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, 1996
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 0-827
EMPIRE STATE BUILDING ASSOCIATES
(Exact name of registrant as specified in its charter)
New York 13-6084254
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:
$33,000,000 of Participations in Partnership 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 33 through 34 of this report.
Number of pages (including exhibits) in this filing: 36<PAGE>
PART I
Item 1. Business.
(a) General
Registrant is a partnership which was organized on July
11, 1961. Registrant holds the tenant's interest in a master
operating leasehold of the Empire State Building (the "Building")
and of the land thereunder, located at 350 Fifth Avenue, New York,
New York (collectively, the "Property"). The fee owner of the
Property is Trump Empire State Partners.
The master lease (the "Lease"), which commenced on
December 27, 1961, currently expires on January 5, 2013. The
Lease contains three 21-year renewal options, which have not been
exercised. If all of the options are exercised, the Lease will
expire on January 5, 2076. Registrant previously exercised an
option to renew the Lease for the term ending January 5, 2013.
Registrant does not operate the Property. It subleases
the Building to Empire State Building Company (the "Sublessee")
pursuant to a net operating sublease (the "Sublease") with a term
and renewal options essentially coextensive with those contained
in the Lease. On January 30, 1989, Sublessee exercised its option
to renew the Sublease for the first renewal term from January 4,
1992 to January 4, 2013.
Registrant's partners are Stanley Katzman, John L. Loehr
and Peter L. Malkin (individually, a "Partner" and, collectively,
the "Partners") each of whom also acts as an agent for holders of
participations in their respective partnership interests in
Registrant (each holder of a participation, individually, a
"Participant" and, collectively, the "Participants").
Sublessee is a partnership in which Peter L. Malkin is a
partner. The Partners in Registrant are also members of the law
firm of Wien & Malkin LLP, 60 East 42nd Street, New York, New
York, counsel to Registrant and to Sublessee (the "Counsel"). See
Items 10, 11, 12 and 13 hereof for a description of the ongoing
services rendered by, and compensation paid to, Counsel and for a
discussion of certain relationships which may pose potential
conflicts of interest among Registrant, Sublessee and certain of
their respective affiliates.
As of December 31, 1996, the Building was 87% occupied
by approximately 730 tenants who engage in various businesses,
including the practice of law and accounting, ladies' and men's
apparel, and ladies' and men's shoes. Registrant does not
maintain a full-time staff. See Item 2 hereof for additional
information concerning the Property.
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(b) The Lease and Sublease
The annual rent payable by Registrant under the Lease is
$1,970,000 from January 5, 1992 through January 5, 2013 and
$1,723,750 annually during the term of each renewal period
thereafter.
Sublessee is required to pay annual basic rent (the
"Basic Rent") equal to $6,018,750 from January 5, 1992 through
January 4, 2013, and $5,895,625 from January 5, 2013 through the
expiration of all renewal terms. Sublessee is also required to
pay overage rent (the "Overage Rent") equal to 50% of its net
operating profit in excess of $1,000,000 in any year.
Overage Rent income is recognized when earned from the
Sublessee, at the close of the year ending December 31; such
income is not determinable until the Sublessee, pursuant to the
Sublease, renders to Registrant a certified report on the
Sublessee's operation of the Property. The Sublease requires that
this report be delivered to Registrant annually within 60 days
after the end of each such fiscal year. Accordingly, all Overage
Rent income and certain supervisory services expense are reflected
in the fourth quarter of each year. The Sublease does not provide
for the Sublessee to render interim reports to Registrant. See
Note 3 of Notes to Financial Statements filed under Item 8 hereof
(the "Notes") regarding Overage Rent payments by Sublessee for the
fiscal years ended December 31, 1996, 1995 and 1994. There was no
Overage Rent paid for the year ended December 31, 1996.
(c) Competition
Pursuant to tenant space leases at the Building, the
average annual base rental payable to Sublessee is approximately
$29 per square foot (exclusive of electricity charges and
escalation) which is at market level as compared to the average
rental rates charged by office buildings offering comparable space
in the immediate vicinity. This is primarily due to a demand for
office space in a building which is considered to have a unique
reputation and a prime location in midtown Manhattan. The
Building is the only major office building in the Fifth Avenue
area between 23rd and 34th Streets. Registrant has been advised
that the average rental rate is approximately $23.50 per square
foot at both 358 Fifth Avenue and 362 Fifth Avenue, which are
neighboring office buildings (containing 12 and 14 stories,
respectively) containing upgraded standard installations, but
lacking comparable views and window space. The average rental
rate at 3 Park Avenue, which contains approximately 35 stories and
is only fifteen years old, is approximately $28.50 per square
foot, and the average rental rate at 1350 Broadway, which contains
37 stories, is approximately $22 per square foot. Most of these
buildings are about the same age as the Building.
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In the overall rental market for commercial space in
Manhattan, rents range from approximately $50 per square foot for
prime office space to approximately $12 per square foot in less
developed industrial and/or secondary commercial areas.
Accordingly, rents at the Building may be considered competitive
for prime office space in midtown Manhattan, given the relative
condition of surrounding buildings and the nature of services,
amenities and office space offered by them as compared to the
Building.
(d) Tenant Leases
Sublessee 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 lease.
Item 2. Property.
Registrant owns the master leasehold on the Building
known as the Empire State Building and on the land thereunder
located at 350 Fifth Avenue in New York City. See Item 1 hereof.
The Building, erected in 1931 and containing 102 stories, a
concourse and a lower lobby, occupies the entire blockfront from
33rd Street to 34th Street on Fifth Avenue. The Building has 72
passenger elevators and 4 freight elevators and is equipped with
air conditioning and individual air handling units. The Building
is subleased to Sublessee under the Sublease which expires on
January 4, 2013 and contains three 21-year renewal options. See
Item 1 hereof for a description of the terms of the Lease and
Sublease.
Item 3. Legal Proceedings.
The Property of Registrant is the subject of the
following pending litigation:
Studley v. Empire State Building Associates: This
action was filed in October 1991, in New York Supreme Court.
Plaintiff holds a $20,000 original participation in Associates.
The defendants are the partner Agents of Associates and Wien,
Malkin & Bettex (now Wien & Malkin LLP). Plaintiff has claimed
that defendants have committed breaches of fiduciary duty in
connection with a solicitation of consents of participants in
Associates in September, 1991, and in respect to other matters
affecting Associates. Motions by plaintiff and defendants for
summary judgment are pending.
