<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the quarterly period ended June 30, 2004

                                       or

[ ]   TRANSITION REPORT UNDER 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 as Specified in Its Charter)

                                    Delaware
         --------------------------------------------------------------
         (State or Other Jurisdiction of Incorporation or Organization)

                                   04-3021042
         --------------------------------------------------------------
                      (I.R.S. Employer Identification No.)

             45 Broad Street, 3rd Floor, Boston, Massachusetts 02109
             -------------------------------------------------------
                    (Address of Principal Executive Offices)

                    Issuer's Telephone Number, (617) 422-5815

--------------------------------------------------------------------------------
        (Former name, former address and former fiscal year, if changed
                               since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:___________

Transitional Small Business Disclosure Format (Check one):
Yes[ ]   No [ ]

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP

                                   FORM 10-QSB

                                  JUNE 30, 2004

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                       <C>
PART  I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                  Consolidated Balance Sheet                                3

                  Consolidated Statements of Operations                     4

                  Consolidated Statements of Partners' Equity (Deficit)     5

                  Consolidated Statements of Cash Flows                     6

                  Notes to Consolidated Financial Statements              7-12

Item 2.  Management's Discussion and Analysis
                     or Plan of Operation                                 13-15

Item 3.  Controls and Procedures                                           15

PART II - Other Information                                                16

Signatures                                                                 17
</TABLE>

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2004
                                   (UNAUDITED)

<TABLE>
<S>                                                           <C>
                                     ASSETS

INVESTMENT IN REAL ESTATE
      Land                                                    $  2,396,037
      Buildings and improvements                                17,940,293
      Furniture and equipment                                      400,420
                                                              ------------
                                                                20,736,750
      Accumulated depreciation                                  (4,005,921)
                                                              ------------
                                                                16,730,829
                                                              ------------

INVESTMENT IN INVESTEE ENTITY                                      479,810
                                                              ------------
CASH AND CASH EQUIVALENTS
      Real estate operating                                        956,226
      Partnership                                                   63,237
                                                              ------------
                                                                 1,019,463
                                                              ------------
CASH AND CASH EQUIVALENTS, SECURITY DEPOSITS                       142,243

OTHER ASSETS                                                       151,412
ESCROW DEPOSITS                                                    199,599
DEFERRED COSTS, less accumulated amortization of $169,578          185,790
                                                              ------------
                                                              $ 18,909,146
                                                              ============
                        LIABILITIES AND PARTNERS' EQUITY

LIABILITIES
      Mortgage notes payable                                  $ 18,497,284
      Accounts payable and accrued expenses                        254,788
      Security deposits                                            130,808
                                                              ------------
                  Total liabilities                             18,882,880
                                                              ------------
COMMITMENTS (Note 5)

PARTNERS' EQUITY
      Limited Partners' Equity - Units of  Investor Limited
            Partnership Interest, $1,000 stated value
            per Unit-Issued and outstanding 26,588 units           257,339
      General Partner's Deficit                                   (231,073)
                                                              ------------
                  Total partners' equity                            26,266
                                                              ------------
                                                              $ 18,909,146
                                                              ============
</TABLE>

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

                                       3
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            FOR THE THREE MONTHS AND
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                              Three Months                    Six Months
                                              Ended June 30,                Ended June 30,
                                           2004           2003           2004           2003
                                        -----------    -----------    -----------    -----------
<S>                                     <C>            <C>            <C>            <C>
REVENUE:
      Rental income                     $ 1,031,751    $ 1,018,209    $ 2,041,287    $ 2,042,173
      Interest and other income              21,977         33,862         46,418         59,776
                                        -----------    -----------    -----------    -----------
               Total revenue              1,053,728      1,052,071      2,087,705      2,101,949
                                        -----------    -----------    -----------    -----------
EXPENSES:
      Operating and administrative          100,215        100,473        213,817        199,308
      Property operating expenses:
           Payroll services                 111,328        107,175        213,022        203,488
           Utilities                         93,837         85,783        200,121        205,777
           Real estate taxes                 65,677         72,905        145,026        157,483
           Other operating expenses         221,934        281,544        429,094        495,202
      Depreciation and amortization         169,203        200,878        338,406        401,618
                                        -----------    -----------    -----------    -----------
               Total expenses               762,194        848,758      1,539,486      1,662,876
                                        -----------    -----------    -----------    -----------
INCOME FROM OPERATIONS                      291,534        203,313        548,219        439,073

