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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
[ ] 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 O-2666
250 WEST 57TH ST. ASSOCIATES
(Exact name of registrant as specified in its charter)
New York 13-6083380
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
60 East 42nd Street, New York, New York 10165
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 687-8700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
$3,600,000 of Participations in Joint-Venture Interests
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 reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ x ] No [ ]
The aggregate market of the voting stock held by non-affiliates
of the Registrant: Not applicable, but see Items 5 and 10 of
this report.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
An Exhibit Index is located on pages 34 through 36 hereof.
Number of pages (including exhibits) in this filing: 51
PART I
Item 1. Business.
(a) General
Registrant is a joint venture which was organized on
May 25, 1953. On September 30, 1953, Registrant acquired fee
title to The Fisk Building, 250-264 West 57th Street, New York,
New York (the "Building") and to the land thereunder (the
"Property"). Registrant's joint venturers are Peter L. Malkin
and Anthony E. Malkin (individually, a "Joint Venturer" and,
collectively, the "Joint Venturers") each of whom also acts as an
agent for holders of participations in their undivided joint
venture interests in Registrant (each holder of a participation,
individually, a "Participant" and, collectively, the
"Participants").
Registrant leases the Property to Fisk Building
Associates (the "Net Lessee"), a partnership, under a long-term
net operating lease dated May 1, 1954 (the "Net Lease"), the
current term of which expires on September 30, 2003. Net Lessee
is a partnership in which Mr. Peter L. Malkin is one of the
Partners. In addition, one of the Joint Venturers is also a
member of Wien & Malkin LLP, 60 East 42nd Street, New York, New
York, which provides supervisory and other services to Registrant
and the Net Lessee ("Supervisor"). See Items 10, 11, 12 and 13
hereof for a description of the on-going services rendered by,
and compensation paid to, Supervisor and for a discussion of
certain relationships which may pose actual or potential
conflicts of interest among Registrant, Net Lessee and certain of
their respective affiliates.
As of December 31, 2000, the Building was approximately
97.66% occupied by approximately 299 tenants, a majority of whom
are engaged in the practices of law, dentistry and accounting,
and the businesses of publishing, insurance and entertainment.
Registrant does not maintain a full-time staff. See Item 2
hereof for additional information concerning the Building.
(b) Net Lease
Effective May 1, 1975, the lease between 250 West 57th
St. Associates, as lessor, and Fisk Building Associates, as
lessee, provides for basic rent equal to mortgage principal and
interest payments plus $28,000 payable to Wien & Malkin LLP for
supervisory services. The lease modification dated November 17,
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2000 between 250 West 57th St. Associates, as lessor, and Fisk
Building Associates, as lessee, provides that the basic rent will
be equal to the sum of $28,000 plus the installment payments for
interest and amortization ( not including any balloon payment due
at maturity ) required annually under the new $15,500,000 first
mortgage loan ( the "First Mortgage" ) from Emigrant Savings
Bank. Basic rent is payable in monthly installments on the first
day of each calendar month in an amount equal to $2,333.33 plus
the projected debt service due on the First Mortgage on the first
day of the ensuing calendar month ( with a reconciliation to be
made as soon as practicable thereafter ): provided, however, that
basic rent due on December 1, 2000 shall include interest prepaid
at the closing of the First Mortgage or accrued thereafter. Basic
rent shall be adjusted on a dollar-for-dollar basis by changes in
the annual debt service on the First Mortgage.
Net Lessee is required to make a monthly payment to
Registrant, as an advance against Primary Overage Rent, of an
amount equal to its operating profit for its previous lease year
in the maximum amount of $752,000 per annum. Net Lessee
currently advances $752,000 each year, which permits Registrant
to make regular monthly distributions at 20% per annum on the
Participants' remaining cash investment.
For the lease year ended September 30, 2000, Net Lessee
reported net operating profit of $5,903,444 after deduction of
Basic Rent. Net Lessee paid Primary Overage Rent of $752,000,
together with Secondary Overage Rent of $2,525,723 for the fiscal
year ended September 30, 2000. The Secondary Overage Rent of
$2,525,723 represents 50% of the excess of the net operating
profit of $5,903,444 over $752,000 ,less $49,999 representing
interest earned and retained by Registrant on funds borrowed for
the improvement program. After the payment of $252,572 to
Supervisor as an additional payment for supervisory services, the
balance of $2,273,151 was distributed to the Participants on
November 30, 2000.
Secondary Overage Rent income is recognized when earned
from Net Lessee, at the close of the lease year ending September
30. Such income is not determinable until Net Lessee, pursuant
to the Net Lease, renders to Registrant a report on the Net
Lessee's operation of the Property. The Net Lease requires that
this report be delivered to Registrant annually within 60 days
after the end of each such lease year. Accordingly, all
Secondary Overage Rent income and related supervisory service
expense can only be determined after the receipt of such report.
The Net Lease does not provide for the Net Lessee to render
interim reports to Registrant, so no income is reflected for the
period between the end of the lease year and the end of
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Registrant's fiscal year. See Note 4 of Notes to Financial
Statements filed under Item 8 hereof (the "Notes") regarding
Secondary Overage Rent payments by Net Lessee for the fiscal
years ended December 31, 2000, 1999 and 1998.
The Net Lease provides for one renewal option of 25
years. The Participants in Registrant and the partners in Net
Lessee have agreed to execute three additional 25-year renewal
terms on or before the expiration of the then applicable renewal
term.
(c) Mortgage Loan Refinancing
Effective November 17, 2000, a new first mortgage was
placed on the property with Emigrant Savings Bank in the amount
of $15,500,000. The Mortgage matures on December 1, 2005. At the
closing, the amount of $7,000,000 was advanced to pay off the
existing first and second mortgages held by Apple Bank for
Savings and to pay for closing and related costs and the costs of
improvements made to the property. The balance of the first
mortgage loan will be advanced in stages through May 31, 2003 to
pay for additional improvements to the property.
Monthly payments under the mortgage are interest only.
Amounts advanced at the closing bear interest at the rate of
7.511% throughout the term of the mortgage. Amounts advanced
after the closing will bear interest at a floating rate equal to
1.65 percentage points above 30, 60, 90, 180 or 360 day LIBOR or
the yield on 30-day U.S. Treasury Securities, as selected by
Associates.
On June 1, 2003 the interest rate on all amounts
advanced following the closing will be converted to a fixed rate
equal to 1.65 percentage points above the then-current yield on
U.S. Treasury Securities having the closest maturity to December
1, 2005.
The mortgage may be prepaid at any time, in whole only,
upon payment of a prepayment penalty based on a yield maintenance
formula. There will be no prepayment penalty if the mortgage is
paid in full during the last 90 days of the term thereof.
(d) Competition
The average annual base rental rate payable to Net
Lessee for leases being done at this time is $26.45 per square
foot (exclusive of electricity charges and escalation).
