March 3, 1993

                United States Court of Appeals
                    For the First Circuit
                                         
No. 92-1921

      TABER PARTNERS, I, A NEW YORK GENERAL PARTNERSHIP,
                    Plaintiff, Appellant,

                              v.

      MERIT BUILDERS, INC., A PUERTO RICO CORP., ET AL.,
                    Defendants, Appellees.
                                         

No. 92-1922

      TABER PARTNERS, I, A NEW YORK GENERAL PARTNERSHIP,
                     Plaintiff, Appellee,

                              v.

          MERIT BUILDERS, INC., A PUERTO RICO CORP.,
                    Defendant, Appellant.
                                         

        APPEALS FROM THE UNITED STATES DISTRICT COURT
               FOR THE DISTRICT OF PUERTO RICO
        [Hon. Jaime Pieras, Jr., U.S. District Judge]
                                                    
                                         

                            Before

                     Selya, Circuit Judge,
                                         
              Coffin, Senior Circuit Judge, and
                                          
                    Stahl, Circuit Judge.
                                        
                                         

Harvey B. Nachman with whom Joan  Schlump Peters was on  brief for
                                                
Merit Builders, Inc.  and Arch Stokes with  whom John R.  Hunt, Stokes
                                                                  
and Murphy,  Ruben T. Nigaglioni and  Ledsma, Palou &amp; Miranda  were on
                                                         
brief for Taber Partners I.
Jay A.  Garcia-Gregory with whom  Rafael R. Vizcarrondo,  Humberto
                                                                  
Guzman-Rodriguez and Fiddler, Gonzalez &amp;  Rodriguez were on brief  for
                                               
appellees.
                                         
                        March 3, 1993
                                         

          STAHL, Circuit  Judge.  This appeal  requires us to
                               

decide whether,  for  purposes of  diversity jurisdiction,  a

partnership's  business activities  should  be considered  in

determining the principal  place of business  of each of  its

corporate partners.  We hold that, in the absence of evidence

that  the partnership  and its  corporate partners  failed to

maintain   their   separate  identities,   the  partnership's

activities  ordinarily  should  not  be considered  for  this

purpose.

                              I.
                                

                      PROCEDURAL POSTURE
                                        

          Plaintiff Taber  Partners I  ("Taber"), a New  York

general  partnership whose  sole  partners are  two New  York

corporations, Lerfer  San Juan Corp. ("Lerfer"),  and Calumet

Corp.  ("Calumet"),  owns and  operates the  Ambassador Plaza

Hotel  &amp;   Casino  ("Hotel")   in  San  Juan,   Puerto  Rico.

Defendants  Merit Builders,  Inc.,  and Merit  Builders, S.E.

(hereinafter  referred to collectively as "Merit") are Puerto

Rico-based construction  companies.  Beginning in March 1988,

Taber and  Merit  entered into  a  series of  consulting  and

construction contracts involving the renovation and expansion

of  the Hotel.    Disputes arose  during  the course  of  the

project, and  in February  1991, Taber commenced  a diversity

action against Merit in the United States District  Court for

the District of  Puerto Rico asserting, inter alia, breach of
                                                  

                             -2-
                              2

contract,  fraud,  and  negligence.    Merit  responded  with

several counterclaims  against  Taber and  filed  third-party

complaints  against  appellees  Victor  Torres  &amp;  Associates

("VTA"),   the   inspecting   architect,    and   Desarrollos

Metropolitanos,  Inc.  ("Desarrollos"),  one  of  the project

subcontractors.   Like  Merit, both  VTA and  Desarrollos are

citizens of Puerto Rico.

