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, 2002
[ ] 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 L.L.C.
(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 LLC Member 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 25 through 28 hereof.
Number of pages (including exhibits) in this filing: 45
250 West 57th St. Associates L.L.C.
December 31, 2002
PART I
FORWARD_LOOKING STATEMENTS
Certain information included in this Annual Report
contains or may contain forward-looking statements within the
meaning of Section 27A of the Securities Exchange Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The
Registrant cautions readers that forward-looking statements,
including, without limitation, those relating to the Registrant's
investment policies and objectives; the financial performance of
the Registrant; the ability of the Registrant to service its
debt; the competitive conditions which affect the Registrant's
business; and the Registrant's liquidity and capital resources,
are subject to certain risks and uncertanties. Actual results or
outcomes may differ materially from those described in the
forward-looking statements and will be affected by a variety of
risks and factors, including, without limitation, the
Registrant's future financial performance; the availability of
capital; general market conditions; national and local economic
conditions, particularly long-term interest rates; Federal, state
and local governmental regulations that affect the Registrant;
and the competitive environment in which the Registrant operates,
including, the availability of commercial space in the area where
the Registrant's property is located. The forward-looking
statements are made as of the date of this Annual Report and the
Registrant assumes no obligation to update the forward-looking
statements or to update the reasons actual results could differ
from those projected in such forward-looking statements.
Item 1. Business.
(a) General
Registrant is a New York limited liability company
which was organized as a joint venture 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 (collectively, the
"Property"). On November 30, 2001, Registrant converted to a
limited liability company under New York law and is now known as
250 West 57th St. 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 and
Anthony E. Malkin (collectively, the "Agents") each of whom also
acts as an agent for holders of participations in his respective
member interests in Registrant (the "Participants").
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250 West 57th St. Associates L.L.C.
December 31, 2002
Registrant leases the Property to Fisk Building
Associates L.L.C.(the "Net Lessee"), 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 New
York limited liability company, and entities created by Peter L.
Malkin for family members are beneficial owners of an interest in
Net Lessee. In addition, both of the Agents hold senior positions
at 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, 2002, the Building was approximately
85.9% occupied by approximately 245 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
Under the Net Lease, effective May 1, 1975, between 250
West 57th St. Associates, as lessor, and Fisk Building Associates
L.L.C., as lessee, basic rent was equal to mortgage principal and
interest payments plus $28,000 payable to Wien & Malkin LLP for
supervisory services. The lease modification dated November 17,
2000 between 250 West 57th St. Associates, as lessor, and Fisk
Building Associates L.L.C., 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). 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 original cash investment.
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250 West 57th St. Associates L.L.C.
December 31, 2002
For the lease year ended September 30, 2002, Net Lessee
reported net operating profit of $3,088,058 after deduction of
Basic Rent. Net Lessee paid Primary Overage Rent of $752,000,
together with Secondary Overage Rent of $1,152,633 for the fiscal
year ended September 30, 2002. The Secondary Overage Rent of
$1,152,633 represents 50% of the excess of the net operating
profit of $3,088,058 over $752,000, less $15,396 representing
interest earned and retained by Registrant on funds borrowed for
the improvement program. Secondary overage rent of $1,152,633
plus $128,936 of accumulated interest income was available for
distribution to the participants. After deducting $126,717 to
Supervisor as an additional payment for supervisory services and
$14,400 for fees relating to the conversion of Registrant to a
limited liability company, the balance of $1,140,452 was
distributed to the Participants on November 29, 2002.
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
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, 2002, 2001 and 2000.
The Net Lease provides for one renewal option of 25
years expiring on September 30, 2028. The Participants 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 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. During 2002, an additional
$5,000,000 was advanced. The balance of the First Mortgage loan
will be advanced in stages through May 31, 2003 to pay for
additional improvements to the Property.
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250 West 57th St. Associates L.L.C.
December 31, 2002
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
Registrant.
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 $27.29 per square
foot (exclusive of electricity charges and escalation).
Current asking rents for the building range from $35 to
$45 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
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, 2002, had an unpaid
principal balance of $12,000,000. For a description of the terms
of the Mortgage Loan see Note 3 of the Notes.
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250 West 57th St. Associates L.L.C.
December 31, 2002
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. 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.
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
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250 West 57th St. Associates L.L.C.
December 31, 2002
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. The parts of the
decision under appeal were affirmed by the Appellate Division on
December 5, 2002, and were further appealed by Wien & Malkin LLP
and Mr. Malkin on January 13, 2003.
At its May 20, 2002 special meeting, Lessee approved by
the requisite vote the removal of Helmsley-Spear, Inc. as
managing and leasing agent and its replacement by one or a
combination of designated independent firms (Cushman & Wakefield,
Insignia/ESG and Newmark & Company Real Estate). On May 21, 2002,
Peter L. Malkin and Wien & Malkin LLP filed a court application
to confirm the vote and to set the final date for Helmsley-Spear,
Inc. termination. Helmsley-Spear, Inc. filed objections. On
September 10, 2002 the court confirmed such votes and ruled that
Helmsley-Spear, Inc. has been discharged and must effect an
orderly transition and departure within 60 days. Helmsley-Spear,
Inc.'s September 27, 2002 motion in the Apellate Division to stay
the court's ruling pending an appeal was denied on October 31,
2002. Helmsley-Spear, Inc.'s appeal was rejected by the Appellate
Division in its February 20, 2003 decision, which affirmed the
court's confirmation of the votes and Helmsley-Spear, Inc.'s
termination. Since November 20, 2002, Helmsley-Spear, Inc. has
not been the managing and leasing agent and has been replaced by
Cushman & Wakefield. Helmsley-Spear, Inc. continues to pursue its
appeal. In accord with the Lessee's approval, the expenses for
the preparation of the solicitation statement, the solicitation
of votes, and the implementation of the new program are being
paid by the Lessee. Such payments have totaled $245,251 from
inception to date (including fees of $72,052 plus disbursements
of $10,522 to Wien & Malkin LLP).