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Proceedings Involving Trump Empire State Partners: In
December 1994, Associates received a notice of default from Trump
Empire State Partners ("Trump"). The Trump default notice to
Associates claims that Associates is in violation of its master
lease because of extensive work which Company has undertaken as
part of an improvement program that commenced before Trump
reportedly acquired its interest in the property in 1994. Trump's
notice also complains that the building is in need of repairs. On
February 14, 1995, Associates and Company filed an action in New
York State Supreme Court against Trump and a related entity for a
declaratory judgment that none of the matters set forth in the
notice of default constitutes a violation of the master lease or
sublease, and that the notice of default is entirely without
merit. Associates' and Company's suit also seeks an injunction to
prevent Trump from implementing the notice of default. On March
24, 1995, the Court granted Associates a preliminary injunction
against Trump. The injunction prohibits Trump from acting on its
notice of default to Associates, at any time, pending the
prosecution of claims by Associates and Company for a final
declaratory judgment and an injunction and other relief against
the Trump defendants.
On February 15, 1995, Trump filed an action against
Associates, Company, Counsel, Harry B. Helmsley, Helmsley-Spear,
Inc., and the Agents for Associates in New York Supreme Court,
alleging that the notice of default is valid and seeking damages
and related relief based thereon. On October 24, 1996, the Court
dismissed all of Trump's claims in their entirety against all
defendants in the action. Trump has appealed this dismissal.
In May 1995, Associates and Company filed a separate
legal action against Trump and various affiliated persons for
breach of the Master Lease and Sublease and for disparagement of
the Property in violation of Associates' and Company's leasehold
rights. The action was amended to include additional claims by
Associates and Company seeking a declaratory judgment that they
may act as an owner of the Property for purposes of making
applications and related activities pursuant to the New York City
Building Code. By decision and order dated October 24, 1996, the
Court sustained Associates' and Company's claims concerning the
parties who may act as owner of the property under the Building
Code. The Court directed that the remaining claims should proceed
to trial. At the same time, the Court dismissed Associates' and
Company's claims against Trump and co-defendants for money
damages. Associates and Company have taken an appeal from that
portion of the Court's order dismissing their claims for money
damages.
Item 4. Submission of Matters to a Vote of Participants.
During the fourth quarter of the fiscal year ended
December 31, 1996, Registrant did not submit any matter to a vote
by the Participants through the solicitation of proxies or
otherwise.
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PART II
Item 5. Market for Registrant's Common Equity
and Related Security Holder Matters.
Registrant is a partnership organized pursuant to a
partnership agreement dated as of July 11, 1961.
Registrant has not issued any common stock. The securi-
ties registered by it under the Securities Exchange Act of 1934,
as amended, consist of participations in the partnership interests
of the Partners in Registrant (the "Participations") and are not
shares of common stock nor their equivalent. The Participations
represent each Participant's fractional share in a Partner's
undivided interest in Registrant and are divided approximately
equally among the Partners. A full unit of the Participations was
offered originally at a purchase price of $10,000; fractional
units were also offered at proportionate purchase prices.
Registrant has not repurchased Participations in the past and is
not likely to change that 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. During the past year
there were 202 transfers. In 27 instances, the indicated purchase
price was equal to 1.5 times the face amount of the participation
transferred, i.e., $15,000 for a $10,000 participation. In two
instances, the indicated purchase price was equal to two times the
face amount of the Participation transferred. In one instance,
the purchase price was equal to 1.7 times the face amount of the
participation transferred. In one instance, the purchase price
was equal to 1.335 times the face amount of the participation
transferred. In all other cases, no consideration was indicated.
(b) As of December 31, 1996, there were 2,641 holders
of Participations of record.
(c) Registrant does not pay dividends. During the year
ended December 31, 1996, Registrant made regular monthly
distributions of $98.21 for each $10,000 Participation. There was
no Overage Rent payable for the year ended December 31, 1996. See
Item 1 hereof. There are no restrictions on Registrant's present
or future ability to make distributions; however, the amount of
such distributions, particularly distributions of Overage Rent,
depends solely on Sublessee's ability to make payments of Basic
Rent and Overage Rent to Registrant. See Item 1 hereof.
Registrant expects to make distributions in the future so long as
it receives the payments provided for under the Sublease. See
Item 7 hereof.
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Item 6.
EMPIRE STATE BUILDING ASSOCIATES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Basic rent income........ $6,018,750 $6,018,750 $6,018,750 $ 6,018,750 $ 6,018,750
Overage rent income...... 0 0 3,597,887 7,712,818 13,003,357
Dividend income.......... 8,647 35,556 39,667 60,657 118,082
Total revenues........ $6,027,397 6,054,306 $9,656,304 $13,792,225 $19,140,189
Net income................ $3,689,511 $3,716,420 $7,100,005 $10,987,930 $15,996,866
Earnings per $10,000
participation unit,
based on 3,300
participation units
outstanding during
the year................. $ 1,118 $ 1,126 $ 2,152 $ 3,330 $ 4,848
Total assets.............. $3,727,494 $3,927,316 $7,527,783 $11,620,333 $16,858,766
Long-term obligations..... $ -0- $ -0- $ -0- $ -0- $ -0-
Distributions per $10,000
participation unit, based
on 3,300 participation
units outstanding
during the year:
Income................. $ 1,118 $ 1,126 $ 2,152 $ 3,330 $ 4,848
Return of capital...... 61 1,089 1,241 1,586 935
Total distributions.... $ 1,179 $ 2,215 $ 3,393 $ 4,916 $ 5,783
</TABLE>
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Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Registrant was organized solely for the purposes of
owning the Property described in Item 2 hereof subject to the
Sublease. Registrant is required to pay from Basic Rent the
amounts due for supervisory services and to distribute the balance
of such rental payments to Participants. Pursuant to the
Sublease, Sublessee has assumed sole responsibility for the
condition, operation, repair, maintenance and management of the
Building. Registrant need not maintain substantial reserves or
otherwise maintain liquid assets to defray any operating expenses
of the Property.