          On the eve of trial,  VTA and Desarrollos moved  to

dismiss, asserting that --  because Taber was also a  citizen

of Puerto Rico --  diversity of citizenship was lacking.   As

the  citizenship of Taber depends upon the citizenship of its

partners, Lerfer and Calumet, the district court first had to

determine Lerfer's and Calumet's  citizenship.  See Carden v.
                                                          

Arkoma Assocs., 494 U.S.  185, 195-96 (1990) (reaffirming the
              

"oft-repeated rule  that diversity jurisdiction in  a suit by

or against [a partnership] depends on the citizenship of `all

the  [partners]' . . .") (quoting Chapman v. Barney, 129 U.S.
                                                   

677,  682   (1889)).    As   Lerfer  and  Calumet   are  both

incorporated in New York, the sole  issue before the district

court   was  the   principal  place   of  business   of  both

corporations.  See 28 U.S.C.    1332(c)(1) ("For the purposes
                  

of  [diversity,] . . . a corporation  shall be deemed to be a

citizen  of any [s]tate by which it has been incorporated and
                                                             

of the [s]tate where it has its principal place of business")

(emphasis supplied).            The district court ultimately

                             -3-
                              3

agreed  with  VTA's   and  Desarrollos'  argument  that   the

principal  place of business  of both Lerfer  and Calumet was

Puerto  Rico.   Thus, on  July, 8,  1992, the  district court

granted  their  motion and  dismissed  the case  for  lack of

subject  matter  jurisdiction.    See  Taber  Partners  I  v.
                                                         

Insurance Co. of North  America, Inc., 798 F. Supp.  904, 912
                                     

(D.P.R. 1992).  

          In this appeal, Taber and Merit, adversaries below,

mount a  joint challenge to the district court's dismissal of

their case.   In so doing,  they argue that, in  light of the

undisputed evidence  that  Lerfer's and  Calumet's  corporate

activities  occurred almost  exclusively  in  New  York,  the

district court's  selection of  Puerto Rico as  the principal

place of business of  both corporations is clearly erroneous.

Before  addressing   appellants'  argument,  we   sketch  the

relevant facts. 

                             II.
                                

                      FACTUAL BACKGROUND
                                        

          In  December 1986,  Mr.  F. Eugene  Romano and  Ms.

Linda E.  Romano, citizens  of New York,  incorporated Lerfer

and  Calumet in  New York.   At  all relevant  times,1 Eugene

                    

1.  For  purposes of  diversity jurisdiction,  citizenship is
determined as of the  date of the initiation of  the lawsuit.
See, e.g., Freeport-McMoRan, Inc. v. K N Energy, Inc., 111 S.
                                                     
Ct. 858, 859  (1991); Media Duplication  Servs., Ltd. v.  HDG
                                                             
Software, Inc., 928 F.2d  1228, 1236 (1st Cir. 1991).   Thus,
              
we  recite relevant  facts as  they  existed on  February 15,
1991, the date Taber filed its complaint.   

                             -4-
                              4

Romano owned all the outstanding shares  of Lerfer, and Linda

Romano  owned all the  outstanding shares of  Calumet.  Linda

Romano  and Mrs.  Jeanne  Romano served  as  the officers  of

Lerfer, while  Eugene Romano and Jeanne Romano  served as the

officers of Calumet.  The  same three individuals also served

as the directors of both corporations.  

          Lerfer and Calumet are "Subchapter S" corporations,

a status entitling them to favorable tax treatment under both

federal  law, see  generally 26  U.S.C.    1361 et  seq., and
                                                        

state law.  See generally New York Tax Law   660(a) (McKinney
                         

1987).   See also Taber  Partners I,  798 F. Supp.  at 907-09
                                   

(explaining the  legal and  practical underpinnings of  an "S

Corporation").   The  Certificates of  Incorporation of  both

companies contain  a broad  declaration of  corporate purpose

"to  engage  in  any  lawful  acts  or  activities for  which

corporations may be organized under the  Business Corporation

Law of the State of New York . . . ."  

          The   headquarters  (and   sole  office)   of  both

corporations is located at 501 Main  Street, Utica, New York.

All  corporate  books  and  records  are  maintained  at  the

headquarters, and all accounting, auditing, and legal work is

handled for both corporations in the state of New York by New

York  accountants and attorneys.   Both corporations maintain

their  bank accounts in New York, and Lerfer also maintains a

working capital account  with an investment firm in New York.