Item 4. Submission of Matters to a Vote of Participants.
No matters were submitted to the Participants during
the period covered by this report.
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250 West 57th St. Associates L.L.C.
December 31, 2002
PART II
Item 5. Market for Registrant's Common Equity
and Related Security Holder Matters.
Registrant was a joint venture pursuant to an agreement
entered into among various individuals dated May 1, 1954. As of
November 30, 2001, Registrant is a limited liability company.
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 member inter-
ests of the Agents 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 Agents'
undivided interest in Registrant and are divided approximately
equally among the members. 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 are neither 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 25 transfers of Participations during 2002. In one
instance, the indicated purchase price was equal to 5.1 times the
face amount of the Participation transferred, i.e., $25,500 for a
$5,000 Participation. In one instance, the indicated purchase
price was equal to 2.5 times the face amount of the Participation
transferred. In all other cases, no consideration was indicated.
(b) As of December 31, 2002, there were 586 holders of
Participations of record.
(c) Registrant does not pay dividends. During the
years ended December 31, 2002 and 2001, 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, 2002 and November 30, 2001, Registrant made additional
distributions for each $5,000 Participation of $1,584 and $3,415,
respectively. Such distributions represented the balance of
Secondary Overage Rent paid by Net Lessee in accordance with the
terms of the Net Lease after deducting the Additional Payment and
certain fees to Supervisor. There are no restrictions on Regis-
trant's present or future ability to make distributions; however,
the amount of such distributions depends on the ability of Net
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250 West 57th St. Associates L.L.C.
December 31, 2002
Lessee to make payments of Basic Rent, Primary Overage Rent and
Secondary Overage Rent to Registrant in accordance with the terms
of the Net Lease. (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 L.L.C.
(A Limited Liability Company)
SELECTED FINANCIAL DATA
Year ended December 31,
2002 2001 2000 1999 1998
Basic minimum annual rent income.. $629,656 $553,770 $ 429,740 $ 341,274 $ 317,157
Primary overage rent income 752,000 752,000 752,000 752,000 752,000
Secondary overage rent income 1,152,633 2,732,389 2,525,723 2,262,956 2,282,064
Total revenues $ 2,534,289 $4,038,159 $3,707,463 $3,356,230 $3,351,221
Net income.................... $ 1,496,439 $3,058,314 $2,952,546 $2,719,635 $2,787,347
Earnings per $5,000 participation
unit, based on 720 participation
units outstanding during each
year $ 2,078 $ 4,248 $ 4,101 $ 3,777 $ 3,871
Total assets $12,183,062 $8,405,356 $6,759,030 $3,905,210 $2,212,651
Long-term obligations $12,000,000 $7,000,000 $7,000,000 $ - $2,789,171
Distributions per $5,000
participation unit, based on
720 participation units
outstanding during each year:
Income $ 2,078 $ 4,248 $ 4,101 $ 3,777 $ 3,850
Return of capital 506 167 56 52 -
Total distributions $ 2,584 $ 4,415 $ 4,157 $ 3,829 $ 3,850
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Item 7.
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
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, 2002. 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 From 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 unaudit
- -ed 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,
2001 2001 2001 2001
Statement of Income Data:
Basic rent income $138,443 $138,442 $ 138,443 $138,442
Advance of primary
overage rent income 188,000 188,000 188,000 188,000
Secondary overage rent
income - - 2,732,389 -
Dividend and interest
income 21,864 16,123 11,248 4,826
Total revenues 348,307 342,565 3,070,080 331,268
Interest on mortgage 131,443 131,442 131,443 131,442
Supervisory services 15,000 15,000 288,239 15,000
Professional fees and
miscellaneous 68 462 23 20,102
Depreciation of building
improvements 5,917 5,917 5,917 33,971
Amortization of mortgage
refinancing costs 25,630 25,630 25,630 25,630
Total expenses 178,058 178,451 451,252 226,145
Net income $170,249 $164,114 $2,618,828 $105,123
Earnings per $5,000
participation unit, based
on 720 participation
units outstanding during
each period $ 236 $ 228 $ 3,637 $ 146
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Item 7.
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
QUARTERLY RESULTS OF OPERATIONS (Continued)
Three Months Ended
March 31, June 30, September 30, December 31,
2002 2002 2002 2002
Statement of Income Data:
Basic rent income $152,803 $156,926 $ 157,130 $162,797
Advance of primary
overage rent income 188,000 188,000 188,000 188,000
Secondary overage rent
income - - 1,152,633 -
Dividend and interest
income 5,502 3,040 2,028 2,699
Total revenues 346,305 347,966 1,499,791 353,496
Interest on mortgage 145,802 149,927 150,130 155,796
Supervisory services 15,000 15,000 146,717 10,000
Professional fees and
miscellaneous 13,650 (13,325) 750 492
Depreciation of building
improvements 32,899 38,544 42,586 44,433
Amortization of mortgage
refinancing costs 25,656 25,687 25,687 25,688
Total expenses 233,007 215,833 365,870 236,409
Net income $113,298 $132,133 $1,133,921 $117,087
Earnings per $5,000
participation unit, based
on 720 participation
units outstanding during
each period $ 157 $ 184 $ 1,575 $ 163
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250 West 57th St. Associates L.L.C.
December 31, 2002
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
Cautionary Statement Identifying Important Factors That Could
Cause Registrant Actual Results to Differ From Those Projected in
Forward-Looking Statements.