The supervisory services provided to Registrant by
Counsel include legal, administrative services and financial
services. The legal and administrative services include acting as
general counsel to Registrant, maintaining all of its partnership
records, performing physical inspections of the Building,
reviewing insurance coverage and conducting annual partnership
meetings. Financial services include monthly receipt of rent from
the Sublessee, payment of monthly rent to the fee owner, 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 Sublessee and financial statements
audited by and tax information prepared by Registrants'
independent certified public accountant, and distribution of such
materials to the Participants. Counsel also prepares quarterly,
annual and other periodic filings with the Securities and Exchange
Commission and applicable state authorities and distributes to the
Participants quarterly source of distribution reports.
Registrant's results of operations are affected
primarily by the amount of rent payable to it under the Sublease.
The amount of Overage Rent payable to Registrant is affected by
(i) the cycles in the New York City economy and real estate rental
market and (ii) the cost of the Property improvement program
described herein under Other Information. It is anticipated that
the improvement program will negatively impact Overage Rent in
1997. It is difficult for management to forecast whether the New
York City real estate market will improve or deteriorate over the
next few years.
A decrease as compared with a prior year or the absence
of Overage Rent results in a reduction as against such prior year
in the dollar amount of distributions made to the Participants and
a reduction in the expenditure for supervisory services.
Reductions in the amount of Overage Rent paid to Registrant in the
future will not have any other impact on Registrant. See
paragraph 1 of Item 7 hereof and Notes 3, 4, 5, and 7 of the
Notes.
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The following summarizes the material factors affecting
Registrant's results of operations for the three preceding years:
(a) Total income decreased for the year ended December 31, 1996
as compared with the year ended December 31, 1995 because of
the reduction in dividend income earned. Total income
decreased for the year ended December 31, 1995 as compared
with the year ended December 31, 1994 primarily because no
Overage Rent was received by Registrant for the year 1995.
See Note 3 of the Notes.
(b) Total expenses were the same for the years ended December 31,
1996 and December 31, 1995. Total expenses decreased for the
year ended December 31, 1995 as compared with the year ended
December 31, 1994. Such decrease resulted from a decrease in
the additional payment for supervisory services payable to
Counsel by reason of the fact that no Overage Rent was
received by Registrant for the year ended December 31, 1995.
See Notes 3 and 5 of the Notes.
The State of New York has asserted utility tax
deficiencies through December 31, 1992 in connection with water,
steam and non-metered electricity rent inclusion charges to
tenants, plus estimated accrued interest of $797,713. The Supreme
Court, New York County, granted summary judgment in favor of the
State, holding that the State utility tax applies to such rent
inclusion charges. The ruling was affirmed by the Appellate
Division. Sublessee sought permission to appeal the Appellate
Division's decision and order to the Court of Appeals. The Court
of Appeals denied Sublessee's motion. In May, 1996, Sublessee
entered into a settlement agreement with the State. Pursuant to
the terms of the settlement agreement, Sublessee agreed to pay the
State's assessed tax in the sum of $979,109, plus interest of
approximately $605,000 through July 31, 1996. The State has
tentatively agreed to payment of the aforesaid liability over a
period of four years, commencing August, 1996, in equal monthly
installments of $40,000, including interest on the unpaid balance
at the statutory rate. Installment payments to the State of
$40,000 per month have been made by Sublessee commencing on August
1, 1996. It is anticipated that New York State will seek to
impose liability on Sublessee for State utility tax for periods
after December 31, 1992. The amount of such additional tax has
yet to be determined.
The City of New York has asserted a utility tax
deficiency in the amount of $277,125 against Sublessee, through
December 31, 1994, in connection with water, steam and non-metered
electricity rent inclusion charges to tenants, plus accrued
interest of approximately $90,000 through December 31, 1996.
Sublessee is contesting the calculation of the City's proposed
utility tax deficiency before the New York City Tax Appeals
Tribunal. The final outcome of Sublessee's appeal cannot
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presently be determined. It is anticipated that New York City
will seek to impose liability on Sublessee for additional New York
City utility tax for periods after December 31, 1994. The amount
of such additional tax has yet to be determined.
Liquidity and Capital Resources
There has been no significant change in Registrant's
liquidity or capital resources for the fiscal year ended December
31, 1996 as compared with the fiscal year ended December 31, 1995.
Inflation
Inflationary trends in the economy do not directly
impact Registrant's operations. As noted above, Registrant does
not actively engage in the operation of the Property. Inflation
may impact the operations of the Sublessee. The Sublessee is
required to pay the Basic Rent regardless of the results of its
operations. Inflation and other operating factors affect only the
amount of Overage Rent payable by the Sublessee, which is based on
the Sublessee's net operating profit.
Other Information
The Sublessee maintains the Building as a high-class
office building as required by the terms of the Sublease.
In 1990, the Sublessee commenced its latest improvement
program which is estimated to be completed in 1997 at a total cost
in excess of $60,000,000. Under this program, approximately 6,400
windows are being replaced and this portion of the program is
completed. In addition, the elevators have been upgraded through
installation of a computerized control system and the replacement
of all electrical and mechanical equipment. The elevator
modernization program has increased elevator speed from 800 to 950
feet per minute to 1200 feet per minute. Also included is water-
proofing the Building's exterior, resetting and repairing the
limestone facade, upgrading the Building's security system,
upgrading and replacing the Building's fire safety system and
making substantial further improvement to the air-conditioning,
domestic pump and water systems, waterproofing the mooring mast
and installing a new observation ticket office.
The Sublessee anticipates that the costs of improvements
to be incurred will result in a reduction in Overage Rent during
1997, but should have no effect on the payment of Basic Rent in
that year.
Under Sublessee's management, the Building recently won
three awards from the Building Owners and Management Association
("BOMA") (BOMA/NY Award 1989; BOMA Middle Atlantic Region Award
1990/91 and the BOMA International Award for excellence 1992/93).
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The New York Landmarks Conservancy recently awarded a Merit
Citation to the Building. In 1994, Metaloptics recognized the
Building for excellence in lighting efficiency. In December 1994,
Energy User News, a national publication, awarded a Certificate of
Merit in the lighting category for excellence and innovation in
energy efficiency and management of the Building.
Item 8. Financial Statements and Supplementary Data.
The financial statements, together with the accompanying
report by, and the consent to the use thereof by Jacobs Evall &
Blumenfeld LLP, immediately following, are being filed in response
to this item.
Item 9. Disagreements on Accounting and Financial Disclosure.
Not applicable.
