UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [XX]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[XX] Preliminary Proxy Statement [ ] Confidential, for use of
[ ] Definitive Proxy Statement the Commission Only
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Commission File No. 0-827
Empire State Building Associates
(Name of Registrant as Speficied In Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[XX] No fee required
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:. . . . . . . . . . . . . . . . . . . . . . .
2) Aggregate number of securities to which transaction
applies:. . . . . . . . . . . . . . . . . . . . . . .
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and determined):
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
5) Total fee paid:. . . . . . . . . . . . . . . . . .
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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and indentify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously Paid:. . . . . . . . . . . . . . .
2) Form, Schedule or Registration Statement No.:
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4) Date Filed:. . . . . . . . . . . . . . . . . . . . .
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EMPIRE STATE BUILDING ASSOCIATES
c/o Wien & Malkin LLP
60 East 42nd Street - 48th Floor
New York, New York 10165-0015
EMPIRE STATE BUILDING ASSOCIATES
STATEMENT ISSUED BY THE AGENTS IN CONNECTION WITH THE
SOLICITATION OF CONSENTS OF THE
PARTICIPANTS
(date of letter)
This Statement is issued in connection with the solicitation
of Consents of the Participants in Empire State Building
Associates ("Associates") by Peter L. Malkin, Thomas N. Keltner,
Jr., and Richard A. Shapiro, as Agents (the "Agents") for the
participants (the "Participants"). Associates was formed to
acquire the long-term leasehold of the Empire State Building, 350
Fifth Avenue, New York, New York (the "Property"), subject to a
net operating sublease (the "Net Sublease").
The Agents are requesting the consent of the Participants to
the designation of new successor Agents. The Agents recommend
approval of the proposal, as there currently is no eligible
successor Agent.
It is anticipated that this Statement and the accompanying
form of Consent will be mailed to the Participants on (date of
letter). The solicitation of Consents will terminate on (first
anniversary of date of letter) unless extended by the Agents, but
in no event later than 90 days thereafter. The Agents will advise
all Participants of the results of this solicitation no later than
60 days after the termination date noted above or any extension
thereof.
I. BACKGROUND
Associates, a New York partnership, was organized on July 11,
1961 to acquire the long-term leasehold on the Property subject to
the Net Sublease. Associates is comprised of three partners, each
of whom acts as Agent for a Group of Participants pursuant to a
participating agreement ("Participating Agreement"). Each of the
three Participant Groups owns a one-third interest in Associates,
representing $11,000,000 in interests of the original $33,000,000
cash investment in Associates.
The original Agents in Associates were the late Lawrence A.
Wien, the late Henry W. Klein and Peter L. Malkin. Peter L.<PAGE>
Malkin, Thomas N. Keltner, Jr. and Richard A. Shapiro are the
current Agents in Associates.
The terms of each Participating Agreement are identical.
Under each of the Participating Agreements between an Agent and
his respective Group of Participants, Participants have the right
to approve or disapprove certain proposed actions by their Agent,
including the designation of successor Agents. Since an Agent is
restricted in the actions he or she can take without consent of
the Participants, and the Property is operated by Empire State
Building Company, the net sublessee (the "Sublessee") under the
Net Sublease, an Agent's discretion in most areas is virtually
non-existent. There is no specific term of office of any Agent,
and Agents receive no compensation for their service.
The percentage in interest of Participants required to
approve the proposal of the Agents in this Statement is described
in Section V. - Terms of Solicitation of Consents.
II. DESIGNATION OF SUCCESSORS TO THE AGENTS
Paragraph Ninth of each Participating Agreement provides
that, in the event of the resignation, removal, death,
incompetency or other disability of an Agent, he shall be
succeeded by certain persons in the order listed therein or by any
other person of full age designated in writing by the holder of at
least 75% of the Participations in that group.
There is no remaining eligible successor Agent available to
serve at this time from those named in the original Participating
Agreements or in the June 30, 1988 consent solicitation letter for
successor Agents. Therefore, it is necessary to designate new
successors for each Agent to provide for the long-term future of
the investment.