Readers of this discussion are advised that the
discussion should be read in conjunction with the financial
statements of Registrant (including related notes thereto)
appearing elsewhere in this Form 10-K. Certain statements in this
discussion may constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements reflect Registrant's current
expectations regarding future results of operations, economic
performance, financial condition and achievements of Registrant,
and do not relate strictly to historical or current facts.
Registrant has tried, wherever possible, to identify these
forward-looking statements by using words such as "believe",
"expect", "anticipate", "intend", "plan", "estimate" or words of
similar meaning.
Although Registrant believes that the expectations
reflected in such forward-looking statements are based on
reasonable assumptions, such statements are subject to risks and
uncertainties, which may cause the actual results to differ
materially from those projected. Such factors include, but are
not limited to, the following: general economic and business
conditions, which will, among other things, affect demand for
rental space, the availability of prospective tenants, lease
rents and the availability of financing; adverse changes in
Registrant's real estate market, including, among other things,
competition with other real estate owners, risks of real estate
development and acquisitions; governmental actions and
initiatives; and environmental/safety requirements.
SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES
The Securities and Exchange Commission ("SEC") recently
issued disclosure guidance for "Critical Accounting Policies".
The SEC defines Critical Accounting Policies as those that
require the application of Management's most difficult,
subjective, or complex judgments, often because of the need to
make estimates about the effect of matters that are inherently
uncertain and may change in subsequent periods.
The discussion and analysis of Registrant's financial
condition and results of operations are based upon its financial
statements, the preparation of which takes into account estimates
based on judgments and assumptions that affect certain amounts
and disclosures. Accordingly, actual results could differ from
these estimates. The accounting policies and estimates used and
outlined in Note 2 to Registrant's financial statements, which
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250 West 57th St. Associates L.L.C.
December 31, 2002
are presented elsewhere in this annual report, have been applied
consistently as at December 31, 2002 and 2001, and for the years
ended December 31, 2002, 2001 and 2000. Registrant's
representatives who are involved in the preparation of its
financial statements and this report believe that the following
accounting policies or estimates require the application of
Management's most difficult, subjective, or complex judgments:
Valuation of Long-Lived Assets: Registrant periodically
assesses the carrying value of long-lived assets whenever
events or changes in circumstances indicate that their
carrying amount may not be recoverable. When Registrant
determines that the carrying value of long-lived assets
may be impaired, the measurement of any impairment is
based on a projected discounted cash flows method
determined by Registrant's advisers. While Registrant's
representatives who are involved in the preparation of its
financial statements and this report believe that such
discounted cash flow methods are reasonable, different
assumptions regarding such cash flows may significantly
affect the measurement of impairment.
Revenue Recognition: Basic rent and additional rent, which
is based on the lessee's annual net income as defined in
the lease, are recognized when earned. Before Registrant
can recognize revenue, it is required to assess, among
other things, its collectibility. If the collectibility of
revenue is incorrectly determined, Registrant's net income
and assets could be overstated.
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 then to 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. The following summarizes the material factors for
the three most recent years affecting Registrant's results of op-
erations for such periods:
(a) Total income decreased for the year ended December 31, 2002
as compared with the year ended December 31, 2001. The
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decrease was the net result of a decrease in Secondary
Overage Rent received by Registrant in 2002 and a decrease
in interest and dividend income and an increase in Basic
minimum rent. Total income increased for the year ended
December 31, 2001 as compared with the year ended December
31, 2000. The increase resulted from an increase in interest
and dividend income and Basic minimum rent and Secondary
Overage Rent received by Registrant in 2001. See Note 4 of
the Notes.
(b) Total expenses increased for the year ended December 31,
2002 as compared with the year ended December 31, 2001. The
increase was the net result of an increase in second
mortgage interest expense and depreciation expense and a
decrease in the additional payment for supervisory services
payable with respect to a decreased amount of Secondary
Overage Rent received by Registrant in 2002, See Notes 3 and
5 of the Notes. Total expenses increased for the year
ended December 31, 2001 as compared with the year ended
December 31, 2000. The increase resulted from an increase
in second mortgage interest expense, an increase in the
additional payment for supervisory services, and
amortization of mortgage refinancing costs and depreciation
and a decrease in professional fees.
-14-
250 West 57th St. Associates L.L.C.
December 31, 2002
Liquidity and Capital Resources
Registrant's liquidity has increased significantly due
to the retention of residual mortgage proceeds at December 31,
2002, as compared to December 31, 2001. Costs relating to the
improvement program are funded from proceeds of a second mortgage
of $15,500,000, of which $3,500,000 is available to be drawn down
at December 31, 2002. Registrant may from time to time establish
a reserve for contingent or unforeseen liabilities.
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.
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.
-15-
250 West 57th St. Associates L.L.C.
December 31, 2002
Item 8. Financial Statements and Supplementary Data.
The financial statements, together with the accom-
panying report by J.H. Cohn LLP immediately following, are being
filed in response to this item.
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 Agent in Registrant. The table below sets forth
as to each individual who served as an Agent in Registrant as of
December 31, 2002 the following: name, age, nature of any family
relationship with any other Agent, 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 an
Agent in Registrant:
Date
Principal Individual
Nature of Occupation became
Family Business and an
Name Age Relationship Experience Employment Agent
Peter L. Malkin 69 Father of Real Estate Senior Partner 1982
Anthony E. Supervision and Chairman
Malkin Wien & Malkin
LLP
Anthony E. Malkin 40 Son of Real estate Senior Director 1998
Peter L. Supervision of Supervisory Services
Malkin and of Wien & Malkin LLP
Management and President of W&M
Properties, L.L.C.
As stated in Item 1 hereof, all of the Agents are
members 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.