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PART III
Item 10. Directors and Executive Officers of Registrant.
Registrant has no directors or officers or any other
centralization of management. There is no specific term of office
for any Partner. The table below sets forth as to each Partner as
of December 31, 1996 the following: name, age, nature of any
family relationship with any other Partner, 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
Partner:
Principal Date
Nature of Occupation Individual
Family Business and became
Name Age Relationship Experience Employment Partner
Stanley Katzman 64 None Attorney-at-Law Senior Partner 1996
Wien & Malkin
LLP,
Counsellors-
at-Law
John L. Loehr 60 None Attorney-at-Law Senior Partner 1996
Wien & Malkin
LLP,
Counsellors-
at-Law
Peter L. Malkin 63 None Attorney-at-Law Senior Partner 1961
Wien & Malkin
LLP,
Counsellors-
at-Law
As stated above, the Partners are members of Counsel.
See Items 1, 11, 12 and 13 hereof for a description of the
services rendered by, and the compensation paid to, Counsel and
for a discussion of certain relationships which may pose actual or
potential conflicts of interest among Registrant, Sublessee 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 Partners are either a director, joint
venturer or general partner are as follows:
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Stanley Katzman is a joint venturer in 250 West 57th St.
Associates and Navarre-500 Building Associates; and a
general partner in Garment Capitol Associates and 60
East 42nd St. Associates.
John L. Loehr is a general partner in Garment Capitol
Associates and 60 East 42nd St. Associates.
Peter L. Malkin is a joint venturer in 250 West 57th St.
Associates and Navarre-500 Building Associates and a
general partner in Garment Capitol Associates and 60
East 42nd St. Associates.
Item 11. Executive Compensation.
As stated in Item 10 hereof, Registrant has no directors
or officers or any other centralization of management.
No remuneration was paid during the current fiscal year
ended December 31, 1996 by Registrant to any of the Partners as
such. Registrant pays Counsel, for supervisory services and dis-
bursements, fees of $100,000 per annum plus 6% of all sums
distributed to the Participants in excess of 9% per annum on their
original cash investment. Pursuant to such arrangements described
herein, Registrant incurred fees to Counsel of $159,417 for
supervisory services rendered during the fiscal year ended
December 31, 1996. The supervisory services include, among other
items, the preparation of reports and related documentation
required by the Securities and Exchange Commission, the monitoring
of all areas of federal and local securities law compliance, the
preparation of certain financial reports, as well as the
supervision of accounting and other documentation related to the
administration of Registrant's business. See Item 7 hereof. Out
of its fees, Counsel paid all disbursements and costs of regular
accounting services. As noted in Items 1 and 10 of this report,
the Partners are also members of Counsel.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
(a) Registrant has no voting securities. See Item
5 hereof. At December 31, 1996, no person owned of record or was
known by Registrant to own beneficially more than 5% of the
outstanding Participations.
(b) At December 31, 1996, the Partners (see Item
10 hereof) beneficially owned, directly or indirectly, the
following Participations:
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Name & Address Amount of
of Beneficial Beneficial Percent
Title of Class Owners Ownership of Class
Participations John L. Loehr $40,000 .1212%
in Partnership 286 Alpine Circle
Interests Rivervale, NJ 07675
Peter L. Malkin $146,250 .4432%
21 Bobolink Lane
Greenwich, CT 06830
At such date, certain of the Partners (or their
respective spouses) held additional Participations as follows:
Stanley Katzman owned of record as trustee but not
beneficially $25,000 pf Participations. Mr. Katzman
disclaims any beneficial ownership of such
Participations.
Peter L. Malkin owned of record as trustee or
co-trustee but not beneficially, $170,000 of
Participations. Mr. Malkin disclaims any beneficial
ownership of such Participations.
Isabel W. Malkin, the wife of Peter L. Malkin,
owned of record and beneficially, $153,333.34 of
Participations. Mr. Malkin disclaims any beneficial
ownership of such Participations.
(c) Not applicable.
Item 13. Certain Relationships and Related Transactions.
(a) As stated in Item 1 hereof, Mr. Stanley
Katzman, Mr. John L. Loehr and Mr. Peter L. Malkin are the three
Partners of Registrant and also act as agents for the Participants
in their respective partnership interests. Mr. Malkin is also a
partner in Sublessee. As a consequence of one of the three
Partners being a partner in Sublessee and all three Partners being
members of Counsel (which represents Registrant and Sublessee),
certain actual and 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 Partners act as agents for the
Participants, certain transactions require the prior consent from
Participants owning a specified interest under the agreement in
order for the agents to act on their behalf. Such transactions
include modifications and extensions of the Sublease, or a sale or
other disposition of the Property or substantially all of
Registrant's other assets.
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Reference is made to Items 1 and 2 hereof for a
description of the terms of the Sublease between Registrant and
Sublessee. The respective interests of the Partners in Registrant
and in the Sublease arise solely from ownership of their respec-
tive participations in Registrant and, in the case of Mr. Malkin,
his ownership of a partnership interest in Sublessee. The
Partners receive no extra or special benefit not shared on a pro
rata basis with all other security holders of Registrant or
partners in Sublessee. However, each of the Partners, by reason
of his respective interest in Counsel, is entitled to receive his
pro rata share of any legal fees or other remuneration paid to
Counsel for professional services rendered to Registrant and
Sublessee. See Item 11 hereof for a description of the
remuneration arrangements between Registrant and Counsel relating
to supervisory services provided by Counsel.
Reference is also made to Items 1 and 10 hereof for
a description of the relationship between Registrant and Counsel,
of which the Partners are among its members. The interest of each
Partner in any remuneration paid or given by Registrant to Counsel
arise solely from the ownership of such Partner's interest in
Counsel. See Item 11 hereof for a description of the remuneration
arrangements between Registrant and Counsel relating to
supervisory services provided by Counsel.
(b) Reference is made to Paragraph (a) above.
(c) Not applicable.
(d) Not applicable.
-14-<PAGE>
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.
(a)(1) Financial Statements:
Consent of Jacobs Evall & Blumenfeld LLP, Certified
Public Accountants, dated April 10, 1997.
Accountant's Report of Jacobs Evall & Blumenfeld LLP,
Certified Public Accountants, dated April 9, 1997.
Balance Sheets at December 31, 1996 and at December 31,
1995 (Exhibit A).
