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, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ________________
Commission file number O-2666
250 WEST 57TH ST. ASSOCIATES
(Exact name of registrant as specified in its charter)
New York 13-6083380
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
60 East 42nd Street, New York, New York 10165
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 687-8700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
$3,600,000 of Participations in Joint-Venture Interests
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ x ] No [ ]
The aggregate market of the voting stock held by non-affiliates
of the Registrant: Not applicable, but see Items 5 and 10 of
this report.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
An Exhibit Index is located on pages 31 through 33 hereof.
Number of pages (including exhibits) in this filing: 50
PART I
Item 1. Business.
(a) General
Registrant is a joint venture which was organized on
May 25, 1953. On September 30, 1953, Registrant acquired fee
title to The Fisk Building, 250-264 West 57th Street, New York,
New York (the "Building") and to the land thereunder (the
"Property"). Registrant's joint venturers are Peter L. Malkin
and Anthony E. Malkin (individually, a "Joint Venturer" and,
collectively, the "Joint Venturers") each of whom also acts as an
agent for holders of participations in their undivided joint
venture interests in Registrant (each holder of a participation,
individually, a "Participant" and, collectively, the
"Participants").
Registrant leases the Property to Fisk Building
Associates (the "Net Lessee"), a partnership, under a long-term
net operating lease dated May 1, 1954 (the "Net Lease"), the
current term of which expires on September 30, 2003. Net Lessee
is a partnership in which Mr. Peter L. Malkin is one of the
Partners. In addition, one of the Joint Venturers is also a
member of Wien & Malkin LLP, 60 East 42nd Street, New York, New
York, which provides supervisory and other services to Registrant
and the Net Lessee ("Supervisor"). See Items 10, 11, 12 and 13
hereof for a description of the on-going services rendered by,
and compensation paid to, Supervisor and for a discussion of
certain relationships which may pose actual or potential
conflicts of interest among Registrant, Net Lessee and certain of
their respective affiliates.
As of December 31, 1999, the Building was approximately
98.87% occupied by approximately 340 tenants, a majority of whom
are engaged in the practices of law, dentistry and accounting,
and the businesses of publishing, insurance and entertainment.
Registrant does not maintain a full-time staff. See Item 2
hereof for additional information concerning the Building.
(b) Net Lease
Effective May 1, 1975, the lease between 250 West 57th
St. Associates, as lessor, and Fisk Building Associates, as
lessee, provides for basic rent equal to mortgage principal and
interest payments plus $28,000 payable to Wien & Malkin LLP for
supervisory services. The lease modification dated September 1,
1999 provides that, upon any further refinancing of mortgages
with an aggregate principal balance up to $12,800,000 (plus
refinancing costs in connection therewith), the basic rent will
be modified and will be equal to the sum of $28,000, plus an
amount equal to the rate of constant payments for interest and
amortization (not including any balloon principal payment due at
maturity) required annually under any such mortgages immediately
subsequent to refinancing; provided, however, that the
refinanced mortgages must be made by an institutional lender on a
nonrecourse basis and the proceeds of any increase in the
principal amount thereof must be used in connection with the
premises.
Net Lessee is required to make a monthly payment to
Registrant, as an advance against Primary Overage Rent, of an
amount equal to its operating profit for its previous lease year
in the maximum amount of $752,000 per annum. Net Lessee
currently advances $752,000 each year, which permits Registrant
to make regular monthly distributions at 20% per annum on the
Participants' remaining cash investment.
For the lease year ended September 30, 1999, Net Lessee
reported net operating profit of $5,277,912 after deduction of
Basic Rent. Net Lessee paid Primary Overage Rent of $752,000,
together with Secondary Overage Rent of $2,262,956 for the fiscal
year ended September 30, 1999. The Secondary Overage Rent of
$2,262,956 represents 50% of the excess of the net operating
profit of $5,277,912 over $752,000. After the payment of
$226,296 to Supervisor as an additional payment for supervisory
services, the balance of $2,036,660 was distributed to the
Participants on November 30, 1999.
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, 1999, 1998 and 1997.
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The Net Lease provides for one renewal option of 25
years. The Participants in Registrant and the partners in Net
Lessee have agreed to execute three additional 25-year renewal
terms on or before the expiration of the then applicable renewal
term.
(c) Mortgage Loan Refinancing
Effective March 1, 1995, the first mortgage loan on the
Property, in the principal amount of $2,890,758, held by Apple
Bank for Savings ("Apple Bank") was refinanced (the
"Refinancing"). The material terms of the refinanced mortgage
loan (the "Mortgage Loan") are as follows:
(i) a maturity date of June 1, 2000;
(ii) monthly payments of $24,096, aggregating
$289,157 per annum, applied first to interest at the
rate of 9.4% per annum and the balance in reduction of
principal;
(iii) no prepayment until after the third loan
year. Thereafter, a 3% penalty will be imposed in the
fourth loan year and a 2% penalty during the fifth loan
year. No prepayment penalty will be imposed if the
Mortgage Loan is paid in full during the last 90 days
of the fifth loan year; and
(iv) no Partner or Participant will have any
personal liability for principal of, or interest on,
the Mortgage Loan.
Effective September 22, 1999, a second mortgage loan,
also held by Apple Bank for Savings, in the amount of $1,500,000
was placed on the Property. The terms are interest only at the
thirty day LIBOR rate with a maturity date of June 1, 2000.
(d) Competition
The average annual base rental rate payable to Net
Lessee for leases being done at this time is $27.60 per square
foot (exclusive of electricity charges and escalation).
Current asking rents for the building range from $35 to
$42 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.
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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 Mortgage
Loans which, at December 31, 1999, had unpaid principal balances
of $4,289,171. For a description of the terms of the Mortgage
Loans see Note 3 of the Notes.
The Building, erected in 1921 and containing 26 floors,
occupies the entire block front on the south side of West 57th
Street between Broadway and Eighth Avenue, New York, New York.
The Building has ten passenger and three freight elevators and is
equipped with a combination of central and individual window unit
air-conditioning.
The Building is net leased to Net Lessee under the Net
Lease. A modification of the Net Lease, effective October 1,
1984, provides for a further renewal term of 25 years, from
October 1, 2003 through September 30, 2028. Registrant and Net
Lessee have agreed to execute separate lease modification
agreements covering three additional 25-year renewal terms on or
before the expiration of the then applicable renewal term. 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
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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 are continuing their prosecution of claims in
the arbitration for relief against Helmsley-Spear, Inc.,
including its termination as the leasing and managing agent for
various entities and properties, including the Registrant's
Lessee.
Item 4. Submission of Matters to a Vote of Participants.
No matters were submitted to the participants during
the last quarter of the period covered by this report.
PART II
Item 5. Market for Registrant's Common Stock
and Related Security Holder Matters.
Registrant is a joint venture organized pursuant to a
joint venture agreement entered into among various individuals
dated May 1, 1954.
Registrant has not issued any common stock. The
securities registered by it under the Securities Exchange Act of
1934, as amended, consist of participations in the joint venture
interests of the Joint Venturers in Registrant (each,
individually, a "Participation" and, collectively,
"Participations") and are not shares of common stock or their
equivalent. The Participations represent each Participant's
fractional share in the Joint Venturers' undivided interest in
Registrant and are divided approximately equally among the Joint
Venturers. Each unit of the Participations was originally
offered at a purchase price of $5,000; fractional units were also
offered at proportionate purchase prices. Registrant has not
repurchased Participations in the past and it is not likely to
change its policy in the future.