-16-
250 West 57th St. Associates L.L.C.
December 31, 2002
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 Agents are also either a director,
member or general partner are as follows:
Peter L. Malkin is a member in 60 East 42nd St.
Associates L.L.C. and Empire State Building Associates
L.L.C. and a general partner in Navarre-500 Building
Associates and Garment Capitol Associates.
Anthony E. Malkin is a member in 60 East 42nd St.
Associates L.L.C. and Empire State Building Associates
L.L.C.
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, 2002 by Registrant to any of the Agents as such.
Registrant pays Supervisor for supervisory services and dis-
bursements: (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,
2002, 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 $186,717 during the
fiscal year ended December 31, 2002. See Item 1. 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, review-
ing 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 also pays Supervisor for other services at hourly
rates.
-17-
250 West 57th St. Associates L.L.C.
December 31, 2002
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
(a) Registrant has no voting securities. See Item 5
hereof. At December 31, 2002, no person owned of record or was
known by Registrant to own beneficially more than 5% of the
outstanding Participations in the undivided Agent interests in
Registrant.
(b) At December 31, 2002, the Agents (see Item 10
hereof) did not beneficially own, directly or indirectly, any
Participations in Registrant.
At such date, certain of the Agents 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 member acts
as agent for his respective group of Participants. As a
consequence of both Agents holding senior positions at
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. However, under the respective participating
agreements pursuant to which the members 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 Agent in
Registrant and in Net Lessee arises solely from ownership of
-18-
250 West 57th St. Associates L.L.C.
December 31, 2002
Participations in Registrant and member interests or
participations in Net Lessee. The Agents receive no extra or
special benefit not shared on a pro rata basis with all other
Participants in Registrant or members and participants in Net
Lessee. However, each of the Agents, who hold senior positions
at Supervisor, by reason of his position at Supervisor, is
entitled to receive his pro rata share of any supervisory 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. The respective interest of the members in any
remuneration paid or given by Registrant to Supervisor arose and
arises solely from the ownership of his respective member
interest therein.
(b) Reference is made to Paragraph (a) above.
(c) Not applicable.
(d) Not applicable.
Item 14. Evaluation of Disclosure Controls and Internal
Control Procedures.
(a) Evaluation of disclosure controls and procedures. Our
Supervisor, after evaluating the effectiveness of our
"disclosure controls and procedures" (as defined in
the Securities Exchange Act of 1934 Rules 13a-14(c)
and 15d-14(c)) as of a date (the "Evaluation Date")
within 90 days before the filing date of this annual
report, has concluded that, as of the Evaluation Date,
our disclosure controls and procedures were adequate
and designed to ensure that information required to be
disclosed in the reports filed or submitted by us
under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the required
time periods.
(b) Changes in internal controls. There were no
significant changes in our internal controls or in
other factors that could significantly affect our
internal controls subsequent to the date of their
evaluation.
-19-
250 West 57th St. Associates L.L.C.
December 31, 2002
PART IV
Item 15. Exhibits, Financial Statement Schedules and
Reports on Form 10-K.
(a)(1) Financial Statements:
Independent Accountant's Report of J.H. Cohn LLP,
dated February 28, 2003.
Balance Sheets at December 31, 2002 and at December 31,
2001 (Exhibit A).
Statements of Income for the fiscal years ended
December 31, 2002, 2001 and 2000 (Exhibit B).
Statement of Members' Deficiency for the fiscal year
ended December 31, 2002 (Exhibit C-1).
Statement of Members' Deficiency for the fiscal year
ended December 31, 2001 (Exhibit C-2).
Statement of Members' Deficiency for the fiscal year
ended December 31, 2000 (Exhibit C-3).
Statements of Cash Flows for the fiscal years ended
December 31, 2002, 2001 and 2000 (Exhibit D).
Notes to Financial Statements for the fiscal years
ended December 31, 2002, 2001 and 2000.
(2) Financial Statement Schedules:
List of Omitted Schedules.
Real Estate and Accumulated Depreciation - December 31,
2002 (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.
-20-
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
Agents in Registrant, pursuant to a Power of Attorney, dated
March 29, 1996 and May 14, 1998 (collectively, the "Power").
250 WEST 57TH ST. ASSOCIATES L.L.C.
(Registrant)
By /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: April 15, 2003
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 Agents in Registrant, pursuant
to the Power, on behalf of the Registrant and as an Agent in
Registrant on the date indicated.
By /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: April 15, 2003
________________________
* Mr. Katzman supervises accounting functions for Registrant.
-21-
CERTIFICATIONS
I, Stanley Katzman, certify that:
(1) I have reviewed this annual report on Form 10-K of 250
West 57th St. Associates L.L.C.;
(2) Based on my knowledge, this annual report does not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the
statements made, in light of the circumstances under
which such statements were made, not misleading with
respect to the period covered by this annual report;
(3) Based on my knowledge, the financial statements, and
other financial information included in this annual
report, fairly present in all material respects the
financial condition, results of operations and cash
flows of the registrant as of, and for, the period
presented in this annual report;
(4) The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities
particularly during the period in which this annual
report is being prepared;
(b) evaluated the effectiveness of the registrant''
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
(5) The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of
registrant's board of directors (or persons performing
the equivalent functions):
-22-
(a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any
material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
(6) The registrant's other certifying officers and I have
indicated in this annual report whether there were
significant changes in internal controls or in other
factors that could significantly affect internal
controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
Date: April 15, 2003
By /s/ Stanley Katzman
Name: Stanley Katzman
Title: Member of Wien & Malkin
LLP, Supervisor of 250 West 57th
St. Associates L.L.C.
