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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ___________
Commission file number 0-827
EMPIRE STATE BUILDING ASSOCIATES L.L.C.
(Exact name of registrant as specified in its charter)
A New York Limited Liability Company 13-6084254
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 East 42nd Street, New York, New York
(Address of principal executive offices)
10165
(Zip Code)
(212) 687-8700
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes [ X ]. No [ ].
An Exhibit Index is located on Page 15 of this Report.
Number of pages (including exhibits) in this filing: 14
Empire State Building Associates L.L.C.
June 30, 2002
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Empire State Building Associates L.L.C.
Condensed Consolidated Statements of Income
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
Income:
Rent income, from a related
party (Note C) $1,504,688 $1,504,688 $3,009,375 $3,009,375
Dividend income 16,204 38,193 115,611 195,358
Interest income 3,092 -0- 3,092 -0-
---------- --------- ---------- ----------
Total income 1,523,984 1,542,881 3,128,078 3,204,733
---------- ---------- ---------- ----------
Expenses:
Leasehold rent (Note B) 111,387 492,500 603,887 985,000
Interest on mortgage (Note B)819,271 -0- 819,271 -0-
Supervisory services, to a
related party (Note D) 39,854 39,854 79,708 79,708
Depreciation of building
(Note B) 258,834 -0- 258,834 -0-
Amortization of
financing costs (Note B) 37,423 -0- 37,423 -0-
Amortization of leasehold
(Note B) 8,686 52,117 60,803 104,234
Fees, including amounts
to a related party
(Note E) 15,234 53,305 53,432 54,277
Miscellaneous 342 -0- 343 -0-
---------- ---------- ---------- ----------
Total expenses 1,291,031 637,776 1,913,701 1,223,219
---------- ---------- -------- ----------
Net income $ 232,953 $ 905,105 $1,214,377 $1,981,514
========== ========== ========== ==========
Earnings per $10,000
Participation unit, based
on 3,300 participation units
outstanding during the period $ 70.59 $ 274.28 $ 367.99 $ 600.46
========== ======== ========= ==========
Distributions per $10,000
participation consisted
of the following:
Income $ 70.59 $ 274.28 $ 367.99 $ 600.46
Return of capital 224.07 20.38 7,221.30 3,992.44
---------- ---------- --------- ----------
Total distributions $ 294.66 $ 294.66 $ 7,589.29 $ 4,592.90
========== ========== ========== ==========
At June 30, 2002 and 2001, there were $33,000,000 of participations
outstanding.
See notes to condensed consolidated financial statements.
-1-
Empire State Building Associates L.L.C.
June 30, 2002
Empire State Building Associates L.L.C.
Condensed Consolidated Balance Sheets
(Unaudited)
Assets June 30, 2002 December 31, 2001
Current assets
Cash $ 507,047 $ 327,850
Restricted cash re: mortgage
interest (Note C) 1,503,092 -0-
Fidelity U.S. Treasury Income Portfolio 3,568,459 29,520,266
Prepaid rent -0- 23,831
Additional rent due from Empire State
Building Company L.L.C., a related party -0- 72,502
---------- -----------
Total current assets 5,578,598 29,944,449
---------- -----------
Deferred Charges -0- 110,050
---------- -----------
Mortgage financing costs 1,796,287 -0-
Less, allowance for amortization 37,423 -0-
---------- -----------
1,758,864 -0-
---------- -----------
Real Estate (Note B)
Leasehold on Empire State Building -0- 39,000,000
Less, allowance for amortization -0- 36,706,830
---------- -----------
-0- 2,293,170
---------- -----------
Land 12,095,036 -0-
---------- -----------
Building 48,380,151 -0-
Less, allowance for depreciation 258,834 -0-
---------- -----------
48,121,317 -0-
---------- -----------
Total real estate 60,216,353 2,293,170
---------- -----------
Total assets $67,553,815 $32,347,669
========== ===========
Liabilities and Members' Equity
Current liabilities:
Accrued fees, to a related
party $ -0- $ 316,804
Accrued supervisory services,
to a related party -0- 1,474,468
Accrued interest payable (Note B) 327,708 -0-
---------- ----------
Total current liabilities 327,708 1,791,272
Long term debt (Note B) 60,500,000 -0-
---------- ----------
Total liabilities 60,827,708 1,791,272
---------- ----------
-2-
Empire State Building Associates L.L.C.