(a) The Participations neither are traded on an
established securities market nor are readily tradable on a
secondary market or the substantial equivalent thereof. Based on
Registrant's transfer records, Participations are sold by the
holders thereof from time to time in privately negotiated
transactions and, in many instances, Registrant is not aware of
the prices at which such transactions occur. Registrant was
advised of 40 transfers of Participations during 1999. In two
instances, the indicated purchase price was equal to
approximately 2.67 times the face amount of the Participation
transferred, i.e., $13,333 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, i.e., $6,250 for a
$2,500 Participation. In one instance, the indicated purchase
price was equal to two times the face amount of the Participation
transferred, i.e., $5,000 for a $2,500 participation. In all
other cases, no consideration was indicated.
(b) As of December 31, 1999, there were 564 holders of
Participations of record.
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(c) Registrant does not pay dividends. During the
years ended December 31, 1999 and 1998, 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, 1999 and November 30, 1998, Registrant made additional
distributions for each $5,000 Participation of $2,829 and $2,849,
respectively. Such distributions represented primarily Secondary
Overage Rent payable by Net Lessee. There are no restrictions on
Registrant's present or future ability to make distributions;
however, the amount of such distributions, particularly
distributions of Secondary Overage Rent, depends solely on Net
Lessee's ability to make payments of Basic Rent, Primary Overage
Rent and Secondary Overage Rent to Registrant. (See Item 1
hereof). Registrant expects to make distributions so long as it
receives the payments provided for under the Net Lease. See Item
7 hereof.
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[SELECTED FINANCIAL DATA]
Item 6.
250 WEST 57th ST. ASSOCIATES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Basic minimum annual
rent income........ $ 341,274 $ 317,157 $ 317,157 $ 317,157 $ 331,691
Primary overage
rent income...... 752,000 752,000 752,000 752,000 752,000
Secondary overage
rent income.... 2,262,956 2,282,064 1,326,984 1,658,477 1,154,342
Total revenue........ $3,356,230 $3,351,221 $2,396,141 $2,727,634 $2,238,033
Net income............. $2,719,635 $2,787,347 $1,909,974 $2,224,320 $1,781,573
Earnings per $5,000 participation
unit, based on 720 participation
units outstanding during each
year.................. $ 3,777 $ 3,871 $ 2,653 $ 3,089 $ 2,474
Total assets............ $3,905,210 $2,212,651 $2,220,481 $2,228,311 $2,236,141
Long-term obligations... $ - $2,789,171 $2,814,821 $2,838,179 $2,859,449
Distributions per $5,000
participation unit, based on
720 participation units
outstanding during each year:
Income............... $ 3,777 $ 3,850 $ 2,634 $ 3,073 $ 2,415
Return of capital.... 52 - - - -
Total distributions...$ 3,829 $ 3,850 $ 2,634 $ 3,073 $ 2,415
</TABLE>
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Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
Registrant was organized solely for the purpose of
owning the Property described in Item 2 hereof subject to a net
operating lease of the Property held by Net Lessee. Registrant
is required to pay, from Basic Rent, the charges on the Mortgage
Loan and amounts for supervisory services, and to then distribute
the balance of such Basic Rent to holders of Participations.
Pursuant to the Net Lease, Net Lessee has assumed responsibility
for the condition, operation, repair, maintenance and management
of the Property. Accordingly, Registrant need not maintain sub-
stantial reserves or otherwise maintain liquid assets to defray
any operating expenses of the Property.
Registrant's results of operations are affected
primarily by the amount of rent payable to it under the Net
Lease. The amounts of Primary Overage Rent and Secondary Overage
Rent are affected by the New York City economy and its real
estate market. It is difficult to forecast the New York City
economy and real estate market over the next few years. The
following summarizes the material factors for the three most re-
cent years affecting Registrant's results of operations for such
periods:
(a) Total income increased for the year ended December 31, 1999
as compared with the year ended December 31, 1998. The
increase resulted from an increase in Basic minimum rent and
dividend income. See Note 4 of the Notes. Total income
increased for the year ended December 31, 1998 as compared
with the year ended December 31, 1997. The increase
resulted from an increase in Secondary Overage Rent received
by Registrant for the lease year ended September 30, 1998 as
compared with the lease year ended September 30, 1997. See
Note 4 of the Notes.
(b) Total expenses increased for the year ended December 31,
1999 as compared with the year ended December 31, 1998. The
increase was the net result of an increase in mortgage
interest expenses, professional fees and amortization of
mortgage refinancing costs and a decrease in supervisory
service expense. See Notes 2b, 3a and 5 of the Notes.
Total expenses increased for the year ended December 31,
1998 as compared with the year ended December 31, 1997. The
increase was the result of an increase in supervisory
service expense. See Notes 2b, 3a and 5 of the Notes.
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Liquidity and Capital Resources
There has been no significant change in Registrant's
liquidity for the year ended December 31, 1999 as compared with
the year ended December 31, 1998.
Based on the current net profit from the Building and
current trends in the geographic area in which the Property is
located, the value of the Property is estimated to be in excess
of the amount of the Mortgage Loan balance at December 31, 1999.
Consequently, there are no material changes anticipated in the
short-term or long-term financial liquidity position of
Registrant, other than the need to refinance the Mortgage Loan
upon maturity. Registrant foresees no need to make material
commitments for capital expenditures from its own resources while
the Net Lease is in effect.
Inflation
Inflationary trends in the economy do not directly
affect Registrant's operations since Registrant does not actively
engage in the operation of the Property. Inflation may impact
the operations of Net Lessee. Net Lessee is required to pay
Basic Rent, regardless of the results of its operations.
Inflation and other operating factors affect the amount of
Primary and Secondary Overage Rent payable by Net Lessee, which
is based on Net Lessee's net operating profit.
Item 8. Financial Statements and Supplementary Data.
The financial statements, together with the accom-
panying report by, and the consent to the use thereof, of J.H.
Cohn LLP immediately following, are being filed in response to
this item.
Item 9. Disagreements on Accounting and Financial Disclosure.
Not applicable.
PART III
Item 10.Directors and Executive Officers of the Registrant.
Registrant has no directors or officers or any other
centralization of management. There is no specific term of
office for any Joint Venturer in Registrant. The table below
sets forth as to each individual who served as a Joint-Venturer
in Registrant as of December 31, 1999 the following: name, age,
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nature of any family relationship with any other Joint Venturer,
business experience during the past five years and principal
occupation and employment during such period, including the name
and principal business of any corporation or any organization in
which such occupation and employment was carried on and the date
such individual became a Joint-Venturer in Registrant:
Date
Principal Individual
Nature of Occupation became
Family Business and Joint
Name Age Relationship Experience Employment Venturer
Peter L. Malkin 66 Father of Real Estate Senior Partner 1982
Anthony E. Supervision and Chairman
Malkin and Law Wien & Malkin
LLP
Anthony E. Malkin 37 Son of President President of 1998
Peter L. of real estate W&M Properties,
Malkin management Inc.
company
As stated in Item 1 hereof, one of the Joint Venturers
is a member of Supervisor. See Items 11, 12 and 13 hereof for a
description of the services rendered by, and the compensation
paid to, Supervisor and for a discussion of certain relationships
which may pose actual or potential conflicts of interest among
Registrant, Net Lessee and certain of their respective
affiliates.
The names of entities which have a class of securities
registered pursuant to Section 12 of the Securities Exchange Act
of 1934 or are subject to the requirements of Section 15(d) of
that Act, and in which the Joint Venturers are also either a
director, joint venturer or general partner are as follows:
Peter L. Malkin is a general partner in Garment Capitol
Associates, 60 East 42nd St. Associates, Navarre-500
Building Associates and Empire State Building
Associates.