Current asking rents for the building range from $42 to
$50 per square foot.
(e) Tenant Leases
Net Lessee operates the Building free from any federal,
state or local government restrictions involving rent control or
other similar rent regulations which may be imposed upon
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residential real estate in Manhattan. Any increase or decrease
in the amount of rent payable by a tenant is governed by the
provisions of the tenant's particular lease. With respect to the
retail leases, the tenants are required to pay electricity
charges and taxes, and some tenants are required to pay cost of
living increases in rent. In one particular instance, percentage
rent was included in the tenant's lease in lieu of cost of living
increases.
Item 2. Properties.
As stated in Item 1 hereof, Registrant owns the
Building located at 250-264 West 57th Street, New York, New York,
known as the "Fisk Building", and the land thereunder.
Registrant's fee title to the Property is encumbered by a
Mortgage Loan which, at December 31, 2000, had an unpaid
principal balance of $7,000,000. For a description of the terms
of the Mortgage Loan see Note 3 of the Notes.
The Building, erected in 1921 and containing 26 floors,
occupies the entire block front on the south side of West 57th
Street between Broadway and Eighth Avenue, New York, New York.
The Building has ten passenger and three freight elevators and is
equipped with a combination of central and individual window unit
air-conditioning.
The Building is net leased to Net Lessee under the Net
Lease. A modification of the Net Lease, effective October 1,
1984, provides for a further renewal term of 25 years, from
October 1, 2003 through September 30, 2028. The holders of more
than 80% of the participations in Registrant have consented to
the granting of options to the Net Lessee to extend the Net Lease
for three additional 25-year renewal terms. There is no change in
the terms of the Net Lease during the renewal periods. See Item
1 hereof.
A majority of the Building's tenants are engaged in the
entertainment business, insurance business, publishing, and the
practice of law, accounting and dentistry. In addition, there
are several commercial tenants located on the street level of the
Building, including a restaurant and several retail stores.
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Item 3. 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, Mr. Malkin and Wien &
Malkin LLP are evaluating with counsel possible court review of the
decision and other action.
Item 4. Submission of Matters to a Vote of Participants.
No matters were submitted to the participants during
the last quarter of the period covered by this report.
-5-
PART II
Item 5. Market for Registrant's Common Equity
and Related Security Holder Matters.
Registrant is a joint venture organized pursuant to a
joint venture agreement entered into among various individuals
dated May 1, 1954.
Registrant has not issued any common stock. The
securities registered by it under the Securities Exchange Act of
1934, as amended, consist of participations in the joint venture
interests of the Joint Venturers in Registrant (each,
individually, a "Participation" and, collectively,
"Participations") and are not shares of common stock or their
equivalent. The Participations represent each Participant's
fractional share in the Joint Venturers' undivided interest in
Registrant and are divided approximately equally among the Joint
Venturers. Each unit of the Participations was originally
offered at a purchase price of $5,000; fractional units were also
offered at proportionate purchase prices. Registrant has not
repurchased Participations in the past and it is not likely to
change its policy in the future.
(a) The Participations neither are traded on an
established securities market nor are readily tradable on a
secondary market or the substantial equivalent thereof. Based on
Registrant's transfer records, Participations are sold by the
holders thereof from time to time in privately negotiated
transactions and, in many instances, Registrant is not aware of
the prices at which such transactions occur. Registrant was
advised of 31 transfers of Participations during 2000. In one
instance, the indicated purchase price was equal to three times
the face amount of the Participation transferred, i.e., $15,000
for a $5,000 Participation. In all other cases, no consideration
was indicated.
(b) As of December 31, 2000, there were 567 holders of
Participations of record.
(c) Registrant does not pay dividends. During the
years ended December 31, 2000 and 1999, Registrant made regular
monthly distributions of $83.33 for each $5,000 Participation
($1,000 per annum for each $5,000 Participation). On November
30, 2000 and November 30, 1999, Registrant made additional
distributions for each $5,000 Participation of $3,157 and $2,829,
respectively. Such distributions represented primarily Secondary
Overage Rent payable by Net Lessee. There are no restrictions on
Registrant's present or future ability to make distributions;
however, the amount of such distributions, particularly
distributions of Secondary Overage Rent, depends solely on Net
Lessee's ability to make payments of Basic Rent, Primary Overage
Rent and Secondary Overage Rent to Registrant. (See Item 1
hereof). Registrant expects to make distributions so long as it
receives the payments provided for under the Net Lease. See Item
7 hereof.
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[SELECTED FINANCIAL DATA]
Item 6.
250 WEST 57th ST. ASSOCIATES
SELECTED FINANCIAL DATA
Year ended December 31,
2000 1999 1998 1997 1996
Basic minimum annual rent income. $ 429,740 $ 341,274 $ 317,157 $ 317,157 $ 317,157
Primary overage rent income...... 752,000 752,000 752,000 752,000 752,000
Secondary overage rent income.... 2,525,723 2,262,956 2,282,064 1,326,984 1,658,477
Total revenues................ $3,707,463 $3,356,230 $3,351,221 $2,396,141 $2,727,634
Net income....................... $2,952,546 $2,719,635 $2,787,347 $1,909,974 $2,224,320
Earnings per $5,000 participation
unit, based on 720 participation
units outstanding during each
year............................ $ 4,101 $ 3,777 $ 3,871 $ 2,653 $ 3,089
Total assets..................... $6,759,030 $3,905,210 $2,212,651 $2,220,481 $2,228,311
Long-term obligations........... $7,000,000 $ - $2,789,171 $2,814,821 $2,838,179
Distributions per $5,000
participation unit, based on
720 participation units
outstanding during each year:
Income........................ $ 4,101 $ 3,777 $ 3,850 $ 2,634 $ 3,073
Return of capital............. 56 52 - - -
Total distributions........... $ 4,157 $ 3,829 $ 3,850 $ 2,634 $ 3,073
-7-
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
Registrant was organized solely for the purpose of
owning the Property described in Item 2 hereof subject to a net
operating lease of the Property held by Net Lessee. Registrant
is required to pay, from Basic Rent, the charges on the Mortgage
Loan and amounts for supervisory services, and to then distribute
the balance of such Basic Rent to holders of Participations.
Pursuant to the Net Lease, Net Lessee has assumed responsibility
for the condition, operation, repair, maintenance and management
of the Property. Accordingly, Registrant need not maintain sub-
stantial reserves or otherwise maintain liquid assets to defray
any operating expenses of the Property.
Registrant's results of operations are affected
primarily by the amount of rent payable to it under the Net
Lease. The amounts of Primary Overage Rent and Secondary Overage
Rent are affected by the New York City economy and its real
estate market. It is difficult to forecast the New York City
economy and real estate market over the next few years. The
following summarizes the material factors for the three most re-
cent years affecting Registrant's results of operations for such
periods:
(a) Total income increased for the year ended December 31, 2000
as compared with the year ended December 31, 1999. The
increase resulted from an increase in Basic minimum rent, an
increase in dividend income and interest income and an
increase in Secondary Overage Rent. See Note 4 of the
Notes. Total income increased for the year ended December
31, 1999 as compared with the year ended December 31, 1998.