June 30, 2002
Empire State Building Associates L.L.C.
Condensed Consolidated Balance Sheets
(Unaudited)
(CONTINUED)
Members' equity: June 30, 2002 December 31, 2001
Members' equity January 1, $ 30,556,397 $ 18,145,097
Add, Net income:
January 1, 2002 through June 30, 2002 1,214,377 -0-
January 1, 2001 through December 31, 2001 -0- 29,512,491
---------- ----------
31,770,774 47,657,588
---------- ----------
Less, Distributions:
Monthly distributions,
January 1, 2002 through June 30, 2002 1,944,667 -0-
January 1, 2001 through December 31, 2001 -0- 3,889,333
Additional distribution on
March 6, 2002 based on overage rent
for the lease year ended
December 31, 2001 23,100,000 -0-
Additional distribution on
March 2, 2001 based on overage rent
for the lease year ended
December 31, 2000 -0- 13,211,858
---------- ----------
Total distributions 25,044,667 17,101,191
---------- ----------
Members' equity:
June 30, 2002 6,726,107 -0-
December 31, 2001 -0- 30,556,397
---------- ----------
Total liabilities and members'
equity
June 30, 2002 $67,553,815
December 31, 2001 =========== $32,347,669
===========
See notes to condensed consolidated financial statements
-3-
Empire State Building Associates L.L.C.
June 30, 2002
Empire State Building Associates L.L.C.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
January 1, 2002 January 1, 2001
through through
June 30, 2002 June 30, 2001
Cash flows from operating activities:
Net income $ 1,214,377 $ 1,981,514
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation of building 258,834 -0-
Amortization of financing costs 37,423 -0-
Amortization of leasehold 60,803 104,234
Change in additional rent due
from sublessee 72,502 2,583,762
Decrease in prepaid rent 23,831 -0-
Change in accrued interest payable 327,708 -0-
Change in accrued supervisory services (1,474,468) (843,310)
Change in accrued fees (316,804) (1,854,565)
---------- ----------
Net cash provided by
operating activities 204,206 1,971,635
---------- ----------
Cash flows from investing activities:
Purchase of real estate (58,132,770) -0-
----------- ----------
Net cash used in investing
activities (58,132,770) -0-
----------- ----------
Cash flows from financing activities:
Cash distributions (25,044,667) (15,156,525)
Proceeds from mortgage payable 60,500,000 -0-
Mortgage financing costs (1,796,287) -0-
---------- ----------
Net cash provided by (used in)
financing activities 33,659,046 (15,156,525)
---------- ----------
Net decrease in cash
and cash equivalents (24,269,518) (13,184,890)
Cash and cash equivalents
beginning of period 29,848,116 15,733,741
---------- ----------
Cash and cash equivalents
end of period $5,578,598 $ 2,548,851
========== ==========
Cash paid for:
Interest $ 491,563 $ -0-
========== ==========
See notes to condensed consolidated financial statements
-4-
Empire State Building Associates L.L.C.
June 30, 2002
Notes to Condensed Consolidated Financial Statements (unaudited)
Note A - Organization and Basis of Presentation
In the opinion of management, the accompanying unaudited
condensed consolidated financial statements reflect all adjustments,
consisting of normal recurring accruals, necessary to present fairly
the financial position of Registrant as of June 30, 2002, its results
of operations for the six months and three months ended June 30, 2002
and 2001 and cash flows for the six months ended June 30, 2002 and
2001 and its changes in Members' equity for the six months ended June
30, 2002. Information included in the condensed balance sheet as of
December 31, 2001 has been derived from the audited balance sheet
included in Registrant's Form 10-K for the year ended December 31,
2001 (the "10-K") previously filed with the Securities and Exchange
Commission (the "SEC"). Pursuant to rules and regulations of the SEC,
certain information and disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or
omitted from these consolidated financial statements unless
significant changes have taken place since the end of the most recent
fiscal year. Accordingly, these unaudited condensed consolidated
financial statements should be read in conjunction with the financial
statements, notes to financial statements and the other information in
the 10-K. The consolidated results of operations for the six months
ended June 30, 2002 are not necessarily indicative of the results to
be expected for the full year.