-23-
CERTIFICATIONS
I, Stanley Katzman, certify that:
(1) I have reviewed this annual report on Form 10-K of 250
West 57th St. Associates L.L.C.;
(2) Based on my knowledge, this annual report does not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the
statements made, in light of the circumstances under
which such statements were made, not misleading with
respect to the period covered by this annual report;
(3) Based on my knowledge, the financial statements, and
other financial information included in this annual
report, fairly present in all material respects the
financial condition, results of operations and cash
flows of the registrant as of, and for, the period
presented in this annual report;
(4) The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities
particularly during the period in which this annual
report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the
Evaluation Date;
(5) The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of
registrant's board of directors (or persons performing
the equivalent functions):
(a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any
material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
-24-
(6) The registrant's other certifying officers and I have
indicated in this annual report whether there were
significant changes in internal controls or in other
factors that could significantly affect internal
controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
Date: April 15, 2003
By /s/ Stanley Katzman
Name: Stanley Katzman
Title: Senior Member of
Financial/Accounting Staff of Wien
& Malkin LLP, Supervisor of 250
West 57th St. Associates L.L.C.
-25-
250 West 57th St. Associates L.L.C.
December 31, 2002
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.
3(d) Registrant's Consent and Operating Agreement
dated as of November 30, 2001
3(e) Certificate of Conversion of Registrant
to a limited liability company dated November
30, 2001 filed with the New York Secretary of
State on December 5, 2001.
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
-26-
250 West 57th St. Associates L.L.C.
December 31, 2002
EXHIBIT INDEX (cont.)
Number Document Page*
Registrant's Statement of Registration
on Form 8-K for the month of October,
1961, is incorporated by reference as
an exhibit hereto.
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 12, 2003
and supplementary financial reports for the
fiscal year ended December 31, 2002. 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 29,
2002 and supplementary financial reports for
the lease year ended September 30, 2002. 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.
-27-
250 West 57th St. Associates L.L.C.
December 31, 2002
EXHIBIT INDEX (cont.)
Number Document Page*
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.
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 a sequential numbering
system.
-28-
250 West 57th St. Associates L.L.C.
December 31, 2002
Exhibit 99(1)
250 West 57th St. Associates L.L.C.
Chief Executive Officer Certification
Pursuant to Section 906
of Sarbanes - Oxley Act of 2002
The undersigned, Stanley Katzman, is signing this Chief
Executive Officer certification as a member of Wien & Malkin LLP,
the supervisor - of 250 West 57th St. Associates
L.L.C.("Registrant") to certify that:
(1) the Annual Report on Form 10-K of Registrant for the period
ended December 31, 2002(the "Report") fully complies with
the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934(15 U.S.C.78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in
all material respects, the financial condition and results
of operations of Registrant.
Dated: April 15, 2003
By /s/ Stanley Katzman
Stanley Katzman
Wien & Malkin LLP, Supervisor
*Registrant's organizational documents do not provide for a Chief
Executive Officer or other officer with equivalent rights and
duties. As described in the Report, Registrant is a limited
liability company which is supervised by Wien & Malkin LLP.
Accordingly, this Chief Executive Officer certification is being
signed by a member of Registrant's supervisor.
-29-
Exhibit 99(2)
250 West 57th St. Associates L.L.C.
Chief Financial Officer Certification
Pursuant to Section 906
of Sarbanes - Oxley Act of 2002
The undersigned, Stanley Katzman, is signing this Chief
Financial Officer certification as a senior member of the
financial/accounting staff of Wien & Malkin LLP, the supervisor*
of 250 West 57th St. Associates L.L.C.("Registrant"), to certify
that:
(1) the Annual Report on Form 10-K of Registrant for the period
ended December 31, 2002(the "Report") fully complies with
the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934(15 U.S.C.78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in
all material respects, the financial condition and results
of operations of Registrant.
Dated: April 15, 2003
By /s/ Stanley Katzman
Stanley Katzman
Wien & Malkin LLP, Supervisor
*Registrant's organizational documents do not provide for a Chief
Financial Officer or other officer with equivalent rights and
duties. As described in the Report, Registrant is a limited
liability company which is supervised by Wien & Malkin LLP.
Accordingly, this Chief Financial Officer certification is being
signed by a senior member of the financial/accounting staff of
Registrant's supervisor.
-30-
[LETTERHEAD OF J.H. COHN, LLP]
INDEPENDENT ACCOUNTANTS' REPORT
To the participants in 250 West 57th St. Associates L.L.C.
(a Limited Liability Company)
New York, N. Y.
We have audited the accompanying balance sheets of 250 West 57th St. Associates
L.L.C. (the "Company") as of December 31, 2002 and 2001, and the related
statements if income, members' deficiency and cash flows for each of the three
years in the period ended December 31, 2002, and the supporting financial
statement schedule as contained in Item 15(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 L.L.C. as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for each of the three years in the period
ended December 31, 2002 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 28, 2003
-31-
EXHIBIT A
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
BALANCE SHEETS
A S S E T S
December 31,
2002 2001
Current Assets:
Cash and cash equivalents (Note 10):
Cash in banks $ 2,146,818 $ 774,604
Cash in distribution account held by
Wien & Malkin LLP 60,000 60,000
Fidelity U.S. Treasury Income Portfolio - 132,078
2,206,818 966,682
Due from Fisk Building Associates,
a related party 5,669 -
TOTAL CURRENT ASSETS 2,212,487 966,682
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 8,313,123 5,659,421
Less: Accumulated depreciation 898,184 7,414,939 739,722 4,919,699
Tenants' installations and
improvements 249,791 249,791
Less: Accumulated depreciation 249,791 - 249,791 -
Building improvements in progress 138,227 -
TOTAL REAL ESTATE 9,670,601 7,037,134
Other Assets:
Mortgage refinancing costs (Note 2c) 517,770 516,618
Less: Accumulated amortization 217,796 115,078
299,974 401,540
TOTAL ASSETS $12,183,062 $8,405,356
LIABILITIES AND MEMBERS' DEFICIENCY
Current Liabilities:
Accrued expenses $ 55,777 $ 57,139
Due to Fisk Building Associates,
a related party 1,313,983 2,170,902
OTAL CURRENT LIABILITIES 1,369,760 2,228,041
Long-term Liabilities:
Bonds, mortgages and similar debt:
Mortgage payable (Note 3) 12,000,000 7,000,000
TOTAL LIABILITIES 13,369,760 9,228,041
Commitments and contingencies (Notes 3 and 11)
Members' Deficiency (Exhibit C) (1,186,698) (822,685)
TOTAL LIABILITIES AND
MEMBERS' DEFICIENCY $12,183,062 $8,405,356
See accompanying notes to financial statements.