The increase resulted from an increase in Basic minimum rent
and dividend income. See Note 4 of the Notes.
(b) Total expenses increased for the year ended December 31,
2000 as compared with the year ended December 31, 1999. The
increase resulted from an increase in the additional payment
for supervisory services payable with respect to an
increased amount of Secondary Overage Rent received by
Registrant in 2000, payment of second mortgage interest
expense and an increase in professional fees and
amortization of mortgage refinancing costs. See Notes 3 and
5 of the Notes. Total expenses increased for the year ended
December 31, 1999 as compared with the year ended December
31, 1998. The increase was the net result of an increase in
mortgage interest expense, professional fees and
amortization of mortgage refinancing costs and a decrease in
supervisory service expense. See Notes 3 and 5 of the Notes.
-8-
{SELECTED FINANCIAL DATA]
Item 7.
250 WEST 57th ST. ASSOCIATES
QUARTERLY RESULTS OF OPERATIONS
The following table presents the Company's operating results for each of the
eight fiscal quarters in the period ended December 31, 2000. The information
for each of these quarters is unaudited and has been prepared on the same basis
as the audited financial statements included in this Annual Report on Form 10-K.
In the opinion of management, all necessary adjustments, which consist only of
normal and recurring accruals, have been included to present fairly the
unaudited quarterly results. This data should be read together with the
financial statements and the notes thereto included in this Annual Report on
Form 10-K.
Three Months Ended
March 31, June 30, September 30, December 31,
1999 1999 1999 1999
Statement of Income Data:
Basic rent income $ 79,290 $ 79,289 $ 80,021 $102,675
Advance of primary
overage rent income 188,000 188,000 188,000 188,000
Secondary overage rent
income - - 2,262,956 -
Dividend income - - 1,282 17,110
Total revenues 267,290 267,289 2,532,259 307,785
Interest on mortgages 66,051 65,904 67,767 87,700
Supervisory services 15,000 15,000 241,296 15,000
Professional fees - - - 37,748
Amortization of mortgage
refinancing costs 1,958 1,957 4,656 34,950
Total expenses 83,009 82,861 313,719 175,398
Net income $184,281 $184,428 $2,218,540 $132,387
Earnings per $5,000
participation unit, based
on 720 participation
units outstanding during
each period $ 256 $ 256 $ 3,081 $ 184
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Item 7.
250 WEST 57th ST. ASSOCIATES
QUARTERLY RESULTS OF OPERATIONS (Continued)
Three Months Ended
March 31, June 30, September 30, December 31,
2000 2000 2000 2000
Statement of Income Data:
Basic rent income $101,518 $103,387 $ 104,707 $120,128
Advance of primary
overage rent income 188,000 188,000 188,000 188,000
Secondary overage
rent income - - 2,525,723 -
Dividend and
interest income 17,959 11,133 2,515 14,309
Total revenues 307,477 302,520 2,820,945 322,437
Interest on mortgages 87,673 89,370 90,520 110,706
Supervisory services 15,000 15,000 272,572 10,000
Professional fees - 74,660 - (34,300)
Amortization of mortgage
refinancing costs 34,114 8,610 8,610 18,298
Total expenses 136,787 187,640 371,702 104,704
Net income $170,690 $114,880 $2,449,243 $217,733
Earnings per $5,000
participation unit, based
on 720 participation
units outstanding during
each period $ 237 $ 160 $ 3,402 $ 302
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Liquidity and Capital Resources
Registrant's liquidity has changed significantly as a
result of a new mortgage placed on the property in 2000. The
prior first mortgage matured in 2000 and was therefore reflected
as a current liability at December 31, 1999. The new mortgage
matures on December 1, 2005 and is therefore reflected as a long-
term liability at December 31, 2000.
No amortization payments are due under the Mortgage to
fully satisfy the outstanding principal balance at maturity, and
furthermore, Registrant does not maintain any reserve to cover
the 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, and assuming further that
current real estate trends continue in the geographic area in
which the Property is located, Registrant anticipates that the
value of the Property would be in excess of the amount of the
Mortgage balance at maturity.
Registrant anticipates that funds for working capital
for the Property will be provided by rental payments received
from Lessee and, to the extent necessary, from additional capital
investment by the partners in Lessee and/or external financing.
However, as noted above, Registrant has no requirement to
maintain substantial reserves to defray any operating expenses of
the Property. Registrant foresees no need to make material
commitments for capital expenditures while the Lease is in
effect.
Inflation
Inflationary trends in the economy do not directly
affect Registrant's operations since Registrant does not actively
engage in the operation of the Property. Inflation may impact
the operations of Net Lessee. Net Lessee is required to pay
Basic Rent, regardless of the results of its operations.
Inflation and other operating factors affect the amount of
Primary and Secondary Overage Rent payable by Net Lessee, which
is based on Net Lessee's net operating profit.
Item 8. Financial Statements and Supplementary Data.
The financial statements, together with the accom-
panying report by, and the consent to the use thereof, of J.H.
Cohn LLP immediately following, are being filed in response to
this item.
-11-
Item 9. Disagreements on Accounting and Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Registrant has no directors or officers or any other
centralization of management. There is no specific term of
office for any Joint Venturer in Registrant. The table below
sets forth as to each individual who served as a Joint-Venturer
in Registrant as of December 31, 2000 the following: name, age,
nature of any family relationship with any other Joint Venturer,
business experience during the past five years and principal
occupation and employment during such period, including the name
and principal business of any corporation or any organization in
which such occupation and employment was carried on and the date
such individual became a Joint-Venturer in Registrant:
Date
Principal Individual
Nature of Occupation became
Family Business and Joint
Name Age Relationship Experience Employment Venturer
Peter L. Malkin 67 Father of Real Estate Senior Partner 1982
Anthony E. Supervision and Chairman
Malkin and Law Wien & Malkin
LLP
Anthony E. Malkin 38 Son of President President of 1998
Peter L. of real estate W&M Properties,
Malkin management Inc.
company
As stated in Item 1 hereof, one of the Joint Venturers
is a member of Supervisor. See Items 11, 12 and 13 hereof for a
description of the services rendered by, and the compensation
paid to, Supervisor and for a discussion of certain relationships
which may pose actual or potential conflicts of interest among
Registrant, Net Lessee and certain of their respective
affiliates.
-12-
The names of entities which have a class of securities
registered pursuant to Section 12 of the Securities Exchange Act
of 1934 or are subject to the requirements of Section 15(d) of
that Act, and in which the Joint Venturers are also either a
director, joint venturer or general partner are as follows:
Peter L. Malkin is a general partner in Garment Capitol
Associates, 60 East 42nd St. Associates, Navarre-500
Building Associates and Empire State Building
Associates.