Statements of Income for the fiscal years ended December
31, 1996, 1995 and 1994 (Exhibit B).
Statement of Partners' Capital for the fiscal year ended
December 31, 1996 (Exhibit C-1).
Statement of Partners' Capital for the fiscal year ended
December 31, 1995 (Exhibit C-2).
Statement of Partners' Capital for the fiscal year ended
December 31, 1994 (Exhibit C-3).
Statements of Cash Flows for the fiscal years ended
December 31, 1996, 1995 and 1994 (Exhibit D).
Notes to Financial Statements for the fiscal years ended
December 31, 1996, 1995 and 1994.
(2) Financial Statement Schedules:
List of Omitted Schedules.
Real Estate and Accumulated Depreciation - December 31,
1995 (Schedule III).
(3) Exhibits: See Exhibit Index.
(b) No Form 8-K was filed by Registrant for the final
quarter of 1996.
-15-<PAGE>
<PAGE>
[LETTERHEAD OF
JACOBS EVALL & BLUMENFELD LLP
CERTIFIED PUBLIC ACCOUNTANTS]
April 10, 1997
Empire State Building Associates
New York, N. Y.
We consent to the use of our independent accountants' report dated
April 9, 1997 covering our audits of the accompanying financial
statements of Empire State Building Associates in connection with and as
part of your December 31, 1996 annual report (Form 10-K) to the
Securities and Exchange Commission.
Jacobs Evall & Blumenfeld LLP
Certified Public Accountants
-16-<PAGE>
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the participants in Empire State Building Associates
(a Partnership)
New York, N. Y.
We have audited the accompanying balance sheets of Empire State Building
Associates ("Associates") as of December 31, 1996 and 1995, and the
related statements of income, partners' capital and cash flows for each
of the three years in the period ended December 31, 1996, 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 Associates' 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 Empire State
Building Associates as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for each of the three years in the
period ended December 31, 1996 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.
As discussed in Note 9 to the financial statements, Associates has been
included as a defendant in actions with other related parties, including
the Agents for Associates and Empire State Building Company, the
sublessee.
Jacobs Evall & Blumenfeld LLP
Certified Public Accountants
New York, N. Y.
April 9, 1997
-17-<PAGE>
<PAGE>
EXHIBIT A
EMPIRE STATE BUILDING ASSOCIATES
BALANCE SHEETS
A S S E T S
<TABLE>
<CAPTION>
December 31,
1996 1995
<S> <C> <C>
Current Assets:
Cash and cash equivalents:
The Chase Manhattan Bank............................... $ 2,888 $ 2,936
Distribution account held by
Wien, Malkin & Bettex LLP (Note 11)................... 324,111 324,111
Fidelity U.S. Treasury Income Portfolio (Note 11)...... 41,153 32,458
368,152 359,505
Prepaid rent............................................. 23,831 23,831
TOTAL CURRENT ASSETS............................... 391,983 383,336
Real Estate (Note 2):
Leasehold on Empire State Building,
350 Fifth Avenue, New York, N. Y........................ 39,000,000 39,000,000
Less: Accumulated amortization........................ 35,664,489 35,456,020
3,335,511 3,543,980
TOTAL ASSETS....................................... $ 3,727,494 $ 3,927,316
LIABILITIES AND PARTNERS' CAPITAL
Liabilities................................................ $ 0 $ 0
Contingencies (Note 9).....................................
Partners' Capital (Exhibit C).............................. 3,727,494 3,927,316
TOTAL LIABILITIES AND PARTNERS' CAPITAL............ $ 3,727,494 $ 3,927,316
</TABLE>
See accompanying notes to financial statements.
-18-<PAGE>
<PAGE>
EXHIBIT B
EMPIRE STATE BUILDING ASSOCIATES
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994
<S> <C> <C> <C>
Revenues:
Rent income, from a related party
(Notes 3 and 10)............................. $6,018,750 $6,018,750 $9,616,637
Dividend income............................... 8,647 35,556 39,667
6,027,397 6,054,306 9,656,304
Expenses:
Leasehold rent (Note 4)....................... 1,970,000 1,970,000 1,970,000
Supervisory services, to a related
party (Note 5)............................... 159,417 159,417 377,670
Miscellaneous expense......................... - - 160
Amortization of leasehold (Note 2)............ 208,469 208,469 208,469
2,337,886 2,337,886 2,556,299
NET INCOME, CARRIED TO PARTNERS'
CAPITAL, (NOTE 8).................. $3,689,511 $3,716,420 $7,100,005
Earnings per $10,000 participation unit, based
on 3,300 participation units outstanding
during each year............................... $ 1,118 $ 1,126 $ 2,152
</TABLE>
See accompanying notes to financial statements.
-19-<PAGE>
<PAGE>
EXHIBIT C-2
EMPIRE STATE BUILDING ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Capital Capital
January 1, Share of December 31,
1995 net income Distributions 1995
<S> <C> <C> <C> <C>
Donald A. Bettex Group.... $2,506,510 $1,238,806 $2,436,211 $1,309,105
C. Michael Spero Group
(formerly Alvin
Silverman Group)........ 2,506,510 1,238,807 2,436,211 1,309,106
Peter L. Malkin Group..... 2,506,510 1,238,807 2,436,212 1,309,105
$7,519,530 $3,716,420 $7,308,634 $3,927,316
</TABLE>
See accompanying notes to financial statements.
-20-<PAGE>
<PAGE>
EXHIBIT C-3
EMPIRE STATE BUILDING ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Capital Capital
January 1, Share of December 31,
1994 net income Distributions 1994
<S> <C> <C> <C> <C>
Donald A. Bettex Group..... $3,871,975 $2,366,668 $3,732,133 $2,506,510
Alvin Silverman Group...... 3,871,974 2,366,669 3,732,133 2,506,510
Peter L. Malkin Group...... 3,871,975 2,366,668 3,732,133 2,506,510
$11,615,924 $7,100,005 $11,196,399 $7,519,530
</TABLE>
See accompanying notes to financial statements.
-21-<PAGE>
<PAGE>
EXHIBIT C-1
EMPIRE STATE BUILDING ASSOCIATES
STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Capital Capital
January 1, Share of December 31,
1996 net income Distributions 1996
<S> <C> <C> <C> <C>
John L. Loehr Group
(formerly Donald A.
