<PAGE>
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 September 30, 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>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Empire State Building Associates
Condensed Statement of Income
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
Income:
Rent income, from a
related party (Note B) $1,504,688 $1,504,688 $4,514,063 $4,514,063
Dividend income 19,209 2,647 65,805 7,781
---------- ---------- ---------- ----------
Total income 1,523,897 1,507,335 4,579,868 4,521,844
---------- ---------- ---------- ----------
Expenses:
Leasehold 492,500 492,500 1,477,500 1,477,500
Supervisory services, to a
related party (Note C) 39,854 39,854 119,563 119,563
Amortization of leasehold 52,117 52,117 156,351 156,351
--------- --------- ---------- ----------
Total expenses 584,471 584,471 1,753,414 1,753,414
--------- --------- ---------- ----------
Net income $ 939,426 $ 922,864 $2,826,454 $2,768,430
========= ========= ========== ==========
Earnings per $10,000
participation unit,
based on 3,300 participation
units outstanding
during the year $ 284.67 $ 279.66 $ 856.50 $ 838.92
========= ========= ========== ==========
Distributions per $10,000
participation consisted
of the following:
Income $ 284.67 $ 279.66 $ 856.50 $ 838.92
Return of capital 9.98 14.99 349.05 45.02
--------- --------- --------- ----------
Total distributions $ 294.65 $ 294.65 $1,205.55 $ 883.94
========= ========= ========= ==========
At September 30, 1998 and 1997, there were $33,000,000 of participations
outstanding.<PAGE>
Empire State Building Associates
Condensed Statement of Income
(Unaudited)
Assets September 30, 1998 December 31, 1997
Current assets
Cash $ 406,302 $ 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 1,310,270 -0-
---------- -----------
Total current Assets 1,740,403 2,803,660
Real Estate
Leasehold on Empire State Building 39,000,000 39,000,000
Less, allowance for amortization 36,029,309 35,872,958
---------- -----------
2,970,691 3,127,042
---------- -----------
Total Assets $4,711,904 $ 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 September 30, 1998 2,826,454 -0-
January 1, 1997 through December 31, 1997 -0- 4,752,560
---------- -----------
7,417,175 8,480,054
Less, Distributions:
Monthly distributions,
January 1, 1998 through September 30, 1998 2,917,000 -0-
January 1, 1997 through December 31, 1997 -0- 3,889,333
Additional Distribution on March 5, 1998
of overage rent for the lease year
ended December 31, 1997 1,061,318 -0-
---------- -----------
3,978,318 3,889,333
---------- -----------
Capital 3,438,857 4,590,721
---------- -----------
Total Liabilities and Capital 4,711,094 5,930,702
========== ===========<PAGE>
Empire State Building Associates
Condensed Statement of Income
(Unaudited)
January 1, 1998 January 1, 1997
through through
September 30, 1998 September 30, 1997
Cash flows from operating
activities:
Net income $2,826,454 $2,768,430
Adjustments to reconcile
net income to cash provided
by operating activities:
Amortization of leasehold 156,351 156,351
Change in additional rent due 2,401,300 -0-
Change in accrued
supervisory services (67,744) -0-
Change in legal fee
reserve account (1,310,270) -0-
---------- ----------
Net cash provided by operating
activities 4,006,091 2,924,781
---------- ----------
Cash flows from financing activities:
Cash distributions (3,978,318) (2,917,000)
---------- ----------
Net cash used in financing
activities (3,978,318) (2,917,000)
---------- ----------
Net cash increase (decrease)
in cash and cash equivalents 27,773 7,781
Cash and cash equivalents
beginning of period 378,529 368,152
---------- ----------
Cash and cash equivalents
end of period $ 406,302 $ 375,933
========== ==========
<PAGE>
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 presented 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 (collectively, 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 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
services.