Registrant was originally organized as a general
partnership on July 11, 1961. On October 1, 2001, Registrant converted
from a general partnership to a limited liability company under New
York law and is now known as Empire State Building Associates L.L.C.
The conversion does not change any aspect of the assets and operations
of Registrant other than to protect its participants from any future
liability to a third party.
Registrant's members are Peter L. Malkin, Anthony E.
Malkin and Thomas N. Keltner, Jr.(collectively, the "Agents"), each of
whom also acts as an agent for holders of participations in his
respective member interest in Registrant (the "Participants").
Note B- Purchase of Fee Title to The Empire State Building
and Land Thereunder, Mortgage Debt, and related
Depreciation and Amortization
Through April 16, 2002 Registrant owned the tenant's
interest in a master operating leasehold (the "Master Lease") on the
Empire State Building (the "Building") ,located at 350 Fifth Avenue,
New York, New York. On April 17, 2002, Registrant acquired, through a
wholly owned limited liability company (Empire State Land Associates
L.L.C.), the fee title to the Building, and the land thereunder (the
"Land") (together, the "Real Estate"), at a price of $57,500,000, and
-5-
Empire State Building Associates L.L.C.
June 30, 2002
obtained a $60,500,000 first mortgage with North Fork Bank (-the
"Mortgage") to finance the acquisition and certain related costs.
The Real Estate is carried in the financial statements at
a total cost of $60,475,187, consisting of $57,500,000 for the
purchase price paid to the seller, $742,820 for acquisition costs, and
$2,232,367 representing the unamortized balance of the cost of the
Master Lease on the date the Real Estate was acquired. The cost of the
Land is estimated to be 20% of the total cost of the Real Estate, and
the Building, 80%. Under the terms of the contract of sale, the deed
contains language to avoid the merger of the fee estate and the
leasehold, although on a consolidated financial statement basis the
Registrant incurred no leasehold rent expense after acquiring the Real
Estate.
The Mortgage matures on May 1, 2012. Monthly payments
under the mortgage are interest only at a fixed rate of 6.5% through
maturity. Payments commenced on June 1, 2002, except that short-term
interest from the closing until April 30, 2002 was due on May 1, 2002.
The mortgage may be prepaid at any time after 24 months with the
payment of a premium equal to the greater of (a) 1% of the amount
prepaid and (b) an amount calculated pursuant to a prepayment formula
designed to preserve the Bank's yield to maturity. The Mortgage loan
is secured by a lien on the Real Estate and Registrant's leasehold
estate under the Master Lease of the Real Estate.
The Building is being depreciated on a straight-line basis
using an estimated life of 39 years from April 17, 2002. Mortgage
financing costs, totaling $1,796,287, are being amortized ratably over
the life of the Mortgage.
Acquisition costs to acquire the Real Estate and mortgage
financing costs include payments totaling $103,587 and $54,909,
respecively, made to the firm of Wien & Malkin LLP, a related party.
Note C Interim Period Reporting
The condensed consolidated financial statements include the
accounts of Empire State Building Associates L.L.C. and, effective
April 17, 2002, its wholly-owned limited liability company, Empire
State Land Associates L.L.C. All intercompany accounts and
transactions have been eliminated in consolidation.
The initial term of the Master Lease expired on January 5,
1992. On January 30, 1989, Registrant exercised its first of four 21-
year renewal options contained in the Master Lease and extended the
Master Lease through January 5, 2013. The annual rent payable under
the Master Lease was $1,970,000 through January 5, 2013 and $1,723,750
annually during the term of each renewal period thereafter.
-6-
Empire State Building Associates L.L.C.