Anthony E. Malkin is a general partner in 60 East 42nd
St. Associates.
Item 11. Executive Compensation.
As stated in Item 10 hereof, Registrant has no direc-
tors or officers or any other centralization of management.
No remuneration was paid during the fiscal year ended
December 31, 2000 by Registrant to any of the Joint Venturers as
such. Registrant pays Supervisor, for legal fees and supervisory
services and disbursements: (i) $40,000 per annum (the "Basic
Payment"); and (ii) an additional payment of 10% of all
distributions to Participants in any year in excess of the amount
representing a return to them at the rate of 15% per annum on
their remaining cash investment (the "Additional Payment"). At
December 31, 2000, the Participants' remaining cash investment
was $3,600,000. Of the Basic Payment, $28,000 is payable from
Basic Rent and $12,000 is payable from Primary Overage Rent
received by Registrant. See Item 1 hereof. Pursuant to such fee
arrangements, Registrant paid Supervisor $312,572 during the
fiscal year ended December 31, 2000. Registrant also paid to
Supervisor professional fees in the amount of $68,560 in
connection with the mortgage refinancing for the improvement
program. See Item 4. The supervisory services provided to
Registrant by Supervisor include real estate supervisory, legal,
administrative and financial services. The services include, but
are not limited to, providing or coordinating with counsel to
Registrant, maintaining all of its partnership and Participant
records, performing physical inspections of the Building,
reviewing insurance coverage and conducting annual partnership
meetings. Financial services include monthly receipt of rent
from the 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 the Net Lessee and financial statements audited by and tax
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information prepared by Registrants' 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.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
(a) Registrant has no voting securities. See Item 5
hereof. At December 31, 2000, no person owned of record or was
known by Registrant to own beneficially more than 5% of the
outstanding Participations in the undivided Joint Venture
interests in Registrant.
(b) At December 31, 2000, the Joint Venturers (see
Item 10 hereof) did not beneficially own, directly or indirectly,
any Participations in Registrant.
At such date, certain of the Partners held additional
Participations as follows:
Anthony E. Malkin owned of record as co-trustee an
aggregate of $8,333 of Participations. Mr. Anthony E.
Malkin disclaims any beneficial ownership of such
Participations.
Entities for the benefit of members of Peter L.
Malkin's family owned of record and beneficially
$88,333 of Participations. Mr. Malkin disclaims any
beneficial ownership of such Participations, except
that trusts related to such entities are required to
complete scheduled payments to Mr. Malkin.
(c) Not applicable.
Item 13. Certain Relationships and Related Transactions.
(a) As stated in Item 1 hereof, each Joint
Venturer acts as agent for his respective group of Participants.
Mr. Malkin is also a partner in Net Lessee. As a consequence of
one of the two Joint Venturers being a partner in Net Lessee and
one of the two Joint Venturers being a member of Supervisor
(which supervises Registrant and Net Lessee), certain actual or
potential conflicts of interest may arise with respect to the
management and administration of the business of Registrant.
-14-
However, under the respective participating agreements pursuant
to which the Joint Venturers act as agents for the Participants,
certain transactions require the prior consent from Participants
owning a specified interest under the Agreements in order for the
agents to act on their behalf. Such transactions include
modifications and extensions of the Net Lease or the Mortgage
Loan, or a sale or other disposition of the Property or
substantially all of Registrant's other assets.
Reference is made to Items 1 and 2 hereof for a
description of the terms of the Net Lease between Registrant and
Net Lessee. The respective interest, if any, of each Joint
Venturer in Registrant and in Net Lessee arises solely from
ownership of Participations in Registrant and partnership
interests or participations in Net Lessee. The Joint Venturers
receive no extra or special benefit not shared on a pro rata
basis with all other Participants in Registrant or partners and
participants in Net Lessee. However, Mr. Peter L. Malkin, by
reason of his respective partnership interest in Supervisor, is
entitled to receive his pro rata share of any supervisory,
service, legal or other remuneration paid to Supervisor for
services rendered to Registrant and Net Lessee. See Item 11
hereof for a description of the remuneration arrangements between
Registrant and Supervisor relating to supervisory services
provided by Supervisor.
Reference is also made to Items 1 and 10 hereof for a
description of the relationship between Registrant and Supervisor
of which one of the Joint Venturers is a member. The respective
interest of the Joint Venturers in any remuneration paid or given
by Registrant to Supervisor arose and arises solely from the
ownership of his respective partnership interest therein. See
Item 11 hereof for a description of the remuneration arrangements
between Registrant and Supervisor relating to supervisory
services provided by Supervisor.
(b) Reference is made to Paragraph (a) above.
(c) Not applicable.
(d) Not applicable.
-15-
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.
(a)(1) Financial Statements:
Consent of J.H. Cohn LLP, Certified Public Accountants,
dated February 19, 2001.
Accountant's Report of J.H. Cohn LLP, Certified Public
Accountants, dated February 15, 2001.
Balance Sheets at December 31, 2000 and at December 31,
1999 (Exhibit A).
Statements of Income for the fiscal years ended
December 31, 2000, 1999 and 1998 (Exhibit B).
Statement of Partners' Capital Deficit for the fiscal
year ended December 31, 2000 (Exhibit C-1).
Statement of Partners' Capital Deficit for the fiscal
year ended December 31, 1999 (Exhibit C-2).
Statement of Partners' Capital Deficit for the fiscal
year ended December 31, 1998 (Exhibit C-3).
Statements of Cash Flows for the fiscal years ended
December 31, 2000, 1999 and 1998 (Exhibit D).
Notes to Financial Statements for the fiscal years
ended December 31, 2000, 1999 and 1998.
(2) Financial Statement Schedules:
List of Omitted Schedules.
Real Estate and Accumulated Depreciation - December 31,
2000 (Schedule III).
(3) Exhibits: See Exhibit Index.
(b) No report on Form 8-K was filed by Registrant
during the last quarter of the period covered by
this report.
-16-
[LETTER OF J.H. COHN
ACCOUNTANTS & CONSULTANTS]
INDEPENDENT ACCOUNTANTS' REPORT
To the participants in 250 West 57th St. Associates
(a Joint Venture)
New York, N. Y.
We have audited the accompanying balance sheets of 250 West 57th St. Associates
(the "Company") as of December 31, 2000 and 1999, and the related statements of
income, partners' capital deficit and cash flows for each of the three years in
the period ended December 31, 2000, and the supporting financial statement
schedule as contained in Item 14(a)(2) of this Form 10-K. These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 250 West 57th St. Associates
as of December 31, 2000 and 1999, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2000
in conformity with accounting principles generally accepted in the United
States of America, and the related financial statement schedule, when considered
in relation to the basic financial statements, presents fairly, in all material
respects, the information set forth therein.