                             -5-
                              5

Each files federal income tax returns from New York and state

income tax returns  in New  York.  Neither  files income  tax

returns in Puerto Rico.

          On   December   29,  1986,   shortly   after  their

incorporation, Lerfer  and Calumet entered into a partnership

agreement ("the Agreement") that formed Taber.  The Agreement

lists  New  York,  or "such  other  place  or  places as  the

[p]artners may determine[,]"  as Taber's  principal place  of

business.2    Under  the  Agreement, Lerfer  obtained  a  99%

ownership  interest  in  Taber,  and Calumet  obtained  a  1%

ownership  interest.  Lerfer  and Calumet agreed  to share in

Taber's net profits and losses under a formula which mirrored

their respective ownership interests.

          Article IV  of the Agreement states:   "The primary

and  specific purpose of [Taber] is  to acquire, own, operate

and  manage [the Hotel in Puerto Rico]."  Pursuant to section

7.01 of the Agreement, Lerfer and Calumet  delegated the day-

to-day  management of  Taber to  Eugene Romano,  as executive

director,  and  Linda Romano,  as  assistant  director.   All

responsibilities   not  enumerated   in  section   7.01  were

delegated  to  the  partnership  generally.    The  Agreement

                    

2.  While the Agreement was negotiated, drafted, and recorded
in New York,  it was  "protocolized" in Puerto  Rico for  the
purpose of recording the deed to the Hotel at the Registry of
Property  in San Juan.  The  protocol procedure was necessary
to establish  Taber's authority to own  property under Puerto
Rico law.  See P.R. Laws Ann. tit. 31,   4313 (1991).
              

                             -6-
                              6

specifically  granted  Taber the  authority,  inter  alia, to
                                                         

borrow money,  enter into  contracts, bring and  defend legal

actions,  and  "[d]o  any  and  all  other  acts  and  things

necessary or  proper  in  furtherance  of  the  [p]artnership

business."

          Since  their  incorporation  in  1986,  Lerfer  and

Calumet have  both described themselves on  their federal and

state tax returns as "holding compan[ies]."  Eugene and Linda

Romano testified in their depositions that each corporation's

sole  function  is  to  hold  or  administer  its  respective

interest in Taber.  To this  end, Lerfer and Calumet employ a

"control-group"  of  twelve  individuals  to  maintain  their

corporate  records   and  financial   accounts.     All  such

maintenance occurs  exclusively in New  York.  An  example of

the type  of New York-centered  activity in which  Lerfer and

Calumet  engage  is  their  management  of loan  transactions

designed to secure their ownership  interests in Taber.   For

instance, Eugene Romano has made substantial loans (totalling

approximately $8,000,000) to Lerfer, which, in turn, reloaned

these funds to Taber.  Each of these loans consisted of funds

that originated in New York  and were evidenced by promissory

notes prepared, executed, and delivered in New York.    

          The  record reveals that  all policy  decisions for

Lerfer and  Calumet are made in  New York.   For example, the

decision  to invest  in  Taber was  made in  New  York.   The

                             -7-
                              7

election  of  corporate  officers  and   the  appointment  of

accountants occur  at the annual Board  of Directors meetings

held  in New  York.   Indeed, the  record contains  almost no

evidence of  corporate activity on the part  of either Lerfer

or Calumet taking place outside of New York.3

          Despite  these  uncontroverted facts,  the district

court concluded that  the principal place of business of both

Lerfer  and Calumet was Puerto Rico.   In so doing, the court

rejected appellants'  characterization of Lerfer  and Calumet

as "passive"  holding companies  and found that  their raison
                                                             

d'etre included the operation of the Hotel:
      