Anthony E. Malkin is a general partner in 60 East 42nd
St. Associates.
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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, 1999 by Registrant to any of the Joint Venturers as
such. Registrant pays Supervisor, for legal fees and supervisory
services and disbursements: (i) $40,000 per annum (the "Basic
Payment"); and (ii) an additional payment of 10% of all
distributions to Participants in any year in excess of the amount
representing a return to them at the rate of 15% per annum on
their remaining cash investment (the "Additional Payment"). At
December 31, 1999, 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 $286,296 during the
fiscal year ended December 31, 1999. Registrant also paid to
Supervisor professional fees in the amount of $31,855 in
connection with the consent solicitation program related to the
improvement program. See Item 4. The supervisory services
provided to Registrant by Supervisor include real estate
supervisory, legal, administrative and financial services. The
services include, but are not limited to, providing or
coordinating with counsel to Registrant, maintaining all of its
partnership and Participant records, performing physical
inspections of the Building, reviewing insurance coverage and
conducting annual partnership meetings. Financial services
include monthly receipt of rent from the Net Lessee, payment of
monthly and additional distributions to the Participants, payment
of all other disbursements, confirmation of the payment of real
estate taxes, and active review of financial statements submitted
to Registrant by the Net Lessee and financial statements audited
by and tax information prepared by Registrants' independent
certified public accountant, and distribution of such materials
to the Participants. Supervisor also prepares quarterly, annual
and other periodic filings with the Securities and Exchange
Commission and applicable state authorities.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
(a) Registrant has no voting securities. See Item 5
hereof. At December 31, 1999, no person owned of record or was
known by Registrant to own beneficially more than 5% of the
outstanding Participations in the undivided Joint Venture
interests in Registrant.
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(b) At December 31, 1999, the Joint Venturers (see
Item 10 hereof) did not beneficially own, directly or indirectly,
any Participations in Registrant.
At such date, certain of the Partners (or their
respective spouses) 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.
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Item 13. Certain Relationships and Related Transactions.
(a) As stated in Item 1 hereof, each Joint
Venturer acts as agent for his respective group of Participants.
Mr. Malkin is also a partner in Net Lessee. As a consequence of
one of the two Joint Venturers being a partner in Net Lessee and
one of the two Joint Venturers being a member of Supervisor
(which supervises Registrant and Net Lessee), certain actual or
potential conflicts of interest may arise with respect to the
management and administration of the business of Registrant.
However, under the respective participating agreements pursuant
to which the Joint Venturers act as agents for the Participants,
certain transactions require the prior consent from Participants
owning a specified interest under the Agreements in order for the
agents to act on their behalf. Such transactions include
modifications and extensions of the Net Lease or the Mortgage
Loan, or a sale or other disposition of the Property or
substantially all of Registrant's other assets.
Reference is made to Items 1 and 2 hereof for a
description of the terms of the Net Lease between Registrant and
Net Lessee. The respective interest, if any, of each Joint
Venturer in Registrant and in Net Lessee arises solely from
ownership of Participations in Registrant and partnership
interests or participations in Net Lessee. The Joint Venturers
receive no extra or special benefit not shared on a pro rata
basis with all other Participants in Registrant or partners and
participants in Net Lessee. However, Mr. Peter L. Malkin, by
reason of his respective partnership interest in Supervisor, is
entitled to receive his pro rata share of any supervisory,
service, legal or other remuneration paid to Supervisor for
services rendered to Registrant and Net Lessee. See Item 11
hereof for a description of the remuneration arrangements between
Registrant and Supervisor relating to supervisory services
provided by Supervisor.
Reference is also made to Items 1 and 10 hereof for a
description of the relationship between Registrant and Supervisor
of which one of the Joint Venturers is a member. The respective
interest of the Joint Venturers in any remuneration paid or given
by Registrant to Supervisor arose and arises solely from the
ownership of his respective partnership interest therein. See
Item 11 hereof for a description of the remuneration arrangements
between Registrant and Supervisor relating to supervisory
services provided by Supervisor.
(b) Reference is made to Paragraph (a) above.
(c) Not applicable.
(d) Not applicable.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.
(a)(1) Financial Statements:
Consent of J.H. Cohn LLP, Certified Public Accountants,
dated February 2, 2000.
Accountant's Report of J.H. Cohn LLP, Certified Public
Accountants, dated January 31, 2000.
Balance Sheets at December 31, 1999 and at December 31,
1998 (Exhibit A).
Statements of Income for the fiscal years ended
December 31, 1999, 1998 and 1997 (Exhibit B).
Statement of Partners' Capital Deficit for the fiscal
year ended December 31, 1999 (Exhibit C-1).
Statement of Partners' Capital Deficit for the fiscal
year ended December 31, 1998 (Exhibit C-2).
Statement of Partners' Capital Deficit for the fiscal
year ended December 31, 1997 (Exhibit C-3).
Statements of Cash Flows for the fiscal years ended
December 31, 1999, 1998 and 1997 (Exhibit D).
Notes to Financial Statements for the fiscal years
ended December 31, 1999, 1998 and 1997.
(2) Financial Statement Schedules:
List of Omitted Schedules.
Real Estate and Accumulated Depreciation - December 31,
1999 (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.
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[LETTERHEAD OF J.H. COHN LLP
ACCOUNTANTS & CONSULTANTS]
INDEPENDENT ACCOUNTANTS' REPORT
To the participants in 250 West 57th St. Associates
(a Joint Venture)
New York, N. Y.
We have audited the accompanying balance sheets of 250 West 57th St. Associates
(the "Company") as of December 31, 1999 and 1998, and the related statements of
income, partners' capital deficit and cash flows for each of the three years in
the period ended December 31, 1999, and the supporting financial statement
schedule as contained in Item 14(a)(2) of this Form 10-K. These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 250 West 57th St. Associates
as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1999 in
conformity with generally accepted accounting principles, 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.
January 31, 2000
-15-
February 2, 2000
250 West 57th St. Associates
New York, N.Y.
We consent to the use of our independent accountants' report dated January 31,
2000, covering our audits of the accompanying financial statements of 250 West
57th St. Associates in connection with and as part of your December 31, 1999
annual report (Form 10-K) to the Securities and Exchange Commission.