J.H. Cohn LLP
New York, N. Y.
February 15, 2001
-17-
February 19, 2001
250 West 57th St. Associates
New York, N.Y.
We consent to the use of our independent accountants' report dated February 15,
2001, covering our audits of the accompanying financial statements of 250 West
57th St. Associates in connection with and as part of your December 31, 2000
annual report (Form 10-K) to the Securities and Exchange Commission.
J.H. Cohn LLP
-18-
EXHIBIT A
250 WEST 57th ST. ASSOCIATES
BALANCE SHEETS
A S S E T S
December 31,
2000 1999
Current Assets:
Cash and cash equivalents (Note 10):
Cash in banks ....................... $1,739,790 $ 32,274
Cash in distribution account held by
Wien & Malkin LLP....................... 60,000 60,000
Fidelity U.S. Treasury Income Portfolio.. 139,008 1,381,731
TOTAL CASH AND CASH EQUIVALENTS.... 1,938,798 1,474,005
Additional rent due from Fisk
Building Associates, a related party...... - 11,835
TOTAL CURRENT ASSETS............... 1,938,798 1,485,840
Real Estate, at cost:
Property situated at 250-264 West 57th
Street, New York, N. Y. (Notes 2b and 3):
Land.................................... 2,117,435 2,117,435
Building................................ $4,940,682 $4,940,682
Less: Accumulated depreciation........ 4,940,682 - 4,940,682 -
Building improvements................... 688,000 688,000
Less: Accumulated depreciation........ 688,000 - 688,000 -
Tenants' installations and
improvements........................... 249,791 249,791
Less: Accumulated depreciation....... 249,791 - 249,791 -
Building improvements,
construction in progress............... 2,198,805 244,960
TOTAL REAL ESTATE.................. 4,316,240 2,362,395
Other Assets:
Mortgage refinancing costs (Note 2c)....... 516,549 130,508
Less: Accumulated amortization........... 12,557 73,533
503,992 56,975
TOTAL ASSETS....................... $6,759,030 $3,905,210
LIABILITIES AND PARTNERS' CAPITAL DEFICIT
Current Liabilities:
Accrued expenses........................... $ 43,814 $ 32,323
Due to Fisk Building Associates,
a related party........................... 417,065 244,960
Principal payments of mortgages payable
within one year (Note 3).................. - 4,289,171
TOTAL CURRENT LIABILITIES.......... 460,879 4,566,454
Long-term Liabilities:
Bonds, mortgages and similar debt:
First and second mortgages
payable (Note 3)........................ $7,000,000 $4,289,171
Less: Current installments shown
above................................. - 4,289,171
7,000,000 -
TOTAL LIABILITIES.................. 7,460,879 4,566,454
Partners' Capital Deficit (Exhibit C)........ (701,849) (661,244)
TOTAL LIABILITIES AND
PARTNERS' CAPITAL DEFICIT......... $6,759,030 $3,905,210
See accompanying notes to financial statements.
-19-
EXHIBIT B
250 WEST 57th ST. ASSOCIATES
STATEMENTS OF INCOME
Year ended December 31,
2000 1999 1998
Revenues:
Rent income, from a
related party (Note 4)......... $3,707,463 $3,356,230 $3,351,221
Dividend income................. 33,195 18,392 -
Interest income................. 12,721 - -
3,753,379 3,374,622 3,351,221
Expenses:
Interest on mortgages
(Note 3)....................... 378,269 287,423 265,616
Supervisory services, to
a related party (Note 5)....... 312,572 286,296 287,959
Professional fees, principally
to a related party (Note 6).... 40,360 37,748 2,469
Amortization of mortgage
refinancing costs (Note 2c).... 69,632 43,520 7,830
800,833 654,987 563,874
NET INCOME, CARRIED TO
PARTNERS' CAPITAL
DEFICIT (NOTE 9)....... $2,952,546 $2,719,635 $2,787,347
Earnings per $5,000
participation unit, based
on 720 participation units
outstanding during each
year............................. $ 4,101 $ 3,777 $ 3,871
See accompanying notes to financial statements.
-20-
EXHIBIT C-1
250 WEST 57th ST. ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL DEFICIT
YEAR ENDED DECEMBER 31, 2000
Partners' Partners'
capital deficit Share of capital deficit
January 1, 2000 net income Distributions December 31, 2000
Anthony E. Malkin
Joint Venture #1.. $ (66,124) $ 295,255 $ 299,315 $ (70,184)
Anthony E. Malkin
Joint Venture #2.. (66,124) 295,254 299,315 (70,185)
Anthony E. Malkin
Joint Venture #3.. (66,124) 295,254 299,315 (70,185)
Anthony E. Malkin
Joint Venture #4.. (66,124) 295,254 299,315 (70,185)
Peter L. Malkin
Joint Venture #1... (66,124) 295,254 299,315 (70,185)
Peter L. Malkin
Joint Venture #2... (66,125) 295,255 299,315 (70,185)
Peter L. Malkin
Joint Venture #3... (66,124) 295,255 299,316 (70,185)
Peter L. Malkin
Joint Venture #4... (66,125) 295,255 299,315 (70,185)
Peter L. Malkin
Joint Venture #5... (66,125) 295,255 299,315 (70,185)
Peter L. Malkin
Joint Venture #6... (66,125) 295,255 299,315 (70,185)
$(661,244) $2,952,546 $2,993,151 $(701,849)
See accompanying notes to financial statements.
-21-
EXHIBIT C-2
250 WEST 57th ST. ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL DEFICIT
YEAR ENDED DECEMBER 31, 1999
Partners' Partners'
capital deficit Share of capital deficit
January 1, 1999 net income Distributions December 31, 1999
Anthony E. Malkin
Joint Venture #1.... $ (62,422) $ 271,964 $ 275,666 $ (66,124)
Anthony E. Malkin
Joint Venture #2.... (62,422) 271,964 275,666 (66,124)
Anthony E. Malkin
Joint Venture #3.... (62,422) 271,964 275,666 (66,124)
Anthony E. Malkin
Joint Venture #4.... (62,422) 271,964 275,666 (66,124)
Peter L. Malkin
Joint Venture #1..... (62,422) 271,964 275,666 (66,124)
Peter L. Malkin
Joint Venture #2..... (62,422) 271,963 275,666 (66,125)
Peter L. Malkin
Joint Venture #3... (62,421) 271,963 275,666 (66,124)
Peter L. Malkin
Joint Venture #4... (62,422) 271,963 275,666 (66,125)
Peter L. Malkin
Joint Venture #5... (62,422) 271,963 275,666 (66,125)
Peter L. Malkin
Joint Venture #6... (62,422) 271,963 275,666 (66,125)
$(624,219) $2,719,635 $2,756,660 $(661,244)
See accompanying notes to financial statements.
