FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] 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)
A New York Partnership 13-6084254
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 East 42nd Street, New York, New York
(Address of principal executive offices)
10165
(Zip Code)
(212) 687-8700
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if
changed since last report)
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 such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [ X ]. No [ ].
An Exhibit Index is located on Page 15 of this Report.
Number of pages (including exhibits) in this filing: 15 <PAGE>
2.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Empire State Building Associates
Condensed Statement of Income
(Unaudited)
For the Three Months
Ended March 31,
Income: 1998 1997
Rent income, from a related
party (Note B) $1,504,687 $1,504,687
Dividend income 27,179 2,382
---------- ----------
Total income 1,531,866 1,507,069
---------- ----------
Expenses:
Leasehold rent 492,500 492,500
Supervisory services, to a
related party (Note C) 39,854 39,854
Amortization of leasehold 52,117 52,117
Miscellaneous -0- -0-
---------- ----------
Total expenses 584,471 584,471
---------- ----------
Net income $ 947,395 $ 922,598
========== ==========
Earnings per $10,000 partici-
pation unit, based on 3,300
participation units out-
standing during the year $ 287.09 $ 279.58
========== ==========
Distributions per $10,000
participation consisted
of the following:
Income $ 287.09 $ 279.58
Return of capital 329.17 15.07
--------- ----------
Total distributions $ 616.26 $ 294.65
========= ==========
At March 31, 1998 and 1997, there were $33,000,000 of participations
outstanding.<PAGE>
Empire State Building Associates
Condensed Balance Sheet
(Unaudited) 3.
Assets March 31, 1998 December 31, 1997
Current assets
Cash $ 400,836 $ 378,529
Prepaid rent 23,831 23,831
Additional rent advance account
held by Wien & Malkin LLP -0- 2,400,000
Additional rent due from Empire State
Building Company, a related party -0- 1,300
Reserve for legal fees 1,277,110 -0-
---------- ----------
Total current assets 1,701,777 2,803,660
Real Estate
Leasehold on Empire State Building 39,000,000 39,000,000
Less, allowance for amortization 35,925,075 35,872,958
---------- ----------
3,074,925 3,127,042
---------- ----------
Total assets $4,776,702 $5,930,702
========== ==========
Current Liabilities:
Accrued legal fees, to a
related party (Note 9) 1,272,237 1,272,237
Accrued supervisory services, to a
related party (Note 5) -0- 67,744
---------- ---------
Total Liabilities 1,272,237 1,339,981
========== =========
Capital
Capital January 1, $4,590,721 3,727,494
Add, Net income:
January 1, 1998 through March 31, 1998 947,395 -0-
January 1, 1997 through December 31, 1997 -0- 4,752,560
---------- -----------
5,538,116 8,480,054
Less, Distributions:
Monthly distributions,
January 1, 1998 through March 31, 1998 972,333 -0-
January 1, 1997 through December 31, 1997 -0- 3,889,933
Additional Distribution on March 5, 1998
of overage rent for the lease year
ended December 31, 1997 1,061,318 -0-
---------- -----------
2,033,651 3,889,333
---------- -----------
Capital
March 31, 1998 3,504,465 -0-
December 31, 1997 -0- 4,590,721
---------- -----------
Total liabilities and capital:
March 31, 1998 $4,776,702
==========
December 31, 1997 5,930,702
=========<PAGE>
4.
Empire State Building Associates
Condensed Statement of Cash Flows
(Unaudited)
January 1, 1998 January 1, 1997
through through
March 31, 1998 March 31, 1997
Cash flows from operating activities:
Net income $ 947,395 $922,598
Adjustments to reconcile net income
to cash provided by operating
activities:
Amortization of leasehold 52,117 52,117
Change in additional rent due 2,401,300 -0-
Change in accrued supervisory services (67,744) -0-
Change in legal fee reserve account (1,277,110) -0-
----------- ----------
Net cash provided by operating
activities 2,055,958 974,715
----------- ----------
Cash flows from financing activities:
Cash distributions (2,033,651) (972,333)
----------- ----------
Net cash used in financing
activities (2,033,651) (972,333)
----------- -----------
Net increase (decrease) in cash and
cash equivalents 22,307 2,382
Cash and cash equivalents
beginning of period 378,529 368,152
---------- ----------
Cash and cash equivalents
end of period $ 400,836 $ 370,534
=========== ===========<PAGE>
Empire State Building Associates 5.