          Only a[n] unrealistically narrow  view of
          the orientation of  the corporations  and
          their  partnership  could  yield  such  a
          conclusion.  The corporations were formed
          to act  as owners  of the [Hotel].   They
          devote  almost  all  of  their  corporate
          activity  to  administer their  assets in
          the    partnership.       They   actively
          authorized the formation of Taber and the
          obtaining  of a  bond  to  assist in  the
          financing of  the  projects.   They  have
          loaned  substantial  amounts of  money to
          Taber.     And   the  directors   of  the
          partnership, Mr. and Ms. Romano,  are the
          directors  of  the  corporations.   Under
          these  circumstances,  the  Court  cannot
          accept   the   characterization  of   the
          corporations'   interests  in   Taber  as
          passive.  The  Court therefore  considers
          of greater significance  the location  of
          the corporations' primary activity.  This
          activity is the renovation  and operation

                    

3.  The record reveals that  Lerfer's and Calumet's Boards of
Directors  held two  "special meetings"  in San  Juan, Puerto
Rico, in connection with  the initial purchase and subsequent
refinancing of the Hotel. 

                             -8-
                              8

          of  the  [Hotel],  which  is  located  in
          Puerto Rico.

Taber Partners  I, 798 F. Supp. at 912.   We do not concur in
                 

the district court's analysis. 

                             III.
                                 

                          DISCUSSION
                                    

          A district court's determination of citizenship for

purposes of diversity jurisdiction is a mixed question of law

and  fact.   As such,  we  will not  set  aside the  district

court's decision unless it is "clearly erroneous."  Lundquist
                                                             

v.  Precision Valley Aviation, Inc., 946 F.2d 8, 11 (1st Cir.
                                   

1991);  Media Duplication, 928 F.2d at 1237.  In addition, we
                         

review the facts of this case mindful that the party invoking

the jurisdiction  of a  federal court carries  the burden  of

proving its existence.  See, e.g., Lundquist, 946 F.2d at 10.
                                            

          In this  circuit, we  utilize "three  distinct, but

not   necessarily  inconsistent  tests"   for  determining  a

corporation's principal  place of  business:  (1)  the "nerve

center" test, which  searches for the location from which the

corporation's activities are controlled and directed; (2) the

"center of  corporate activity" test, which  searches for the

location of the corporation's  day-to-day management; and (3)

the  "locus of the operations of the corporation" test, which

searches  for  the  location  of   the  corporation's  actual

                             -9-
                              9

physical operations.  Topp v. CompAir Inc., 814 F.2d 830, 834
                                          

(1st Cir. 1987).

          While we have not had occasion to apply these tests

to a general partnership  whose partners are corporations, we

frequently  have  applied  them to  corporations  involved in

parent-subsidiary   relationships.      See,   e.g.,   U.S.I.
                                                             

Properties Corp. v.  M.D. Constr.  Co., Inc., 860  F.2d 1,  7
                                            

(1st  Cir.  1988),  cert.   denied,  490  U.S.  1065  (1989);
                                  