-22-
EXHIBIT C-3
250 WEST 57th ST. ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL DEFICIT
YEAR ENDED DECEMBER 31, 1998
Partners' Partners'
capital deficit Share of capital deficit
January 1, 1998 net income Distributions December 31, 1998
Anthony E. Malkin
Joint Venture #1
(formerly Stanley Katzman
Joint Venture #1)... $ (63,993) $ 278,735 $ 277,164 $ (62,422)
Anthony E. Malkin
Joint Venture #2
(formerly Stanley Katzman
Joint Venture #2)..... (63,993) 278,735 277,164 (62,422)
Anthony E. Malkin
Joint Venture #3
(formerly Stanley Katzman
Joint Venture #3)..... (63,993) 278,735 277,164 (62,422)
Anthony E. Malkin
Joint Venture #4
(formerly Stanley Katzman
Joint Venture #4)..... (63,993) 278,735 277,164 (62,422)
Peter L. Malkin
Joint Venture #1....... (63,993) 278,735 277,164 (62,422)
Peter L. Malkin
Joint Venture #2....... (63,993) 278,735 277,164 (62,422)
Peter L. Malkin
Joint Venture #3....... (63,993) 278,735 277,163 (62,421)
Peter L. Malkin
Joint Venture #4....... (63,993) 278,734 277,163 (62,422)
Peter L. Malkin
Joint Venture #5....... (63,993) 278,734 277,163 (62,422)
Peter L. Malkin
Joint Venture #6....... (63,993) 278,734 277,163 (62,422)
$(639,930) $2,787,347 $2,771,636 $(624,219)
See accompanying notes to financial statements.
-23-
EXHIBIT D
250 WEST 57th ST. ASSOCIATES
STATEMENTS OF CASH FLOWS
Year ended December 31,
2000 1999 1998
Cash flows from operating activities:
Net income..............................$ 2,952,546 $ 2,719,635 $ 2,787,347
Adjustments to reconcile net income
to net cash provided by operating
activities:
Amortization......................... 69,632 43,520 7,830
Change in additional rent due
from Fisk Building Associates....... 11,835 (11,835) -
Change in accrued expenses........... 11,491 10,273 (183)
Change in due to Fisk
Building Associates................. 172,105 - -
Net cash provided by
operating activities........... 3,217,609 2,761,593 2,794,994
Cash flows from investing activities:
Payments for building improvements,
construction in progress (1,953,845) - -
Net cash used in investing
activities..................... (1,953,845) - -
Cash flows from financing activities:
Cash distributions...................... (2,993,151) (2,756,660) (2,771,636)
Principal payments on long-term debt.... (4,289,171) (25,650) (23,358)
Proceeds from second mortgage payable... 7,000,000 1,500,000 -
Payment of mortgage refinancing costs... (516,649) (89,402) -
Net cash used in financing
activities..................... (798,971) (1,371,712) (2,794,994)
Net change in cash.............. 464,793 1,389,881 -
Cash and cash equivalents,
beginning of year........................ 1,474,005 84,124 84,124
CASH AND CASH EQUIVALENTS,
END OF YEAR....................$ 1,938,798 $ 1,474,005 $ 84,124
Supplemental disclosures of cash flow information:
Cash paid for:
Interest.............................$ 364,669 $ 279,258 $ 265,799
Supplemental disclosures of noncash
investing and financing activities:
In 1999 the Company purchased certain building improvements, construction in
progress, totaling $244,960, by means of a financing agreement with the Lessee.
See accompanying notes to financial statements.
-24-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
1. Business Activity
250 West 57th Street Associates (the "Company") is a joint venture which
owns commercial property situated at 250 West 57th Street, New York, New
York, known as the "Fisk Building". The property is net leased to Fisk
Building Associates (the Lessee").
2. Summary of Significant Accounting Policies
a. Cash and cash equivalents:
Cash and cash equivalents include investments in money market funds
and all highly liquid debt instruments purchased with a maturity of
three months or less.
b. Real Estate and Depreciation:
Land and building:
The basis for building valuation was seventy per cent (70%) of the
total purchase price in 1953 of the land and building, $7,058,117,
which amounts to $4,940,682. The balance of the purchase price,
$2,117,435, was allocated to land cost. The seventy per cent
allocation of total cost to the building was based upon the percentage
of assessed valuation of the building to the total assessed valuation
on the land and building at the time of acquisition.
The building, building improvements and tenants installations and
improvements are fully depreciated.
In 1999 the Company began a building improvements program (see Note
12). At December 31, 2000 building improvements construction costing
$2,198,805 was in progress. No depreciation has been taken on these
assets since they were not finished or put into service as of December
31, 2000.
c. Mortgage refinancing costs, amortization and related party transactions:
Mortgage refinancing costs in 1999 include charges of $41,106 incurred
in connection with the 1996 modification of the previous first
mortgage (see Note 3); such charges include $17,754 paid to the firm
of Wien & Malkin LLP, a related party. These mortgage refinancing
costs were amortized ratably over the extended term of the previous
first mortgage, from March 1, 1996 through November 17, 2000.
Mortgage refinancing costs paid in 1999, totaling $89,402, include
charges incurred in connection with the second mortgage. Such charges
include $17,435 paid to the firm of Wien & Malkin LLP. These mortgage
refinancing costs were amortized ratably over the extended term of the
second mortgage, from September 22, 1999 through November 17, 2000.
Mortgage refinancing costs paid in 2000, totaling $516,549, include
charges incurred in connection with the new first mortgage. Such
charges include $38,817 paid to the firm of Wien & Malkin LLP. These
mortgage refinancing costs are being amortized ratably over the term
of the new first mortgage, from November 17, 2000 through December 1,
2005.
-25-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
2. Summary of Significant Accounting Policies (continued)
d. Use of estimates:
In preparing financial statements in conformity with accounting
principles generally accepted in the United States of America,
management makes estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements, as well as the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. First and Second Mortgages Payable
The previous first mortgage was held by Apple Bank for Savings and was
scheduled to mature on December 1, 2000, as extended from June 1, 2000.
Annual mortgage charges were $289,157, payable in equal monthly
installments, applied first to interest at the rate of 9.4% per annum and
the balance to principal.
Effective September 22, 1999 a second mortgage was placed on the property
with Apple Bank for Savings, in the amount of $1,500,000, to finance the
building improvements program (see Note 12). The mortgage required
monthly payments of interest only based on the 30-day LIBOR rate and was
scheduled to mature on December 1, 2000, as extended from June 1, 2000.
Effective November 17, 2000, a new first mortgage was placed on the
property with Emigrant Savings Bank in the amount of $15,500,000. The
mortgage matures on December 1, 2005. At the closing, the amount of
$7,000,000 was advanced to pay off the then existing first and second
mortgages held by Apple Bank for Savings and to pay for closing and
related costs and the costs of improvements made to the property. The
balance of the first mortgage loan will be advanced in stages through
May 31, 2003 to pay for additional improvements to the property.