INTEREST EXPENSE                            351,323        356,465        703,960        711,542

EQUITY IN INCOME  (LOSS) OF
     INVESTEE ENTITY                          6,844         (1,276)        11,702        (22,804)
                                        -----------    -----------    -----------    -----------
NET LOSS                                $   (52,945)   $  (154,428)   $  (144,039)   $  (295,273)
                                        ===========    ===========    ===========    ===========
NET LOSS ALLOCATED
     TO GENERAL PARTNER                 $      (529)   $    (1,544)   $    (1,440)   $    (2,953)
                                        ===========    ===========    ===========    ===========
NET LOSS ALLOCATED
      TO LIMITED PARTNERS               $   (52,416)   $  (152,884)   $  (142,599)   $  (292,320)
                                        ===========    ===========    ===========    ===========
NET LOSS PER UNIT OF
      INVESTOR LIMITED PARTNERSHIP
      INTEREST, BASED ON 26,588 UNITS
      ISSUED AND OUTSTANDING            $     (1.97)   $     (5.75)   $     (5.36)   $    (10.99)
                                        ===========    ===========    ===========    ===========
</TABLE>

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

                                       4
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
              CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
                   FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND
                      FOR THE YEAR ENDED DECEMBER 31, 2003

<TABLE>
<CAPTION>
                                       Units of
                                       Investor      Investor
                                       Limited       Limited      General
                                     Partnership    Partners'    Partner's
                                       Interest       Equity      Deficit       Total
                                       --------       ------      -------       -----
<S>                                  <C>            <C>          <C>          <C>
BALANCE, December 31, 2002              26,588      $ 837,382    $(225,214)   $ 612,168

   Net loss                                  -       (437,444)      (4,419)    (441,863)
                                        ------      ---------    ---------    ---------
BALANCE, December 31, 2003              26,588        399,938     (229,633)     170,305

   Net loss (unaudited)                      -       (142,599)      (1,440)    (144,039)
                                        ------      ---------    ---------    ---------
BALANCE, June 30, 2004 (unaudited)      26,588      $ 257,339    $(231,073)   $  26,266
                                        ======      =========    =========    =========
</TABLE>

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

                                        5
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            2004           2003
                                                                        ------------   ------------
<S>                                                                     <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net loss                                                          $  (144,039)   $  (295,273)
      Adjustments to reconcile net loss to net cash
         provided by (used in) operating activities:
            Depreciation                                                    320,030        383,243
            Amortization                                                     18,376         18,375
            Equity in (income) loss of Investee Entity                      (11,701)        22,804
            Decrease in other assets                                         41,871         57,427
            Decrease in accounts payable and accrued expenses               (30,351)      (238,382)
            Decrease in security deposits, net                                6,461          4,582
                                                                        -----------    -----------
                  Net cash provided by (used in) operating activities       200,647        (47,224)
                                                                        -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures - building improvements                          (22,186)      (363,592)
      Increase in escrow deposits, net                                      (51,589)       (59,178)
                                                                        -----------    -----------
                  Net cash used in investing activities                     (73,775)      (422,770)
                                                                        -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
      Payments of mortgage principal                                       (134,353)      (126,751)
                                                                        -----------    -----------
                  Cash used in financing activities                        (134,353)      (126,751)
                                                                        -----------    -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                    (7,481)      (596,745)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                            1,026,944      1,724,534
                                                                        -----------    -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                $ 1,019,463    $ 1,127,789
                                                                        ===========    ===========
SUPPLEMENTAL CASH FLOW INFORMATION:

         Cash paid for interest                                         $   707,493    $   715,050
                                                                        ===========    ===========
</TABLE>

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

                                        6
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)

(1)   ORGANIZATION AND GENERAL PARTNER - BHP

      Historic Preservation Properties 1989 Limited Partnership (the
      Partnership) was formed on September 1, 1988 under the Delaware Revised
      Uniform Limited Partnership Act. The purpose of the Partnership is to
      invest in a diversified portfolio of real properties, or entities
      investing in 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 the Partnership. 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 June 30, 2004, BHP had established
      three such partnerships, including the Partnership.