March 31, 1998
Notes to Condensed Financial Statements (unaudited)
Note A - Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with the instructions
to Form 10-Q and therefore do not include all information and
footnotes necessary for a fair presentation of financial position,
results of operations and statement of cash flows in conformity
with generally accepted accounting principles. The accompanying
unaudited condensed financial statements include all adjustments
(consisting only of normal recurring accruals) which are, in the
opinion of the partners in Registrant, necessary for a fair
statement of the results for such interim periods. The partners
in Registrant believe that the accompanying unaudited condensed
financial statements and the notes thereto fairly disclose the
financial condition and results of Registrant's operations for the
periods indicated and are adequate to make the information pre-
sented therein not misleading.
Note B - Interim Period Reporting
The results for the interim periods are not necessarily
indicative of the results to be expected for a full year.
Registrant is a partnership which was organized on July
11, 1961. Registrant owns the tenant's interest in a master
operating leasehold (the "Master Lease") on the Empire State
Building (the "Building") and the land thereunder, located at 350
Fifth Avenue, New York, New York (the "Property"). On November
27, 1991, Prudential Insurance Company of America sold the fee
ownership of the property to EGHolding Co. Inc. which, through
merger and conveyance, reportedly transferred its interest as
lessor to Trump Empire State Partners ("Trump"). Associates'
rights under the master leasehold remain unchanged.
As of April 15, 1998 Registrant's partners are Peter L.
Malkin, Thomas N. Keltner, Jr. and Richard A. Shapiro (col-
lectively, the "Partners"), each of whom also acts as an agent for
holders of participations in his respective partnership interest
in Registrant (the "Participants").
The initial term of the Master Lease expired on January
5, 1992. On January 30, 1989, Registrant exercised its first of
four 21-year renewal options contained in the Master Lease and
extended the Master Lease through January 5, 2013. The annual
rent payable under Master Lease is $1,970,000 through January 5,
2013 and $1,723,750 annually during the term of each renewal
period thereafter.
The value of the Master Lease is stated at cost. To
reflect Registrant's exercise of the first renewal option under<PAGE>
Empire State Building Associates 6.
March 31, 1998
the Master Lease, the estimated useful life of the Master Lease
has been revised to 25 years, effective January 1, 1988, through
January 5, 2013.
Registrant does not operate the Property. It subleases
the Property to Empire State Building Company ("Sublessee")
pursuant to a net operating sublease (the "Sublease") with a term
and renewal options essentially coextensive with those contained
in the Master Lease. On January 30, 1989, Sublessee elected to
renew the Sublease for a term commencing January 4, 1992 to
January 4, 2013.
Sublessee is required to pay annual basic rent ("Basic
Rent") of $6,018,750 from January 1, 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 Registrant
overage rent of 50% of Sublessee's net operating profit in excess
of $1,000,000 for each lease year ending December 31 ("Overage
Rent").
Overage Rent and other accumulated interest and dividend
income are distributed annually after payment of any additional
payments for supervisory services to Counsel (as described in Note
C below). For 1997, Sublessee reported net operating profit of
$5,802,601; therefore, there was Overage Rent payable of
$2,401,300 for the year ended December 31, 1997. Registrant paid
Counsel $127,161 as an additional payment for supervisory ser-
vices.
Sublessee is a New York 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, which acts as counsel to Registrant and Sublessee
("Counsel"). See Note C below.
Note C - Supervisory Services
Registrant pays Counsel for supervisory services and
disbursements (i) the basic payment of $100,000 per annum (the
"Basic Payment") and (ii) an additional payment of 6% of all
distributions to Participants in any year in excess of the amount
representing a return of 9% per annum on their remaining original
cash investment in any year ("Additional Payment"). At March 31,
1998, such remaining cash investment was $33,000,000, representing
the original cash investment of the Participants in Registrant.
No remuneration was paid during the three month period
ended March 31, 1998 by Registrant to any of the Partners as such.
Pursuant to the Fee arrangements described herein, Registrant paid
Counsel $25,000 of the Basic Payment for supervisory services for
the three month period ended March 31, 1998, and $4,951 a month as
the Additional Payment for supervisory services. The supervisory<PAGE>
Empire State Building Associates 7.
March 31, 1998
services provided to Registrant by Counsel include legal,
administrative 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 disburse-
ments, 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 Partici-
pants. 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.
Reference is made to Note B of this Item 1 ("Note B")
for a description of the terms of the Sublease between Registrant
and Sublessee. The respective interests of the Partners in
Registrant and in Sublessee arise solely from ownership of their
respective 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 Participants in Registrant or partners
in Sublessee. However, each of the Partners, by reason of his
respective interest in Counsel, is entitled to receive his share
of any legal fees or other remuneration paid to Counsel for legal
and supervisory services rendered to Registrant and Sublessee.