Rodriguez v. SK &amp; F Co., 833 F.2d 8, 9 (1st Cir. 1987); Topp,
                                                            

814 F.2d at 833-39; Lugo-Vina v. Pueblo Int'l, Inc., 574 F.2d
                                                   

41, 43-44 (1st Cir.  1978); de Walker v. Pueblo  Int'l, Inc.,
                                                            

569 F.2d 1169, 1170-73 (1st Cir. 1978).  In  this context, we

have repeatedly held  that, where there  is no evidence  that

the integrity  of the corporate  form has been  violated, the

separate  corporate  identities of  a  parent  and subsidiary

should be  honored  when determining  either one's  principal

place  of business.   See  U.S.I. Properties,  860 F.2d  at 7
                                            

(recognizing  separate  corporate   identity  of   subsidiary

despite   evidence  that   subsidiary  was   wholly-owned  by

"grandparent"  corporation,  shared  all  its   officers  and

directors with grandparent, was grossly undercapitalized, and

did not prepare its own budget, construction requirements, or

policies  and   procedures);   Rodriguez,  833   F.2d  at   9
                                        

(recognizing separate corporate  identity of subsidiary where

evidence showed  that  it  operated  independently  from  its

                             -10-
                              10

parent);  Topp,  814   F.2d  at  833  (recognizing   separate
              

corporate  identity  of  subsidiary  holding  company despite

evidence that it could not act without the express permission

of its parent,  and that its  sole function was  to serve  as

financial  conduit for  parent);  Lugo-Vina, 574  F.2d at  43
                                           

(recognizing  separate  corporate  identity of  parent  where

evidence  showed  it operated  independently  of wholly-owned

subsidiary);  de  Walker,  569  F.2d   at  1173  (recognizing
                        

separate  corporate identity of  parent despite evidence that

parent consolidated its profits  and losses with that  of its

wholly-owned  subsidiary  in  presenting  parent's  financial

reports  to shareholders,  that subsidiary  was  considered a

"division" of  parent, and that subsidiary  accounted for 60%

of parent's  and subsidiary's  combined operations).   Accord
                                                             

Danjaq,  S.A. v.  Pathe Communications  Corp., 979  F.2d 772,
                                             

774-75   (9th  Cir.  1992)  (recognizing  separate  corporate

identity  of   parent   despite  evidence   that   subsidiary

"perform[ed] the lion's share" of the film production for the

parent)  (citing  Lugo-Vina,  574  F.2d  at  43-44);  Pyramid
                                                             

Securities Ltd. v.  IB Resolution, Inc., 924 F.2d  1114, 1120
                                       

(D.C.  Cir.)  (recognizing  separate  corporate  identity  of

parent despite  evidence that  parent was "alter-ego"  of its

subsidiary and  was being  sued for  acts of  its subsidiary)

(citing  U.S.I.  Properties  Corp.,  860 F.2d  at  7),  cert.
                                                             

denied, 112  S. Ct.  85 (1991);  Schwartz v. Electronic  Data
                                                             

                             -11-
                              11

Sys., Inc., 913  F.2d 279, 283  (6th Cir. 1990)  (recognizing
          

separate  corporate  identity  of  subsidiary  where evidence

showed "formal  separation [was] maintained")  (citing U.S.I.
                                                             

Properties  Corp., 860  F.2d at  7; Topp,  814 F.2d  at 835).
                                        

Contra Freeman  v. Northwest Acceptance Corp.,  754 F.2d 553,
                                             

557 (5th Cir. 1985) (imputing citizenship of a  subsidiary to

its parent  and alleged "alter-ego") (citing  Toms v. Country
                                                             

Quality Meats, Inc., 610 F.2d  313, 315-16 (5th Cir.  1980));
                   

Bonar, Inc. v. Schottland, 631 F. Supp. 990, 997-98 (E.D. Pa.
                         

1986)  (imputing citizenship  of  parent to  subsidiary where

evidence showed that the business of both was "identical" and

court determined  that their formal separation  was "merely a

corporate fiction").

          For instance,  in Topp,  we held that  the district
                                

court erred in applying  the "nerve center" test in  a manner

which  "ignore[d]  the  separate  corporate  identity of  the

corporation whose citizenship [was] being sought."  Topp, 814
                                                        

F.2d at 835.   In  that case, the  district court  determined

that the principal  place of business  of the subsidiary  was

England, the  location  of the  parent.   Id.  at 832.    The
                                             

subsidiary   in  Topp   was   a  holding   company  with   no
                     

manufacturing, purchasing,  or sales facilities.   Id. at 834
                                                      

n.3.   Its  principal  function was  to  act as  a  financial

conduit   for  its   parent,  providing   administrative  and

financial services to  various other subsidiaries  across the

                             -12-
                              12

United  States.  Id. at 834.   The district court found that,
                    

although  the subsidiary maintained  an office  and conducted

its business  activities in New Hampshire,  it was controlled

by the parent  who made  all of the  major policy  decisions,

including  the hiring  and  firing of  the  employees of  the

subsidiary.   As a result,  the district court  reasoned that

England was the subsidiary's "nerve center."  Id. at 832.
                                                 

          We  reversed the  district court  and held  that it

erroneously merged  the activities of the  subsidiary and the

parent in  determining the subsidiary's "nerve  center."  Id.
                                                             

at 834.  We  made clear that, in determining  a corporation's

principal place  of business,  the activities of  the company

whose citizenship is  at issue are  those that are  relevant.