      The Amended and Restated Agreement of Limited Partnership (Partnership
      Agreement) of the Partnership generally provides that all net profits, net
      losses, tax credits and cash distributions of the Partnership from normal
      operations be allocated 99% to the Limited Partners and 1% to BHP. Excess
      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 the Partnership on or prior to
      certain specified dates.

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The consolidated financial statements should be read in conjunction with
      the consolidated financial statements and notes thereto included in
      HPP'89's form 10-KSB for the year ended December 31, 2003.

      Principles of Consolidation

      The consolidated financial statements include the accounts and
      transactions of the Partnership, The Cosmopolitan at Mears Park, LLC
      (TCAMP) and Portland Lofts Associates Limited Partnership (Portland Lofts)
      after the elimination of all intercompany accounts and transactions.
      Members' equity of TCAMP has been classified as partners' equity in the
      accompanying consolidated financial statements. The Partnership and its
      consolidated entities are collectively referred to herein as HPP'89.

      Under the principles of consolidation, losses and other charges applicable
      to the minority interest which exceed the minority interest in equity
      capital of the minority interest are charged against the controlling
      interest since there is no obligation for the minority interest to make
      good such losses or other charges. Once the minority interest has been
      reduced to zero, future earnings of the minority interest are credited to
      the controlling interest to the extent of the losses or other charges
      applicable to the minority interest, which have been charged against the
      controlling interest. At June 30, 2004, the minority interest in TCAMP (1%
      membership interest owned by a party unrelated to HPP'89) has been reduced
      to zero and cumulative losses and other charges applicable to the minority
      interest which have been charged against the Partnership total $9,288.

      Investment in Investee Entity

      The Partnership accounts for its investment in 402 Julia Street Associates
      Limited Partnership (Investee Entity) 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 is not recorded after the respective
      investment account is reduced to zero. The allocable portion of earnings
      of an Investee Entity is not recorded until all previously unrecorded
      losses are absorbed.

                                        7
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2004
                                   (UNAUDITED)

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Investment in Investee Entity (continued)

      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 the Partnership'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 consolidated 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.

      The consolidated financial statements include all adjustments which, in
      the opinion of management, are necessary in order to make the consolidated
      financial statements not misleading.

      Reclassifications

      Certain amounts in the three and six months ended June 30, 2003, financial
      statements have been reclassified to conform to the 2004 presentation.

      Real Estate and Depreciation

      Real estate is held for lease and stated at cost. Depreciation is provided
      over the estimated economic useful lives of the assets using the
      straight-line method.

      Acquisition of assets and expenditures incurred that extend the useful
      life of the related assets are capitalized. Expenditures for maintenance
      and repairs, including major repairs and replacements made as part of a
      periodic maintenance program to restore the assets repaired to
      substantially original condition, are expensed as incurred.

      HPP'89 reviews property and equipment held and used for impairment
      whenever events or changes in circumstances indicate that the carrying
      value of the asset may not be recoverable. An impairment loss is
      recognized if the sum of the expected future cash flows, undiscounted and
      excluding interest expense, from the use of the asset is less than the
      carrying value of the asset.

      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 June 30, 2004,
      cash equivalents totaled $833,332.

      At June 30, 2004, HPP'89 had $511,484 of cash and cash equivalents on
      deposit in banks in excess of amounts insured by the Federal Deposit
      Insurance Corporation. Also at June 30, 2004, HPP'89 had $413,579 of
      Massachusetts' municipal money market funds which are not insured or
      guaranteed.

      Deferred Costs

      Deferred costs relating to mortgage notes and commercial leases are
      amortized on a straight-line basis over their respective terms.

                                        8
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2004
                                   (UNAUDITED)

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Revenue Recognition

      Revenue, principally under annual operating leases, is recorded when due.
      In most cases, management expects that in the normal course of business,
      leases will be renewed or replaced by other leases.

      Income Taxes

      No provision (benefit) for income taxes is reflected in the accompanying
      consolidated financial statements. Partners of the Partnership 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 REAL ESTATE AND INVESTEE ENTITY

      The Investee Entity's agreement, in general, provides for a sharing of
      management duties and decisions among the Partnership and the local
      general partner. Significant Investee Entity decisions require the
      approval of both the Partnership and the local general partner. In
      addition, the Investee Entity has entered into various agreements with its
      local general partner (or its affiliates), to provide development,
      management and other services, for which the local general partner (or its
      affiliates), are paid fees by 402 Julia Street Associates Limited
      Partnership.