June 30, 2002
Prior to the acquisition of the Real Estate in April 2002, the value
of the Master Lease was stated at cost and amortized using the
straight-line method over its lease term. Since the unamortized cost
of the Master Lease is included as part of the cost of the Real Estate
as of April 17, 2002, no amortization has been taken since that date.
Cash at June 30, 2002 includes $1,503,092 on deposit in a
money market account held at North Fork Bank pursuant to the terms of
the Mortgage, to be used monthly through April 2003 to satisfy a
portion ($166,167) of Registrant's mortgage interest obligation. In
April 2003, and annually thereafter, Registrant is obligated to
deposit an additional $2,000,000 into this restricted account under
the same conditions.
Registrant does not operate the Property. It subleases the
Property to Empire State Building Company L.L.C. ("Sublessee")
pursuant to a net operating sublease (the "Sublease")with a term and
renewal options essentially coextensive with those contained in the
Master Lease. On January 30, 1989, Sublessee elected to renew the
Sublease for a term commencing January 4, 1992 to January 4, 2013.
Sublessee is required to pay annual basic rent ("Basic
Rent") of $6,018,750 from January 1, 1992 through January 4, 2013 and
$5,895,625 from January 5, 2013 through the expiration of all renewal
terms. Sublessee is also required to pay Registrant overage rent of
50% of Sublessee's net operating profit, as defined in the sublease,
in excess of $1,000,000 for each lease year ending December 31
("Overage Rent").
Overage Rent and other accumulated interest and dividend
income are distributed annually after payment of any additional
payments for supervisory services to Supervisor (as described in Note
D below). For 2001, Sublessee reported net operating profit of
$53,145,005; therefore, there was Overage Rent of $26,072,502 for the
year ended December 31, 2001. Registrant paid Supervisor $1,474,468
as an additional payment for supervisory services.
Sublessee is a New York limited liability company in which
Peter L. Malkin is a member, and through entities created by Peter L.
Malkin for family members are beneficial owners.
Note D - Supervisory Services
Registrant pays Supervisor for supervisory services and
disbursements. The supervisory fees are $100,000 per annum (the "Basic
Payment") plus an additional payment of 6% of all distributions to
Participants in any year in excess of the amount representing a return
of 9% per annum on their remaining original cash investment in any
year ("Additional Payment"). At June 30, 2002 such remaining cash
investment was $33,000,000, representing the original cash investment
of the Participants in Registrant.
-7-
Empire State Building Associates L.L.C.
June 30, 2002
The supervisory services provided to Registrant by
Supervisor include, but are not limited to, providing or coordinating
counsel services to Registrant, maintaining all of its entity and
Participant records, performing physical inspections of the Building,
reviewing insurance coverage, conducting annual supervisory review
meetings, receipt of monthly rent from Net Lessee, payment of monthly
and additional distributions to the Participants, payment of all other
disbursements, confirmation of the payment of real estate taxes, and
active review of financial statements submitted to Registrant by Net
Lessee and financial statements audited by and tax information
prepared by Registrant's independent certified public accountant, and
distribution of such materials to the Participants. Supervisor also
prepares quarterly, annual and other periodic filings with the
Securities and Exchange Commission and applicable state authorities.
Registrant pays Supervisor for other services at hourly
rates.
Pursuant to the Fee arrangements described herein,
Registrant paid Supervisor $50,000 of the Basic Payment for
supervisory services for the six month period ended June 30, 2002 and
$4,951 a month as the Additional Payment for supervisory services. No
remuneration was paid during the six month period ended June 30, 2002
by Registrant to any of the Members as such.
Reference is made to Note C of this Item 1 ("Note C") for a
description of the terms of the Sublease between Registrant and
Sublessee. The respective interests of the Members in Registrant and
in Sublessee arise solely from ownership of their respective
Participations in Registrant and, in the case of Mr. Malkin, his
family entities' ownership of an interest in Sublessee. The Members
receive no extra or special benefit not shared on a pro rata basis
with all other Participants in Registrant or members in Sublessee.