-32-
EXHIBIT B
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
STATEMENTS OF INCOME
Year ended December 31,
2002 2001 2000
Revenues:
Rent income, from a
related party (Note 4) $2,534,289 $4,038,159 $3,707,463
Dividend income 2,523 5,570 33,195
Interest income 10,746 48,491 12,721
2,547,558 4,092,220 3,753,379
Expenses:
Interest on mortgages
(Note 3) 601,655 525,770 378,269
Supervisory services, to
a related party (Note 5) 186,717 333,239 312,572
Professional fees, including fees
to a related party (Note 6) 1,567 20,655 40,360
Amortization of mortgage
refinancing costs (Note 2c) 102,718 102,520 69,632
Depreciation of building
improvements (Note 2b) 158,462 51,722 -
1,051,119 1,033,906 800,833
NET INCOME, CARRIED TO
MEMBERS' DEFICIENCY
(NOTE 9) $1,496,439 $3,058,314 $2,952,546
Earnings per $5,000
participation unit, based
on 720 participation units
outstanding during each year $ 2,078 $ 4,248 $ 4,101
See accompanying notes to financial statements.
-33-
EXHIBIT C-3
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
STATEMENT OF MEMBERS' DEFICIENCY
YEAR ENDED DECEMBER 31, 2000
Members' Members'
deficiency Share of deficiency
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.
-34-
EXHIBIT C-1
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
STATEMENT OF MEMBERS' DEFICIENCY
YEAR ENDED DECEMBER 31, 2002
Members' Members'
deficiency Share of deficiency
January 1, 2002 net income Distributions December 31, 2002
Anthony E. Malkin
Joint Venture #1............. $ (82,268) $ 149,643 $ 186,045 $ (118,670)
Anthony E. Malkin
Joint Venture #2............. (82,269) 149,644 186,045 (118,670)
Anthony E. Malkin
Joint Venture #3............. (82,269) 149,644 186,045 (118,670)
Anthony E. Malkin
Joint Venture #4............. (82,269) 149,644 186,045 (118,670)
Peter L. Malkin
Joint Venture #1.............. (82,269) 149,644 186,045 (118,670)
Peter L. Malkin
Joint Venture #2.............. (82,269) 149,644 186,045 (118,670)
Peter L. Malkin
Joint Venture #3.............. (82,268) 149,644 186,046 (118,670)
Peter L. Malkin
Joint Venture #4.............. (82,268) 149,644 186,046 (118,670)
Peter L. Malkin
Joint Venture #5.............. (82,268) 149,644 186,045 (118,669)
Peter L. Malkin
Joint Venture #6.............. (82,268) 149,644 186,045 (118,669)
$(822,685) $1,496,439 $1,860,452 $(1,186,698)
See accompanying notes to financial statements.
-35-
EXHIBIT C-2
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
STATEMENT OF MEMBERS' DEFICIENCY
YEAR ENDED DECEMBER 31, 2001
Members' Members'
deficiency Share of deficiency
January 1, 2001 net income Distributions December 31, 2001
Anthony E. Malkin
Joint Venture #1 $ (70,184) $ 305,831 $ 317,915 $ (82,268)
Anthony E. Malkin
Joint Venture #2 (70,185) 305,831 317,915 (82,269)
Anthony E. Malkin
Joint Venture #3 (70,185) 305,831 317,915 (82,269)
Anthony E. Malkin
Joint Venture #4 (70,185) 305,831 317,915 (82,269)
Peter L. Malkin
Joint Venture #1 (70,185) 305,831 317,915 (82,269)
Peter L. Malkin
Joint Venture #2 (70,185) 305,831 317,915 (82,269)
Peter L. Malkin
Joint Venture #3 (70,185) 305,832 317,915 (82,268)
Peter L. Malkin
Joint Venture #4 (70,185) 305,832 317,915 (82,268)
Peter L. Malkin
Joint Venture #5 (70,185) 305,832 317,915 (82,268)
Peter L. Malkin
Joint Venture #6 (70,185) 305,832 317,915 (82,268)
$(701,849) $3,058,314 $3,179,150 $(822,685)
See accompanying notes to financial statements.
