  containing 255 residential
         units and  approximately  2,250 square feet of  commercial  space.  The
         building was  renovated,  and certain  renovation  costs  qualified for
         Rehabilitation  Tax Credits.  HPP'89's  investment in The  Cosmopolitan
         Building represented approximately 39% of the aggregate funds initially
         available for  investment.  For the year ended  December 31, 2000,  the
         economic occupancy of TCAMP was 94% (unaudited).

         Rehabilitation   Tax  Credits   generated   by  the   purchase  of  the
         Cosmopolitan  Building and  previously  allocated  to HPP'89's  Limited
         Partners totaled  $4,307,491 since inception.  As of December 31, 1994,
         100% of these tax credits were fully vested.

         Effective March 15, 1996, HPP'89 contributed the Cosmopolitan Building,
         and certain other assets and liabilities, to TCAMP (a Limited Liability
         Company) for a 50% ownership  interest and accounts for its  investment
         in TCAMP  under the equity  method of  accounting.  Distributions  from
         TCAMP to  HPP'89  and the  other  member  are  subject  to the order of
         distributions as specified in the Operating Agreement of TCAMP.

         HPP'89 recorded net income of $295,638 and $233,276 for the years ended
         December 31, 2000 and 1999,  respectively,  from the TCAMP  Investment.
         HPP'89 received cash  distributions of $262,500 and $250,000 from TCAMP
         for the years ended December 31, 2000 and 1999, respectively.

         HPP'89's  investments in the Investee Entities at December 31, 2000 are
         summarized as follows:

         Cumulative:

         Investment and advances made in cash                   $    4,880,288
         Evaluation and acquisition costs                              835,709
         Interest capitalization and other costs                        39,615
         Net equity in income of Investee Entities                         112
         Reserves for realization of investments                    (3,469,267)
         Amortization of certain costs                                 (56,232)
         Distributions received from Investee Entities              (1,335,700)
         Sale of one third interest of Investee Entity                (241,620)
                                                                ----------------

                                                                $      652,905
                                                                ================

         The above summary of HPP'89's investments in Investee Entities does not
         include its investment in Jenkins Court.

         The equity in income of Investee Entities reflected in the accompanying
         statements  of  operations  included  income of $483,243  and  $395,910
         (prior to recovery of $113,752 default loan receivable),  for the years
         ended December 31, 2000 and 1999, respectively, and annual amortization
         of certain  costs of $3,252,  for each of the years ended  December 31,
         2000 and 1999.


                                      F-11

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


     (3)  Investments  in  Investee  Entities;   Commitments  and  Contingencies
          (Continued)

         Summary combined balance sheet of the Investee  Entities as of December
         31, 2000 and summary  combined  statements of operations  for the years
         ended December 31, 2000 and 1999 are as follows.

                             COMBINED BALANCE SHEET
                                     ASSETS

                                                                     2000
                                                                  -----------
         Buildings and improvements (net of
         accumulated depreciation of $4,543,230)               $     14,437,784
         Land                                                         2,041,326
         Other assets (net of accumulated
         amortization of $220,538)                                      525,675
         Cash and cash equivalents                                      535,328
                                                                ----------------

                  Total assets                                  $    17,540,113
                                                                ================

                        LIABILITIES AND PARTNERS' EQUITY

                                                                     2000
                                                                  -----------
       Liabilities
               Mortgage and notes payable                      $     12,947,002
               Other liabilities                                        628,106
                                                               -----------------
               Total liabilities                                     13,575,108
                                                               -----------------

               Partners' equity:
               HPP'89                                                 2,756,018
               Other partners                                         1,208,987
                                                               -----------------
                  Total partners' equity                              3,965,005
                                                               -----------------

                     Total liabilities and partners' equity    $     17,540,113
                                                               =================

Members'  equity in TCAMP has been  classified  as partners'  equity in the
combined balance sheet.


                        COMBINED STATEMENTS OF OPERATIONS

                                                     2000             1999
                                                  ----------      -----------

   Revenue:
           Rental revenue                     $   4,361,451       $   4,178,519
           Interest and other income                 71,524              78,077
                                              --------------      --------------
                                                  4,432,975           4,256,596
                                              --------------      --------------

   Expenses:
         Interest expense                         1,186,689           1,207,119
         Depreciation and amortization              593,734             608,453
         Operating expenses                       1,959,496           1,913,019
                                              --------------      --------------
                                                  3,739,919           3,728,591
                                              --------------      --------------

   Net income from operations                  $    693,056       $     528,005
                                               =============      ==============
   Net income allocated to HPP'89              $    380,444       $     290,696
                                               =============      ==============
   Net income allocated to other partners      $    312,612       $     237,309
                                               =============      ==============


                                      F-12

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

 (4)     Commitments

         Effective  July 1, 1998,  HPP'89 engaged Gunn  Financial,  Incorporated
         (GFI),   an   unaffiliated   Massachusetts   corporation,   to  provide
         accounting,  asset management and investor services.  GFI provides such
         services for an annual  management  fee plus  reimbursement  of all its
         costs of providing these services. The agreement expires on the earlier
         of June 30, 2006 or liquidation of the Partnership, as defined. Through
         June 30, 2000,  the annual fee was $63,000 and effective  July 1, 2000,
         the annual fee was reduced to $54,000. For the years ended December 31,
         2000 and 1999, GFI was reimbursed  $160,176 and $120,218,  respectively
         for operating costs.

 (5)     Fair Value of Financial Instruments

         The fair values of cash and cash  equivalents and accounts  payable and
         accrued  expenses  at  December  31, 2000  approximate  their  carrying
         amounts due to their short maturities.



                                      F-13