Bettex Group)............ $ 1,309,105 $ 1,229,837 $ 1,296,444 $ 1,242,498
Stanley Katzman Group
(formerly C. Michael
Spero Group)............. 1,309,106 1,229,837 1,296,445 1,242,498
Peter L. Malkin Group...... 1,309,105 1,229,837 1,296,444 1,242,498
$ 3,927,316 $ 3,689,511 $ 3,889,333 $ 3,727,494
</TABLE>
See accompanying notes to financial statements.
-22-<PAGE>
<PAGE>
EXHIBIT D
EMPIRE STATE BUILDING ASSOCIATES
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994
<S> <C> <C> <C>
Cash flows from operating activities:
Net income.................................... $3,689,511 $3,716,420 $ 7,100,005
Adjustments to reconcile net income to
cash provided by operating activities:
Amortization of leasehold.................. 208,469 208,469 208,469
Changes in operating assets
and liabilities:
Overage rent due from Empire State
Building Company, a related party
(Notes 3 and 10)....................... - 97,887 (85,069)
Accrued supervisory services
to a related party (Note 5)............ - (8,253) 3,844
Net cash provided by
operating activities................. 3,897,980 4,014,523 7,227,249
Cash flows from financing activities:
Cash distributions............................ (3,889,333) (7,308,634) (11,196,399)
Net cash used in financing
activities............................ (3,889,333) (7,308,634) (11,196,399)
Net increase (decrease) in cash
and cash equivalents.................. 8,647 (3,294,111) (3,969,150)
Cash and cash equivalents, beginning of year.... 359,505 3,653,616 7,622,766
CASH AND CASH EQUIVALENTS, END OF YEAR. $ 368,152 $ 359,505 $ 3,653,616
</TABLE>
See accompanying notes to financial statements.
-23-<PAGE>
<PAGE>
EMPIRE STATE BUILDING ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
1. Business Activity
Empire State Building Associates ("Associates") is a general
partnership which holds the tenant's position in the master
leasehold of the Empire State Building, located at 350 Fifth Avenue,
New York City. Associates subleases the property to Empire State
Building Company ("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 Amortization of Leasehold:
Real estate, consisting of a leasehold, is stated at cost. In
1988, Associates determined that it would exercise its first
renewal option under the lease, and did so in January 1989.
Amortization of the leasehold is being computed by the straight-
line method over the estimated useful life of 25 years, from
January 1, 1988 to January 5, 2013 (see Note 4).
c. Use of Estimates:
In preparing financial statements in conformity with generally
accepted accounting principles, management often 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. Related Party Transactions - Rent Income
Rent income for the years ended December 31, 1996, 1995 and 1994,
totalling $6,018,750, $6,018,750 and $9,616,637, respectively,
consists of the minimum annual rent plus overage rent under an
operating sublease dated December 27, 1961, as modified February 15,
1965, with Company (the "sublessee"), as follows:
Year ended December 31,
1996 1995 1994
Minimum net basic rent...... $6,018,750 $6,018,750 $ 6,018,750
Overage rent earned......... - - 3,597,887
$6,018,750 $6,018,750 $ 9,616,637
-24-<PAGE>
<PAGE>
EMPIRE STATE BUILDING ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(Continued)
3. Related Party Transactions - Rent Income (continued)
The sublease provides for the same initial term and renewal options
as the leasehold (see Note 4), less one day. In January 1989, the
sublessee exercised its option to renew the sublease for the first
renewal period from January 4, 1992 to January 4, 2013. The annual
minimum net basic rent during the first renewal term was reduced to
$6,018,750, and is to be further reduced to $5,895,625 during each
of the remaining three renewal terms.
Overage rent earned is equal to fifty percent of the sublessee's
annual net income (as defined in the sublease) in excess of
$1,000,000.
A partner in Associates is also a partner in the sublessee.
4. Leasehold Rent
Leasehold rent represents the net basic rent of $1,970,000 per annum
under an operating lease dated December 27, 1961, as modified
February 15, 1965, with The Prudential Insurance Company of America
("Prudential"), over the first renewal term of the lease, 21 years,
from January 5, 1992 to January 5, 2013.
The lease contains options for Associates to renew the leasehold for
an additional 3 successive periods of 21 years each. The basic rent
is to be further reduced to $1,723,750 per annum during each of the
remaining three renewal terms.
On November 27, 1991, Prudential sold the property to E.G. Holding
Co., Inc. which, through merger and conveyance, reportedly
transferred its interest as lessor to Trump Empire State Partners
("Trump") (see Note 9). Associates' rights under the master
leasehold remain unchanged.
5. Related Party Transactions - Supervisory Services
Supervisory services (including disbursements and cost of regular
accounting services) during the years ended December 31, 1996, 1995
and 1994, totalling $159,417, $159,417 and $377,670, respectively,
represent fees paid to the firm of Wien, Malkin & Bettex LLP. Some
members of that firm are partners in Associates.
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 in Associates each year.
-25-<PAGE>
<PAGE>
EMPIRE STATE BUILDING ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(Continued)
6. Number of Participants
There were approximately 2,620 participants in the participating groups
at December 31, 1996, 1995 and 1994.
7. Determination of Distributions to Participants
Distributions to participants in 1996, 1995 and 1994 of $3,889,333,
$7,308,634 and $11,196,399, respectively, represented the following:
<TABLE>
1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Minimum annual rent.. $ 6,018,750 $ 6,018,750 $ 6,018,750
Overage rent,
earned in
previous year,
distributed in
current year........ - 3,597,887 7,712,818
Dividend income
earned in previous
year, distributed
in current year..... - 39,667 60,657
6,018,750 9,656,304 13,792,225
Less:
Leasehold rent
expense............ $1,970,000 $1,970,000 $1,970,000
Supervisory
services paid...... 159,417 377,670 625,826
2,129,417 2,347,670 2,595,826
Distributions
to participants..... $ 3,889,333 $ 7,308,634 $11,196,399
</TABLE>
-26-<PAGE>
<PAGE>
EMPIRE STATE BUILDING ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(Continued)
8. Distributions and Amount of Income per $10,000 Participation Unit
Distributions per $10,000 participation unit during the years 1996,
1995 and 1994 based on 3,300 participation units outstanding during
each year, consisted of the following:
Year ended December 31,
1996 1995 1994
Income........................ $1,118 $1,126 $2,152
Return of capital............. 61 1,089 1,241
TOTAL DISTRIBUTIONS....... $1,179 $2,215 $3,393
Net income is computed without regard to income tax expense since
Associates does not itself pay a tax on its income; instead, any
such taxes are paid by the participants in their individual
capacities.