The Agents recommend that each Group of Participants approve
the following as successor Agents for its Group: (a) any
individual who, at the time of his or her designation as Agent, is
a partner in Wien & Malkin LLP or any successor thereto (W&MLLP),
(b) any individual who, at the time of his or her designation as
Agent, is associated with or employed by W&MLLP and has
appropriate business experience and qualifications as determined
by the Chairman of the Executive Committee of W&MLLP, (c) Anthony
E. Malkin, and (d) Scott D. Malkin. The order of succession shall
be determined by Peter L. Malkin or, failing such determination,
by the Executive Committee of W&MLLP. Currently, Peter L. Malkin
serves as Chairman of the Executive Committee.
The Participants' consent to the designation of a category of
persons qualified to act as successor Agents, such as is
represented by partners (category (a) above) and selected
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associates or employees (category (b) above) of W&MLLP, will
provide greater assurance of the continued availability of
qualified individuals who are eligible to serve as Agents as
vacancies occur in the future. Designation of categories of
appropriate individuals also will reduce the need to conduct
solicitations to approve new successor Agents, thus eliminating
the expensive, burdensome and time-consuming process of consent
solicitations for this ministerial purpose.
W&MLLP has provided supervisory, accounting, professional and
various other services to Associates since the formation of
Associates in 1961. The Agents, each of whom is a partner in
W&MLLP, believe that the firm's experience in providing services
to Associates uniquely qualifies its partners, and employees or
associated persons of W&MLLP selected by the Chairman of its
Executive Committee, to serve as successor Agents.
Anthony E. Malkin and Scott D. Malkin are sons of Peter L.
Malkin, and each is a graduate of Harvard College and experienced
in real estate. After receiving law and business graduate degrees
from Harvard University, Scott D. Malkin has been actively
involved in real estate ownership and development in the United
States and Europe for the past fourteen years. Anthony E. Malkin
has served for the past ten years as President of W&M Properties,
Inc., the real estate management firm owned by Peter L. Malkin and
him. During his tenure at W&M Properties, Inc., Anthony E. Malkin
initiated over $260,000,000 in property acquisitions, and
$330,000,000 in property-related financing transactions, and has
had primary responsibility for day-to-day management and operation
of office, residential and industrial properties located in eight
states of the United States.
III. POTENTIAL CONFLICTS OF INTEREST
A. Certain Ownership of Participations
As of July 31, 1998, the Agents beneficially owned,
directly or indirectly, the following Participations:
Title of Class Name & Address Amount of
of Beneficial Beneficial Percent
Owner Ownership of Class
Participations in Peter L. Malkin $163,750 .50%
Partnership Interests 21 Bobolink Lane
Greenwich, CT 06830
Thomas N. Keltner, Jr. $ 5,000 .02%
1111 Park Avenue
New York, NY 10128
Richard A. Shapiro $ 5,000 .02%
38 Flint Avenue
Larchmont, NY 10538
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Peter L. Malkin also owned of record as trustee or co-
trustee, but not beneficially, $195,000 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.
Isabel W. Malkin, the wife of Peter L. Malkin, owned
of record and beneficially $158,333 of Participations, or .48%
of the outstanding Participations. Mr. Malkin disclaims any
beneficial ownership of his wife's Participations.
Jane Shapiro, the wife of Richard A. Shapiro, owned of
record and beneficially, $5,000 of Participations, or .02% of
the outstanding Participations. Mr. Shapiro disclaims any
beneficial ownership of his wife's Participations.
Anthony E. Malkin, a son of Peter L. Malkin, owned of
record and beneficially $23,333 of Participations, or .07% of
the outstanding Participations. He also acts as co-trustee for
trusts owning .11% of the outstanding Participations, and he
disclaims any beneficial ownership in those Participations.
Scott D. Malkin, a son of Peter L. Malkin, owned of
record and beneficially $65,833 of Participations, or .20% of
the outstanding Participations. He also acts as custodian for
.04% of the outstanding Participations, owned by certain of his
children and he disclaims any beneficial ownership in those
Participations.