As of April 15, 1998, the Partners owned of record and
beneficially an aggregate of $163,750 of participations in
Registrant, representing less than 1% of the currently outstanding
participations therein totaling $33,000,000.
In addition, as of April 15, 1998 certain of the
Partners (or their respective spouses) held additional
Participations as follows:
Peter L. Malkin owned of record as trustee or
co-trustee, but not beneficially, $195,000 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 $158,333 of Participations. Mr.
Malkin disclaims any beneficial ownership of such
Participations.<PAGE>
Empire State Building Associates 8.
March 31, 1998
Richard A. Shapiro owned of record as custodian, but not
beneficially $12,500 of Participations. Mr. Shapiro
disclaims any beneficial ownership of such Participa-
tions.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
As stated in Note B, Registrant was organized for the
purpose of acquiring the Master Lease of the Property subject to
the Sublease. Basic Rent received by Registrant is used to pay
annual rent due under the Master Lease, the Basic Payment and the
Additional Payment for supervisory services; the balance of such
Rent is distributed to the Participants. Overage Rent and any
interest and dividends accumulated thereon are distributed to the
Participants after the Additional Payment is made to Counsel. See
Note C of Item 1 above. Pursuant to the Sublease, Sublessee has
assumed responsibility for the condition, operation, repair,
maintenance and management of the Property. Registrant is not
required to maintain substantial reserves or otherwise maintain
liquid assets to defray any operating expenses of the Property.
Registrant does not pay dividends. During the three
month period ended March 31, 1998, Registrant made regular monthly
distributions of $98.21 for each $10,000 participation ($1,178.52
per annum for each $10,000 participation). There are no restric-
tions on Registrant's present or future ability to make
distributions; however, the amount of such distributions depends
solely on the ability of Sublessee to make payments of Basic Rent
and Overage Rent to Registrant in accordance with the terms of the
Sublease. Registrant expects to make distributions in the future
so long as it receives the payments provided for under the
Sublease. See Note B.
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 remaining expenses for the improvement program to the
Building, which commenced in 1990, will reduce Overage Rent during
the years 1998 and 1999, but should have no effect on the payment
of Basic Rent in those years. It is difficult for management to
forecast the New York City real estate market over the next few
years.
Total income increased for the three month period ended
March 31, 1998 as compared with the three month period ended March
31, 1997. Such increase resulted from an increase in dividend
income earned on funds temporarily invested in Fidelity U.S.
Treasury Income Portfolio. Total expenses remained the same for<PAGE>
Empire State Building Associates 9.
March 31, 1998
the three-month period ended March 31, 1998 as compared with the
three-month period ended March 31, 1997.
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. The Supreme Court, New
York County, granted summary judgment in favor of the State, which
ruling was affirmed by the Appellate Division, First Department,
holding that the State utility tax applies to such rent inclusion
charges. 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
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 $163,012 through December 31, 1997.
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
presently be determined. It is anticipated that New York City
will also 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 for the three month period ended March 31, 1998, as
compared with the three month period ended March 31, 1997.
Assuming that the Building continues to generate an
annual net profit in future years comparable to that in the
current year, Registrant anticipates that the value of the
Building and the Property will exceed the indicated balance sheet
value at March 31, 1998.<PAGE>
Empire State Building Associates 10.
March 31, 1998
Registrant anticipates that funds for working capital
will be generated by operations of the Building by Sublessee,
which entity in turn is required to make payments of Basic Rent
and Overage Rent under the Sublease and, to the extent necessary,
from additional capital investment by the partners in Sublessee
and/or external financing. Registrant foresees no need to make
material commitments for capital expenditures while the Sublease
is in effect.
Inflation
Registrant believes that there has been no material
change in the impact of inflation on its operations since the
filing of its report on Form 10-K for the year ended December 31,
1997, which report and all exhibits thereto are incorporated
herein by reference and made a part hereof.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Property of Registrant is the subject of the
following pending litigation:
Studley v. Empire State Building Associates: 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 Registrant brought suit in New York Supreme Court, New York
County against the Agents for Registrant (Peter L. Malkin, Donald
A. Bettex and Alvin Silverman), in their individual capacities and
Wien, Malkin & Bettex (currently "Wien & Malkin LLP") counsel to
Registrant. The suit claimed that the defendants had 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 Registrant in September 1991 and in relation to
other unrelated acts of the Agents and the sublessee. By order
dated July 14, 1997, and entered July 29, 1997, the Court granted
defendants' motion for summary judgment and dismissal of the
action. The plaintiff filed an appeal with respect to the
foregoing order. By decision and order entered April 2, 1998, the
Appellate Court unanimously affirmed the order dismissing the
action. The plaintiff has filed a further complaint alleging
similar claims, purportedly as a class action. Defendants'
counsel intend to file a motion to dismiss the new complaint based
upon the Court's prior rulings and on other grounds.
