-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P45TMfyP7kvoHpWlCksjWc3kisorxQQ4K2mA1nqyhln3lTlOEF2p3Daz6qdDfZoo kD1lV7N4vzSLjTQN4tHycQ== 0000100412-96-000002.txt : 19960402 0000100412-96-000002.hdr.sgml : 19960402 ACCESSION NUMBER: 0000100412-96-000002 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960401 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: 250 WEST 57TH ST ASSOCIATES CENTRAL INDEX KEY: 0000100412 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 136083380 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-02666 FILM NUMBER: 96542615 BUSINESS ADDRESS: STREET 1: C/O WEIN MALKIN & BETTEX STREET 2: 60 WEST EAST 42ND STREET CITY: NEW YORK STATE: NY ZIP: 10165 BUSINESS PHONE: 2126878700 10-K 1 250 WEST 57TH ASSOCIATES 10-K FILING FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1995 [ ] 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 O-2666 250 WEST 57TH ST. ASSOCIATES (Exact name of registrant as specified in its charter) New York 13-6083380 State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 60 East 42nd Street, New York, New York 10165 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 687-8700 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to section 12(g) of the Act: $3,600,000 of Participations in Joint-Venture Interests 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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ] The aggregate market of the voting stock held by non-affiliates of the Registrant: Not applicable, but see Items 5 and 10 of this report. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. An Exhibit Index is located on pages 31 through 33 hereof. Number of pages (including exhibits) in this filing: 47 PART I Item 1. Business. (a) General Registrant is a joint venture which was organized on May 25, 1953. On September 30, 1953, Registrant acquired fee title to The Fisk Building, 250-264 West 57th Street, New York, New York (the "Building") and to the land thereunder (the "Property"). Registrant's joint venturers are Peter L. Malkin, Stanley Katzman and Ralph W. Felsten (individually, a "Joint Venturer" and, collectively, the "Joint Venturers") each of whom also acts as an agent for holders of participations in their undivided joint venture interests in Registrant (each holder of a participation, individually, a "Participant" and, collectively, the "Participants"). Registrant leases the Property to Fisk Building Associates (the "Net Lessee"), a partnership, under a net operating lease dated May 1, 1954 (the "Net Lease"), the current term of which expires on September 30, 2003. Net Lessee is a partnership in which Mr. Malkin is one of the Partners. The Joint Venturers are also members of the law firm of Wien, Malkin & Bettex, 60 East 42nd Street, New York, New York, counsel to Registrant and the Net Lessee (the "Counsel"). See Items 10, 11, 12 and 13 hereof for a description of the ongoing services rendered by, and compensation paid to, Counsel and for a discussion of certain relationships which may pose actual or potential conflicts of interest among Registrant, Net Lessee and certain of their respective affiliates. As of December 31, 1995, the Building was approximately 88% occupied by approximately 275 tenants, a majority of whom are engaged in the practices of law, dentistry and accounting, and the businesses of publishing, insurance and entertainment. Registrant does not maintain a full-time staff. See Item 2 hereof for additional information concerning the Building. (b) Net Lease Under the Net Lease, Net Lessee must pay (i) annual basic rent equal to the sum of $28,000 plus an amount equal to the rate of constant payments for interest and amortization required annually under the first mortgage described below (the "Basic Rent"), and (ii)(A) primary overage rent equal to the lesser of (1) Net Lessee's net operating income for the lease year or (2) $752,000 (the "Primary Overage Rent"), and (B) secondary overage rent equal to 50% of any remaining balance of Net Lessee's net operating income for such lease year ("Secondary Overage Rent"). Net Lessee is required to make a monthly payment to Registrant, as an advance against Primary Overage Rent, of an amount equal to its operating profit for its previous lease year in the maximum amount of $752,000 per annum. Net Lessee currently advances $752,000 each year which permits Registrant to make regular monthly distributions at 20% per annum on the Participants' remaining cash investment. For the lease year ended September 30, 1995, Net Lessee reported net operating profit of $3,060,683 after deduction of Basic Rent. Net Lessee paid Primary Overage Rent of $752,000, together with Secondary Overage Rent of $1,154,342 for the fiscal year ended September 30, 1995. The Secondary Overage Rent of $1,154,342 represents 50% of the excess of the net operating profit of $3,060,683 over $752,000. After the payment of $22,305 for expenditures in connection with the refinancing of the first mortgage on the Property and the payment of $113,204 to Counsel as an additional payment for supervisory services, the balance of $1,018,833 was distributed to the Participants on November 30, 1995. Secondary Overage Rent income is recognized when earned from Net Lessee, at the close of the lease year ending September 30. Such income is not determinable until Net Lessee, pursuant to the Net Lease, renders to Registrant a certified report on the operation of the Property. The Net Lease requires that this report be delivered to Registrant annually within 60 days after the end of each such lease year. Accordingly, all Secondary Overage Rent income and related supervisory service expense can only be determined after the receipt of such report. The Net Lease does not provide for the Net Lessee to render interim reports to Registrant, so no income is reflected for the period between the end of the lease year and the end of Registrant's fiscal year. See Note 4 of Notes to Financial Statements filed under Item 8 hereof (the "Notes") regarding Secondary Overage Rent payments by Net Lessee for the fiscal years ended December 31, 1995, 1994 and 1993. The Net Lease provides for one renewal option of 25 years. The Participants in Registrant and the partners in Net Lessee have agreed to execute three additional 25-year renewal terms on or before the expiration of the then applicable renewal term. (c) Mortgage Loan Refinancing Effective March 1, 1995, the first mortgage loan on the Property, in the principal amount of $2,890,758, held by Apple Bank for Savings ("Apple Bank") was refinanced (the "Refinancing"). The material terms of the refinanced mortgage loan (the "Mortgage Loan") are as follows: -2- (i) a maturity date of June 1, 2000; (ii) monthly payments of $24,096 aggregating $289,157 per annum applied first to interest at the rate of 9.4% per annum and the balance in reduction of principal; (iii) no prepayment until after the third loan year. Thereafter, a 3% penalty will be imposed in the fourth loan year and a 2% penalty during the fifth loan year. No prepayment penalty will be imposed if the Mortgage Loan is paid in full during the last 90 days prior to maturity of the Mortgage Loan; and (iv) no Partner or Participant will have any personal liability for principal of, or interest on, the Mortgage Loan. Registrant incurred $36,758 of expenses in connection with the Refinancing, including $17,754 which was paid to Counsel for various services and disbursements. Net Lessee paid 14,453 of these expenses as additional basic rent and advanced the balance of $22,305 which was repaid from the receipt of Secondary Overage Rent, thus obviating the need to increase the principal amount of the Mortgage Loan. Net Lessee is obligated to pay Basic Rent equal to the sum of annual mortgage charges and supervisory fees. Accordingly, effective March 3, 1995, Basic Rent was reduced by $4,329 a year, such amount representing the annual savings in mortgage charges under the refinanced Mortgage Loan. Assuming that Net Lessee continues to earn a profit in excess of Basic Rent and Primary Overage Rent, Registrant should receive increased Secondary Overage