SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x ] Preliminary Proxy Statement
[x ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c)
or 240.14a-12
...........Navarre-500 Building Associates..........
(Name of Registrant as Specified In Its Charter)
............................................................
...............................................
(Name of Person(s) Filing Proxy Statement if
other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),
14a-6(i)(1), 14a-6(i)(2) or tem 22(a)(2) of
Schedule 14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[xx] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies: Participations
2) Aggregate number of securities to which
transaction applies: [____]
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it
was determined): The fee is equal to 1/50th of 1%
of the assumed fair market value of the Property,
which is presumed to be the aggregate of the cash
to be received by the Registrant.
4) Proposed maximum aggregate value of transaction:
[$_____]
<PAGE>
5) Total fee paid: $8,000
[ ] 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 identify 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 as Registration Statement No.:
3) Filing Party:
4) Date Filed:
-2-<PAGE>
Navarre 500 Building Associates
c/o Wien & Malkin LLP
60 East 42nd Street 48th Floor
New York, New York 10165-0015
Telephone (212) 687-8700
Telecopier (212) 986-7679
4/7/99
April ___, 1999
To: Participants in Navarre-500 Building
Associates ("Associates")
I am writing to request (a) your consent to the sale of
Associates' Leasehold (the "Leasehold") of the property known as
500 Seventh Avenue, 512 Seventh Avenue, and 228 West 38th Street
in New York City (the "Property") pursuant to a joint sale and
allocation program with the net sublessee of the Property and (b)
your agreement to payment of incentive compensation to Wien &
Malkin LLP in the event of a sale.
BACKGROUND
Lawrence A. Wien formed Associates in 1958 to purchase
the Leasehold for $3,200,000, subject to a net sublease to 500-
512 Seventh Avenue Associates (the "Lessee"). Since then, all
the Agents serving as partners in Associates on behalf of the
Participants have been partners in Wien & Malkin LLP, including
Mr. Wien until his death in 1988. I continue to serve as an
Agent. Wien & Malkin LLP has served as supervisor and counsel to
both Associates and the Lessee from inception.
Prior to forming Associates, Mr. Wien formed the Lessee
as the net operating sublessee of the Property. The Lessee
initially consisted primarily of certain Wien & Malkin LLP
partners, their family members, and officers of Helmsley-Spear,
Inc. I own a 1.477% beneficial interest in the Lessee, and my
family and I own 2.793% of the participations in Associates. The
Lessee is current in all its obligations to Associates.
SALE PROGRAM
The enclosed Statement describes the rise in the New
York City real estate sale market, the decline in garment
<PAGE>
industry demand for space in the Garment Center, and the
resulting rationale for sale of the Leasehold in cooperation with
the Lessee. Currently, the Property is experiencing vacancies as
a showroom building and is not competitive with other buildings
for general office tenants. I believe that a comprehensive
redevelopment is required to make the Property competitive. Such
a redevelopment would involve speculative investment risks which
Mr. Wien believed, and I continue to believe, are not appropriate
for the Participants who invested in, and expected to participate
in, a passive investment.
Sale prices for buildings in the Garment Center have
been strengthened generally by the rise in the Manhattan market,
the major new investments made by entertainment, communications
and financial companies in the nearby Times Square and Penn
Station office districts, the shortage of space in these adjacent
areas, and the redevelopment of Garment Center buildings for
office use. The Lessee is concurrently soliciting authorization
from its partners for sale of its interest in the Property on the
condition that Associates join in the sale. The Lessee's action
is based on its expectation that sale of the combined interests
would command a premium for both Associates and the Lessee. As a
result, Associates may have the opportunity to join with the
Lessee for sale at an optimal price for both.
If the Lessee joins with Associates in a sale, the net
sale proceeds would be divided between Associates and the Lessee
in accord with an allocation determined by Cushman & Wakefield, a
recognized independent expert, as specified in the Statement.