However, each of the Members, who hold senior positions at Supervisor
(which supervises Registrant and Sublessee), by reason of their
position at Supervisor, may receive income attributable to supervisory
or other remuneration paid to Supervisor for services rendered to
Registrant and Sublessee.
As of June 30, 2002 the Members owned of record and
beneficially an aggregate of $28,333 of participations in Registrant,
representing less than 1% of the currently outstanding participations
therein totaling $33,000,000.
In addition, as of June 30, 2002 certain of the Members (or
their respective spouses) held additional Participations as follows:
Entities for the benefit of members of Peter L. Malkin's
family owned of record and beneficially $557,917 of
Participations. Peter L. Malkin disclaims any beneficial
ownership of such Participations, except that related trusts
are required to complete scheduled payments to Peter L.
Malkin.
-8-
Empire State Building Associates L.L.C.
June 30, 2002
Peter L. Malkin owned of record as trustee or co-trustee,
but not beneficially, $307,500 of Participations. Peter L.
Malkin disclaims any beneficial ownership of such
Participations.
Anthony E. Malkin owned of record as trustee or co-trustee,
but not beneficially, $35,833 of Participations. Anthony E.
Malkin disclaims any beneficial ownership of such
Participations.
Note E Fees
Fees of $53,305 for the three months ended June 30, 2001,
represents reimbursement payments to Wien & Malkin LLP for its advances
to third-party professionals for legal fees and disbursements relating
to the Studley litigation.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Registrant was organized for the initial purpose of
acquiring the Master Lease of the Property subject to the Sublease.
Basic Rent received by Registrant is used to pay annual rent due under
the Master Lease and the Basic Payment and Additional Payment for
supervisory services; the balance of such Basic Rent is distributed to
the Participants. Overage Rent and any interest and dividends
accumulated thereon are used for payment of interest on the Mortgage,
and the balance is distributed to the Participants after the
Additional Payment is made to Supervisor. See Note C of Item 1 above.
Pursuant to the Sublease, Sublessee has assumed responsibility for the
condition, operation, repair, maintenance and management of the
Property. Registrant is not required to maintain liquid assets to
defray any operating expenses of the Property.
Registrant does not pay dividends. During the six month
period ended June 30, 2002 Registrant made regular monthly
distributions of $98.21 for each $10,000 participation ($1,178.52 per
annum for each $10,000 participation). There are no restrictions on
Registrant's present or future ability to make distributions; however,
the amount of such distributions, particularly distributions of
Overage Rent, depends on the ability of Sublessee to make payments of
Basic Rent and Overage Rent to Registrant in accordance with the terms
of the Sublease. Registrant expects to make distributions in the
future so long as it receives the payments provided for under the
Sublease. See Note C.
-9-
Empire State Building Associates L.L.C.
June 30, 2002
Registrant's results of operations are affected primarily by
the amount of rent payable to it under the Sublease. The amount of
Overage Rent payable to Registrant is affected by the New York City
economy and real estate market.
Total income decreased for the six month period ended June
30, 2002 as compared with the six month period ended June 30, 2001.
Such decrease was the result of a decrease in dividend income earned
on funds temporarily invested in Fidelity U.S. Treasury Income
Portfolio. Total expenses increased for the six month period ended
June 30, 2002 as compared with the six month period ended June 30,
2001. Such increase is the net result of the incurrence of mortgage
interest expense, the depreciation of the building, amortization of
mortgage financing and a decrease in rent expense during the six month
period ended June 30, 2002.
Sublessee was liable for New York State Utility Tax for
periods after December 31, 1992 through 1997. The State has settled
all utility taxes for the years 1993 through 1997 with a payment of
$243,270 plus accrued interest of approximately $183,613 through
December 31, 2001. Payment of $428,883 in connection with the
foregoing was made by Sublessee on February 1, 2002. A final payment
of $2,129 was made on March 15, 2002.
Liquidity and Capital Resources
Registrant's liquidity has increased significantly for the
six month period ended June 30, 2002, as compared with the six month
period ended June 30, 2001 as a result of the retention of a portion
of the prior year's overage rent income and residual mortgage proceeds
from the new Mortgage. Registrant may from time to time establish a
reserve for contingent or unforeseen liabilities.