Proceedings Involving Trump Empire State Partners: In
December 1994, Registrant received a notice of default from Trump.
The Trump default notice to Registrant claimed that Registrant was
in violation of its master lease because of extensive work which
Sublessee had undertaken as part of an improvement program that
commenced before Trump reportedly acquired its interest in the
property in 1994. Trump's notice also complained that the
Building was in need of repairs. On February 14, 1995, Registrant
and Sublessee filed an action in New York State Supreme Court
against Trump for a declaratory judgment that none of the matters<PAGE>
Empire State Building Associates 11.
March 31, 1998
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. Registrant's and Sublessee's suit also
seeks an injunction to prevent Trump from implementing the notice
of default. On March 24, 1995, the Court granted Registrant a
preliminary injunction against Trump. In 1996 the Court granted
two additional preliminary injunctions against Trump with respect
to two additional default notices. The preliminary injunctions
prohibit Trump from acting on its notices of default to Registrant
at any time, pending the prosecution of claims by Registrant and
Sublessee for a final declaratory judgment and an injunction and
other relief against the Trump defendants. The Appellate Court
has upheld and affirmed the granting of such preliminary injunc-
tions against the Trump defendants.
On February 15, 1995, Trump filed an action against
Registrant, Sublessee, Counsel, Harry B. Helmsley, a partner in
Sublessee, Helmsley-Spear, Inc. (the management company of the
Empire State Building), and the Agents for Registrant 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 appealed
this Order. The Appellate Court has unanimously affirmed the
dismissal of Trump's claims.
In May, 1995, Registrant and Sublessee 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 Registrant' and Sublessee's leasehold
rights. The action was amended to include additional claims by
Registrant and Sublessee seeking a declaratory judgment that they
may act as an owner of the Property for purposes of making ap-
plications and related activities pursuant to the New York City
Building Code. By decision and order dated October 24, 1996, the
Court sustained Registrant's and Sublessee's claims concerning the
parties who may act as owner of the Property under the Building
Code, but dismissed Registrant's and Sublessee's claims against
Trump and co-defendants for money damages. Registrant and
Sublessee appealed that portion of the Court's order dismissing
their claims for money damages. The Appellate Court has affirmed
that part of the Court's order dismissing the claims for money
damages.
New York Skyline Inc.: Registrant is a defendant in an
action instituted in the Supreme Court of the State of New York,
County of New York, entitled New York Skyline Inc. v. Empire State
Building Company, Empire State Building Associates, Nell H.
Kessner, Helmsley-Spear, Inc. and Stephen A. Tole. This lawsuit,
which was brought by a tenant in the Building and was filed on
December 23, 1997, seeks at least $205,000,000 in damages. In its
complaint, plaintiff-tenant asserts thirteen causes of action<PAGE>
Empire State Building Associates 12.
March 31, 1998
(twelve of which are against Sublessee) in connection with its
leases and license agreements of space in the Building and alleges
that it is entitled to, among other things, specific performance
as to its alleged rights under its leases and licensing agreements
with Sublessee, a declaratory judgment as to the rights of the
parties under the leases and licensing agreements, any monies al-
legedly due plaintiff under those agreements, as well as injunc-
tive relief and additional money damages. While the complaint
includes Registrant as a named defendant, it does not allege or
identify any agreement between plaintiff and Registrant or any
other basis of liability on Registrant's part to plaintiff.
On or about February 5, 1998, plaintiff served an
amended complaint which, among other things, added Kessner &
Cyruli, f/k/a Nell H. Kessner & Associates, former landlord-tenant
counsel for the Building, and Eileen Aluska, a former Helmsley-
Spear, Inc. employee, as party defendants. The amended complaint
asserts eleven causes of action, similar to those asserted in the
original complaint.
On March 16, 1998, Registrant filed an answer to the
amended complaint denying all allegations of liability.
Registrant intends to contest the case vigorously.