The Statement contains examples of the allocation of sale
proceeds in accord with this allocation. See Section IV.D. of
the Statement entitled Potential Conflicts of Interest. The
Agents will not proceed with the sale unless the amount available
per distribution to the Participants will be at least five times
the original cash investment.
Subject to approval of the sale by the Participants,
the Agents and the Lessee have engaged Eastdil Realty Company,
L.L.C., a leading independent real estate brokerage firm, to
conduct a thorough marketing program for the joint sale by
Associates and the Lessee. Wien & Malkin LLP will continue as
supervisor and counsel to Associates to help assure an optimal
sale result and will represent Associates, as well as the Lessee,
in connection with the sale. Monthly distributions to
Participants are expected to continue until any authorized sale
is concluded.
INCENTIVE COMPENSATION
Wien & Malkin LLP has supervised this investment from
its creation in 1958 and has developed the program for marketing
the joint sale with the Lessee. As previously approved by the
Participants, Wien & Malkin LLP receives from Associates (a) an
-2-<PAGE>
annual supervisory fee of $40,000 for its supervisory services,
from which it also pays Associates' accounting fees and other
disbursements, and (b) incentive compensation equal to 10% of all
distributions to Participants in any year after the Participants
have received distributions in that year equal to 23% of the
original investment. Incentive compensation was last paid for the
lease year ending in June 1997.
In performing its calculations to determine the
allocation between Associates and the Lessee, Cushman & Wakefield
independently determined the value attributable to Wien & Malkin
LLP's supervisory interest. In lieu of the existing formula for
incentive compensation, I recommend that each Participant
voluntarily, and only as to his or her own distributions, agree
that Wien & Malkin LLP should receive the share of sale
distributions determined by Cushman & Wakefield, as specified in
the Statement as the sole incentive compensation to Wien &
Malkin LLP on sale.
CONSENT PROCEDURES
The consent of all Participants is required to
authorize the sale program. However, to assure that a small
minority cannot frustrate the will of the great majority, upon
receipt of consent from 80% in interest of an Agent's group, the
Participating Agreement authorizes the Agent to purchase for $683
per $10,000 of original investment the interest of any
Participant who withholds consent 10 days after written advice
that the 80% threshold has been achieved. Each Agent presently
intends to purchase the interest of any non-consenting
Participant in his group once the 80% threshold is achieved.
This purchase provision does not apply to the proposal for Wien &
Malkin LLP incentive compensation, as to which each consent is to
be an individual decision.
Enclosed are (a) the Statement, detailing the sale
program and including financial reports, and (b) a colored
Consent and Agreement Form. Each Participant should review the
Statement before signing and returning the Consent and Agreement
Form.
Consent and Agreement Forms which are signed and
returned without a choice indicated will constitute a consent to
the sale program and an agreement to the incentive compensation
and will be binding on each Participant as if such Participant
had actually indicated that choice.
-3-<PAGE>
SUMMARY
Based upon current market conditions, the Agents
believe that the sale program outlined in the Statement is the
best course in the current situation and that such sale will
result in a distribution to the Participants of more than five
times the original investment. Therefore, I urge your consent to
the sale program and your agreement to the incentive
compensation.
If you have any question, please contact any partner
in Wien & Malkin LLP, by mail at 60 East 42nd Street, New York,
New York 10165, by telephone at 212-687-8700, or by telecopier at
212-986-7679.
Sincerely,
Peter L. Malkin
Enclosure
PLEASE SIGN, DATE AND IMMEDIATELY RETURN THE ENCLOSED COLORED
COPY OF THE CONSENT AND AGREEMENT. A SIGNED CONSENT AND
AGREEMENT FORM WHICH IS RETURNED WITHOUT AN INDICATED CHOICE WILL
CONSTITUTE A BINDING AFFIRMATIVE CONSENT AND AGREEMENT. ONCE
GIVEN, CONSENT AND AGREEMENT MAY NOT BE REVOKED
-4-<PAGE>
