UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [XX]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[XX] Preliminary Proxy Statement
[XX] Confidential, for use of the Commission Only
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Commission File No. 0-2666
250 West 57th Street Associates
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[XX] No fee required
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and determined):
<PAGE>
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
-2-<PAGE>
250 WEST 57th STREET ASSOCIATES
c/o Wien & Malkin LLP
60 East 42nd Street - 26th Floor
New York, New York 10165-0015
Telephone: 212-687-8700
Telecopier: 212-986-7679
May __, 1999
To Participants in 250 West 57th Street Associates ("Associates"):
On behalf of the Agents for the Participants, I am seeking
your consent to a program to complete and finance improvements at
the Fisk Building (the "Building").
1. Introduction.
After review with the Lessee, Wien & Malkin LLP supervisory
staff, and on-site Building personnel, I believe the proposed
improvements are necessary to maintain the Building, its
competitive market position, and Associates' long-term investment
return. The Lessee intends to proceed with the program: Were the
Lessee to proceed and pay the cost out of cash flow, overage rent
and extra distributions to Participants would be substantially
reduced and might be eliminated for several years.
Therefore, I recommend that Associates cooperate by
refinancing the mortgage to facilitate the improvement program and
reduce the impact of the program upon distributions to
Participants.
<PAGE>
The program is more fully described in the enclosed Statement
by the Agents in the Solicitation of Participant Consents.
2. Background.
Associates has owned the Building since 1953 subject to a
long-term net lease to Fisk Building Associates (the "Lessee"),
which pays basic rent, from which mortgage debt service and basic
supervisory fees are paid, and overage rent based on operating
profit, from which monthly and extra distributions to Participants
are paid. Total distributions for 1998 were equal to 77% of the
original cash investment.
The area of Manhattan surrounding the Building continues to
improve. The projects to replace the Coliseum and improve
Columbus Circle will both enhance the area of the Building and
encourage quality tenants to seek space in an upgraded Fisk
Building. While these new developments represent increased
competition, there is great potential to be captured by upgrading
the Building and its systems and providing greater amenities.
To protect and exploit the Building's economic prospects in
an improved market, the Lessee has prepared a Building upgrade and
amenity enhancement program that has been fully designed,
engineered, and bid by third party expert consultants.
3. Improvement Program.
The improvements proposed to be completed after December 31,
1998, are shown in Exhibit A to the enclosed Statement and are
estimated to cost approximately $6,000,000 over five years.
-2-<PAGE>
Included in the budget are: (a) $1,107,000 for replacement of
the Building's approximately 1,300 windows, (b) $1,415,000 for
facade restoration and roof set-back renovation, (c) $685,000 for
upgrading the Building's HVAC system by installing a new chiller,
(d) $300,000 for converting the Building's remaining DC electrical
feeds to AC, (e) $530,000 for lobby improvements, (f) $380,000 for
renovating the public bathrooms, corridors and stairwells, (g)
$130,000 for fire, security and communication systems upgrade, and
(h) $290,000 for modernizing elevator equipment. The balance will
be available for contingencies discovered in the field and
improvement of tenant spaces.
4. Financing.
The $6,000,000 estimated cost of the improvements over
approximately five years will be funded through a combination of a
fee mortgage increase (from the current $2,800,000) and operating
cash flow. Associates will own the improvements paid from
mortgage proceeds and will receive tax benefits from depreciation.
The increased mortgage charges will be paid by Associates from an
equivalent increase in the basic rent paid by the Lessee. Basic
rent and cash payments for other improvements will be deducted in
computing overage rent, so that the improvement costs will be
borne equally by Associates and the Lessee but spread through
mortgage refinancings over many years, thus stabilizing
distributions to Participants.
5. Basic Rent.
Currently, basic rent is $317,157 a year, to be adjusted to
reflect any increase or decrease in debt service on the existing
mortgage balance. The basic rent payable by the Lessee to
Associates will increase to cover debt service on the increased
mortgage.
-3-<PAGE>
Assuming no enhancement in bottom line performance from
higher rental rates, higher occupancy, and lower credit loss from
all these improvements, an initial increase in the mortgage from
$2,800,000 to $8,800,000 with interest at 7.5% on the additional
$6,000,000 and with 25 year amortization, the basic annual rent
increase will be $__________, and overage rent will decrease by
one-half of that amount. For an original $10,000 Participant who
received $7,700 in distributions for 1998, this mortgage increase
would reduce overage distributions by less than $_____ a year.
However, this reduction may be offset by increased rental income
paid by office and store tenants. The maximum mortgage
contemplated by the program will be $9,000,000 but will depend
upon funding available from cash flow.
6. Solicitation and Program Expenses.
The expenses for the consent solicitation, lease amendment,
refinancing, transfer and recording taxes, legal fees, and related
costs will be funded from the mortgage increase and repaid by the
Lessee's increased basic rent. Wien & Malkin LLP will represent
Associates and the Lessee in this program, and it and its
affiliates will be indemnified with the Agents by Associates and
the Lessee against any claim or expense arising in connection with
the program.
7. Conclusion.
Certain Building lobby improvements by the Lessee are already
in progress or have been previewed by tenants, brokers, and
prospective tenants and have been welcomed enthusiastically.
Combined with a rededicated staff and new marketing initiatives
-4-<PAGE>
(including a newsletter and website), enthusiasm amongst Building
tenants and new interest in the Building by brokers and
prospective tenants provide early validation that the contemplated
expenditures will preserve and enhance the Building's operating
results in an improved market while the related financing will
stabilize the Participants' returns.
Enclosed are (a) the Statement with financial reports
detailing the program and (b) a colored Consent Form. Each
Participant should review the Statement before signing and
returning the colored Consent Form. The consent of 75% of the
Participants in each group is required to authorize the program.
By signing and returning the enclosed Consent Form, you
authorize the Agents and any partner or senior director at Wien &
Malkin LLP designated by me to conclude on behalf of Associates
the necessary agreements to effect this financing and improvement
program.
9. Recommendation.
I strongly urge your consent. The Lessee has demonstrated
that the improvements are necessary to meet the Building's
physical and marketing requirements. If the financing of the
improvements is not allowed, whatever improvements the Lessee
pursues will reduce or end distributions from overage rent
payments for several years.
Financing of the improvements as proposed will also improve
the tax shelter for Participants.
-5-<PAGE>
Please sign and return the enclosed Consent Form as soon as
possible. If you have any question, please call any of my
partners at Wien & Malkin LLP, Alvin Silverman, Stanley Katzman,
or Thomas N. Keltner, Jr.
Very truly yours,
Peter L. Malkin
THE AGENTS RECOMMEND YOUR CONSENT. PLEASE SIGN, DATE AND
IMMEDIATELY RETURN THE ENCLOSED COLORED COPY OF THE CONSENT. A
SIGNED CONSENT FORM WHICH IS RETURNED WITHOUT AN INDICATED CHOICE
WILL CONSTITUTE A BINDING AFFIRMATIVE CONSENT. ONCE GIVEN,
CONSENT MAY NOT BE REVOKED.
-6-<PAGE>