Rent at the annual rate of $2,164 (one half of the annual savings on the Mortgage Loan). The Refinancing will not affect the amount of regular monthly distributions to the Participants. Prior to the Refinancing, the Property was subject to a mortgage loan with the following material terms: (i) a maturity date of June 1, 1995, with an option to extend the loan for an additional five-year term at 300 basis points over the highest five-year U.S. Treasury Note Yield, but not less than 9.75% per annum, with constant monthly payments based upon a 30-year amortization schedule; (ii) during the initial term, monthly payments of $24,457 aggregating $293,486 per annum applied first to interest at the rate of 9.75% per annum and the balance in reduction of principal; and -3- (iii) no prepayment until the fourth loan year or, if Registrant exercises its option to extend the loan, no prepayment until the fourth extended loan year. Thereafter, prepayment in full, but not in part, upon furnishing to Apple Bank (a) not more than 120 days and not less than 60 days' prior written notice and (b) a prepayment fee of 3% based on the then outstanding principal balance, which fee shall decrease to 2% during the fifth loan year (or fifth extended loan year), except that no prepayment fee will be charged to Registrant if prepayment is made within 90 days prior to maturity under the initial term or extended term of the Mortgage Loan. (d) Competition Pursuant to currently offered tenant space leases at the Building, the average annual base rental rate payable to Net Lessee approximates $26 per square foot (exclusive of electricity charges and escalation) which rental rate is competitive with the average rental rates charged by similar office buildings currently offering comparable space in the immediate vicinity. Registrant has been advised that the currently offered average rental rate is approximately $27 per square foot at one neighboring office build- ing with certain upgraded interior improvements, located at 1775 Broadway (across 57th Street). A building located at 1780 Broadway, which contains 12 stories and provides no rear or side window exposure (due to its location in the middle of the block), offers space at approximately $22 per square foot. 1776 Broadway, a building which contains 24 stories and offers approximately the same grade facilities as the Building, currently offers a rental rate averaging approximately $28 per square foot. In the overall rental market for commercial space in Manhattan, rents range from approximately $45 per square foot on Fifth Avenue to approximately $7 per square foot in less-developed industrial and/or commercial areas. Accordingly, rents at the Building may be considered competitive in the area, given the relative condition of surrounding buildings and the nature of services, amenities and office space offered by them as compared to the Building. (e) Tenant Leases Net Lessee operates the Building free from any federal, state or local government restrictions involving rent control or other similar rent regulations which may be imposed upon residen- tial real estate in Manhattan. Any increase or decrease in the amount of rent payable by a tenant is governed by the provisions of the tenant's particular lease. With respect to the retail leases, the tenants are required to pay electricity charges and taxes, and some tenants are required to pay cost of living -4- increases in rent. In one particular instance, percentage rent was included in the tenant's lease in lieu of cost of living increases. Item 2. Properties. As stated in Item 1 hereof, Registrant owns the Building located at 250-264 West 57th Street, New York, New York, known as the "Fisk Building", and the land thereunder. Registrant's fee title to the Property is encumbered by the Mortgage Loan which, at December 31, 1995, had an unpaid principal balance of $2,878,818. For a description of the terms of the Mortgage Loan see Note 3 of the Notes. The Building, erected in 1921 and containing 26 floors, occupies the entire block front on the south side of West 57th Street between Broadway and Eighth Avenue, New York, New York. The Building has ten passenger and three freight elevators and is equipped with a combination of central and individual window unit air-conditioning. The Building is net leased to Net Lessee under the Net Lease. A modification of the Net Lease, effective October 1, 1984, provides for a further renewal term of 25 years, from October 1, 2003 through September 30, 2028. Registrant and Net Lessee have agreed to execute separate lease modification agreements covering three additional 25-year renewal terms on or before the expiration of the then applicable renewal term. There is no change in the terms of the Net Lease during the renewal periods. See Item 1 hereof. A majority of the Building's tenants are engaged in the entertainment business, insurance business, publishing, and the practice of law, accounting and dentistry. In addition, there are several commercial tenants located on the street level of the Building, including a restaurant and several retail stores. Item 3. Legal Proceedings. There are no material pending legal proceedings to which Registrant is a party. Item 4. Submission of Matters to a Vote of Security Holders. During the fourth quarter of the fiscal year ended December 31, 1995, Registrant did not submit any matter to a vote of the Participants through the solicitation of proxies or other- wise. -5- PART II Item 5. Market for Registrant's Common Stock and Related Security Holder Matters. Registrant is a joint venture organized pursuant to a joint venture agreement entered into among various individuals dated May 1, 1954. Registrant has not issued any common stock. The securities registered by it under the Securities Exchange Act of 1934, as amended, consist of participations in the joint venture interests of the Joint Venturers in Registrant (each, individually, a "Participation" and, collectively, "Participations") and are not shares of common stock or their equivalent. The Participations represent each Participant's fractional share in the Joint Venturers' undivided interest in Registrant and are divided approximately equally among the Joint Venturers. Each unit of the Participations was originally offered at a purchase price of $5,000; fractional units were also offered at proportionate purchase prices. Registrant has not repurchased Participations in the past and it is not likely to change its policy in the future. (a) The Participations neither are traded on an established securities market nor are readily tradable on a secondary market or the substantial equivalent thereof. Based on Registrant's transfer records, Participations are sold by the holders thereof from time to time in privately negotiated transactions and, in many instances, Registrant is not aware of the prices at which such transactions occur. Registrant was advised of 55 transfers of Participations during 1995. In four instances, the indicated purchase price was equal to two times the face amount of the Participation transferred, i.e. $10,000 for a $5,000 Participation. In two instances, the indicated purchase price was equal to 2.26 times the face amount of the Participation transferred. (b) As of December 31, 1995, there were 545 holders of Participations of record. (c) Registrant does not pay dividends. During the years ended December 31, 1994 and 1993, Registrant made regular monthly distributions of $83.33 for each $5,000 Participation ($1,000 per annum for each $5,000 Participation). On November 30, 1995 and November 30, 1994, Registrant made additional distributions for each $5,000 Participation of $1,415 and $1,710, respectively. Such distributions represented primarily Secondary Overage Rent payable by Net Lessee. There are no restrictions on Registrant's present or future ability to make distributions; -6- however, the amount of such distributions, particularly dis- tributions of Secondary Overage Rent, depends solely on Net Lessee's ability to make payments of Basic Rent, Primary Overage Rent and Secondary Overage Rent to Registrant. (See Item 1 hereof). Registrant expects to make distributions so long as it receives the payments provided for under the Net Lease. See Item 7 hereof. -7- Item 6. 250 WEST 57th ST. ASSOCIATES SELECTED FINANCIAL DATA