J.H. Cohn LLP
-16-
EXHIBIT A
250 WEST 57th ST. ASSOCIATES
BALANCE SHEETS
A S S E T S
<TABLE>
<CAPTION>
December 31,
1999 1998
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents (Note 10):
Cash in Fleet Bank............. $ 32,274 $ 24,124
Cash in distribution account held by
Wien & Malkin LLP.................. 60,000 60,000
Fidelity U.S. Treasury Income
Portfolio....................... 1,381,731 -
TOTAL CASH AND CASH EQUIVALENTS.... 1,474,005 84,124
Additional rent due from Fisk
Building Associates, a related party..... 11,835 -
TOTAL CURRENT ASSETS.............. 1,485,840 84,124
Real Estate, at cost:
Property situated at 250-264 West 57th
Street, New York, N. Y. (Notes 2b and 3):
Land....................... 2,117,435 2,117,435
Building................... $4,940,682 $4,940,682
Less: Accumulated
depreciation......... 4,940,682 - 4,940,682 -
Building improvements............ 688,000 688,000
Less: Accumulated depreciation..688,000 - 688,000 -
Tenants' installations and
improvements....................249,791 249,791
Less: Accumulated depreciation..249,791 - 249,791 -
Building improvements,
construction in progress...... 244,960 -
TOTAL REAL ESTATE......... 2,362,395 2,117,435
Other Assets:
Mortgage refinancing costs
(Note 2c)...................... 130,508 41,106
Less: Accumulated amortization... 73,533 30,014
56,975 11,092
TOTAL ASSETS....................... $3,905,210 $2,212,651
LIABILITIES AND PARTNERS' CAPITAL DEFICIT
Current Liabilities:
Accrued expenses........................ $ 32,323 $ 22,049
Due to Fisk Building Associates,
a related party...................... 244,960 -
Principal payments of mortgages payable
within one year (Note 3)............. 4,289,171 25,650
TOTAL CURRENT LIABILITIES.......... 4,566,454 47,699
Long-term Liabilities:
Bonds, mortgages and similar debt:
First and second mortgages
payable (Note 3).............$4,289,171 $2,814,821
Less: Current installments shown
above...................... 4,289,171 25,650
- 2,789,171
TOTAL LIABILITIES.................. 4,566,454 2,836,870
Partners' Capital Deficit (Exhibit C)........ (661,244) (624,219)
TOTAL LIABILITIES AND
PARTNERS' CAPITAL DEFICIT.... $3,905,210 $2,212,651
</TABLE>
See accompanying notes to financial statements.
-17-
EXHIBIT B
250 WEST 57th ST. ASSOCIATES
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998 1997
<S> <C> <C> <C>
Revenues:
Rent income, from a
related party (Note 4)......... $3,356,230 $3,351,221 $2,396,141
Dividend income................. 18,392 - -
3,374,622 3,351,221 2,396,141
Expenses:
Interest on mortgages
(Note 3)....................... 287,423 265,616 267,721
Supervisory services, to
a related party (Note 5)....... 286,296 287,959 190,708
Professional fees, principally
to a related party (Note 6).... 37,748 2,469 19,909
Amortization of mortgage
refinancing costs (Note 2c).... 43,520 7,830 7,829
654,987 563,874 486,167
NET INCOME, CARRIED TO
PARTNERS' CAPITAL
DEFICIT (NOTE 9)....... $2,719,635 $2,787,347 $1,909,974
Earnings per $5,000
participation unit, based
on 720 participation units
outstanding during each
year............................. $ 3,777 $ 3,871 $ 2,653
</TABLE>
See accompanying notes to financial statements.
-18-
EXHIBIT C-1
250 WEST 57th ST. ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL DEFICIT
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Partners' Partners'
capital deficit Share of capital deficit
January 1, 1999 net income Distributions December 31, 1999
Anthony E. Malkin
Joint Venture #1.. $ (62,422) $ 271,964 $ 275,666 $ (66,124)
Anthony E. Malkin
Joint Venture #2.... (62,422) 271,964 275,666 (66,124)
Anthony E. Malkin
Joint Venture #3.... (62,422) 271,964 275,666 (66,124)
Anthony E. Malkin
Joint Venture #4.... (62,422) 271,964 275,666 (66,124)
Peter L. Malkin
Joint Venture #1..... (62,422) 271,964 275,666 (66,124)
Peter L. Malkin
Joint Venture #2..... (62,422) 271,963 275,666 (66,125)
Peter L. Malkin
Joint Venture #3..... (62,421) 271,963 275,666 (66,124)
Peter L. Malkin
Joint Venture #4..... (62,422) 271,963 275,666 (66,125)
Peter L. Malkin
Joint Venture #5..... (62,422) 271,963 275,666 (66,125)
Peter L. Malkin
Joint Venture #6..... (62,422) 271,963 275,666 (66,125)
$(624,219) $2,719,635 $2,756,660 $(661,244)
</TABLE>
See accompanying notes to financial statements.
-19-
EXHIBIT C-2
250 WEST 57th ST. ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL DEFICIT
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Partners' Partners'
capital deficit Share of capital deficit
January 1, 1998 net income Distributions December 31, 1998
<S> <C> <C> <C> <C>
Anthony E. Malkin
Joint Venture #1
(formerly Stanley Katzman
Joint Venture #1)... $ (63,993) $ 278,735 $ 277,164 $ (62,422)
Anthony E. Malkin
Joint Venture #2
(formerly Stanley Katzman
Joint Venture #2)... (63,993) 278,735 277,164 (62,422)
Anthony E. Malkin
Joint Venture #3
(formerly Stanley Katzman
Joint Venture #3)... (63,993) 278,735 277,164 (62,422)
Anthony E. Malkin
Joint Venture #4
(formerly Stanley Katzman
Joint Venture #4)... (63,993) 278,735 277,164 (62,422)
Peter L. Malkin
Joint Venture #1...... (63,993) 278,735 277,164 (62,422)
Peter L. Malkin
Joint Venture #2....... (63,993) 278,735 277,164 (62,422)
Peter L. Malkin
Joint Venture #3.... (63,993) 278,735 277,163 (62,421)
Peter L. Malkin
Joint Venture #4...... (63,993) 278,734 277,163 (62,422)
Peter L. Malkin
Joint Venture #5..... (63,993) 278,734 277,163 (62,422)
Peter L. Malkin
Joint Venture #6...... (63,993) 278,734 277,163 (62,422)
$(639,930) $2,787,347 $2,771,636 $(624,219)
</TABLE>
See accompanying notes to financial statements.
-20-
EXHIBIT C-3
250 WEST 57th ST. ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL DEFICIT
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Partners' Partners'
capital deficit Share of capital deficit
January 1, 1997 net income Distributions December 31, 1997
<S> <C> <C> <C> <C>
Stanley Katzman
Joint Venture #1.. $ (65,354) $ 190,998 $ 189,637 $ (63,993)
Stanley Katzman
Joint Venture #2... (65,354) 190,997 189,636 (63,993)
Stanley Katzman
Joint Venture #3... (65,353) 190,997 189,637 (63,993)
Stanley Katzman
Joint Venture #4... (65,354) 190,997 189,636 (63,993)
Peter L. Malkin
Joint Venture #1.. (65,354) 190,997 189,636 (63,993)
Peter L. Malkin
Joint Venture #2... (65,353) 190,997 189,637 (63,993)
Peter L. Malkin
Joint Venture #3
(formerly
Ralph W. Felsten
Joint Venture #1)... (65,354) 190,998 189,637 (63,993)
Peter L. Malkin
Joint Venture #4
(formerly
Ralph W. Felsten
Joint Venture #2)... (65,354) 190,998 189,637 (63,993)
Peter L. Malkin
Joint Venture #5
(formerly
Ralph W. Felsten
Joint Venture #3)... (65,354) 190,998 189,637 (63,993)
Peter L. Malkin
Joint Venture #6
(formerly
Ralph W. Felsten
Joint Venture #4).... (65,353) 190,997 189,637 (63,993)
$(653,537) $1,909,974 $1,896,367 $(639,930)
</TABLE>
See accompanying notes to financial statements.