Id.   Moreover,  we  held  that  as  long  as  the  corporate
   

formalities are preserved by  the parent and subsidiary, they

are entitled to recognition:

          [D]efendants   presented   uncontradicted
          evidence     that     [the    subsidiary]
          maintained,  in  New  Hampshire, its  own
          general  ledger,  corporate minutes  book
          and register of  unissued stock, its  own
          bank  accounts,  and  its  own  executive
          offices.  [The subsidiary] filed  its own
          federal and state income and unemployment
          taxes, social  security contributions and
          excise  taxes.   This  evidence indicates
          that the separate  corporate identity  of
          [the  subsidiary]  is   entitled  to   be
          recognized. 

Id. at 837.   We therefore concluded that, while  "the shots"
   

may  have been called by the parent in England, the principal

                             -13-
                              13

place of business  of the subsidiary  was New Hampshire,  the

"operational  center of the corporation in question."  Id. at
                                                          

835 n.4.

          Likewise,  in de  Walker, we  held that  a parent's
                                  

principal place of business was Puerto Rico, the situs of its
                                                             

"day-to-day management and operations," rather than New York,

the  place  where   its  wholly-owned  subsidiary   conducted

business.  de Walker,  569 F.2d at 1172.   Despite compelling
                    

evidence  that the  parent and  subsidiary in de  Walker were
                                                        

closely intertwined, see id.  at 1171, we were  not persuaded
                            

to  ignore their separate corporate identities.  Id. at 1172.
                                                    

          The critical  factual question in de  Walker, as in
                                                      

Topp, was not the degree of control the parent exercised over
    

the  subsidiary,  but whether  the  two  businesses preserved

their separate corporate identities.  We reasoned that:

          While the  documents . .  . indicate that
          [the  parent]  was  ultimately  the  sole
          beneficiary   and    director   of   [the
          subsidiary's] corporate activities, there
          is  nothing  in the  record  to undermine
          [the   parent's]   claim  that   the  two
          corporations        were       separately
          incorporated,  had   separate  boards  of
          directors,  kept separate  accounting and
          tax records, and had  separate facilities
          and operational personnel.   And, leaving
          aside the activities  of [the  subsidiary
          in New York], there is next to nothing in
          the   record   to  establish   that  [the
          parent],   in  its   corporate  capacity,
                                                  
          conducted  any  business  outside  Puerto
          Rico.

                             -14-
                              14

de  Walker, 569 F.2d at 1171 (emphasis supplied).  We further
          

reasoned that the close interrelationship of the corporations

was  incidental to  the  parent's ownership  of  100% of  the

subsidiary's  stock  and   did  "not  justify   ignoring  the

otherwise separate character of  the two corporations."4  Id.
                                                             

at 1173.  

          Thus, pertinent circuit authority, particularly our

opinions in Topp and  de Walker, stand for the  following two
                               

unremarkable  propositions:    (1)  that  in   determining  a

corporation's principal place of business, a district court's

inquiry must focus  solely on the business activities  of the
                          

corporation whose  principal place  of business is  at issue;

and  (2) that an exception to this general rule applies where

there is evidence that the separate corporate identities of a

parent and subsidiary have  been ignored.  We can  discern no

reason  why these  propositions should  not apply  with equal

force where the entities at issue are corporate partners.5

                    

4.  An exception to this  general rule exists in cases  where
there  is  evidence  that  the  parent  and  subsidiary  have
violated  the  integrity of  the corporate  formalities which
they selected.  E.g., de Walker, 569 F.2d at 1173.
                               