Year ended December 31, 1995 1994 1993 1992 1991 Basic minimum annual rent income. $ 331,691 $ 321,486 $ 321,486 $ 321,486 $ 321,486 Primary overage rent income...... 752,000 752,000 752,000 752,000 752,000 Secondary overage rent income.... 1,154,342 1,367,772 1,146,828 1,003,181 1,974,727 Total revenue................. $2,238,033 $2,441,258 $2,220,314 $2,076,667 $3,048,213 Net income....................... $1,781,573 $1,944,494 $1,744,631 $1,614,436 $2,487,908 Earnings per $5,000 participation unit, based on 720 participation units outstanding during each year............................ $ 2,474 $ 2,701 $ 2,423 $ 2,242 $ 3,455 Total assets..................... $2,236,141 $2,209,164 $2,226,533 $2,243,909 $2,261,285 Long-term obligations............ $2,859,449 $2,877,271 $2,893,621 $2,904,401 $2,914,184 Distributions per $5,000 participation unit, based on 720 participation units outstanding during each year: Income........................ $ 2,415 $ 2,701 $ 2,423 $ 2,242 $ 3,455 Return of capital............. - 9 11 12 13 Total distributions........... $ 2,415 $ 2,710 $ 2,434 $ 2,254 $ 3,468
-8- Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation. Registrant was organized solely for the purposes of owning the Property described in Item 2 hereof subject to a net operating lease of the Property held by Net Lessee. Registrant is required to pay, from Basic Rent, the mortgage charges and amounts for supervisory services, and to then distribute the balance of such Basic Rent to holders of Participations. Pursuant to the Net Lease, Net Lessee has assumed sole responsibility for the condition, operation, repair, maintenance and management of the Property. Accordingly, Registrant need not maintain substantial reserves or otherwise maintain liquid assets to defray any operating expenses of the Property. Registrant's results of operations are affected primarily by the amount of rent payable to it under the Net Lease. The amount of Secondary Overage Rent is affected by the New York City economy and its real estate market. It is difficult to forecast whether the New York City economy and real estate market will improve over the next few years. The following summarizes the material factors for the three most recent years affecting Registrant's results of operations for such periods: (a) Total income decreased for the year ended December 31, 1995 as compared with the year ended December 31, 1994. The decrease resulted from a decrease in Secondary Overage Rent net of an increase in Basic Rent received by Registrant for the lease year ended September 30, 1995 as compared with the lease year ended September 30, 1994. See Note 4 of the Notes. Total income increased for the year ended December 31, 1994 as compared with the year ended December 31, 1993. The increase resulted from the increase in Secondary Overage Rent received by Registrant for the lease year ended September 30, 1994 as compared with the lease year ended September 30, 1993. See Note 4 of the Notes. (b) Total expenses decreased for the year ended December 31, 1995 as compared with the year ended December 31, 1994. The decrease was the result of (i) a decrease in supervisory service expense, (ii) a decrease in interest on the Mortgage Loan and (iii) a decrease in amortization of mortgage refinancing costs. See Notes 3a and 5 of the Notes. Total expenses increased for the year ended December 31, 1994 as compared with the year ended December 31, 1993. The increase was the net result of (x) an increase in supervisory service expense and (y) a decrease in interest on the Mortgage Loan. See Notes 3a and 5 of the Notes. -9- Liquidity and Capital Resources There has been no significant change in Registrant's liquidity for the year ended December 31, 1995 as compared with the year ended December 31, 1994. Based on the current net profit from the Building and current trends in the geographic area in which the Property is located, the value of the Property is estimated to be in excess of the amount of the Mortgage Loan balance at December 31, 1995. Consequently, there are no material changes anticipated in the short-term or long-term financial liquidity position of Registrant, other than the need to refinance the Mortgage Loan upon maturity. Registrant foresees no need to make material commitments for capital expenditures while the Net Lease is in effect. Inflation Inflationary trends in the economy do not directly affect Registrant's operations since Registrant does not actively engage in the operation of the Property. Inflation may impact the operations of Net Lessee. Net Lessee is required to pay Basic Rent, regardless of the results of its operations. Inflation and other operating factors affect only the amount of Primary and Secondary Overage Rent payable by Net Lessee, which is based on Net Lessee's net operating profit. Item 8. Financial Statements and Supplementary Data. The financial statements, together with the accompanying report by, and the consent to the use thereof, of Jacobs Evall & Blumenfeld LLP immediately following, are being filed in response to this item. Item 9. Disagreements on Accounting and Financial Disclosure. Not applicable. -10- PART III Item 10. Directors and Executive Officers of the Registrant. Registrant has no directors or officers or any other centralization of management. There is no specific term of office for any Joint Venturer in Registrant. The table below sets forth as to each individual who served as a Joint-Venturer in Registrant as of December 31, 1995 the following: name, age, nature of any family relationship with any other Joint Venturer, business exper- ience during the past five years and principal occupation and employment during such period, including the name and principal business of any corporation or any organization in which such occupation and employment was carried on and the date such individual became a Joint-Venturer in Registrant: Date Principal Individual Nature of Occupation became Family Business and Joint Name Age Relationship Experience Employment Venturer Peter L. Malkin 62 None Attorney-at-Law Senior Partner 1982 Wien, Malkin & Bettex, Counsellors- at-Law Stanley Katzman 63 None Attorney-at-Law Senior Partner 1995 Wien, Malkin & Bettex, Counsellors- at-Law Ralph W. Felsten 69 None Attorney-at-Law Senior Partner 1990 Wien, Malkin & Bettex, Counsellors- at-Law As stated in Item 1 hereof, each Joint Venturer is a member of Counsel. See Items 11, 12 and 13 hereof for a description of the services rendered by, and the compensation paid to, Counsel and for a discussion of certain relationships which may pose actual or potential conflicts of interest among Registrant, Net Lessee and certain of their respective affiliates. The names of entities which have a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or are subject to the requirements of Section 15(d) of -11- that Act, and in which the Joint Venturers are also either a director, joint venturer or general partner are as follows: Ralph W. Felsten is a general partner in 60 East 42nd St. Associates. Stanley Katzman is a general partner in 60 East 42nd St. Associates. Peter L. Malkin is a general partner in Garment Capitol Associates, 60 East 42nd St. Associates, Navarre-500 Building Associates and Empire State Building Associates. Item 11. Executive Compensation. As stated in Item 10 hereof; Registrant has no directors or officers or any other centralization of management. No remuneration was paid during the fiscal year ended December 31, 1995 by Registrant to any of the Joint Venturers as such. Registrant pays Counsel for legal fees and supervisory services and disbursements, fees of $40,000 per annum, plus 10% of all distributions to the Participants in any year in excess of the amount representing a return at the rate of 15% per annum on their remaining cash investment. At December 31, 1995, such remaining cash investment was $3,600,000. See Item 1 hereof. Pursuant to