Monthly payments under the mortgage are interest only. Amounts advanced
at the closing bear interest at the rate of 7.511% throughout the term of
the mortgage. Amounts advanced after the closing will bear interest at a
floating rate equal to 1.65 percentage points above 30, 60, 90, 180 or
360 day LIBOR or the yield on 30-day U.S. Treasury Securities, as selected
by the Company.
On June 1, 2003, the interest rate on all amounts advanced following the
closing will be converted to a fixed rate equal to 1.65 percentage points
above the then current yield on U.S. Treasury Securities having the
closest maturity to December 1, 2005.
The real estate is pledged as collateral for the first mortgage.
-26-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
4. Related Party Transactions - Rent Income
Rent income earned during the year ended December 31, 2000, 1999 and 1998,
totaling $3,707,463, $3,356,230 and $3,351,221, respectively, constitutes
the basic minimum annual rental plus overage rent under an operating lease
dated September 30, 1953 (as modified June 12, 1961, June 10, 1965, May 1,
1975, October 1, 1984, September 1, 1999 and November 17, 2000) with the
Lessee, consisting of the following:
Year ended December 31,
2000 1999 1998
Basic minimum annual rent... $ 429,740 $ 341,274 $ 317,157
Primary overage rent........ 752,000 752,000 752,000
Secondary overage rent...... 2,525,723 2,262,956 2,282,064
$3,707,463 $3,356,230 $3,351,221
The lease, as modified, provided for rent income until September 30, 2003,
as follows:
A) A basic annual rent equal to the sum of $28,000 plus current mortgage
requirements for interest and amortization.
The lease modification dated November 17, 2000 provides that the basic
rent will be payable in equal monthly installments totaling an annual
amount equal to the sum of $28,000, plus payments for interest and
amortization (not including any balloon principal payment due at
maturity) required annually under the new $15,500,000 first mortgage
loan from Emigrant Savings Bank (Note 3), and any refinancings of such
mortgage.
B) A primary overage rent equal to the lesser of $752,000 per annum for
each year ending September 30th, or the Lessee's defined net operating
profit for its lease year ending September 30th after deduction of
basic rent and advances previously paid on account of primary overage
rent; and
C) A secondary overage rent consisting of 50% of any remaining balance of
the Lessee's defined net operating profit (after payment of basic rent
and primary overage rent) for its lease year ending September 30th.
Primary overage rent has been billed to and advanced by the Lessee in equal
monthly installments of $62,667. While it is not practicable to estimate
that portion of overage rent for the lease year ending on the ensuing
September 30th which would be allocable to the current three month period
ending December 31st, the Company's policy is to include in its income each
year the advances of primary overage rent income received from October 1st
to December 31st.
No other overage rent is accrued by the Company for the period between the
end of the Lessee's lease year ending September 30th and the end of the
Company's fiscal year ending December 31st.
-27-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
4. Related Party Transactions - Rent Income (continued)
In 1978, the Lessee exercised its option to renew the lease for a 25 year
period from October 1, 1978 through September 30, 2003 on the same terms as
provided during the balance of the initial period. The lease modification
effective October 1, 1984 provides for an option for one renewal term of 25
years commencing October 1, 2003. The terms of the lease remain the same
during the renewal period.
The Lessee may surrender the lease at the end of any month, upon sixty
days' prior written notice; the liability of the Lessee will end on the
effective date of such surrender.
A partner in the Company is also a partner in the Lessee.
5. Related Party Transactions - Supervisory Services
Fees for supervisory services (including disbursements and cost of regular
accounting services) during the years ended December 31, 2000, 1999 and
1998, totaling $312,572, $286,296 and $287,959, respectively, were paid to
the firm of Wien & Malkin LLP. Some members of that firm are partners in
the Company. Fees for supervisory services are paid pursuant to an
agreement, which amount is based on a rate of return of investment achieved
by the participants of the Company each year.
6. Related Party Transactions - Professional Fees
Professional fees (including disbursements) during the years ended December
31, 2000, 1999 and 1998, totaling $34,260, $31,855 and $2,469,
respectively, were paid to the firm of Wien & Malkin LLP, a related party.
7. Number of Participants
There were approximately 550 participants in the various joint ventures as
of December 31, 2000, 1999 and 1998.
8. Determination of Distributions to Participants
Distributions to participants during each year represent mainly the excess
of rent income received over the mortgage requirements and cash expenses.
-28-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
9. Distributions and Amount of Income per $5,000 Participation Unit
Distributions and amount of income per $5,000 participation unit during the
years 2000, 1999 and 1998, based on 720 participation units outstanding
during each year, consisted of the following:
Year ended December 31,
2000 1999 1998
Income................. $ 4,101 $ 3,777 $ 3,850
Return of capital...... 56 52 -
Total distributions.. $ 4,157 $ 3,829 $ 3,850
Net income is computed without regard to income tax expense since the
Company does not pay a tax on its income; instead, any such taxes are paid
by the participants in their individual capacities.
10. Concentration of Credit Risk
The Company maintains cash balances in two banks, a money market fund
(Fidelity U.S. Treasury Income Portfolio) and in a distribution account
held by Wien & Malkin LLP. The bank balances are each insured by the
Federal Deposit Insurance Corporation up to $100,000. Uninsured balances
of cash in banks amounted to approximately $1,591,000 at December 31, 2000.
The cash in the money market fund and the distribution account held by Wien
& Malkin LLP is not insured. The funds held in the distribution account
were paid to the participants on January 1, 2001.
11. Contingencies
Wien & Malkin LLP and Peter L. Malkin, a partner in the Company, are
engaged in a dispute with Helmsley-Spear, Inc., the managing agent of the
Fisk Building, concerning the future management, leasing and supervision of
the property. In this connection, certain legal and professional fees and
other expenses have been paid and incurred and additional costs are
expected to be incurred. The Company's allocable share of such costs
cannot as yet be determined. Accordingly, the Company has not provided for
the expense and related liability with respect to such costs in the
accompanying financial statements.
-29-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
12. Building Improvements Program
In 1999 the participants of the Company and the Lessee approved a building
improvements program (the "Program") estimated to cost between $7,700,000
and $10,000,000, and expected to take five years to complete.
The Lessee began financing the Program in 1999 and billing the Company for
the costs incurred. The Company will own the improvements and finance them
through an increase in the fee mortgage.
In November 2000 the Company obtained a new first mortgage (Note 3) in the
amount of $15,500,000 to finance the Program. At December 31, 2000
$7,000,000 was advanced against the new first mortgage. The increased
mortgage charges will be paid by the Company from an equivalent increase in
the basic rent paid by the Lessee to the Company (Note 4).
13. Receipt of Warrants and Stock in Telecommunications Companies
In 2000 the Company received 3,153 shares of common stock of Broadband Office,
Inc., and warrants to acquire 8,107 shares and 6,600 shares of common stock of
Gillette Global Network, Inc. ("Gillette") and ENN Providers, Inc.