5.  The  appellees attempt  to justify  the district  court's
treatment of  Taber, Lerfer,  and Calumet  as one  entity for
diversity  purposes by  relying almost  exclusively upon  New
York partnership law, which they contend regards the partners
and  a  partnership  as a  single  entity.    Whether or  not
appellees are  correct in their characterization  of New York
partnership  law,  a  proposition  on  which  we  express  no
opinion,  such law is not controlling in light of federal law
                                                         
which distinguishes  between a partnership  and its  partners
for purposes  of diversity jurisdiction.   See, e.g., Carden,
                                                            

                             -15-
                              15

          Here, the uncontroverted facts reveal that the sole

corporate  "activities"  of  Lerfer  and  Calumet consist  of

holding or administering their assets  in Taber, and that all

such administering occurs exclusively in New York.  Moreover,

there  is no evidence that  Lerfer and Calumet  engage in the

operation  and/or management  of  the Hotel.   Indeed,  it is

uncontroverted that Taber was expressly created by Lerfer and

Calumet,  as  stated  in  the Agreement,  "to  acquire,  own,

operate and manage [the Hotel in Puerto Rico]."  See also 798
                                                         

F. Supp. at 905,  906 (characterizing as undisputed  the fact

that "Taber's business is the operation and management of the

[Hotel]").   It  is  also apparent  from  the Agreement  that

Lerfer  and Calumet  delegated the  day-to-day management  of

Taber  to   Taber's  officers,   Eugene  and   Linda  Romano.

Appellees have introduced no  evidence to suggest that either

Lerfer or Calumet ever usurped that role.6

                    

494 U.S. at  195-96.  We  therefore find appellees'  argument
unpersuasive.

6.  We are aware that the district  court found that Lerfer's
and Calumet's "primary activity  . . . is the  renovation and
operation of the  [Hotel], which is located in  Puerto Rico."
See Taber Partners I, 798 F. Supp. at 912.   However, we have
                    
not  found any evidence to  support such a  finding.  Indeed,
the district  court itself  found that "[Lerfer  and Calumet]
devote almost  all of their corporate  activity to administer
their assets in the  partnership," id., activity which occurs
                                      
almost  exclusively  in New  York.    It further  found  that
"Taber's  business is  the  operation and  management of  the
[Hotel]." Id. at 906.  Given that the district court  made no
             
attempt to reconcile  these findings, we are not  inclined to
accord them any deference.   

                             -16-
                              16

          In sum, the record  reveals that Lerfer and Calumet

serve  as  holding companies  which  manage  their assets  in

Taber, a separate, and legally distinct, partnership  entity,

and that  all their  "activities" as holding  companies occur

exclusively in  New York.   We  need go  no  further.   Under

either the  "nerve center" test  or the "center  of corporate

activity"  test,7 the  principal  place of  business of  both

Lerfer  and Calumet is New York.8   Cf. Vareka Invs., N.V. v.
                                                          

American Inv. Properties, Inc., 724 F.2d 907, 910 (11th Cir.)
                              

(holding that  Ecuador corporation which  served as  "passive

investment vehicle"  for  Florida  real  estate  venture  had

principal place  of business  in Ecuador where  it maintained

its  corporate   books  and   records,  made   all  corporate

decisions, held all corporate  meetings, hired its employees,

and obtained loans for the initial purchase of  the venture),

cert.  denied, 469 U.S. 826 (1984).9  Both Lerfer and Calumet
             

                    

7.  Because Lerfer  and Calumet  have no  physical operations
(i.e., factories, warehouses, sales offices, etc.) the "locus
     
of  the operations  of  the corporation"  test  would not  be
helpful.  See Topp, 814 F.2d at 834 n.3 (rejecting utility of
                  
a "locus of physical operations of  the corporation" test for
a holding company).

8.  Because we find that  New York is the principal  place of
business of both  Lerfer and Calumet under  either the "nerve
center" or "center of corporate  activity" test, we need  not
determine which of  the two tests  is most appropriate  under
these facts.  