such fee arrangements, Registrant paid Counsel $173,204 during the fiscal year ended December 31, 1995. The supervisory services include, among other items, the preparation of reports and related documentation required by the Securities and Exchange Commission, the monitoring of all areas of federal and local security law compliance, the preparation of certain financial reports, as well as the supervision of accounting and other documentation related to the administration of Registrant's business. Out of its fees, Counsel paid all disbursements and costs of regular accounting services. As noted in Items 1 and 10 hereof, the Joint Venturers are members of Counsel. Item 12. Security Ownership of Certain Beneficial Owners and Management. (a) Registrant has no voting securities. See Item 5 hereof. At December 31, 1995, no person owned of record or was known by Registrant to own beneficially more than 5% of the outstanding Participations in the undivided Joint Venture interests in Registrant. (b) At December 31, 1995, the Joint Venturers (see Item 10 hereof) beneficially owned, directly or indirectly, as a group the following Participations in Registrant: -12- Name & Address Amount of of Beneficial Beneficial Percent Title of Class Owners Ownership of Class Participations Ralph W. Felsten $ 5,000.00 .1388% in Joint Venture 300 East 54th St. Interests Apartment 15H New York, NY 10022 Stanley Katzman $ 5,833.34 .1620% 75-18 193rd Street Flushing, NY 11366 Peter L. Malkin $15,833.34 .4398% 21 Bobolink Lane Greenwich, CT 06830 At such date, one of the Joint Venturers (see Item 10 hereof) held additional Participations as follows: Isabel Malkin, the wife of Peter L. Malkin, owned of record and beneficially $70,000 of Participations. Mr. Malkin disclaims any beneficial ownership of such Participations. (c) Not applicable. Item 13. Certain Relationships and Related Transactions. (a) As stated in Item 1 hereof, each Joint Venturer acts as agent for his respective group of Participants. Mr. Malkin is also a partner in Net Lessee. Mr. Felsten is a participant in the Net Lessee. As a consequence of one of the three Joint Venturers being a partner in Net Lessee, and one being a participant in the Net Lessee, and all three Joint Venturers being members of Counsel (which represents Registrant and Net Lessee), certain actual or potential conflicts of interest may arise with respect to the management and administration of the business of Registrant. However, under the respective partici- pating agreements pursuant to which the Joint Venturers act as agents for the Participants, certain transactions require the prior consent of a specified number of the Participants in order for the agents to act on their behalf. Such transactions include modifications and extensions of the Net Lease or the Mortgage Loan, or a sale or other disposition of the Property or substantially all of Registrant's other assets. Reference is made to Items 1 and 2 hereof for a description of the terms of the Net Lease between Registrant and Net Lessee. The respective interest, if any, of each Joint Venturer in Registrant and in Net Lessee arises solely from -13- ownership of Participations in Registrant and partnership interests or participations in Net Lessee. The Joint Venturers receive no extra or special benefit not shared on a pro rata basis with all other Participants in Registrant or partners and participants in Net Lessee. However, each of the Joint Venturers by reason of his respective partnership interest in Counsel is en- titled to receive his pro rata share of any legal fees or other remuneration paid to Counsel for professional services rendered to Registrant and Net Lessee. Reference is also made to Items 1 and 10 hereof for a description of the relationship between Registrant and Counsel of which the Joint Venturers are members. The respective interests of the Joint Venturers in any remuneration paid or given by Registrant to Counsel arose and arises solely from the ownership of their respective partnership interests therein. See Item 11 hereof for a description of the remuneration arrangements between Registrant and Counsel. (b) Reference is made to Paragraph (a) above. (c) Not applicable. (d) Not applicable. -14- PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a)(1) Financial Statements: Consent of Jacobs Evall & Blumenfeld LLP, Certified Public Accountants, dated January 31, 1996. Accountant's Report of Jacobs Evall & Blumenfeld LLP, Certified Public Accountants, dated January 31, 1996. Balance Sheets at December 31, 1995 and at December 31, 1994 (Exhibit A). Statements of Income for the fiscal years ended December 31, 1995, 1994 and 1993 (Exhibit B). Statement of Partners' Capital Deficit for the fiscal year ended December 31, 1995 (Exhibit C-1). Statement of Partners' Capital Deficit for the fiscal year ended December 31, 1994 (Exhibit C-2). Statement of Partners' Capital Deficit for the fiscal year ended December 31, 1993 (Exhibit C-3). Statements of Cash Flows for the fiscal years ended December 31, 1995, 1994 and 1993 (Exhibit D). Notes to Financial Statements for the fiscal years ended December 31, 1995, 1994 and 1993. (2) Financial Statement Schedules: List of Omitted Schedules. Real Estate and Accumulated Depreciation - December 31, 1995 (Schedule III). (3) Exhibits: See Exhibit Index. (b) No report on Form 8-K was filed by Registrant during the last quarter of the period covered by this report. -15- [LETTERHEAD OF JACOBS EVALL & BLUMENFELD LLP CERTIFIED PUBLIC ACCOUNTANTS] INDEPENDENT ACCOUNTANTS' REPORT To the participants in 250 West 57th St. Associates (a Joint Venture) New York, N. Y. We have audited the accompanying balance sheets of 250 West 57th St. Associates (the "Company") as of December 31, 1995 and 1994, and the related statements of income, partners' capital deficit and cash flows for each of the three years in the period ended December 31, 1995 and the supporting financial statement schedule as contained in Item 14(a)(2) of this Form 10-K. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 250 West 57th St. Associates as of December 31, 1995 and 1994, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles, and the related financial statement schedule, when considered in relation to the basic financial statements, presents fairly, in all material respects, the information set forth therein. Jacobs Evall & Blumenfeld LLP Certified Public Accountants New York, N. Y. January 31, 1996 -16- January 31, 1996 250 West 57th St. Associates New York, N.Y. We consent to the use of our independent accountants' report dated January 31, 1996, covering our audit of the accompanying financial statements of 250 West 57th St. Associates in connection with and as part of your December 31, 1995 annual report (Form 10-K) to the Securities and Exchange Commission. Jacobs Evall & Blumenfeld LLP Certified Public Accountants -17- EXHIBIT A 250 WEST 57th ST. ASSOCIATES BALANCE SHEETS A S S E T S
December 31, 1995 1994 Current Assets: Cash in NatWest Bank N.A................... $ 24,125 $ 24,485 Cash in distribution account held by Wien, Malkin & Bettex (Note 9).......... 60,000 60,000 TOTAL CURRENT ASSETS............... 84,125 84,485 Real Estate, at cost: Property situated at 250-264 West 57th Street, New York, N. Y. (Notes 2a and 3): Land.................................... 2,117,435 2,117,435 Building................................ $4,940,682 $4,940,682 Less: Accumulated depreciation........ 4,940,682 - 4,940,682 - Building improvements................... 688,000 688,000 Less: Accumulated depreciation........ 688,000 - 688,000 - Tenants' installations and improvements........................... 249,791 249,791 Less: Accumulated depreciation....... 249,791 - 249,791 - Other Assets: Mortgage refinancing costs (Note 2b)....... 41,106 87,333 Less: Accumulated amortization........... 6,525 80,089 34,581 7,244 TOTAL ASSETS....................... $2,236,141 $2,209,164