-21-
EXHIBIT D
250 WEST 57th ST. ASSOCIATES
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998 1997
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................ $ 2,719,635 $ 2,787,347 $ 1,909,974
Adjustments to reconcile net income
to net cash provided by operating
activities:
Amortization.................. 43,520 7,830 7,829
Change in additional rent due
from Fisk Building Associates. (11,835) - -
Change in accrued expenses..... 10,274 (183) (167)
Net cash provided by
operating activities..... 2,761,593 2,794,994 1,917,636
Cash flows from financing activities:
Cash distributions................ (2,756,660) (2,771,636) (1,896,367)
Principal payments on long-term debt. (25,650) (23,358) (21,270)
Proceeds from second mortgage
payable.................... 1,500,000 - -
Payment of mortgage refinancing
costs..................... (89,402) - -
Net cash used in financing
activities.......... (1,371,712) (2,794,994) (1,917,637)
Net change in cash... 1,389,881 - (1)
Cash and cash equivalents,
beginning of year............. 84,124 84,124 84,125
CASH AND CASH EQUIVALENTS,
END OF YEAR.......... $ 1,474,005 $ 84,124 $ 84,124
Supplemental disclosures of cash flow information:
Cash paid for:
Interest................... $ 279,258 $ 265,799 $ 267,888
</TABLE>
Supplemental disclosures of noncash
investing and financing activities:
In 1999 the Company purchased certain building improvements, construction in
progress, totaling $244,960, by means of a financing agreement with the
Lessee.
See accompanying notes to financial statements.
-22-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
1. Business Activity
250 West 57th Street Associates (the "Company") is a joint venture which owns
commercial property situated at 250 West 57th Street, New York, New York,
known as the "Fisk Building". The property is net leased to Fisk Building
Associates (the Lessee").
2. Summary of Significant Accounting Policies
a. Cash and cash equivalents:
Cash and cash equivalents include investments in money market funds and
all highly liquid debt instruments purchased with a maturity of three
months or less.
b. Real Estate and Depreciation:
Land and building:
The basis for building valuation was seventy per cent (70%) of the total
purchase price in 1953 of the land and building, $7,058,117, which
amounts to $4,940,682. The balance of the purchase price, $2,117,435,
was allocated to land cost. The seventy per cent allocation of total
cost to the building was based upon the percentage of assessed valuation
of the building to the total assessed valuation on the land and building
at the time of acquisition.
The building, building improvements and tenants installations and
improvements are fully depreciated.
In 1999 the Company began a building improvements program (see Note 12).
At December 31, 1999 building improvements construction costing $244,960
was in progress. No depreciation has been taken on these assets since
they were not finished or put into service as of December 31, 1999.
c. Mortgage refinancing costs, amortization and related party
transactions:
Mortgage refinancing costs of $41,106 include charges incurred in
connection with the 1996 modification of the first mortgage (see Note
3a); such charges include $17,754 paid to the firm of Wien & Malkin LLP,
a related party. These mortgage refinancing costs are being amortized
ratably over the extended term of the first mortgage, from March 1, 1996
through June 1, 2000.
Mortgage refinancing costs paid in 1999, totaling $89,402, include
charges incurred in connection with the second mortgage (see Note 3b).
Such charges include $17,435 paid to the firm of Wien & Malkin LLP, a
related party. These mortgage refinancing costs are being amortized
ratably over the term of the second mortgage, from September 22, 1999
through June 1, 2000.
-23-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
2. Summary of Significant Accounting Policies (continued)
d. Use of estimates:
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. First Mortgage Payable
a. The first mortgage is held by Apple Bank for Savings and matures
on June 1, 2000, when the principal balance will be $2,777,754. Annual
mortgage charges are $289,157, payable in equal monthly installments,
applied first to interest at the rate of 9.4% per annum and the balance
to principal.
b. Effective September 22, 1999 a second mortgage was placed on the
property with Apple Bank for Savings, in the amount of $1,500,000, to
finance the building improvements program (see Note 12). The mortgage
requires monthly payments of interest only based on the 30-day LIBOR
rate and will mature on June 1, 2000.
The real estate is pledged as collateral for the first and second
mortgages.
4. Related Party Transactions - Rent Income
Rent income earned during the year ended December 31, 1999, 1998 and
1997, totaling $3,356,230, $3,351,221 and $2,396,141, 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 and September 1,
1999) with the Lessee, consisting of the following:
Year ended December 31,
1999 1998 1997
Basic minimum annual rent... $ 341,274 $ 317,157 $ 317,157
Primary overage rent........ 752,000 752,000 752,000
Secondary overage rent...... 2,262,956 2,282,064 1,326,984
$3,356,230 $3,351,221 $2,396,141
-24-
250 WEST 57th ST. ASSOCIATES
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. Upon the further
refinancing of any mortgage with an aggregate principal balance of up to
$12,800,000 (plus refinancing costs in connection therewith), the annual
basic rent will be modified and will be equal to the sum of $28,000 plus
an amount equal to the rate of constant payments for interest and
amortization required annually under any such mortgage immediately
subsequent to refinancing computed on the principal balance of the
mortgage immediately prior to such refinancing;
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 partner in the Company is also a partner in the Lessee.
-25-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
5. Related Party Transactions - Supervisory Services
Fees for supervisory services (including disbursements and cost of
regular accounting services) during the years ended December 31, 1999,
1998 and 1997, totaling $286,296, $287,959 and $190,708, respectively,
were paid to the firm of Wien & Malkin LLP. Some members of that firm
are partners in the Company. Fees for supervisory services are paid
pursuant to an agreement, which amount is based on a rate of return
of investment achieved by the participants of the Company each year.
6. Related Party Transactions - Professional Fees
Professional fees (including disbursements) during the year ended
December 31, 1999, 1998 and 1997, totaling $31,855, $2,469 and $19,909,
respectively, were paid to the firm of Wien & Malkin LLP, a related
party.
7. Number of Participants
There were approximately 550 participants in the various joint ventures
as of December 31, 1999, 1998 and 1997.
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 1999, 1998 and 1997, based on 720 participation units
outstanding during each year, totaled $3,829, $3,850 and $2,634,
respectively. The 1999 distribution of $3,829 consisted of income in
the amount of $3,777 and a return of capital in the amount of $52. The
1998 and 1997 distributions consisted of income only.
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.
26-
250 WEST 57th ST. ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(continued)
10. Concentration of Credit Risk
The Company maintains cash balances in a bank, money market fund (Fidelity
U.S. Treasury Income Portfolio) and in a distribution account held by Wien &
Malkin LLP. The bank balance is insured by the Federal Deposit Insurance
Corporation up to $100,000, and at December 31, 1999 was completely insured.
The cash in the money market fund and the distribution account held by Wien
& Malkin LLP is not insured. The funds held in the distribution account were
paid to the participants on January 1, 2000.
11. Contingencies
Wien & Malkin LLP and Peter L. Malkin, a partner in the Company, are engaged
in a dispute with Helmsley-Spear, Inc., the managing agent of the Fisk
Building, concerning the future management, leasing and supervision of the
property. In this connection, certain legal and professional fees and other
expenses have been paid and incurred and additional costs are expected to be
incurred. The Company's allocable share of such costs cannot as yet be
determined. Accordingly, the Company has not provided for the expense and
related liability with respect to such costs in the accompanying financial
statements.
12. Building Improvements Program
In 1999 the participants of the Company and the Lessee approved a building
improvements program (the "Program") estimated to cost between $7,700,000 and
$10,000,000, and expected to take five years to complete.
The Lessee is currently financing the Program and billing the Company for the
costs incurred. The Company will own the improvements and finance them
through an increase in the fee mortgage.
In September 1999 the Company obtained a second mortgage (Note 3b) in the
amount of $1,500,000 to initiate the financing of the Program. The Company
intends to refinance the first and second mortgages when they mature on June
1, 2000 and obtain additional fee mortgage increases as work progresses. The
increased mortgage charges will be paid by the Company from an equivalent
increase in the basic rent paid by the Lessee to the Company (Note 4).