No amortization payments are due under the Mortgage to
reduce the outstanding principal balance prior to maturity.
Furthermore, Registrant does not maintain any reserve to cover the
principal payment of such Mortgage indebtedness at maturity.
Therefore, repayment of the Mortgage will depend on Registrant's
ability to arrange a refinancing. Assuming that the Property
continues to generate an annual net profit in future years comparable
to that in past years, Registrant anticipates that the value of the
Master Lease and Property would be well in excess of the amount of the
Mortgage balance at maturity.
Registrant anticipates that funds for working capital will
be generated by operations of the Building by Sublessee, which entity
in turn is required to make payments of Basic Rent and Overage Rent
under the Sublease and, to the extent necessary, from additional
capital investment by the members of the Sublessee and/or external
financing.
-10-
Empire State Building Associates L.L.C.
June 30, 2002
Inflation
Registrant believes that there has been no material change
in the impact of inflation on its operations since the filing of its
report on Form 10-K for the year ended December 31, 2001, which report
and all exhibits thereto are incorporated herein by reference and made
a part hereof.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Property of Registrant is the subject of the following
pending litigation:
Wien & Malkin LLP, et. al. v. Helmsley-Spear, Inc., et. al.
On June 19, 1997 Wien & Malkin LLP and Peter L. Malkin filed an action
in the Supreme Court of the State of New York, against Helmsley-Spear,
Inc. and Leona Helmsley concerning various partnerships which own,
lease or operate buildings managed by Helmsley-Spear, Inc., including
Registrant's property. In their complaint, plaintiffs sought the
removal of Helmsley-Spear, Inc. as managing and leasing agent for all
of the buildings. Plaintiffs also sought an order precluding Leona
Helmsley from exercising any partner management powers in the
partnerships. In August, 1997, the Supreme Court directed that the
foregoing claims proceed to arbitration. As a result, Mr. Malkin and
Wien & Malkin LLP filed an arbitration complaint against Helmsley-
Spear, Inc. and Mrs. Helmsley before the American Arbitration
Association. Helmsley-Spear, Inc. and Mrs. Helmsley served answers
denying liability and asserting various affirmative defenses and
counterclaims; and Mr. Malkin and Wien & Malkin LLP filed a reply
denying the counterclaims. By agreement dated December 16, 1997, Mr.
Malkin and Wien & Malkin LLP (each for their own account and not in
any representative capacity) reached a settlement with Mrs. Helmsley
of the claims and counterclaims in the arbitration and litigation
between them. Mr. Malkin and Wien & Malkin LLP then continued their
prosecution of claims in the arbitration for relief against Helmsley-
Spear, Inc., including its termination as the leasing and managing
agent for various entities and properties, including the Registrant's
Lessee. The arbitration hearings were concluded in June 2000, and the
arbitrators issued their decision on March 30, 2001, ordering that the
termination of Helmsley-Spear, Inc. would require a new vote by the
partners in the Lessee, setting forth procedures for such a vote, and
denying the other claims of all parties. Following the decision,
Helmsley-Spear, Inc. applied to the court for confirmation of the
decision, and Mr. Malkin and Wien & Malkin LLP applied to the court
for an order setting aside that part of the decision regarding the
procedure for partnership voting to terminate Helmsley-Spear, Inc. and
various other parts of the decision on legal grounds. The court
granted the motion to confirm the arbitrators' decision and denied the
application to set aside part of the arbitrators' decision. Mr. Malkin
and Wien & Malkin LLP have served notice of appeal of the court's
determination.
On November 29, 2001, an action entitled Irving Schneider v. Peter
L. Malkin et al. was brought in New York State Supreme Court by the
holder of a $10,000 original participation in Associates (representing
1/3300th of the interests in Associates) against Associates' Agents,
claiming that the Agents had violated contractual and fiduciary duties
and that the consent of the Participants to Associates' program for
acquisition and financing of the fee title to the Empire State Building
-11-
Empire State Building Associates L.L.C.