B. Relationships with Sublessee
Peter L. Malkin, one of the Agents, also is a Partner in
the Sublessee and owns 3.685% of the partner interests in the
Sublessee.
Isabel W. Malkin owns a .18% of the partner interests in
the Sublessee.
The wife of another member of W&MLLP owns .55% of the
partner interests in the Sublessee.
As a consequence of (a) one of the Agents being a
partner in the Sublessee, and (b) the current and certain
potential future Agents being members of W&MLLP (which represents
Associates and the Sublessee), certain actual or potential
conflicts of interest may arise with respect to the management and
administration of the business of Associates. However, under the
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respective Participating Agreements, certain transactions require
prior consent from Participants owning a specified interest under
the Agreements in order for the Agents to act on their behalf.
Such transactions include (a) the modification or extension of the
Net Sublease or the granting of a new Net Sublease, or (b) the
granting, extending or modifying of a new mortgage loan secured by
Associates' leasehold in the Property, or (c) a sale or other
disposition of Associates' leasehold in the Property or
substantially all of Associates' other assets. The interest, if
any, of each Agent in Associates and in the Sublessee, as a
partner therein, arises solely from ownership of Participations in
Associates and direct or indirect partner interests in the
Sublessee. The Agents, as investors in Associates and the
Sublessee, receive no extra or special benefit and simply share
pro rata with all other Participants in Associates or partners in
the Sublessee. However, any Agent who is a member of W&MLLP is
entitled to receive a pro rata share of any supervisory or legal
fee or other remuneration paid to W&MLLP for professional services
rendered to the Sublessee and to Associates, as described below.
W&MLLP receives $270,000 annually from the Sublessee for
acting as supervisor of the Sublessee.
C. W&MLLP Services to Associates
Each of the current Agents is a member of W&MLLP, which
firm receives compensation from Associates for providing various
supervisory services to Associates. In consideration for such
supervisory services, W&MLLP receives (a) an annual basic
supervisory fee of $100,000 and (b) additional compensation equal
to 6% of (1) one-half of (i) the savings arising from the
elimination of leasehold mortgage charges (which occurred in 1984)
and (ii) the reductions in master lease rent in 1992 and 2013 and
(2) any overage rent received by Associates. During the year
ended December 31, 1997, Associates paid W&MLLP a total of
$227,161. From Associates' payments to it, W&MLLP pays
disbursements of Associates relating to W&MLLP's supervisory
services to Associates, for accounting and certain other
professional fees, filing and search fees, and certain report
preparation and mailing costs.
W&MLLP also acts as legal counsel to Associates and
provides certain legal services in addition to the supervisory
services described above for legal fees at its standard rates. As
legal counsel to Associates, W&MLLP participated in the
preparation and filing of this Consent Solicitation Statement and
will receive compensation for its services.
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IV. FEES AND EXPENSES
All fees and expenses relating to the solicitation of
Consents hereunder, including those of third parties engaged by
W&MLLP to assist in the preparation of this Consent Statement,
will be advanced by W&MLLP and then reimbursed by Associates by
deducting such amounts from overage rent otherwise available for
distribution to Participants.
V. TERMS OF SOLICITATION OF CONSENTS
The Participating Agreement between an Agent and the
Participants in that Agent's Group requires that consents for the
designation of successor Agents discussed in Section II above be
received from 75% in interest of the Participants in the Group.
The new successor Agents will be designated for each Group as and
when the requisite consents are received for that Group.
On December 31, 1997, there was a total of 2,622 Participants
of record holding Participations in the three Groups. Each
Participant's voting percentage in his or her Group is determined
by a fraction, the numerator of which is the face amount of the
Participation owned and the denominator of which is the Group's
original $11,000,000 investment in Associates. At December 31,
1997, no person held Participations aggregating more than 5% of
the total outstanding Participations.
