FORM 10-Q-A
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 6 of this Report.
Number of pages (including exhibits) in this filing: 8<PAGE>
PART I. FINANCIAL INFORMATION
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.
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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
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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.
Year 2000 Issues
Pursuant to SEC Release No. 33-7558, the
Securities and Exchange Commission ("SEC") has instructed
registrants to make suitable disclosure regarding year 2000
readiness. Accordingly, Registrant reports the following:
Registrant receives base and overage rent from
Sublessee, for which Helmsley-Spear, Inc. manages the
property as Sublessee's managing and leasing agent.
Registrant's supervisor, Wien & Malkin LLP, has requested
the managing agent to provide information related to its
Year 2000 readiness. However, this information has not yet
been provided by the managing agent. Registrant will
continue to seek information related to Year 2000 readiness
from the managing agent.
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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: March 31, 1999
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: March 31, 1999
__________________________
* Mr. Katzman supervises accounting functions for Registrant.
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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 17, 1998,
reflecting a change in the Partners of
Registrant, effective as of April 15,
1998.
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.
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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
19th day of August, 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;*
JOHN L. LOEHR, residing at 286 Alpine Circle, River Vale, New
Jersey 07675, has been succeeded as a partner by RICHARD A.
SHAPIRO, residing at 38 Flint Avenue, Larchmont, New York 10538.
STANLEY KATZMAN, residing at 30 East 62nd Street, New York, New
York 10021, has been succeeded as a partner by THOMAS N. KELTNER,
Jr., residing at 1111 Park Avenue, New York, New York 10128.
The members of EMPIRE STATE BUILDING ASSOCIATES now consist of:
Thomas N. Keltner, Jr., Peter L. Malkin and Richard A. Shapiro.
In Witness Whereof, the undersigned have as of the 15th day of
April, 1998 made and signed this certificate.
s/s Stanley Katzman s/s Thomas N. Keltner, Jr.
STANLEY KATZMAN THOMAS N. KELTNER, JR.
s/s John L. Loehr s/s Richard A. Shapiro
JOHN L. LOEHR RICHARD A. SHAPIRO
s/s Peter L. Malkin
PETER L. MALKIN
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State of New York, County of New York ss.:
On this 29th day of July, 1998 before me personally appeared
JOHN L. LOEHR, STANLEY KATZMAN, THOMAS N. KELTNER, JR., PETER L.
MALKIN and RICHARD A. SHAPIRO, 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.
s/s Notary Public
s/s NOTARY PUBLIC
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