9. Litigation
a. On October 21, 1991, in an action entitled Studley v. Empire State
Building Associates et al., the holder of a $20,000 original
participation in Associates brought suit in New York Supreme Court,
New York County against the Agents for Associates (Peter L. Malkin,
Donald A. Bettex and Alvin Silverman), in their individual
capacities and Wien, Malkin & Bettex, (currently "Wien & Malkin
LLP") counsel to Associates. The suit claims that the defendants
have engaged in breaches of fiduciary duty and acts of self-dealing
in relation to the Agents' solicitation of consents and
authorizations from the participants in Associates in September
1991 and in relation to other unrelated acts of the Agents and the
sublessee. Associates is a nominal defendant and the complaint
does not seek any direct relief from it; accordingly, counsel is of
the opinion that no loss or other unfavorable outcome of the action
against Associates is anticipated.
b. In December 1994, Associates received a notice of default from
Trump. The Trump default notice to Associates claims that
Associates is in violation of its master lease because of extensive
work which the sublessee, Company, has undertaken as part of an
improvement program that commenced before Trump reportedly acquired
its interest in the property in 1994. Trump's notice also
complains that the building is in need of repairs. On February 14,
1995, Associates and Company filed an action in New York State
Supreme Court against Trump for a declaratory judgment that none of
the matters set forth in the notice of default constitutes a
violation of the master lease or sublease, and that the notice of
default is entirely without merit. Associates' and Company's suit
also seeks an injunction to prevent Trump from implementing the
notice of default. On March 24, 1995, the Court granted Associates
-27-<PAGE>
<PAGE>
EMPIRE STATE BUILDING ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(Continued)
9. Litigation (continued)
a preliminary injunction against Trump. In 1996 the Court granted
two additional injunctions against Trump with respect to two
additional default notices. The injunctions prohibit Trump from
acting on its notices of default to Associates at any time, pending
the prosecution of claims by Associates and Company for a final
declaratory judgment and an injunction and other relief against the
Trump defendants.
On February 15, 1995, Trump filed an action against Associates,
Company, Wien, Malkin & Bettex LLP, Harry B. Helmsley, a partner in
Company, Helmsley-Spear, Inc. (the management company of the Empire
State Building), and the Agents for Associates in New York State
Supreme Court, alleging that the notice of default is valid and
seeking damages and related relief based thereon. On October 24,
1996 the Court dismissed all of Trump's claims in their entirety
against all defendants in the action. Trump has appealed this
Order.
In May, 1995, Associates and Company filed a separate legal action
against Trump and various affiliated persons for breach of the
master lease and sublease, and disparagement of the property in
violation of Associates' and Company's leasehold rights. The
action was amended to include additional claims by Associates and
Company seeking a declaratory judgment that they may act as an
owner of the Property for purposes of making applications and
related activities pursuant to the New York City Building Code. By
decision and order dated October 24, 1996, the Court sustained
Associates' and Company's claims concerning the parties who may act
as owner of the Property under the Building Code, but dismissed
Associates' and Company's claims against Trump and co-defendants
for money damages. Associates and Company have appealed that
portion of the Court's order dismissing their claims for money
damages.
Depending upon the ultimate resolution of the litigations, the Agents
may be entitled to reimbursement from Associates of their legal and
accounting expenses relating to the Studley and Trump suits, and, in
turn, Associates may be entitled to indemnification from Company.
Through December 31, 1996 legal and accounting expenses in connection
with the Studley suit have amounted to approximately $910,000, of which
$600,000 has been advanced by Wien & Malkin LLP, counsel (a related
party), to third party professional firms and $310,000 represents
accumulated professional time of Wien & Malkin LLP. In addition,
counsel has advised that its records at December 31, 1996 indicate
approximately $287,000 in accumulated professional time related to the
Trump suits which, depending upon the outcome of such litigation, may
or may not be billed to Associates. Should such sum be billed,
Associates, in turn, may be entitled to seek reimbursement and
indemnification from Company. Substantial additional legal and
accounting costs may be incurred in both cases.
-28-<PAGE>
<PAGE>
EMPIRE STATE BUILDING ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(Continued)
9. Litigation (continued)
The determination of the allocable share of the net legal and
accounting costs and disbursements to be borne by Associates and
chargeable to Company involve complex issues of fact and law. Because
of uncertainties concerning these issues, amounts for professional
fees accruable to Associates and amounts indemnifiable by Company
cannot be estimated, and therefore have not been provided for in the
accompanying financial statements. Resolutions unfavorable to
Associates could result in material liabilities and charges which have
also not been reflected in the accompanying financial statements.
10. Concentration of Credit Risk
Associates maintains cash balances in a bank, money market fund
(Fidelity U.S. Treasury Income Portfolio), and a distribution account
held by Wien, Malkin & Bettex LLP. The bank balance is insured by the
Federal Deposit Insurance Corporation up to $100,000, and at December
31, 1996 was completely insured. The cash in the money market fund
and the distribution account held by Wien, Malkin & Bettex LLP is not
insured. The funds held in the distribution account were paid to the
participants on January 1, 1997.
-29-<PAGE>
<PAGE>
EMPIRE STATE BUILDING 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.
-30-<PAGE>
<PAGE>
SCHEDULE III
EMPIRE STATE BUILDING ASSOCIATES
Real Estate and Accumulated Depreciation
December 31, 1996
<TABLE>
<S> <C> <C>
Column
A Description Leasehold on Empire State Building
located at 350 Fifth Avenue,
New York, New York.
B Encumbrances................................................ None
C Initial cost to company
Leasehold................................................. $39,000,000
D Cost capitalized subsequent to acquisition.................. None
E Gross amount at which carried at
close of period
Leasehold................................................ $39,000,000(a)
F Accumulated amortization.................................... $35,664,489(b)
G Date of construction 1931
H Date acquired December 27, 1961
I Life on which leasehold amortization
in latest income statements is computed 25 years from January 1,
1988 (see Note 2 of
Notes to Financial
Statements).
