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 [ ]
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[ ] Preliminary Proxy Statement [ ] Confidential, for use of
[XX] Definitive Proxy Statement the Commission Only
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Commission File No. 0-2673
Navarre-500 Building Associates
(Name of Registrant as Speficied In Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than Registrant)
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NAVARRE-500 BUILDING ASSOCIATES
c/o Wien & Malkin LLP
60 East 42nd Street - 48th Floor
New York, New York 10165-0015
NAVARRE-500 BUILDING ASSOCIATES
STATEMENT ISSUED BY THE AGENTS IN CONNECTION WITH THE
SOLICITATION OF CONSENTS OF THE
PARTICIPANTS
December 18, 1998
This Statement is issued in connection with the solicitation of
Consents of the Participants in Navarre-500 Building Associates
("Associates") by Peter L. Malkin and Thomas N. Keltner, Jr., as
Agents (the "Agents") for the participants (the "Participants").
Associates was formed to acquire the long-term leasehold of 500
Seventh Avenue, 512 Seventh Avenue and 228 West 38th Street, New York,
New York (the "Buildings"), 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 only one eligible successor Agent.
It is anticipated that this Statement and the accompanying form of
Consent will be mailed to the Participants on December 18, 1998. The
solicitation of Consents will terminate on December 18, 1999 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 March 21,
1958 to acquire the long-term leasehold on the Property subject to the
Net Sublease. Associates is comprised of two partners, each of whom
acts as Agent for a Group of Participants pursuant to a participating
agreement ("Participating Agreement"). Each of the two Participant
Groups owns a one-half interest in Associates, representing $1,600,000
in interests of the original $3,200,000 cash investment in Associates.
The original Agents in Associates were the late Lawrence A. Wien
and Fred Linden. Peter L. Malkin and Thomas N. Keltner, Jr. 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 500-512 Seventh Avenue
Associates, the net sublesseee (the "Sublessee") under the Net
Sublease, an Agent's discretion in most areas is virtually
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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 Sixth of each Participating Agreement provides that, in
the event of the retirement, removal, bankruptcy, death, insanity 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 successor Agent available to serve at this
time from those named in the original Participating Agreements. There
is only one successor Agent named in the January 12, 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 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 1958. 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 $270,000,000 in
property acquisitions, and $350,000,000 in property-related financing
transactions, and has had primary responsibility for day-to-day
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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 November 30, 1998, the Agents beneficially owned,
directly or indirectly, the following Participations:
Amount of
Name of Beneficial Percent
Title of Class Beneficial Owner Ownership of Class
Participations in Peter L. Malkin $33,125 1.04%
Partnership Interests
Thomas N. Keltner, Jr. None 0%
Peter L. Malkin also owned of record as trustee, but
not beneficially, $7,500 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 $5,000 of Participations, or .16% of the
outstanding Participations. Mr. Malkin disclaims any beneficial
ownership of his wife's Participations.
Anthony E. Malkin, a son of Peter L. Malkin, owned of record
and beneficially $10,000 of Participations, or .31% of the outstanding
Participations.
Scott D. Malkin, a son of Peter L. Malkin, owned of record
and beneficially $10,000 of Participations, or .31% of the outstanding
Participations.
B. Relationships with Net Sublessee
Peter L. Malkin, one of the Agents, also is a partner in the
Net Sublessee and owns 1.48% of the partner interests in the Net
Sublessee. He also acts as trustee for trusts owning 1.07% of the
partner interests in the Net 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 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
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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 $96,000 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 payment of $40,000 a year and an additional payment of
10% of cash available for distributions to Participants in excess of
23% in any year on the original cash investment of Associates. During
the year ended December 31, 1997, Associates paid W&MLLP a total of
$121,828. 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. During the year ended December 31, 1997, W&MLLP did not
receive any fee from Associates in consideration of legal services
rendered.
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.
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On December 31, 1997, there was a total of 608 Participants of
record holding Participations in the two 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 $1,600,000
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 December 18, 1999,
but may be extended by the Agents through March 18, 2000. There is no
record date establishing the identity of the Participants entitled to
vote on the proposal. Holders of Participations as of December 18,
1998 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.
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 $5,000 Participation
was $5,000 and $6,250.
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 AND THOMAS N. KELTNER, JR.
AS AGENTS (THE "AGENTS") ON BEHALF OF
NAVARRE-500 BUILDING ASSOCIATES
As a Participant in Navarre-500 Building Associates, the owner of
the long-term leasehold of 500 Seventh Avenue, 512 Seventh Avenue and
228 West 38th Street, 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 December 18, 1998 (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 vote to abstain
is treated the same as a vote to disapprove.
The Solicitation of Consents will terminate on December 18, 1999,
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: _______________
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