      Following is a summary of information regarding Real Estate investments
      and the Investee Entity investment.

      THE COSMOPOLITAN AT MEARS PARK, LLC (TCAMP), a Limited Liability Company,
      was formed on March 15, 1996, under the Delaware Limited Liability Company
      Act. The purpose of TCAMP is to engage in investment in, and operation of,
      real estate. TCAMP owns a residential apartment complex containing 255
      residential units and approximately 2,250 square feet of commercial space
      located at 250 6th Street, St. Paul, Minnesota. Profits and losses are
      allocated to the members, and distributions from TCAMP to the Partnership
      and the other member are subject to the order of distribution, as
      specified in the Operating Agreement of TCAMP. The liability of the
      members of TCAMP for losses, debts and obligations of TCAMP is limited to
      their capital contributions, except under applicable law members may,
      under certain circumstances, be liable to TCAMP to the extent of previous
      distributions received by the members in the event TCAMP does not have
      sufficient assets to satisfy its liabilities.

      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 commercial space,
      located at 555 Northwest Park Avenue in Portland, Oregon. Profits and
      losses are allocated, and cash distributions are made, to the partners in
      accordance with Portland Lofts' Partnership Agreement.

      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 containing 24 residential
      units and approximately 3,900 net rentable square feet of commercial space
      located at 402 Julia Street, New Orleans, Louisiana.

      On September 16, 1993, the Partnership sold one-third of its general
      partnership interest in 402 Julia to the developer general partner for
      $185,000. The Partnership'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
      June 30, 2004, the remaining uncollected payments total $50,000, which are
      secured by the interest sold to the developer general partner, and are
      included in other assets.

      Under the equity method of accounting, the Partnership recorded income
      (loss) from the 402 Julia Investment of $13,328 and ($21,178),
      respectively, and amortization expense of $1,626, for the six months ended
      June 30, 2004 and 2003.

                                        9
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2004
                                   (UNAUDITED)

(3)   INVESTMENTS IN REAL ESTATE AND INVESTEE ENTITY (CONTINUED)

      The summary balance sheet as of June 30, 2004 and summary statements of
      operations for the six months ended June 30, 2004 and 2003, of the
      Investee Entity are as follows:

                              SUMMARY BALANCE SHEET
                                  JUNE 30, 2004

<TABLE>
<S>                                                                          <C>
                                     ASSETS
   Land                                                                      $  132,800
   Building and improvements (net of accumulated depreciation of $573,056)    1,008,515
   Cash and cash equivalents                                                    269,546
    Cash equivalents, security deposits                                          20,760
    Other assets, less accumulated amortization of $ 25,398                     105,932
                                                                             ----------
              Total assets                                                   $1,537,553
                                                                             ==========
                        LIABILITIES AND PARTNERS' EQUITY
Liabilities:
   Mortgage note payable                                                     $1,018,226
   Other liabilities                                                             42,673
                                                                             ----------
         Total liabilities                                                    1,060,899
                                                                             ----------
Partners' equity:
   HPP'89                                                                       424,991
   Other partners                                                                51,663
                                                                             ----------
         Total partners' equity                                                 476,654
                                                                             ----------
              Total liabilities and partners' equity                         $1,537,553
                                                                             ==========
</TABLE>

                        SUMMARY STATEMENTS OF OPERATIONS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

<TABLE>
<CAPTION>
                                                     2004        2003
                                                   ---------   ---------
<S>                                                <C>         <C>
Revenue:
         Rental revenue                            $ 135,197   $ 122,479
         Interest and other income                     7,667       6,066
                                                   ---------   ---------
               Total revenue                         142,864     128,545
                                                   ---------   ---------
Expenses:
         Operating expenses                           66,371     104,330
         Depreciation and amortization                21,916      21,916
         Interest expense                             34,176      34,716
                                                   ---------   ---------
               Total expenses                        122,463     160,962
                                                   ---------   ---------
Net income (loss) from operations                  $  20,401   $ (32,417)
                                                   =========   =========
Net income (loss) allocated to HPP'89              $  13,328   $ (21,178)
                                                   =========   =========
Net income (loss) allocated to other partners      $   7,073   $ (11,239)
                                                   =========   =========
</TABLE>