</TABLE>
(a) There have been no changes in the carrying values of real estate
for the years ended December 31, 1996, December 31, 1995 and
December 31, 1994. The costs for federal income tax purposes
are the same as for financial statement purposes.
(b) Accumulated amortization
Balance at January 1, 1994 $35,039,082
Amortization:
F/Y/E 12/31/94 $208,469
12/31/95 208,469
12/31/96 208,469 625,407
Balance at December 31, 1996 $35,664,489
-31-<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
The individual signing this report on behalf of
Registrant is Attorney-in-Fact for Registrant and each of the
Partners in Registrant, pursuant to a Power of Attorney, dated
August 6, 1996 (the "Power").
EMPIRE STATE BUILDING REGISTRANT
(Registrant)
By /s/Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: April 11, 1997
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
person as Attorney-in-Fact for each of the Partners in Registrant,
pursuant to the Power, on behalf of Registrant and as a Partner in
Registrant on the date indicated.
By /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Date: April 11, 1997
______________________
* Mr. Katzman supervises accounting functions for Registrant.
-32-<PAGE>
<PAGE>
EXHIBIT INDEX
Number Document Page*
3(a) Registrant's Partnership Agreement dated July
11, 1961, filed as Exhibit No. 1 to
Registrant's Registration Statement on Form
S-1 as amended (the "Registration Statement")
by letter dated August 8, 1962 and assigned
File No. 2-18741, is incorporated by reference
as an exhibit hereto.
3(b) Amended Business Certificate of Registrant
filed with the Clerk of New York County on
August 19, 1996 reflecting a change in the
Partners of Registrant.
4 Registrant's form of Participating Agreement,
filed as Exhibit No. 6 to the Registration
Statement by letter dated August 8, 1962 and
assigned File No. 2-18741, is incorporated by
reference as an exhibit hereto.
10(a) Mortgage dated December 21, 1951 from Imperium
Corporation to Prudential Insurance Company of
America ("Prudential"), filed by letter dated
March 31, 1981 (Commission File No. 0-827) as
Exhibit 10(a) to Registrant's Form 10-K for
the fiscal year ended December 31, 1980, is
incorporated by reference as an exhibit
hereto.
10(b) Modification of Indenture of Lease dated
December 27, 1961 between Prudential and
Registrant filed by letter dated March 31,
1981 (Commission File No. 0-827) as Exhibit
10(b) to Registrant's Form 10-K for the fiscal
year ended December 31, 1980, is incorporated
by reference as an exhibit hereto.
10(c) Sublease dated December 27, 1961 between
Registrant and Sublessee, filed by letter
dated March 31, 1981 (Commission File No.
0-827) as Exhibit 10(d) to Registrant's Form
10-K for the fiscal year ended December 31,
______________________
* Page references are based on sequential numbering system.
-33-<PAGE>
<PAGE>
1980, is incorporated by reference as an
exhibit hereto.
10(e) Modification and Extension Agreement, dated
October 26, 1964 between The Bowery Savings
Bank and Celeritas Realty Corp., filed by
letter dated March 31, 1981 (Commission File
No. 0-827) as Exhibit 10(e) to Registrant's
Form 10-K for the fiscal year ended December
31, 1980, is incorporated by reference as an
exhibit hereto.
24 Power of Attorney dated August 6,1996, between
Peter L. Malkin, John L. Loehr and Stanley
Katzman, the partners of Registrant and
Richard A. Shapiro and Stanley Katzman, filed
as Exhibit 25 to Registrant's 10-Q for the
quarter ended September 30, 1996 and
incorporated by reference as an exhibit
hereto.
27 Financial Data Schedule of Registrant for
the fiscal year ended December 31, 1996.
-34-
EXHIBIT 3(b)
AMENDED BUSINESS CERTIFICATE
The undersigned hereby certify that a certificate of business
under the assumed name
EMPIRE STATE BUILDING ASSOCIATES
for the conduct of business at 60 East 42nd Street, New York, New
York, was filed in the office of the County Clerk New York County,
State of New York, on the 23rd day of August, 1961, under index
number 6543/61; that the last amended certificate was filed on the
10th day of June 1996, in the office of said County Clerk under
index number 6543/61.
It is hereby further certified that this amended certificate
is made for the purposes of more accurately setting forth the
facts recited in the original certificate or the last amended
certificate and to set forth the following changes in such facts.
DONALD A. BETTEX, residing at 700 Park Avenue, New York, New York
10128 has been succeeded as a partner by JOHN L. LOEHR, residing
at 286 Alpine Circle, River Vale, New Jersey 07675.
The members of EMPIRE STATE BUILDING ASSOCIATES now consist of:
Stanley Katzman, John L. Loehr, and Peter L. Malkin.
IN WITNESS WHEREOF, the undersigned have as of the 30th day
of June, 1996 made and signed this certificate.
_____________________ __________________
DONALD A. BETTEX STANLEY KATZMAN
__________________
JOHN L. LOEHR
<PAGE>
<PAGE>
State of New York )
: ss.:
County of New York)
On this 10th day of July, 1996, before me personally appeared
DONALD A. BETTEX, JOHN L. LOEHR, and STANLEY KATZMAN, to me known
and known to me to be the individuals described in and who
executed the foregoing certificate, and they thereupon duly
acknowledged to me that they executed the same.
__________________
Judy Love
Notary Public
State of New York
No. 41-4877662
Qualified in Queens County
Commission Expires 11/17/96
-2-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Balance Sheet as of December 31, 1996 and the Statement Of Income
for the year ended December 31, 1996, and is qualified in its entirety by
refenence to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 368,152
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 391,983<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,727,494<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,727,494<F3>
<TOTAL-LIABILITY-AND-EQUITY> 3,727,494
<SALES> 6,018,750<F4>
<TOTAL-REVENUES> 6,027,397<F5>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,337,886<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,689,511
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,689,511
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,689,511
<EPS-PRIMARY> 1,118<F7>
<EPS-DILUTED> 1,118<F7>
<FN>
<F1>Includes prepaid rent
<F2>Includes remaining unamortized leasehold at book value
<F3>Partnership capital
<F4>Rental income
<F5>Includes dividend income
<F6>Leasehold rent supervisory fees of and amortization of leasehold
<F7>Earnings per $10,000 participation unit, based on 3,300 participation
units outstanding during the year
</FN>
</TABLE>