9.  In  so holding, we are not unaware  of a line of cases in
which district courts, in  determining the principal place of
business of a holding company, have looked to the business of
the entity whose  assets are  being held rather  than to  the

                             -17-
                              17

                    

business of the holding company.  See Bonar,  631 F. Supp. at
                                           
996 ("[the holding  company] was created to hold  and operate
[parent's] interest in [Pennsylvania  company], and it has no
business other  than this  venture.  Therefore,  [the holding
company's]   principal   place   of   business   is   clearly
Pennsylvania,  not  the  state  in which  its  executive  and
administrative offices may be located . . . ."); Hanna Mining
                                                             
Co. v. Minnesota  Power &amp; Light Co., 573  F. Supp. 1395, 1400
                                   
(D. Minn. 1983) ("[The  holding company] was created  to hold
and  operate [parent's] interest  in [Minnesota venture], and
it  has no business other than this venture.  Therefore, [the
holding company's] principal place  of business is clearly in
Minnesota,  not  in the  state  in  which its  executive  and
administrative offices may be  located . . . ."),  aff'd, 739
                                                        
F.2d 1368 (8th Cir. 1984); Hereth v. Jones, 544 F. Supp. 111,
                                          
112  (E.D. Va.  1982) ("[The  holding company's]  sole raison
                                                             
d'etre is to be the corporate general partner in [a] Virginia
      
nursing home venture.   Thus[,]  such activity  as exists  in
Virginia  is  greater  than  the non-activity  in  any  other
[s]tate.").  
     While  we were unable to discern from the facts of Hanna
                                                             
Mining exactly what level of activity took place in the state
      
where the  holding company's offices were  located, the facts
of both Bonar and Hereth reveal that the holding companies at
                        
issue  in each  case performed  no corporate activity  of any
                                  
kind in the states where their offices were located.  Indeed,
in Bonar, the evidence revealed that  the "office" was merely
        
a mailing  address, and that  the company  had no  employees,
executives,  officers, or  directors in  the state  where the
"office"  was located.  Bonar, 631 F.  Supp. at 994-95.  As a
                             
result, the court  was persuaded to look  to Minnesota, where
the holding company's attorney  resided and worked, where its
officers and  directors resided, and  where the  negotiations
over  the  initial  stock purchase  occurred.    Id.  at 995.
                                                    
Likewise, in Hereth, the court found that the holding company
                   
had  "absolutely  no function  or activity"  in the  state of
incorporation, and had "no  employees anywhere."  Hereth, 544
                                                        
F.  Supp.  at 112.   As  a result,  the  court looked  to the
activities  of the  business venture  that was  owned  by the
partnership  in  which  the  holding company  was  a  general
partner.  Id. 
             
     The   instant  case,   however,  presents   an  entirely
different  fact  pattern.    As detailed  above,  Lerfer  and
Calumet  operate out  of  New York.    They have  an  office,
                
employees,   bank  accounts,   a  working   capital  account,
corporate books and records,  and Board of Directors meetings
in New York.  The corporate officers and directors all reside
in New York,  and almost all  of the corporations'  decisions

                             -18-
                              18

are  therefore  citizens  of   New  York.    And   because  a

partnership is  a  citizen  of  those  states  in  which  its

partners  are citizens, see supra p. 3, it follows that Taber
                                 

is also a citizen of New York, and that the  district court's

contrary determination was clearly erroneous.

                       IV.  CONCLUSION
                                      

          As  Taber is a citizen  of New York,  the amount in

controversy is ample, and  none of the entities on  the other

side  of  the  lawsuit  shares  Taber's citizenship,  subject

matter  jurisdiction is  present.   We therefore  reverse and

remand the case for  further proceedings consistent with this

opinion.

          Reversed and remanded.
                                

                    

are made  in New York.   As such, Lerfer and  Calumet, unlike
the  holding  companies at  issue  in Bonar  and  Hereth, are
                                                        
holding  companies with  corporate  operations distinct  from
those of the company whose assets they hold.  As a result, we
find the reasoning in the above line of cases inapposite. 

                             -19-
                              19