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 September 30,
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 nine month period ended
September 30, 1998 by Registrant to any of the Partners as such. Pursuant to
the Fee arrangements described herein, Registrant paid Counsel $75,000 of the
Basic Payment for supervisory services for the nine month period ended September
30, 1998, and $4,951 a month as the Additional Payment for supervisory services.
The supervisory 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 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.
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 September 30, 1998, the Partners owned of record and
beneficially an aggregate of $231,250 of participations in Registrant,
representing less than 1% of the currently outstanding participations therein
totaling $33,000,000.
In addition, as of September 30, 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.
Richard A. Shapiro owned of record as custodian, but not
beneficially $12,500 of Participations. Mr. Shapiro
disclaims any beneficial ownership of such Participations.
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 nine month period
ended September 30, 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 restrictions 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 nine month period ended
September 30, 1998 as compared with the nine month period ended September 30,
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 the nine month period ended September 30, 1998
as compared with the nine month period ended September 30, 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 $202,505 through July 31,
1998. 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 nine month period ended September 30, 1998, as compared with the nine
month period ended September 30, 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 September 30, 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 been denied permission to appeal
to the New York Court of Appeals. The plaintiff has filed a further complaint
alleging similar claims, purportedly as a class action. Defendants' counsel has
filed 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 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 injunctions 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's 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
applications 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 (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 allegedly due plaintiff under those
agreements, as well as injunctive 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 Sublessee, 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 partnerships which own, lease or operate buildings
managed by Helmsley-Spear, Inc., including Registrant's property. In their
complaint, plaintiffs sought the removal of Helmsley-Spear, Inc. as managing
and leasing agent for all of the buildings. Plaintiffs also sought an order
precluding Leona Helmsley from exercising any partner management powers in the
partnerships. In August, 1997, the Supreme Court directed that the foregoing
claims proceed to arbitration. As a result, Mr. Malkin and Wien & Malkin LLP
filed an arbitration complaint against Helmsley-Spear, Inc. and Mrs. Helmsley
before the American Arbitration Association. Helmsley-Spear, Inc. and Mrs.
Helmsley served answers denying liability and asserting various affirmative
defenses and counterclaims; and Mr. Malkin and Wien & Malkin LLP filed a reply
denying the counterclaims. By agreement dated December 16, 1997, Mr. Malkin
and Wien & Malkin LLP (each for their own account and not in any representative
capacity) reached a settlement with Mrs. Helmsley of the claims and
counterclaims in the arbitration and litigation between them. Mr. Malkin and
Wien & Malkin LLP are continuing their prosecution of claims in the arbitration
for relief against Helmsley-Spear, Inc., including its termination as the
leasing and managing agent for various entities and properties, including the
Registrant's Sublessee.
Item 5. Other Information
The Sublessee is to maintain 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
modernization program has increased elevator speed from 800 to 950 feet per
minute to 1200 feet per minute. Also included is waterproofing 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>
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
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 which was
filed as Exhibit 24 to Registrant's 10-Q for the
quarter ended March 31, 1998 and is incorporated
herein by reference.
__________________________
* Page references are based on sequential numbering system.
<PAGE>
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: November , 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: November , 1998
__________________________
* Mr. Katzman supervises accounting functions for Registrant.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Balance Sheet as of September 30, 1998 and the Statement Of Income
for the year ended September 30, 1998, and is qualified in its entirety by
refenence to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 406,302
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,740,403<F1>
<PP&E> 39,000,000
<DEPRECIATION> 36,029,309
<TOTAL-ASSETS> 4,711,904
<CURRENT-LIABILITIES> 1,272,237
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,438,857
<TOTAL-LIABILITY-AND-EQUITY> 4,711,904
<SALES> 4,514,063<F2>
<TOTAL-REVENUES> 4,579,868<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,753,414<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,826,454
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,826,454
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,826,454
<EPS-PRIMARY> 856.50<F5>
<EPS-DILUTED> 856.50<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>