Because the action is still in the pleading stage and
pre-trial discovery has not yet started, counsel for Registrant
has not formed a professional conclusion that an adverse outcome
is either probable or remote.
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 part-
nerships which own, lease or operate buildings managed by
Helmsley-Spear, Inc., including Registrant's property. In their
complaint, plaintiffs sought the removal of Helmsley-Spear, Inc.
as managing and leasing agent for all of the buildings.
Plaintiffs also sought an order precluding Leona Helmsley from
exercising any partner management powers in the partnerships. In
August, 1997, the Supreme Court directed that the foregoing claims
proceed to arbitration. As a result, Mr. Malkin and Wien & Malkin
LLP filed an arbitration complaint against Helmsley-Spear, Inc.
and Mrs. Helmsley before the American Arbitration Association.
Helmsley-Spear, Inc. and Mrs. Helmsley served answers denying
liability and asserting various affirmative defenses and
counterclaims; and Mr. Malkin and Wien & Malkin LLP filed a reply
denying the counterclaims. By agreement dated December 16, 1997,
Mr. Malkin and Wien & Malkin LLP (each for their own account and
not in any representative capacity) reached a settlement with
Mrs. Helmsley of the claims and counterclaims in the arbitration
and litigation between them. Mr. Malkin and Wien & Malkin LLP are
continuing their prosecution of claims in the arbitration for<PAGE>
Empire State Building Associates 13.
March 31, 1998
relief against Helmsley-Spear, Inc., including its termination as
the leasing and managing agent for various entities and proper-
ties, including the Registrant's Sublessee.
Item 5. Other Information
The Sublessee maintains the Building as a high-class
office building as required by the terms of the Sublease.
In 1990, Sublessee commenced its latest improvement
program which is estimated to be completed in 1999 at a total cost
in excess of $68,000,000. 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
the installation of a computerized control system and replacement
of all electrical and mechanical equipment. The elevator modern-
ization program has increased elevator speed from 800 to 950 feet
per minute to 1200 feet per minute. Also included is waterproof-
ing 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 deck ticket office.
The Sublessee anticipates that the costs of improvements
to be incurred will reduce Overage Rent during the years 1998 and
1999, but should have no effect on the payment of Basic Rent in
those years.
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).
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 6. Exhibits and Reports on Form 8-K
(a) The exhibit hereto is incorporated by reference.
(b) Registrant did not file any report on Form 8-K for
the period for which this report is being filed. <PAGE>
Empire State Building Associates 14.
March 31, 1998
SIGNATURES
Pursuant to the requirements 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
Partners in Registrant, pursuant to Powers of Attorney, dated
August 6, 1996 and May 14, 1998 (collectively, the "Power").
EMPIRE STATE BUILDING ASSOCIATES
(Registrant)
By: /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Dated: June 1, 1998
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 Partners in Registrant, pursuant
to the Power, on behalf of Registrant on the date indicated.
By: /s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*
Dated: June 1, 1998
______________________
* Mr. Katzman supervises accounting functions for Registrant<PAGE>
Empire State Building Associates 15.
March 31, 1998
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 refer-
ence 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 which was filed as Exhibit
3(b) to Registrant's Annual Report on
10-K for the fiscal year ended
December 31, 1996 and is incorporated
by reference as an exhibit hereto.
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.
24 Powers of Attorney dated August 6,
1996 and May 14, 1998 between the
Partners of Registrant and Stanley
Katzman and Richard A. Shapiro.
______________________
* Page references are based on sequential numbering system.<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Balance Sheet as of March 31, 1998 and the Statement Of Income
for the year ended March 31, 1998, and is qualified in its entirety by
refenence to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 400,836
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,701,777<F1>
<PP&E> 39,000,000
<DEPRECIATION> 35,925,075
<TOTAL-ASSETS> 4,776,702
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,504,465
<TOTAL-LIABILITY-AND-EQUITY> 4,776,702
<SALES> 1,504,687<F2>
<TOTAL-REVENUES> 1,531,866<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 584,471<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 947,395
<INCOME-TAX> 0
<INCOME-CONTINUING> 947,395
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 947,395
<EPS-PRIMARY> 287.09<F5>
<EPS-DILUTED> 287.09<F5>
<FN>
<F1>Includes prepaid rent
<F2>Rental income
<F3>Includes dividend income
<F4>Leasehold rent, supervisory fees, legal fees and amortization of
leasehold
<F5>Earnings per $10,000 participation unit, based on 3,300 participation
units outstanding during the year
</FN>
</TABLE>