LIABILITIES AND PARTNERS' CAPITAL DEFICIT Current Liabilities: Accrued interest payable................... $ 22,551 $ 23,511 Principal payments of first mortgage payable within one year (Note 3).......... 19,369 16,350 TOTAL CURRENT LIABILITIES.......... 41,920 39,861 Long-term Liabilities: Bonds, mortgages and similar debt: First mortgage payable (Note 3).......... $2,878,818 $2,893,621 Less: Current installments shown above................................. 19,369 16,350 2,859,449 2,877,271 TOTAL LIABILITIES.................. 2,901,369 2,917,132 Partners' Capital Deficit (Exhibit C)........ (665,228) (707,968) TOTAL LIABILITIES AND PARTNERS' CAPITAL DEFICIT......... $2,236,141 $2,209,164
See accompanying notes to financial statements. -18- EXHIBIT B 250 WEST 57th ST. ASSOCIATES STATEMENTS OF INCOME
Year ended December 31, 1995 1994 1993 Revenues: Rent income, from a related party (Note 4)......... $2,238,033 $2,441,258 $2,220,314 Expenses: Interest on mortgage (Note 3)....................... 273,835 282,611 283,624 Supervisory services, to a related party (Note 5)....... 173,204 196,777 174,683 Amortization of mortgage refinancing costs (Note 2b)...................... 9,421 17,376 17,376 456,460 496,764 475,683 NET INCOME, CARRIED TO PARTNERS' CAPITAL DEFICIT (NOTE 8)....... $1,781,573 $1,944,494 $1,744,631 Earnings per $5,000 participation unit, based on 720 participation units outstanding during each year............................. $ 2,474 $ 2,701 $ 2,423
See accompanying notes to financial statements. -19- EXHIBIT C-1 250 WEST 57th ST. ASSOCIATES STATEMENT OF PARTNERS' CAPITAL DEFICIT YEAR ENDED DECEMBER 31, 1995
Partners' Partners' capital deficit Share of capital deficit January 1, 1995 net income Distributions December 31, 1995 Ralph W. Felsten Joint Venture #1.............. $ (70,797) $ 178,157 $ 173,883 $ (66,523) Ralph W. Felsten Joint Venture #2.............. (70,797) 178,157 173,883 (66,523) Ralph W. Felsten Joint Venture #3.............. (70,797) 178,157 173,883 (66,523) Ralph W. Felsten Joint Venture #4.............. (70,797) 178,158 173,884 (66,523) Stanley Katzman Joint Venture #1 (formerly Alvin Silverman Joint Venture #1)............ (70,797) 178,158 173,884 (66,523) Stanley Katzman Joint Venture #2 (formerly Alvin Silverman Joint Venture #2)............ (70,797) 178,158 173,884 (66,523) Stanley Katzman Joint Venture #3 (formerly Alvin Silverman Joint Venture #3)............ (70,796) 178,157 173,883 (66,522) Stanley Katzman Joint Venture #4 (formerly Alvin Silverman Joint Venture #4)............ (70,797) 178,157 173,883 (66,523) Peter L. Malkin Joint Venture #1.............. (70,797) 178,157 173,883 (66,523) Peter L. Malkin Joint Venture #2.............. (70,796) 178,157 173,883 (66,522) $(707,968) $1,781,573 $1,738,833 $(665,228)
See accompanying notes to financial statements. -20- EXHIBIT C-2 250 WEST 57th ST. ASSOCIATES STATEMENT OF PARTNERS' CAPITAL DEFICIT YEAR ENDED DECEMBER 31, 1994
Partners' Partners' capital deficit Share of capital deficit January 1, 1994 net income Distributions December 31, 1994 Ralph W. Felsten Joint Venture #1.............. $ (70,147) $ 194,450 $ 195,100 $ (70,797) Ralph W. Felsten Joint Venture #2.............. (70,147) 194,450 195,100 (70,797) Ralph W. Felsten Joint Venture #3.............. (70,147) 194,450 195,100 (70,797) Ralph W. Felsten Joint Venture #4.............. (70,147) 194,450 195,100 (70,797) Alvin Silverman Joint Venture #1.............. (70,147) 194,449 195,099 (70,797) Alvin Silverman Joint Venture #2.............. (70,146) 194,449 195,100 (70,797) Alvin Silverman Joint Venture #3.............. (70,146) 194,449 195,099 (70,796) Alvin Silverman Joint Venture #4.............. (70,147) 194,449 195,099 (70,797) Peter L. Malkin Joint Venture #1.............. (70,147) 194,449 195,099 (70,797) Peter L. Malkin Joint Venture #2.............. (70,146) 194,449 195,099 (70,796) $(701,467) $1,944,494 $1,950,995 $(707,968)
See accompanying notes to financial statements. -21- EXHIBIT C-3 250 WEST 57th ST. ASSOCIATES STATEMENT OF PARTNERS' CAPITAL DEFICIT YEAR ENDED DECEMBER 31, 1993
Partners' Partners' capital deficit Share of capital deficit January 1, 1993 net income Distributions December 31, 1993 Ralph W. Felsten Joint Venture #1.............. $ (69,395) $ 174,463 $ 175,215 $ (70,147) Ralph W. Felsten Joint Venture #2.............. (69,395) 174,463 175,215 (70,147) Ralph W. Felsten Joint Venture #3.............. (69,395) 174,463 175,215 (70,147) Ralph W. Felsten Joint Venture #4.............. (69,395) 174,463 175,215 (70,147) Alvin Silverman Joint Venture #1.............. (69,395) 174,463 175,215 (70,147) Alvin Silverman Joint Venture #2.............. (69,395) 174,463 175,214 (70,146) Alvin Silverman Joint Venture #3.............. (69,395) 174,463 175,214 (70,146) Alvin Silverman Joint Venture #4.............. (69,396) 174,463 175,214 (70,147) Peter L. Malkin Joint Venture #1.............. (69,396) 174,463 175,214 (70,147) Peter L. Malkin Joint Venture #2.............. (69,396) 174,464 175,214 (70,146) $(693,953) $1,744,631 $1,752,145 $(701,467)
See accompanying notes to financial statements. -22- EXHIBIT D 250 WEST 57th ST. ASSOCIATES STATEMENTS OF CASH FLOWS
Year ended December 31, 1995 1994 1993 Cash flows from operating activities: Net income.............................. $ 1,781,573 $ 1,944,494 $ 1,744,631 Adjustments to reconcile net income to cash provided by operating activities: Amortization......................... 9,421 17,376 17,376 Change in accrued interest payable... (960) (88) (79) Payments of mortgage refinancing costs: To a related party (Note 2b).......... (17,754) - - Other................................. (19,004) - - Net cash provided by operating activities........... 1,753,276 1,961,782 1,761,928 Cash flows from financing activities: Cash distributions...................... (1,738,833) (1,950,995) (1,752,145) Principal payments on long-term debt.... (14,803) (10,780) (9,783) Net cash used in financing activities..................... (1,753,636) (1,961,775) (1,761,928) Net change in cash.............. (360) 7 - Cash, beginning of year................... 84,485 84,478 84,478 CASH, END OF YEAR............... $ 84,125 $ 84,485 $ 84,478 Supplemental disclosures of cash flow information: Year ended December 31, 1995 1994 1993 Cash paid for: Interest............................. $ 274,795 $ 282,699 $ 283,703
See accompanying notes to financial statements. -23- 250 WEST 57th ST. ASSOCIATES NOTES TO FINANCIAL STATEMENTS 1. Business Activity 250 West 57th Street Associates ("the Company") is a joint venture which owns commercial property situated at 250 West 57th Street, New York, New York, known as the "Fisk Building". The property is net leased to Fisk Building Associates (the "Lessee"). 2. Summary of Significant Accounting Policies a. Real Estate and Depreciation: Land and building: The basis for building valuation was seventy per cent (70%) of the total purchase price in 1953 of the land and building, $7,058,117, which amounts to $4,940,682. The balance of the purchase price, $2,117,435, was allocated to land cost. The seventy per cent allocation of total cost to the building was based upon the percentage of assessed valuation of the building to the total assessed valuation on the land and building at the time of acquisition. The building, building improvements and tenants installations and improvements are fully depreciated. b. Mortgage Refinancing Costs, Amortization and Related Party Transactions: Mortgage refinancing costs of $87,333 were incurred in connection with the 1990 refinancing of the first mortgage payable and were charged to income ratably over the five year term of the mortgage (see Note 3a). Such costs include payments of $45,020 to the firm of Wien, Malkin & Bettex; some partners in that firm are also partners in the Company. Effective March 1, 1995, the first mortgage was modified and extended (see Note 3b) and new mortgage refinancing costs of $36,758 were incurred. Mortgage refinancing costs of $41,106 consist of the unamortized balance of the 1990 refinancing costs of $4,348 plus the new refinancing costs of $36,758 (including payments of $17,754 to the firm of Wien, Malkin & Bettex). Such costs are being amortized ratably over the extended term of the first mortgage, from March 1, 1995 through June 1, 2000. c. Use of Estimates: In preparing financial statements in conformity with generally accepted accounting principles, management often makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. -24- 250 WEST 57th ST. ASSOCIATES NOTES TO FINANCIAL STATEMENTS (continued) 3. First Mortgage Payable a. On May 24, 1990, a first mortgage was placed on the property with Apple Bank for Savings in the amount of $2,934,861. Annual mortgage charges were $293,486, payable in equal monthly installments, applied first to interest at the rate of 9.75% per annum and the balance to principal. The first mortgage was scheduled to mature on June 1, 1995. b. Effective March 1, 1995, the first mortgage, having a balance of $2,890,758, was modified and extended to mature on June 1, 2000, when the principal balance will be $2,777,754. Annual mortgage charges are $289,157, payable in equal monthly installments, applied first to interest at the rate of 9.4% per annum and the balance to principal. Principal payments required to be made on long-term debt are as follows: Year ending December 31, 1996............................... $ 19,369 1997............................... 