(4)   MORTGAGE NOTES PAYABLE

      TCAMP's mortgage note payable bears interest at 6.995%, amortizes over a
      30-year schedule, and requires monthly principal and interest payments
      totaling $93,095 with the unpaid principal balance under the mortgage note
      payable on May 1, 2011. The mortgage note payable is secured by TCAMP's
      property, rents, and assignment of leases. The mortgage note requires
      monthly escrow deposits for real estate taxes, insurance escrow and
      replacement reserves of $22,491, $5,730, and $5,313, respectively.

      Portland Lofts' mortgage note payable bears interest at 9%, amortizes over
      a 25-year schedule, requires monthly payments of principal and interest of
      $47,205, and matures on July 1, 2006, at which time all unpaid principal
      and interest is due. The mortgage note payable is secured by Portland
      Lofts' property, rents and assignment of leases.

                                       10
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2004
                                   (UNAUDITED)

(4)   MORTGAGE NOTES PAYABLE (CONTINUED)

      As of June 30, 2004, annual maturities of the mortgage notes payable for
      the next five years are as follows:

<TABLE>
<CAPTION>
Year Ending December 31,             Amount
------------------------             ------
<S>                               <C>
        2004                      $   139,783
        2005                          299,519
        2006                        4,915,863
        2007                          191,270
        2008                          202,637
</TABLE>

(5)   RELATED PARTY TRANSACTION AND COMMITMENTS

      TCAMP entered into a management agreement with Claremont Management
      Limited Liability Company (CMLLC) to manage the property. The sole
      shareholder of CMLLC is related to the other member of TCAMP. The
      agreement expires on September 30, 2004 and automatically renews
      thereafter on an annual basis, unless terminated earlier as provided for
      in the agreement. The management agreement requires the payment of a
      management fee of 3% of gross receipts, as defined in the agreement, plus
      the reimbursement of all CMLLC's costs of providing these services.
      Management fees under the management agreement totaled $41,335 and
      $42,019, respectively, for the six months ended June 30, 2004 and 2003.
      Expense reimbursements to CMLLC for the six months ended June 30, 2004 and
      2003 totaled $174,604 and $167,955, respectively.

      Portland Lofts entered into a management agreement with an unrelated party
      to manage the property for a fee of 3% of the gross receipts as defined in
      the agreement. The agreement expires July 1, 2004 and automatically renews
      thereafter on an annual basis, unless terminated earlier as provided for
      in the agreement.

      The Partnership engages 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 of $54,000 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. For the six months ended June
      30, 2004 and 2003, GFI was reimbursed $118,676 and $114,018, respectively,
      for operating costs.

      The Partnership and TCAMP have committed to pay the principal of GFI
      $5,000 per month for direct mortgage services and operational management
      provided by him for TCAMP. The agreement continues in effect until such
      services are no longer rendered. For each of the six months ended June 30,
      2004 and 2003, the principal of GFI was paid $30,000 for these services.

                                       11
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2004
                                   (UNAUDITED)

(6)   MINIMUM FUTURE RENTALS UNDER OPERATING LEASES

      Portland Lofts rents space to commercial tenants under operating leases of
      varying terms expiring through 2012. As of June 30, 2004, Portland Lofts
      had entered into seven commercial leases covering 56% of the building's
      net rentable commercial space and five commercial month-to-month leases.
      For the six months ended June 30, 2004, two commercial tenants comprised
      approximately 31% of commercial rental income under noncancellable
      commercial leases.

      At June 30, 2004, minimum future rentals, excluding reimbursement of real
      estate taxes and certain operating expenses, to be received under
      noncancellable commercial leases are as follows:

<TABLE>
<CAPTION>
Year Ending December 31,        Amount
------------------------        ------
<S>                            <C>
          2004                 $112,320
          2005                  246,937
          2006                  223,093
          2007                  200,741
          2008                  164,982
       Thereafter               151,601
</TABLE>

      In most cases, management expects that in the normal course of business,
      commercial leases will be renewed or replaced by other leases and
      month-to-month arrangements will be continued or replaced by other leases.