June 30, 2002
pursuant to the September 14, 2001 Solicitation is ineffective. On
February 28, 2002, the Court granted an order dismissing all of Mr.
Schneider's claims. Mr. Schneider filed on March 8, 2002 a notice of
appeal of the order dismissing his claims.
In April 2002, Leona M. Helmsley, who is a 63.75% member in
Sublessee, brought litigation against Sublessee's supervisor, Wien &
Malkin LLP, and member, Peter L. Malkin, claiming misconduct and seeking
damages and disqualification from performing services for Sublessee.
Wien & Malkin LLP and Mr. Malkin are defending against these claims.
Item 5. Other Information
Sublessee is to maintain the Building as a high-class office
building as required by the terms of the Sublease.
Based on Sublessee's review of the need for upgrades and
improvements to the property, it is projected by Sublessee that
improvement costs of approximately $4,200,000 will be incurred in
2002.
The Sublessee anticipates that the costs of improvements to
be incurred will reduce Overage Rent during the year 2002 but should
have no effect on the payment of Basic Rent.
Item 6. Exhibits and Reports on Form 8-K
(a) See exhibit index.
(b) Registrant filed a Form 8-K on May 8, 2002.
-12-
Empire State Building Associates L.L.C.
June 30, 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
The individual signing this report on behalf of Registrant
is Attorney-in-Fact for Registrant and each of the Partners in
Registrant, pursuant to Powers of Attorney, dated August 6, 1996 and
May 14, 1999 (collectively, the "Power").
EMPIRE STATE BUILDING ASSOCIATES L.L.C.
(Registrant)
By: /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: August 28, 2002
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the undersigned as Attorney-
in-Fact for each of the Members in Registrant, pursuant to the Power,
on behalf of Registrant on the date indicated.
By: /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: August 28, 2002
__________________________
* Mr. Katzman supervises accounting functions for Registrant.
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Empire State Building Associates L.L.C.
June 30, 2002
EXHIBIT INDEX
Number Document Page*
3(a) Attached hereto as Exhibit 3(c) is
Registrant's Consent and Operating
Agreement dated as of September 30, 2001
as a Limited Liability Company, which
incorporates by reference the Registrant's
prior Partnership Agreement dated July 11,
1961, filed as Exhibit No. 1 to
Registrant's Registration Statement on
Form S-1 as amended (the "Registration
Statement") by letter dated August 8, 1962
and assigned File No. 2-18741 and, itself
incorporated by reference as an exhibit
hereto.
3(b) Amended Business Certificate of
Registrant filed with the Clerk of New
York County on August 19, 1996 reflecting
a change in the Partners of Registrant
which was filed as Exhibit 3(b) to
Registrant's Annual Report on 10-K for the
fiscal year ended December 31, 1996 and is
incorporated by reference as an exhibit
hereto.
3(c) Registrant's Consent and Operating
Agreement dated as of September 30, 2001
4 Registrant's form of Participating
Agreement, filed as Exhibit No. 6 to the
Registration Statement by letter dated
August 8, 1962 and assigned File No. 2-
18741, is incorporated by reference as an
exhibit hereto.
13(a) Letter to Participants dated April 15,
2002 and supplementary financial reports
for the fiscal year ended December 31,
2001. The foregoing material shall not
be deemed "filed" with the Commission or
otherwise subject to the liabilities of
Section 18 of the Securities Exchange Act
of 1934.
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Empire State Building Associates L.L.C.
June 30, 2002
EXHIBIT INDEX
(cont.)
Number Document Page*
24 Powers of Attorney dated August 6, 1996
and May 14, 1999 between the Partners of
Registrant and Stanley Katzman and Richard
A. Shapiro which was filed as Exhibit 24
to Registrant's 10-Q for the quarter ended
June 30, 1999 and is incorporated herein
by reference.
99 (1) Chief Executive Officer Certification
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
99 (2) Chief Financial Officer Certification
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
__________________________
* Page references are based on sequential numbering system.
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