21,270 1998............................... 23,358 1999............................... 25,650 Through June 1, 2000............... 2,789,171 $2,878,818 The real estate is pledged as collateral for the first mortgage. 4. Related Party Transactions - Rent Income Rent income earned during the year ended December 31, 1995, 1994 and 1993, totaling $2,238,033, $2,441,258 and $2,220,314, respectively, constitutes the basic minimum annual rental plus overage rent under an operating lease dated September 30, 1953 (as modified June 12, 1961, June 10, 1965, May 1, 1975 and October 1, 1984) with the Lessee, consisting of the following: Year ended December 31, 1995 1994 1993 Basic minimum annual rent... $ 331,691 $ 321,486 $ 321,486 Primary overage rent........ 752,000 752,000 752,000 Secondary overage rent...... 1,154,342 1,367,772 1,146,828 $2,238,033 $2,441,258 $2,220,314 The lease modification dated October 1, 1984 provides for rent income until September 30, 2003, as follows: A) A basic annual rent equal to the sum of $28,000 plus current mortgage requirements for interest and amortization. Upon any further refinancing of the first mortgage (Note 3), the annual basic rent will be modified and will be equal to the sum of $28,000 plus an amount equal to the rate of constant payments for interest and amortization required annually under any such first mortgage immediately subsequent to refinancing computed on the principal balance of the mortgage immediately prior to such refinancing; -25- 250 WEST 57th ST. ASSOCIATES NOTES TO FINANCIAL STATEMENTS (continued) 4. Related Party Transactions - Rent Income (continued) B) A primary overage rent equal to the lesser of $752,000 per annum for each year ending September 30th, or the lessee's defined net operating profit for its lease year ending September 30th after deduction of basic rent and advances previously paid on account of primary overage rent; and C) A secondary overage rent consisting of 50% of any remaining balance of the lessee's defined net operating profit (after payment of basic rent and primary overage rent) for its lease year ending September 30th. Primary overage rent has been billed to and advanced by the Lessee in equal monthly installments of $62,667. While it is not practicable to estimate that portion of overage rent for the lease year ending on the ensuing September 30th which would be allocable to the current three month period ending December 31st, the Company's policy is to include in its income each year the advances of primary overage rent income received from October 1st to December 31st. No other overage rent is accrued by the Company for the period between the end of the Lessee's lease year ending September 30th and the end of the Company's fiscal year ending December 31st. In 1978, the Lessee exercised its option to renew the lease for a twenty-five year period from October 1, 1978 through September 30, 2003 on the same terms as provided during the balance of the initial period. The lease modification effective October 1, 1984 provides for an option for one renewal term of 25 years commencing October 1, 2003. The terms of the lease remain the same during the renewal period. The Lessee may surrender the lease at the end of any month, upon sixty days' prior written notice; the liability of the Lessee will end on the effective date of such surrender. A partner in the Company is also a partner in the Lessee. 5. Related Party Transactions - Supervisory Services Fees for supervisory services (including disbursements and cost of regular accounting services) during the years ended December 31, 1995, 1994 and 1993, totaling $173,204, $196,777 and $174,683, respectively, were paid to the firm of Wien, Malkin & Bettex. Some partners in that firm are also partners in the Company. Fees for supervisory services are paid pursuant to an agreement, which amount is based on a rate of return of investment achieved by the participants of the Company each year. 6. Number of Participants There were approximately 525 participants in the various joint ventures as at December 31, 1995, 1994 and 1993. -26- 250 WEST 57th ST. ASSOCIATES NOTES TO FINANCIAL STATEMENTS (continued) 7. Determination of Distributions to Participants Distributions to participants during each year represent mainly the excess of rent income received over the mortgage requirements and cash expenses. 8. Distributions and Amount of Income per $5,000 Participation Unit Distributions per $5,000 participation unit for each fiscal period, based on 720 participation units outstanding during each such period, consisted of the following: Year ended December 31, 1995 1994 1993 Income................. $2,415 $2,701 $2,423 Return of capital...... - 9 11 TOTAL DISTRIBUTIONS.. $2,415 $2,710 $2,434 Net income is computed without regard to income tax expense since the Company does not pay a tax on its income; instead, any such taxes are paid by the participants in their individual capacities. 9. Concentration of Credit Risk The Company maintains cash balances in a bank and in a distribution account held by Wien, Malkin & Bettex. The bank balance is insured by the Federal Deposit Insurance Corporation up to $100,000, and at December 31, 1995 was completely insured. The distribution account held by Wien, Malkin & Bettex is not insured. The funds held in the distribution account were paid to the participants on January 1, 1996. 10. Financial Instruments Effective for years ended after December 15, 1995, FAS No. 107, "Disclosures about Fair Value of Financial Instruments", requires disclosure of the fair value of certain financial instruments for which it is practicable to estimate that value. It was not practicable to estimate the fair value of long-term debt because quoted market prices do not exist and an estimate could not be made through other means without incurring excessive costs. -27- 250 WEST 57th ST. ASSOCIATES OMITTED SCHEDULES The following schedules have been omitted as not applicable in the present instance: SCHEDULE I - Condensed financial information of registrant. SCHEDULE II - Valuation and qualifying accounts. SCHEDULE IV - Mortgage loans on real estate. -28- SCHEDULE III 250 WEST 57th ST. ASSOCIATES Real Estate and Accumulated Depreciation December 31, 1995 Column A Description Office building and land located at 250-264 West 57th Street, New York, New York, known as the "Fisk Building". B Encumbrances Apple Bank for Savings Balance at December 31, 1995.................................. $2,878,818 C Initial cost to company Land.......................................................... $2,117,435 Building...................................................... $4,940,682 D Costs capitalized subsequent to acquisition Improvements.................................................. $ 937,791 Carrying costs................................................ $ NONE E Gross amount at which carried at close of period Land......................................................... $2,117,435 Building and Improvements.................................... 5,878,473 Total........................................................ $7,995,908(a) F Accumulated depreciation and amortization....................... $5,878,473(b) G Date of construction 1921 H Date acquired September 30, 1953 I Life on which depreciation in latest income statements is computed Not applicable