("Narrowcast"), respectively, (each of the aforementioned companies
collectively referred to as the "Corporations"). The stock and warrants were
provided to the Company for allowing the Corporations, at little or no cost to
the Company, to wire the building to provide high speed internet access and
other telecommunications services, the installation of monitors in the
building's elevator cabs to display current news and weather reports,
advertisements and building information messages. The Lessee received an equal
amount of shares and warrants. In addition, the Lessee will receive from 5% to
10% of the revenues generated by such services from advertising and
subscriptions with tenants of the building. No income from these sources was
earned in 2000. The warrants are exercisable, generally, following an initial
public offering ("IPO") of each of the Corporations. There is no expectation
that such an IPO will occur at anytime soon. The Gillette and Narrowcast
warrants expire on August 29, 2003 and August 17, 2005, respectively. There
are restrictions as to the transfer of stock and there is no current market for
the warrants or the stock. Since they did not have an ascertainable value as
of the date they were granted or at December 31, 2000, no amounts have been
recorded in the accompanying financial statements for such warrants or shares.
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250 WEST 57th ST. ASSOCIATES
OMITTED SCHEDULES
The following schedules have been omitted as not applicable in the present
instance:
SCHEDULE I - Condensed financial information of registrant.
SCHEDULE II - Valuation and qualifying accounts.
SCHEDULE IV - Mortgage loans on real estate.
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SCHEDULE III
250 WEST 57th ST. ASSOCIATES
Real Estate and Accumulated Depreciation
December 31, 2000
Column
A Description Office building and land located at
250-264 West 57th Street, New York,
New York, known as the "Fisk
Building".
B Encumbrances Emigrant Savings Bank
Balance at December 31, 2000............................... $ 7,000,000
C Initial cost to company
Land....................................................... $ 2,117,435
Building................................................... $ 4,940,682
D Costs capitalized subsequent to acquisition
Improvements............................................... $ 937,791
Building improvements, construction in progress............. $ 2,198,805
Carrying costs............................................. $ NONE
E Gross amount at which carried at
close of period
Land....................................................... $ 2,117,435
Building, building improvements and
building improvements, construction in progress.......... 8,077,278
Total..................................................... $10,194,713(a)
F Accumulated depreciation.................................... $ 5,878,473(b)
G Date of construction 1921
H Date acquired September 30, 1953
I Life on which depreciation in latest
income statements is computed Not applicable
(a) For the years ended December 31, 2000 and 1999 the Company engaged in a
Building Improvements Program (see Note 12) and incurred building
improvements, construction in progress costs of $1,953,845 and $244,960,
respectively, which increased the carrying value of real estate property to
$10,194,713 and $8,240,868, respectively. The carrying value of real estate
for the year ended December 31, 1998 was $7,995,908. The costs for federal
income tax purposes are the same as for financial statement purposes.
(b) Accumulated depreciation
Balance at January 1, 1998 $5,878,473
Depreciation:
F/Y/E 12/31/98 None
12/31/99 None
12/31/00 None None
Balance at December 31, 2000 $5,878,473
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
The individual signing this report on behalf of
Registrant is Attorney-in-Fact for Registrant and each of the
Joint Venturers in Registrant, pursuant to a Power of Attorney,
dated March 29, 1996 and May 14, 1998 (collectively, the
"Power").
250 WEST 57TH ST. ASSOCIATES
(Registrant)
By /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: April 16, 2001
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 Joint Venturers in Registrant,
pursuant to the Power, on behalf of the Registrant and as a Joint
Venturer in Registrant on the date indicated.
By /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: April 16, 2001
________________________
* Mr. Katzman supervises accounting functions for Registrant.
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EXHIBIT INDEX
Number Document Page*
3(a) Registrant's Joint Venture Agreement, dated
May 25, 1953, which was filed as Exhibit No.
3(a) to Registrant's Registration Statement
on Form S-1 (the "Registration Statement"),
is incorporated by reference as an exhibit
hereto.
3(b) Amended Business Certificate of Registrant
filed with the Clerk of New York County on
July 24, 1998 reflecting a change in the
Partners of Registrant which was filed as
Exhibit 3(b) to Registrant's Amended
Quarterly Report on 10-Q for the period ended
September 30, 1998 and is incorporated by
reference as an exhibit hereto.
3(c) Registrant's Memorandum of Agreement among
Joint Venturers in 250 West 57th St.
Associates, dated June 9, 1953, filed as
Exhibit 1 to the Registration Statement, is
incorporated by reference as an exhibit
hereto.
4 Registrant's form of Participation Agreement,
which was filed as Exhibit No. 4(a) to the
Registration Statement, is incorporated by
reference as an exhibit hereto.
10(a) Net Lease between Registrant and Fisk
Building Associates dated September 30, 1957,
which was filed as Exhibit No. 2(d) to the
Registration Statement, is incorporated by
reference as an exhibit hereto.
10(b) Modification of Net Lease dated
November 10, 1961, was filed by letter
dated November 21, 1961 as Exhibit B to
Registrant's Statement of Registration
on Form 8-K for the month of October,
1961, is incorporated by reference as
an exhibit hereto.
_______________________
* Page references are based on a sequential numbering system.
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10(c) Second Modification Agreement of Net Lease
dated June 10, 1965, between Registrant and
Fisk Building Associates which was filed by
letter dated December 29, 1981 as Exhibit
10(c) to Registrant's Annual Report on Form
10-K for the year ended September 30, 1981 is
incorporated by reference as an exhibit
hereto.
10(d) Fourth Lease Modification Agreement dated
November 12, 1985 between Registrant and Fisk
Building Associates, which was filed by
letter dated January 13, 1986 as Exhibit
10(g) to Registrant's Annual Report on Form
10-K for the year ended, September 30, 1985,
is incorporated herein by reference as an
exhibit hereto.
10(e) Modification of Mortgage dated as of March 1,
1995 between Registrant and the Apple Bank
for Savings, which was filed on March 30,
1995 as Exhibit 10(e) to Registrant's Annual
Report on Form 10-K, is incorporated herein
by reference as an exhibit hereto.
13(a) Letter to Participants dated March 2, 2001
and supplementary financial reports for the
fiscal year ended December 31, 2000. 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.
13(b) Letter to Participants dated November 30,
2000 and supplementary financial reports for
the lease year ended September 30, 2000. 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.
_______________________
* Page references are based on a sequential numbering system.
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24 Power of Attorney dated March 29, 1996 and
May 14, 1998 between Partners of Registrant
and Stanley Katzman and Richard A. Shapiro,
attached as Exhibit 24 to Registrant's 10-Q
for the quarter ended March 31, 1998, and
incorporated herein by reference as an
exhibit hereto.
_______________________
* Page references are based on a sequential numbering system.
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