-27-
250 WEST 57th ST. ASSOCIATES
OMITTED SCHEDULES
The following schedules have been omitted as not applicable in the present
instance:
SCHEDULE I - Condensed financial information of registrant.
SCHEDULE II - Valuation and qualifying accounts.
SCHEDULE IV - Mortgage loans on real estate.
-28-
SCHEDULE III
250 WEST 57th ST. ASSOCIATES
Real Estate and Accumulated Depreciation
December 31, 1999
<TABLE>
<CAPTION>
Column
<S> <C>
A Description Office building and land located at
250-264 West 57th Street, New York,
New York, known as the "Fisk
Building".
B Encumbrances Apple Bank for Savings
Balance at December 31, 1999.............................. $4,289,171
C Initial cost to company
Land...................................................... $2,117,435
Building.................................................. $4,940,682
D Costs capitalized subsequent to acquisition
Improvements.............................................. $ 937,791
Building improvements, construction in progress........... $ 244,960
Carrying costs............................................ $ NONE
E Gross amount at which carried at
close of period
Land...................................................... $2,117,435
Building, Improvements and Improvements in Progress....... 6,123,433
Total..................................................... $8,240,868(a)
F Accumulated depreciation................................... $5,878,473(b)
G Date of construction 1921
H Date acquired September 30, 1953
I Life on which depreciation in latest
income statements is computed Not applicable
</TABLE>
(a) For the year ended December 31, 1999 the Company began a Building
Improvements Program (see Note 12) and incurred building improvements,
construction in progress costs of $244,960, which increased the carrying value
of real estate property to $8,240,868. The carrying value of real estate for
the years ended December 31, 1998 and December 31, 1997 was $7,995,908. The
costs for federal income tax purposes are the same as for financial statement
purposes.
(b) Accumulated depreciation
Balance at January 1, 1997 $5,878,473
Depreciation:
F/Y/E 12/31/97 None
12/31/98 None
12/31/99 None None
Balance at December 31, 1999 $5,878,473
-29-
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
The individual signing this report on behalf of
Registrant is Attorney-in-Fact for Registrant and each of the
Joint Venturers in Registrant, pursuant to a Power of Attorney,
dated March 29, 1996 and May 14, 1998 (collectively, the
"Power").
250 WEST 57TH ST. ASSOCIATES
(Registrant)
By /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: April 14, 2000
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed by the undersigned as
Attorney-in-Fact for each of the Joint Venturers in Registrant,
pursuant to the Power, on behalf of the Registrant and as a Joint
Venturer in Registrant on the date indicated.
By /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: April 14, 2000
________________________
* Mr. Katzman supervises accounting functions for Registrant.
-30-
EXHIBIT INDEX
Number Document Page*
3(a) Registrant's Joint Venture Agreement, dated
May 25, 1953, which was filed as Exhibit No.
3(a) to Registrant's Registration Statement
on Form S-1 (the "Registration Statement"),
is incorporated by reference as an exhibit
hereto.
3(b) Amended Business Certificate of Registrant
filed with the Clerk of New York County on
July 24, 1998 reflecting a change in the
Partners of Registrant which was filed as
Exhibit 3(b) to Registrant's Amended
Quarterly Report on 10-Q for the period ended
September 30, 1998 and is incorporated by
reference as an exhibit hereto.
3(c) Registrant's Memorandum of Agreement among
Joint Venturers in 250 West 57th St.
Associates, dated June 9, 1953, filed as
Exhibit 1 to the Registration Statement, is
incorporated by reference as an exhibit
hereto.
4 Registrant's form of Participation Agreement,
which was filed as Exhibit No. 4(a) to the
Registration Statement, is incorporated by
reference as an exhibit hereto.
10(a) Net Lease between Registrant and Fisk
Building Associates dated September 30, 1957,
which was filed as Exhibit No. 2(d) to the
Registration Statement, is incorporated by
reference as an exhibit hereto.
10(b) Modification of Net Lease dated
November 10, 1961, was filed by letter
dated November 21, 1961 as Exhibit B to
Registrant's Statement of Registration
on Form 8-K for the month of October,
1961, is incorporated by reference as
an exhibit hereto.
_______________________
* Page references are based on a sequential numbering system.
-31-
EXHIBIT INDEX
Number Document Page*
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 February 18,
2000 and supplementary financial reports for
the fiscal year ended December 31, 1999. The
foregoing material shall not be deemed
"filed" with the Commission or otherwise
subject to the liabilities of Section 18 of
the Securities Exchange Act of 1934.
13(b) Letter to Participants dated November 30,
1999 and supplementary financial reports for
the lease year ended September 30, 1999. The
foregoing material shall not be deemed
"filed" with the Commission or otherwise
subject to the liabilities of Section 18 of
the Securities Exchange Act of 1934.
_______________________
* Page references are based on a sequential numbering system.
-32
EXHIBIT INDEX
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.
27 Financial Data Schedule of Registrant for
fiscal year ended December 31, 1999.
_______________________
* Page references are based on a sequential numbering system.
-33
Exhibit 13a
[LETTERHEAD OF WIEN & MALKIN LLP]
February 22, 2000
To Participants in 250 West 57th St. Associates
Federal Identification Number 13-6083380
We enclose the annual report of 250 West 57th St. Associates, the joint
venture which owns the Fisk Building at 250 West 57th Street, New York City,
for the year ended December 31, 1999.
The reported income for 1999 was $2,719,635. This was less than
distributions of $2,756,660 representing the current monthly distributions
totaling $720,000 per annum and the additional distribution of $2,036,660,
which was paid to participants on November 30, 1999. The difference, results
primarily from amortization of mortgage refinancing costs.
Since the inception of this investment, a portion of the distributions
has constituted a return of capital, and has not been reportable as income. As
a result, the book value on December 31, 1999 of an original cash investment of
$10,000 was a deficit balance of $1,837.
Additional rent for the lease year ended September 30, 1999 was
$3,014,956 or an excess of $2,262,956 over advances of $752,000 by the lessee
against additional rent ($720,000 to participants plus $32,000 to Wien & Malkin
LLP). As approved by the participants, Wien & Malkin LLP received $226,296.
The balance of the additional rent of $2,036,660 was distributed to the
participants on November 30, 1999. The additional distribution of $2,036,660
represented an annual return of about 56.6% on the original cash investment of
$3,600,000. Regular monthly distributions are at the rate of 20% per annum on
the cash investment so that total distributions for the year ended December 31,
1999 were about 76.6% on the original cash investment.
The enclosed Schedule K-1 form(s) (Form 1065), containing 1999 tax
information, must be reviewed in detail by your accountant.
If you have any question about the enclosed material, please communicate
with our office.
Please retain this letter and the enclosed Schedule K-1 form(s) for the
preparation of your income tax returns for the year 1999.
Cordially yours,
WIEN & MALKIN LLP
By: Stanley Katzman
SK:jf
Encs.
-34-
[LETTERHEAD OF ROGOFF & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS]
Independent Auditor's Report
To the Participants in
250 West 57th St. Associates (a Partnership):
We have audited the accompanying balance sheet of 250 West 57th St.
Associates as of December 31, 1999, and the related statements of income, of
partners' capital (deficit) and of cash flows for the year then ended. These
financial statements are the responsibility of management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides 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 at December 31, 1999, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
Rogoff & Company, P.C.