(a) There have been no changes in the carrying value of real estate for the years ended December 31, 1995, December 31, 1994 and December 31, 1993. The costs for federal income tax purposes are the same as for financial statement purposes. (b) Accumulated depreciation and amortization Balance at January 1, 1993 $5,878,473 Depreciation: F/Y/E 12/31/93 None 12/31/94 None 12/31/95 None None Balance at December 31, 1995 $5,878,473 -29- SIGNATURE Pursuant to the requirements of Section 13 or 15(d) 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 Joint Venturers in Registrant, pursuant to a Power of Attorney, dated March 29, 1996 (the "Power"). 250 WEST 57TH ST. ASSOCIATES (Registrant) By /s/ Stanley Katzman Stanley Katzman, Attorney-in-Fact* Date: March 29, 1996 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 Joint Venturers in Registrant, pursuant to the Power, on behalf of the Registrant and as a Joint Venturer in Registrant on the date indicated. By /s/ Stanley Katzman Stanley Katzman, Attorney-in-Fact* Date: March 29, 1996 ______________________ * Mr. Katzman supervises accounting functions for Registrant. -30- EXHIBIT INDEX Number Document Page* 3(a) Registrant's Joint Venture Agreement, dated May 25, 1953, which was filed as Exhibit No. 3(a) to Registrant's Registration Statement on Form S-1 (the "Registration Statement"), is incorporated by reference as an exhibit hereto. 3(b) Amended Business Certificate of Registrant filed with the Clerk of New York County on December 22, 1995 reflecting a change in the Partners of Registrant. 3(c) Registrant's Memorandum of Agreement among Joint Venturers in 250 West 57th St. Associates, dated June 9, 1953, filed as Exhibit 1 to the Registration Statement, is incorporated by reference as an exhibit hereto. 4 Registrant's form of Participation Agreement, which was filed as Exhibit No. 4(a) to the Registration Statement, is incorporated by reference as an exhibit hereto. 10(a) Net Lease between Registrant and Fisk Building Associates dated September 30, 1957, which was filed as Exhibit No. 2(d) to the Registration Statement, is incorporated by reference as an exhibit hereto. 10(b) Modification of Net Lease dated November 10, 1961, was filed by letter dated November 21, 1961 as Exhibit B to Registrant's Statement of Registration on Form 8-K for the month of October, 1961, is incorporated by reference as an exhibit hereto. ______________________ * Page references are based on a sequential numbering system. -31- Number Document Page* 10(c) Second Modification Agreement of Net Lease dated June 10, 1965, between Registrant and Fisk Building Associates which was filed by letter dated December 29, 1981 as Exhibit 10(c) to Registrant's Annual Report on Form 10-K for the year ended September 30, 1981 is incorporated by reference as an exhibit hereto. 10(d) Fourth Lease Modification Agreement dated November 12, 1985 between Registrant and Fisk Building Associates, which was filed by letter dated January 13, 1986 as Exhibit 10(g) to Registrant's Annual Report on Form 10-K for the year ended, September 30, 1985, is incorporated herein by reference as an exhibit hereto. 10(e) Modification of Mortgage dated as of March 1, 1995 between Registrant and the Apple Bank for Savings, which was filed on March 30, 1995 as Exhibit 10(e) to Registrant's Annual Report on Form 10-K, is incorporated herein by reference as an exhibit hereto. 13(a) Letter to Participants dated November 30, 1995 and supplementary financial reports for the lease year ended September 30, 1995. The foregoing material shall not be deemed "filed" with the Commission or otherwise subject to the liabilities of Section 18 of the Securities Exchange Act of 1934. 13(b) Letter to Participants dated January 31, 1996 and supplementary financial reports for the fiscal year ended December 31, 1995. The foregoing material shall not be deemed "filed" with the Commission or otherwise subject to the liabilities of Section 18 of the Securities Exchange Act of 1934. ______________________ * Page references are based on a sequential numbering system. -32- 24 Power of Attorney dated March 29, 1996, between Peter L. Malkin, Stanley Katzman and Ralph W. Felsten as partners of Registrant and Stanley Katzman and Richard A. Shapiro. 27 Financial Data Schedule of Registrant for fiscal year ended December 31, 1995. -33- Exhibit 3(b) AMENDED BUSINESS CERTIFICATE The undersigned hereby certify that a certificate of business under the assumed name 250 WEST 57TH ST. 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 11th day of June, 1953, under index number 6981/53; that the last amended certificate was filed on the 20th day of September, 1990 in the office of said County Clerk under index number 6981/53. 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. ALVIN SILVERMAN, residing at 110 Redwood Drive, Roslyn, New York 11576, has been succeeded as a partner by STANLEY KATZMAN, residing at 75-18 193 Street, Flushing, New York 11366. The members of 250 West 57th St. Associates now consist of: Ralph W. Felsten, Peter L. Malkin and Stanley Katzman. IN WITNESS WHEREOF, the undersigned have as of the 2nd day of July, 1995 made and signed this certificate. /s/ Alvin Silverman /s/ Ralph W. Felsten ALVIN SILVERMAN RALPH W. FELSTEN /s/ Stanley Katzman STANLEY KATZMAN State of New York, County of New York ss.: On this 2nd day of August, 1995, before me personally appeared ALVIN SILVERMAN, STANLEY KATZMAN and RALPH W. FELSTEN, 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/ Estelle Beeber Notary Public State of New York No. 5241708 Qualified in New York County Commission Expires 9/30/96 EX-13 2 [LETTERHEAD OF WIEN MALKIN & BETTEX COUNSELLORS AT LAW] November 30, 1995 TO PARTICIPANTS IN 250 WEST 57TH ST. ASSOCIATES: We enclose the operating report of the lessee, Fisk Building Associates, for the fiscal year of the lease ended September 30, 1995. The lessee reported profit of $3,060,683 subject to addi- tional rent for the lease year ended September 30, 1995, as against profit of $3,487,544 for the lease year ended September 30, 1994. Additional rent for the lease year ended September 30, 1995 was $1,906,342; $752,000 was advanced against additional rent so that the balance of additional rent is $1,154,342. The total amount to be distributed is $1,132,037 after payment of $22,305 for expenditures in connection with the refinancing of the first mortgage on March 1, 1995. Wien, Malkin & Bettex receives an additional payment for supervisory services of 10% of distributions in excess of 15% per annum on the cash investment. Accordingly, Wien, Malkin & Bettex received $113,204 of the additional rent and the balance of $1,018,833 is being distributed to the participants. A check for your share of the additional distribution and the computation of the additional payment to Wien, Malkin & Bettex and distribution are enclosed. The additional distribution of $1,018,833 represents a return of about 28.3% on the cash investment of $3,600,000. Regular monthly distributions are at the rate of 20% a year, so that dis- tributions for the lease year ended September 30, 1995 were about 48.3% per annum. If you have any question about the enclosed material please communicate with us at our New York office or, if it is more con- venient, at our branch office in Palm Beach, Florida. Cordially yours, WIEN, MALKIN & BETTEX By: Stanley Katzman SK/fm Encs. 250 West 57th St. Associates Computation of Additional Payment for Supervisory Services and Distribution For the Lease Year Ended September 30, 1995 Secondary additional rent $1,154,342 Less, mortgage refinancing costs 22,305 Subject to Secondary additional rent 1,132,037 Primary additional rent for the lease year ended September 30, 1995 752,000 1,884,037 Less, additional basic payment of