(7)   FAIR VALUE OF FINANCIAL INSTRUMENTS

      The carrying amounts of cash and cash equivalents, cash and cash
      equivalents security deposits, other assets, escrow deposits, accounts
      payable and accrued expenses, and security deposits at June 30, 2004
      approximate their fair values due to their short maturities. The fair
      values of the mortgage notes payable at June 30, 2004 approximate their
      carrying amounts based on the interest rates available for similar
      financing arrangements. All financial instruments are held for non-trading
      purposes.

                                       12
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                                  JUNE 30, 2004

Item 2. Management's Discussion and Analysis 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.

Critical Accounting Policies. The SEC defines critical accounting policies as
those that require application of management's most difficult, subjective or
complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain and may change in subsequent
periods.

The Company's significant accounting policies are disclosed in the footnotes to
HPP'89's consolidated financial statements. Management believes the following
significant accounting policies also are considered critical accounting
policies:

      HPP'89 capitalizes as investment in real estate the initial acquisition of
      property and equipment and those expenditures incurred that extend the
      useful life of the related assets. Expenditures for maintenance and
      repairs, including major repairs and replacements made as part of a
      periodic maintenance program to restore the assets repaired to
      substantially original condition, are expensed as incurred. During the
      quarters ended June 30, 2004, the Partnership did not record any
      expenses of major repairs and/or maintenance costs incurred as part of a
      periodic maintenance program rather than capitalizing such expenditures.

      HPP'89 reviews its long-lived assets, principally investment in real
      estate, for impairment whenever events or changes in circumstances
      indicate that the carrying value of the asset may not be recoverable. An
      impairment loss is required to be recognized if the sum of the expected
      future cash flows, undiscounted and excluding interest expense, from the
      use of the asset is less than the carrying value of the asset. For the
      quarters ended June 30, 2004, the Partnership did not recognize an
      impairment loss.

Plan of Operation. 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; it will however invest cash flow
from the properties in normal repairs and maintenance.

As of June 30, 2004, the Partnership had $63,237 of total cash and cash
equivalents. The Partnership'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 TCAMP and
Portland Lofts. The Partnership has sufficient cash to meet its short-term
operating needs.

The short-term liquidity of 402 Julia, TCAMP and Portland Lofts 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 $78,000 for each of
the six months ended June 30, 2004 and 2003. The Partnership received
distributions from TCAMP of $247,500 for the six months ended June 30, 2003.

                                       13
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                                  JUNE 30, 2004
                                   (CONTINUED)

On October 1, 2002 Portland Lofts entered into a contract for exterior building
repairs and maintenance work totaling $443,711 (inclusive of change orders). The
date of commencement of the work was February 1, 2003. As of December 31, 2003,
100% of the contract had been completed.

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.

Management's Discussion and Analysis of Financial Condition and Results of
Operations. The Partnership accounts for its investment in 402 Julia using the
equity method of accounting. The consolidated financial statements as of and for
the three and six months ended June 30, 2004 and 2003 include the accounts and
transactions of the Partnership, TCAMP and Portland Lofts after the elimination
of all inter-company accounts and transactions.

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 is not recorded after the respective investment account
is reduced to zero. The allocable portion of earnings of an Investee Entity is
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.

The Partnership's allocable share of operating income and/or losses in 402 Julia
is 65.33%. For the quarters ended June 30, 2004, 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 quarters
ended June 30, 2003, 402 Julia recorded an economic occupancy of 88% for its
residential units and an economic occupancy of 100% for its commercial space for
a combined economic occupancy of 90%. 402 Julia has benefited from a relatively
strong New Orleans market and continues to record stable operations. For the six
months ended June 30, 2004 and 2003, 402 Julia recorded net income (loss) of
approximately $20,400 and $(32,400), respectively, which included depreciation
and amortization for each of the six months ended June 30, 2004 and 2003 of
approximately $21,916.

TCAMP operates in the competitive lowertown district of St. Paul, Minnesota.
TCAMP had an economic occupancy of 82% and 85%, respectively, for the six months
ended June 30, 2004 and 2003. For the quarters ended June 30, 2004, TCAMP
recorded a net loss of approximately $54,000 which included depreciation and
amortization of approximately $218,600. TCAMP recorded a net loss of
approximately $147,600 for the quarters ended June 30, 2003 which included
depreciation and amortization of approximately $286,200.