New York, New York
January 31, 2000
-35-
250 West 57th St. Associates
Balance Sheet
December 31, 1999
Assets
Cash:
Fleet Bank $ 32,274
Distribution account held by
Wien & Malkin LLP 60,000
Fidelity Money Market Account
(U.S. Treasury Income Portfolio) 1,381,731
1,474,005
Fisk Building, 250 West 57th Street,
New York City:
Land $2,117,435
Building $4,940,682
Less: Accumulated depreciation 4,940,682 -
Building improvements 688,000
Less: Accumulated depreciation 688,000 -
Tenants' installations and
improvements 249,791
Less: Accumulated amortization 249,791 -
Building improvements in progress 244,960 2,362,395
Rent Receivable 11,835
Mortgage refinancing costs 130,508
Less: Accumulated amortization 73,533 56,975
Total Assets $3,905,210
Liabilities and Partners' Capital (Deficit)
Liabilities:
First mortgage $2,789,171
Second mortgage 1,500,000
Accrued interest on mortgages 30,214
Due to Fisk Building Associates 244,960
Accrued expenses 2,109
Total liabilities 4,566,454
Partners' Capital (Deficit), December 31, 1999 ( 661,244)
Total Liabilities and Partners' Capital (Deficit) $3,905,210
The Accompanying Notes are an Integral Part of these Financial Statements.
-36-
250 West 57th St. Associates
Statement of Income
For the Year Ended December 31, 1999
Income:
Basic rent $ 341,274
Additional rent 3,014,956
Dividend income 18,392
Total income 3,374,622
Expenses:
Interest on first mortgage $263,306
Interest on second mortgage 24,117
Supervisory services 286,296
Professional fees 37,748
Total expenses 611,467
Net income before amortization 2,763,155
Amortization of mortgage refinancing costs 43,520
Net income $2,719,635
The Accompanying Notes are an Integral part of these Financial Statements.
-37-
250 West 57th St. Associates
Statement of Partners' Capital (Deficit)
December 31, 1999
Partners' capital (deficit), January 1, 1999 $( 624,219)
Add: Net income for the year ended December 31, 1999 2,719,635
2,095,416
Less: Monthly distributions to participants
January 1, 1999 through
December 31, 1999 $ 720,000
Distribution to participants on
November 30, 1999 of balance of
additional rent for the lease year
ended September 30, 1999 2,036,660 2,756,660
Partners' capital (deficit), December 31, 1999 $( 661,244)
The Accompanying Notes are an Integral part of these Financial Statements.
-38-
250 West 57th St. Associates
Statement of Cash Flows
For the Year Ended December 31, 1999
Cash flows from operating activities:
Net income $2,719,635
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of mortgage refinancing costs 43,520
Rent receivable (11,835)
Mortgage refinancing costs (89,402)
Accrued interest on mortgages 8,165
Due to Fisk Building Associates 244,960
Accrued expenses 2,109
Net cash provided by operating activities 2,917,152
Cash flows from investing activities:
Improvements in progress (244,960)
Cash flows from financing activities:
Proceeds from second mortgage 1,500,000
Principal payments on first mortgage (25,651)
Monthly distributions to participants (720,000)
Distribution on November 30, 1999 of balance
of additional rent for the lease year
ended September 30, 1999 (2,036,660)
Net cash used by financing activities (1,282,311)
Net change in cash 1,389,881 -
Cash at beginning of year 84,124
Cash at end of year $1,474,005
Supplemental Cash Flow Disclosures
Year Ended December 31, 1999
Cash paid during the year for interest $ 279,258
The Accompanying Notes are an Integral part of these Financial Statements.
-39-
250 West 57th St. Associates
Notes to Financial Statements
December 31, 1999
1. Business Activity
250 West 57th St. Associates ("Associates") is a joint venture which owns an
office building located in New York City. The building is net leased to Fisk
Building Associates.
2. Significant Accounting Policies
Basis of Presentation
The financial statements have been prepared on the accrual basis of
accounting.
Depreciation
Depreciation of the cost of the building was computed by the straight-line
method over estimated useful life of 30 years through September 30, 1983.
The cost of the building improvements was depreciated by the straight-line
method over various periods from date of completion of improvement through
September 30, 1983.
The cost of tenants' installations and improvements was amortized by the
straight-line method over the terms of the leases.
Amortization
Capitalized mortgages refinancing costs of $130,508 are being charged to
expense ratably during the period of the mortgage through June 1, 2000.
Use of Estimates
Preparing financial statements in conformity with generally accepted
accounting principles requires management to make 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 reportedamounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
3. Lease and Related Party Transactions
(a) Effective May 1, 1975, the lease between 250 West 57th St. Associates,
as lessor, and Fisk Building Associates, as lessee, provides for basic rent
equal to mortgage principal and interest payments plus $28,000 payable to
Wien & Malkin LLP for supervisory services.
(b) The lease modification dated September 1, 1999 provides that, upon any
further refinancing of mortgages with an aggregate principal balance up to
$12,800,000 (plus refinancing costs in connection therewith), the basic rent
will be modified and will be equal to the sum of $28,000, plus an amount
equal to the rate of constant payments for interest and amortization (not
including any balloon principal payment due at maturity) required annually
under any such mortgages immediately subsequent to refinancing; provided,
however, that the refinanced mortgages must be made by an institutional
lender on a nonrecourse basis and the proceeds of any increase in the
principal amount thereof must be used in connection with the premises.
-40-
250 West 57th St. Associates
Notes to Financial Statements
December 31, 1999
3. Lease - (continued)
(c) In accordance with a lease modification, effective October 1, 1984,
primary additional rent is equal to the lesser of $752,000 per annum or the
net operating profit of the property, as defined, after deduction of basic
rent. If the full primary additional rent of $752,000 is paid, it will equal
20% of the original $3,600,000 cash investment plus $32,000 payable to Wien &
Malkin LLP for supervisory services. Advances against primary additional
rent are paid by the lessee based on the net operating profit of the property
for the prior year to a maximum amount of $752,000. Primary additional rent
for the lease year ended September 30, 1999 was $752,000. Advances against
primary additional rent of $752,000 per annum for the lease year ending
September 30, 2000 are being paid. No other additional rent is accrued by
Associates for the period between the end of the lessee's lease year ending
September 30th and the end of Associate's fiscal year ending December 31st.
Secondary additional rent is equal to 50% of the net operating profit of the
property after payment of basic rent and primary additional rent for lease
years ending September 30. Secondary additional rent for the lease year
ended September 30, 1999 was $3,014,956.
(d) The lessee has exercised its option to renew the lease for a period of
25 years, from October 1, 1978 through September 30, 2003. The lease
modification, effective October 1, 1984, provides for an additional renewal
term of 25 years from October 1, 2003 through September 30, 2028; the
holders of more than 80% of the participations in 250 West 57th St.
Associates have consented to the granting of options to the lessee to extend
the lease for three additional 25-year renewal terms. There is no change in
the terms of the lease during the renewal periods.
(e) Some partners in Fisk Building Associates are also partners in
Associates.
4. Supervisory Services and Related Party Transactions
Payments for supervisory services, including disbursements and cost of
accounting services, are made to the firm of Wien & Malkin LLP. Some
partners in that firm are also partners in Associates.
5. Professional Fees and Related Party Transactions
Payments for professional fees, including disbursements, are made to the firm
of Wien & Malkin LLP. Some members of that firm are partners in Associates.
6. First Mortgage
(a) Effective March 1, 1995, a new first mortgage was placed on the property
with the Apple Bank for Savings in the amount of $2,890,758. Annual mortgage
charges are $289,157, payable in equal monthly installments, applied first to
interest at the rate of 9.40% per annum and the balance to principal. The
mortgage will mature on June 1, 2000, with a balance of $2,777,754.