This solicitation of Consents will terminate on (first
anniversary of letter), but may be extended by the Agents through
(90 days thereafter). There is no record date establishing the
identity of the Participants entitled to vote on the proposal.
Holders of Participations as of (date of letter) will be
recognized as entitled to vote. If any Participation is
transferred before the Consent with respect to that Participation
is given, the transferee will be entitled to vote. If Consent to
the proposal has been given prior to the transfer of a
Participation, however, the transferee will be bound by the vote
of the transferor.
W&MLLP has been authorized by the Agents to solicit the
Consents of Participants by mail, fax, telephone and telegram
after the mailing of this Statement. Forms of Consent that are
signed and returned without a choice indicated as to the proposal
for which Consent is sought will be deemed to constitute a Consent
to the proposal and will be binding on each Participant as if such
Participant had actually indicated such Consent on such form. If
the Consent is returned undated, it will be deemed dated as of the
date received by the Agents.
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The Agents recommend that Participants consent to the
designation of successor Agents as proposed. Please note that a
vote to abstain is treated the same as a vote to disapprove.
Participations are not traded on an established securities
market, nor are they readily tradeable on a secondary market or
the substantial equivalent thereof. Based on Associates' transfer
records, Participations are sold by holders from time to time in
privately negotiated transactions, and, in many instances,
Associates is unaware of the prices at which such transactions
occur (other than certain transfers involving Participations owned
by members of W&MLLP or their families). However, Associates has
been advised that the sale price during the past twenty-four
months for an original $10,000 Participation ranged between
$15,000 and $22,500.
If you have any question or desire any additional information
concerning this Consent solicitation, please communicate with
Stanley Katzman, Mark Labell, Thomas N. Keltner, Jr., Richard A.
Shapiro or Alvin Silverman, partners in Wien & Malkin LLP, by mail
at 60 East 42nd Street, New York, New York 10165-0015, by phone at
212-687-8700, or by fax at 212-986-7679.
PLEASE SIGN, DATE AND IMMEDIATELY RETURN THE COLORED COPY OF
THE CONSENT IN THE ENCLOSED ENVELOPE. ONCE GIVEN, CONSENT MAY NOT
BE REVOKED.
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CONSENT
(SOLICITED BY PETER L. MALKIN, THOMAS N. KELTNER, JR. AND
RICHARD A. SHAPIRO AS AGENTS (THE "AGENTS") ON
BEHALF OF EMPIRE STATE BUILDING ASSOCIATES)
As a Participant in EMPIRE STATE BUILDING ASSOCIATES, the
owner of the long-term leasehold of the Empire State Building, 350
Fifth Avenue, New York, New York, I hereby take the following
action in response to the Agents' proposal for the designation of
successor Agents as outlined in the Statement issued by the Agents
in connection with the Solicitation of Consents of the
Participants, dated (to be inserted) (the "Statement"):
CONSENT WITHHOLD CONSENT
Consent to
______ and Approve of ______ Disapprove of
Abstain from
______ Consenting to
the designation of the successor Agents, as described in Section
II of the Statement.
The Agents recommend that Participants consent to the
designation of successor Agents as proposed. Please note that a
note to abstain is treated the same as a vote to disapprove.
The Solicitation of Consents will terminate on (first
anniversary of date of letter) but may be extended until 90 days
thereafter.
The matter for which a Consent is being solicited is more
fully described in the Statement, receipt of which is hereby
acknowledged and which is incorporated herein by reference.
IF THIS FORM IS SIGNED AND RETURNED WITHOUT A CHOICE INDICATED,
CONSENT WILL BE DEEMED TO HAVE BEEN GIVEN AS IF SUCH CONSENT WAS
ACTUALLY INDICATED ON THE FORM. IF THE CONSENT IS RETURNED
UNDATED, IT WILL BE DEEMED DATED AS OF THE DATE RECEIVED BY THE
AGENTS. ONCE GIVEN, THE CONSENT (OR DEEMED CONSENT) MAY NOT BE
REVOKED.
Dated: ______________________, 1998.