-36-
EXHIBIT D
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
STATEMENTS OF CASH FLOWS
Year ended December 31,
2002 2001 2000
Cash flows from operating activities:
Net income $ 1,496,439 $ 3,058,314 $ 2,952,546
Adjustments to reconcile net income
to net cash provided by operating
activities:
Amortization 102,718 102,520 69,632
Change in additional rent due
from Fisk Building Associates (5,669) (1,469) 11,835
Change in accrued expenses (1,362) 13,325 11,491
Depreciation of building improvements 158,462 51,722 -
Net cash provided by
operating activities 1,750,588 3,224,412 3,045,504
Cash flows from investing activities:
Payments for building improvements (2,791,929) (2,772,615) (1,953,845)
Net cash used in investing
activities (2,791,929) (2,772,615) (1,953,845)
Cash flows from financing activities:
Cash distributions (1,860,452) (3,179,150) (2,993,151)
Principal payments on long-term debt - - (4,289,171)
Proceeds from second mortgage payable 5,000,000 - 7,000,000
Payment of mortgage refinancing costs (1,152) (69) (516,649)
Advance from (payments to) Fisk
Building Associates (856,919) 1,755,306 172,105
Net cash provided by (used in)
financing activities 2,281,477 (1,423,913) (626,866)
Net change in cash 1,240,136 (972,116) 464,793
Cash and cash equivalents,
beginning of year 966,682 1,938,798 1,474,005
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 2,206,818 $ 966,682 $ 1,938,798
Supplemental disclosures of cash flow information:
Cash paid during year for interest $ 589,692 $ 525,770 $ 364,669
See accompanying notes to financial statements.
-37-
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
1. Business Activity and Reorganization
250 West 57th Street Associates L.L.C. (the "Company") 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").
The Company operated as a joint venture, 250 West 57th Street Associates,
until November 30, 2001, when it converted to a limited liability company and
changed its name. Ownership percentages in the Company were unchanged by the
conversion. The Company continues to be treated as a partnership for tax
purposes, and the joint venture's income tax basis of the assets and
liabilities carried over to the limited liability company.
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 of $688,000, and tenants
installations and improvements are fully depreciated.
In connection with the building improvements program which began in
1999 (see Note 3), costs totaling $7,763,350 at December 31, 2002,
including improvements in progress at December 31, 2002 aggregating
$138,227, have been incurred. Depreciation of these assets is being
provided using the straight-line method over an estimated useful life
of 39 years.
c. Mortgage refinancing costs, amortization and related party transactions:
Mortgage refinancing costs incurred in connection with the 1996
modification of the previous first mortgage (see Note 3) were amortized
ratably over the extended term of the that mortgage, from March 1, 1996
through November 17, 2000.
Mortgage refinancing costs incurred in connection with the second
mortgage were amortized ratably over the extended term of the second
mortgage, from September 22, 1999 through November 17, 2000.
-38-
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
2. Summary of Significant Accounting Policies (continued)
c. Mortgage refinancing costs, amortization and related party transactions
(continued):
Mortgage refinancing costs paid in 2002, 2001 and 2000, totaling
$517,770, were incurred in connection with the new first mortgage. Such
charges include $38,817 paid to the firm of Wien & Malkin LLP, a related
party. These mortgage refinancing costs are being amortized ratably over
the term of the new first mortgage, from November 17, 2000 through
December 1, 2005.
d. Valuation of Long-Lived Assets:
The Company periodically assesses the carrying value of long-lived
assets whenever events or changes in circumstances indicate that their
carrying amount may not be recoverable. When the Company determines that
the carrying value of long-lived assets may be impaired, the measurement
of any impairment is based on a projected discounted cash flows method.
e. Revenue Recognition:
Basic minimum rent and overage rent, which is based on the Lessee's
annual net income, as defined in the lease, are recognized when earned.
f. 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. Mortgage Indebtedness and Building Improvements Program
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.
In connection with a building improvements program (the "Program") approved
by the Participants and the Lessee, the Lessee began financing the Program
in 1999 and billing the Company for costs incurred. 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 Program. 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.
-39-
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
3. Mortgage Indebtedness and Building Improvements Program
(continued)
A new first mortgage was placed on the property effective November 17, 2000,
with Emigrant Savings Bank in the amount of $15,500,000. At the closing,
$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. On January 23,
2002 and December 16, 2002, respectively, additional mortgage advances of
$2,000,000 and $3,000,000 were drawn on the mortgage loan to pay for building
improvement advances by the Lessee. The balance of the first mortgage loan
will be advanced in stages through May 31, 2003 to pay for additional
improvements to the property. All improvements made under the Program are
owned by the Company and financed through an increase in the fee mortgage,
which will be funded by an equivalent increase in the basic rent paid by the
Lessee to the Company (See Note 4).
Monthly payments under the first mortgage are interest only. Amounts
advanced at the closing ($7,000,000) bear interest at the rate of 7.511%
throughout the term of the mortgage. Amounts advanced after the closing
until May 31, 2003 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. As of December 31, 2002, the
effective floating rate on the mortgage proceeds drawn down after the closing
($5,000,000) was 4.0%.
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 matures on December 1, 2005, when the entire principal balance
falls due.
The real estate is pledged as collateral for the first mortgage.
The estimated fair value of the Company's mortgage debt, based on the
available market information or other appropriate valuation methodologies,
was $12,700,000 and $7,100,000 at December 31, 2002 and 2001, respectively.
4. Related Party Transactions - Rent Income
Rent income earned during the years ended December 31, 2002, 2001 and 2000,
totaling $2,534,289, $4,038,159 and $3,707,463, 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,
2002 2001 2000
Basic minimum annual rent $ 629,656 $ 553,770 $ 429,740
Primary overage rent 752,000 752,000 752,000
Secondary overage rent 1,152,633 2,732,389 2,525,723
$2,534,289 $4,038,159 $3,707,463
-40-
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
4. Related Party Transactions - Rent Income (continued)
The lease, as modified, provides 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 refinancing 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.
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 member 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, 2002, 2001 and 2000,
totaling $186,717, $333,239 and $312,572, respectively, were paid to the firm
of Wien & Malkin LLP. Some members of that firm are members 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.