-41-
250 West 57th St. Associates
Notes to Financial Statements
December 31, 1999
6. First Mortgage - (continued)
(b) Prepayment privileges: The mortgage is not prepayable until March 1,
1998. Thereafter, a 3% penalty will be imposed through February 28, 1999
and a 2% penalty will be imposed until March 2, 2000. There will be no
prepayment penalty if the mortgage is paid in full during the last 90 days
of the term of the mortgage.
7. Second Mortgage
Effective September 22, 1999, a new second mortgage was placed on the
property with Apple Bank for Savings in the amount of $1,500,000.
Monthly payments of interest only are being made at the thirty day
LIBOR rate. The mortgage will mature on June 1, 2000.
8. Income Taxes
Net income is computed without regard to income tax expense, since the
partnership does not pay a tax on its income; instead, any such taxes are
paid by the participants in their individual capacities.
9. Concentration of Credit Risk
Associates maintains cash balances in a bank, in a money market fund, and in
a distribution account held by Wien & Malkin LLP. The bank balance is
insured by the Federal Deposit Insurance Corporation up to $100,000, and at
December 31, 1999 was completely insured. 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, 2000. The money market account
is not insured.
10.Contingencies
Wien & Malkin LLP and Peter L. Malkin are engaged in a dispute with Helmsley-
Spear, Inc. concerning the management, leasing and supervision of the
property. In this connection, certain legal and professional fees and other
expenses have been paid and incurred and additional costs are expected to be
incurred. The Partnership's allocable share of such costs is as yet
undetermined. Accordingly, the Partnership has not provided for the expense
and related liability with respect to such costs in the attached financial
statements.
-42-
Exhibit 13 b
[LETTERHEAD OF WIEN & MALKIN LLP]
November 30, 1999
TO PARTICIPANTS IN 250 WEST 57TH ST. ASSOCIATES:
We enclose the operating report of the lessee, Fisk Building
Associates, for the fiscal year of the lease ended September 30,
1999. The lessee reported profit of $5,277,912 subject to addi-
tional rent for the lease year ended September 30, 1999, as
against profit of $5,316,127 for the lease year ended September
30, 1998.
Additional rent for the lease year ended September 30, 1999
was $3,014,956; $752,000 was advanced against additional rent so
that the balance of additional rent is $2,262,956.
Wien & Malkin LLP receives an additional payment for
supervisory services of 10% of distributions in excess of 15% per
annum on the cash investment. Accordingly, Wien & Malkin LLP
received $226,296 of the additional rent and the balance of
$2,036,660 is being distributed to the participants. A check for
your share of the additional distribution and the computation of
the additional payment to Wien & Malkin LLP and distribution are
enclosed.
The additional distribution of $2,036,660 represents a return
of about 56.6% on the cash investment of $3,600,000. Regular
monthly distributions are at the rate of 20% a year, so that dis-
tributions for the lease year ended September 30, 1999 were about
76.6% per annum.
If you have any question about the enclosed material please
communicate with the undersigned.
Cordially yours,
WIEN & MALKIN LLP
By: Stanley Katzman
SK/fm
Encs.
-43-
250 West 57th St. Associates
Computation of Additional Payment for
Supervisory Services and Distribution
For the Lease Year Ended September 30, 1999
Secondary additional rent $2,282,064
Primary additional rent for the lease
year ended September 30, 1999 752,000
3,014,956
Less, additional basic payment of Wien &
Malkin LLP from primary overage rent 12,000
Total rent to be distributed 3,002,956
15% return on $3,600,000 investment 540,000
Subject to additional payment at 10%
to Wien & Malkin LLP $2,462,956
Additional payment at 10% $ 246,296
Paid to Wien & Malkin LLP as
advances for additional rent 20,000
Balance of additional payment to
Wien & Malkin LLP $ 226,296
Summary:
Additional distribution to participants $2,036,660
Payment to Wien & Malkin LLP, as above 226,296
Total secondary additional rent available
for distribution to participants and
payment to Wien & Malkin LLP $2,262,956
-44-
[LETTERHEAD OF ROGOFF & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS]
Fisk Building Associates
60 East 42nd Street
New York, New York 10165
Gentlemen:
In accordance with our engagement, we have compiled the special-purpose
statement of income and expense of Fisk Building Associates for the lease year
ended September 30, 1999.
Our engagement included the examination of statements of receipts and
disbursements for the property, together with supporting records, but did not
include the verification by direct communication of the income from tenants or
liabilities and disbursements to vendors.
We have no knowledge of any other contingent liabilities that should
be disclosed.
Based on our compilation, subject to the above, the accompanying
special-purpose statement of income and expense presents fairly the net
operating income, as defined, for the computation of additional rent, of Fisk
Building Associates, for the lease year ended September 30, 1999.
Rogoff & Company P.C.
New York, New York
October 20, 1999
-45-
Fisk Building Associates
Statement of Income and Expense
October 1, 1998 through September 30, 1999
Income:
Rent income $10,623,133
Escalation income 683,653
Electric income, net 759,838
Other income 41,750
Total Income 12,108,374
Expenses:
Real estate taxes $1,799,424
Labor costs 1,885,147
Repairs, supplies and improvements 1,346,455
Management and leasing 579,578
Fuel oil 52,258
Professional fees 216,595
Security 236,663
Security monitor system 82,183
Water 86,600
Insurance 33,704
Rubbish removal 51,074
Telephone 24,326
Advertising 106,403
Miscellaneous 12,895
Total expenses before rent expense 6,513,305
Net income before rent expense 5,595,069
Less, Basic rent expense 317,157
Net income subject to primary and
secondary additional rent 5,277,912
Less, Primary additional rent 752,000
Net income subject to secondary
additional rent $ 4,525,912
Secondary additional rent at 50% $ 2,262,956
Computation of Additional Rent due Landlord:
Primary additional rent $ 752,000
Secondary additional rent 2,262,956
Total Additional Rent 3,014,956
Less, Advances against additional rent 752,000
Additional rent due landlord $ 2,262,956
The accompanying letter of transmittal and notes are an integral part
of this statement.
-46-
Fisk Building Associates
Notes to Financial Statement
Note 1 - The lease as modified effective October 1, 1984 provides for
additional rent, as follows:
Additional rent equal to the first $752,000 of the Lessee's net
operating income, as defined, in each lease year.
Further additional rent equal to 50% of the Lessee's remaining
net operating income, as defined, in each lease year.
-47-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Balance Sheet as of December 31, 1999 and the Statement Of Income
for the year ended December 31, 1999, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,474,005
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,485,840
<PP&E> 8,240,868
<DEPRECIATION> 3,905,210
<TOTAL-ASSETS> 3,905,210<F1>
<CURRENT-LIABILITIES> 4,566,454<F2>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (661,244)<F3>
<TOTAL-LIABILITY-AND-EQUITY> 3,905,210<F4>
<SALES> 3,356,230<F5>
<TOTAL-REVENUES> 3,374,622
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 367,564
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 287,423
<INCOME-PRETAX> 2,719,635
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,719,635
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,719,635
<EPS-BASIC> 3,777<F7>
<EPS-DILUTED> 3,777<F7>
<FN>
<F1>Includes unamortized mortgage costs
<F2>Accrued interest on mortgage and mortgage principal payment due
within one year
<F3>Partnership capital
<F4>Includes long-term debt
<F5>Rental income
<F6>Supervisory services, amortization of mortgage refinance costs and
Professional fees
<F7>Earnings per $5,000 participation unit, based on 720 participation units
outstanding during the period.
-49-
</TABLE>