For the quarters ended June 30, 2004, Portland Lofts recorded an economic
occupancy of 90% for its residential units and an economic occupancy of 78% for
its commercial space for a combined economic occupancy of 87%. For the quarters
ended June 30, 2003, Portland Lofts recorded an economic occupancy of 83% for
its residential units and an economic occupancy of 93% for its commercial space
for a combined economic occupancy of 85%. For the quarters ended June 30, 2004,
Portland Lofts recorded net income of approximately $111,100 which included
depreciation and amortization of approximately $119,800. For the quarters ended
June 30, 2003, Portland Lofts recorded net income of approximately $64,400 which
included depreciation and amortization of approximately $115,500.

HPP'89 recorded a consolidated net loss of approximately $52,900 for the quarter
ended June 30, 2004 compared to a consolidated net loss of approximately
$154,400 for the quarter ended June 30, 2003. HPP'89 recorded a consolidated net
loss of approximately $144,000 for the six months ended June 30, 2004 compared
to a consolidated net loss of approximately $295,300 for the same period in
2003. The consolidated net loss for the three and six months ended June 30, 2004
compared to the same periods in 2003 decreased primarily due to decreases in
other operating expenses and depreciation and amortization. Other operating
expenses decreased primarily due to painting of common areas at TCAMP while
depreciation and amortization decreased as a result of fully depreciated
furniture and fixtures at TCAMP.

                                       14
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                                  JUNE 30, 2004
                                   (CONTINUED)

                      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 real estate investment and
the Investee Entity, are highly leveraged in view of the fact that each property
is subject to a long-term first mortgage loan. Operating expenses and rental
revenue of each property are subject to inflationary and other economic 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, real estate investments and
its Investee Entity 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
rents, such increases could also adversely affect Partnership and property
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 3. Controls and Procedures.

The General Partner (performing similar functions of Chief Executive Officer and
Chief Financial Officer) and Robert Gunn (President of GFI, performing similar
functions of Financial Officer) have evaluated the effectiveness of the
Partnership's disclosure controls and procedures as of June 30, 2004, and have
determined there are sufficient internal controls in place for the Partnership,
TCAMP, Portland Lofts and 402 Julia to effectively report all adjustments
necessary in order to make the consolidated financial statements and footnotes
not misleading. Management has not made any changes to the internal controls or
in other factors that could significantly affect internal controls, subsequent
to the date of our most recent evaluation.

                                       15
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                           PART II - OTHER INFORMATION
                                  JUNE 30, 2004

Item 1.     Legal Proceedings

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

            To the best knowledge of the General Partner, Portland Lofts
            Associates L.P., 402 Julia Street Associates L.P. and The
            Cosmopolitan at Mears Park, LCC are not currently subject to any
            material pending legal proceedings.

Item 2.     Changes in Securities and Use of Proceeds - Not applicable.

Item 3.     Defaults Upon Senior Securities - Not applicable.

Item 4.     Submission of Matters to a Vote of Security Holders - Not
            applicable.

Item 5.     Other Information - Not applicable.

Item 6.     Exhibits and Reports on Form 8-K

            (a)   Exhibit 31.1 - General Partner's Certification pursuant to 18
                  U.S.C. Section 1350 as adopted pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

            (b)   Exhibit 31.2 - Asset Manager's Certification pursuant to 18
                  U.S.C. Section 1350 as adopted pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002

            (c)   Exhibit 32.1 - General Partner's Certification pursuant to 18
                  U.S.C. Section 1350 as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

            (d)   Exhibit 32.2 - Asset Manager's Certification pursuant to 18
                  U.S.C. Section 1350 as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

            (e)   Reports on Form 8-K - None

                                       16
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant 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:  August 12, 2004                       By:   /s/ Terrence P. Sullivan
                                                   -----------------------------
                                                   Terrence P. Sullivan,
                                                   President

                                        and

Date:  August 12, 2004                       By:   /s/ Terrence P. Sullivan
                                                   -----------------------------
                                                   Terrence P. Sullivan,
                                                   General Partner

                                       17