-41-
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
6. Related Party Transactions - Professional Fees
Professional fees (including disbursements) during the years ended December
31, 2001 and 2000, totaling $530 and $34,260, respectively, were paid to the
firm of Wien & Malkin LLP, a related party.
7. Number of Participants
There were approximately 575 participants in the various joint ventures as of
December 31, 2002, 2001 and 2000.
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.
9. Distributions and Amount of Income per $5,000 Participation Unit
Distributions and amount of income per $5,000 participation unit during the
years 2002, 2001 and 2000, based on 720 participation units outstanding
during each year, consisted of the following:
Year ended December 31,
2002 2001 2000
Income $2,078 $4,248 $4,101
Return of capital 506 167 56
Total distributions $2,584 $4,415 $4,157
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, 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 $2,043,000 at December 31, 2002. The
cash in 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, 2003.
-42-
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
11. Litigation
Wien & Malkin LLP and Peter L. Malkin, a member in Associates, have been
engaged in a dispute proceeding with Helmsley-Spear, Inc. commenced in 1997
concerning the management, leasing and supervision of the property subject to
the net lease, in which Wien & Malkin and Mr. Malkin have sought an order
removing Helmsley-Spear. In this connection, certain costs for legal and
professional fees and other expenses have been paid and incurred by Wien &
Malkin and Mr. Malkin, and additional costs are expected to be incurred. Wien
& Malkin and Mr. Malkin have represented that such costs will be recovered only
to the extent that (a) a competent tribunal authorized payment or (b) an
investor voluntarily agrees that his or her proportionate share be paid.
Accordingly, Associates' allocable share of such costs is as yet undetermined,
and Associates has not provided for the expense and related liability with
respect to such costs in these financial statements.
The original action was commenced in June 1997 and was referred to arbitration.
The March 30, 2001 decision of the arbitrators, which was confirmed by the
court, (i) reaffirms the right of the investors in the Lessee to vote to
terminate Helmsley- Spear without cause, (ii) dismisses Helmsley-Spear claims
against Wien & Malkin and Peter Malkin, and (iii) rejects the termination of
Helmsley-Spear for cause. The parts of the decision under appeal were affirmed
by the Appellate Division on December 5, 2002, and were further appealed by
Wien & Malkin and Mr. Malkin on January 13, 2003.
At the Lessee's May 20, 2002 special meeting, a vote of the investors was
conducted on proposals for the removal without cause of Helmsley-Spear as
managing and leasing agent and its replacement by one or a combination of
designated independent firms (Cushman & Wakefield, Insignia/ESG, and Newmark
Realty), including payment by the Lessee of the expenses for the preparation
of the solicitation statement, the solicitation of votes, and the implementat-
ion of the new program. On May 21, 2002, the proponents of the proposals,
Peter L. Malkin and Wien & Malkin, filed a court application to determine
and confirm all investors' votes for removal without cause and replacement
and to set the final date for Helmsley-Spear's termination. Helmsley-Spear
filed objections, and on September 10, 2002 the court confirmed such votes
and ruled that Helmsley-Spear has been discharged and must effect an orderly
transition and departure within 60 days. As of November 20, 2002, Helmsley-
Spear is no longer the managing and leasing agent and has been replaced by
Cushman & Wakefield, Inc. Helmsley-Spear continues to pursue its appeal.
In accord with the Lessee's May 20, 2002 vote, the expenses for the preparat-
ion of the solicitation statements, the solicitation of votes and the imple-
mentation of the new program are being paid by the Lessee. Such payments
have totaled $245,251, including $82,574 to Wien & Malkin.
12. Receipt of Warrants and Stock in Telecommunications Companies
In 2000, the Company received shares of common stock and warrants from certain
unrelated companies in exchange for permission for those companies to provide
high speed internet access and other telecommunication services to the
building. The Lessee received an equal amount of shares and warrants. There
are restrictions as to the transfer of stock, and neither the warrants nor
the stock have had an ascertainable value since their issuance. Accordingly,
the accompanying financial statements do not reflect any value for these
securities.
13. Reclassifications
As a result of the conversion of Company in 2001 to a limited liability company
(Note 1), certain accounts in the 2000 financial statements have been reclass-
ified to conform with subsequent year presentation.
-43-
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
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.
-44-
SCHEDULE III
250 WEST 57th ST. ASSOCIATES L.L.C.
(A Limited Liability Company)
Real Estate and Accumulated Depreciation
December 31, 2002
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, 2002............................ $12,000,000
C Initial cost to company
Land.................................................... $ 2,117,435
Building................................................. $ 4,940,682
D Costs capitalized subsequent to acquisition
Building improvements and tenant installations
and improvements......... ................... $ 8,701,141
Carrying costs................................. NONE
E Gross amount at which carried at
close of period
Land.......................................... $ 2,117,435
Building and building improvements and
tenant installations and improvements........ 13,641,823
Total....................................... $15,759,258(a)
F Accumulated depreciation....................... $ 6,088,657(b)
G Date of construction 1921
H Date acquired September 30, 1953
I Life on which depreciation in latest
income statements is computed 39 years
(a) Gross amount of real estate
Balance at January 1, 2000 $ 8,240,869
Purchase of building improvements and building improvements
in progress(expenditures advanced by Lessee, a
related party, and recorded by the Company):
F/Y/E 12/31/00 $1,953,845
12/31/01 2,772,615
12/31/02 2,791,929 7,518,389
Balance at December 31, 2002 $15,759,258
The costs for federal income tax purposes are the same as for
financial statement purposes.
(b) Accumulated depreciation
Balance at January 1, 2000 $5,878,473
Depreciation:
F/Y/E 12/31/00 None
12/31/01 $ 51,722
12/31/02 158,462 210,184
Balance at December 31, 2002 $6,088,657
-45-