Wien, Malkin & Bettex from primary overage rent 12,000 Total rent to be distributed 1,872,037 15% return on $3,600,000 investment 540,000 Subject to additional payment at 10% to Wien, Malkin & Bettex $1,332,037 Additional payment at 10% $ 133,204 Paid to Wien, Malkin & Bettex as advances for additional rent 20,000 Balance of additional payment to Wien, Malkin & Bettex $ 113,204 Summary: Additional distribution to participants $1,018,833 Payment to Wien, Malkin & Bettex, as above 113,204 Total secondary additional rent available for distribution to participants and payment to Wien, Malkin & Bettex $1,132,037 [LETTERHEAD OF KAUFMAN GOLDSTEIN CERTIFIED PUBLIC ACCOUNTANTS] Fisk Building Associates 60 East 42nd Street New York, New York 10165 Gentlemen: In accordance with our engagement, we have reviewed the special-purpose statement of income and expense of Fisk Building Associates for the lease year ended September 30, 1995. Our engagement included the examination of statements of receipts and disbursements for the property, together with supporting records, but did not include the verification by direct communication of the income from tenants or liabilities and disbursements to vendors. We have no knowledge of any other contingent liabilities that should be disclosed. Based on our review, subject to the above, the accompanying special-purpose statement of income and expense presents fairly the net operating income, as defined, for the computation of additional rent, of Fisk Building Associates, for the lease year ended September 30, 1995. Respectfully submitted, Kaufman Goldstein New York, New York October 18, 1995 Fisk Building Associates Statement of Income and Expense October 1, 1994 through September 30, 1995 (Unaudited) Income: Rent income $ 9,008,305 Escalation income 752,402 Electric income, net 531,890 Other income 67,733 Total Income 10,360,330 Expenses: Real estate taxes $2,033,393 Labor costs 1,781,145 Repairs, supplies and improvements 1,625,922 Management and leasing 706,097 Fuel oil 74,261 Professional fees 197,354 Security 171,188 Security monitor system 22,892 Water 41,000 Insurance 110,068 Rubbish removal 88,270 Telephone 11,057 Advertising 76,924 Miscellaneous 27,303 Total expenses before rent expense 6,966,874 Net income before rent expense 3,393,456 Less, Basic rent expense 332,773 Net income subject to primary and secondary additional rent 3,060,683 Less, Primary additional rent 752,000 Net income subject to secondary additional rent 2,308,683 Secondary additional rent at 50% $1,154,342 Computation of additional rent due landlord: Primary additional rent $ 752,000 Secondary additional rent 1,154,342 Total additional rent 1,906,342 Less, Advances against additional rent 752,000 Additional rent due landlord $1,154,342 The accompanying letter of transmittal and notes are an integral part of this statement. -2- Fisk Building Associates Notes to Financial Statement Note 1 - The lease as modified effective October 1, 1984 provides for additional rent, as follows: Additional rent equal to the first $752,000 of the Lessee's net operating income, as defined, in each lease year. Further additional rent equal to 50% of the Lessee's remaining net operating income, as defined, in each lease year. -3- EX-13 3 [LETTERHEAD OF WIEN MALKIN & BETTEX COUNSELLORS AT LAW January 31, 1996 To Participants in 250 West 57th St. Associates Federal Identification Number 13-6083380 We enclose the annual report of 250 West 57th St. Associates, the joint venture which owns the Fisk Building at 250 West 57th Street, New York City, for the year ended December 31, 1995. The reported income for 1995 was $1,781,573. This was more than distributions of $1,738,833 representing the current monthly distributions totalling $720,000 per annum and the additional dis- tribution of $1,018,833, which was paid to participants on November 30, 1995. The difference, mainly representing the payment of mortgage refinancing costs, is an increase in capital investment. The mortgage refinancing costs will be deductible for tax purposes over the period of the mortgage, from March 1, 1995 through June 1, 2000. Since the inception of this investment, a portion of the dis- tributions has constituted a return of capital, and has not been reportable as income. As a result, the book value on December 31, 1995 of an original cash investment of $10,000 was a deficit bal- ance of $1,848. Additional rent for the lease year ended September 30, 1995 was $1,906,342 or an excess of $1,154,342 over advances of $752,000 by the lessee against additional rent ($720,000 to par- ticipants plus $32,000 to Wien, Malkin & Bettex). The total amount distributed was $1,132,037 after payment of $22,305 for expenditures in connection with the refinancing of the first mortgage on March 1, 1995. As approved by the participants, Wien, Malkin & Bettex received $113,204 and the balance of the additional rent of $1,018,833 was distributed to the participants on November 30, 1995. The additional distribution of $1,018,833 represented an annual return of about 28.3% on the original cash investment of $3,600,000. Regular monthly distributions are at the rate of 20% per annum on the cash investment so that total distributions for the year ended December 31, 1995 were about 48.3% on the original cash investment. (over) Re: 250 West 57th St. Associates 2. The enclosed Schedule K-1 form(s) (Form 1065), containing 1995 tax information, must be reviewed in detail by your accountant. If you have any question about the enclosed material, please communicate with us at our New York office or, if it is more con- venient, at our branch office in Palm Beach, Florida. Please retain this letter and the enclosed Schedule K-1 form(s) for the preparation of your income tax returns for the year 1995. Cordially yours, WIEN, MALKIN & BETTEX By: Stanley Katzman SK:fm Encs. [LETTERHEAD OF KAUFMAN GOLDSTEIN CERTIFIED PUBLIC ACCOUNTANTS] Independent Accountant's Report To the Participants in 250 West 57th St. Associates (a Partnership): We have audited the accompanying balance sheet of 250 West 57th St. Associates ("Associates") as of December 31, 1995, and the related statements of income, partners' capital deficit and cash flows for the year then ended. These financial statements are the responsibility of Associates' management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of Associates as of December 3l, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. Kaufman Goldstein Certified Public Accountants 60 East 42nd Street New York, New York 10165 January 29, 1996 250 West 57th St. Associates Balance Sheet December 31, 1995 Assets Cash: National Westminster Bank, USA $ 24,124 Distribution account held by Wien, Malkin & Bettex 60,000 84,124 Fisk Building, 250 West 57th Street, New York City: Land $2,117,435 Building $4,940,682 Less: Accumulated depreciation 4,940,682 - Building improvements 688,000 Less: Accumulated depreciation 688,000 - Tenants' installations and improvements 249,791 Less: Accumulated amortization 249,791 - 2,117,435 Mortgage refinancing costs 41,106 Less: Accumulated amortization 6,524 34,582 Total Assets $2,236,141 Liabilities and Partners' Capital Deficit Liabilities: First mortgage $2,878,818 Accrued interest on first mortgage 22,551 Total Liabilities 2,901,369 Partners' Capital Deficit, December 31, 1995 ( 665,228) Total Liabilities and Partners' Capital Deficit $2,236,141 The accompanying notes are an integral part of these financial statements. 250 West 57th St. Associates Statement of Income For the Year Ended December 31, 1995 Income: Basic rent $ 331,691 Additional rent 1,906,342 Total income 2,238,033 Expenses: Interest on first mortgage $273,835 Supervisory services 173,204 Total expenses 447,039 Net income before amortization 1,790,994 Amortization of mortgage refinancing costs 9,421 Net income $1,781,573 The accompanying notes are an integral part of these financial statements. 250 West 57th St. Associates Statement of Partners' Capital Deficit December 31, 1995 Partners' capital deficit, January l, 1995 ($ 707,968) Add: Net income for the year ended December 31, 1995 1,781,573 1,073,605 Less: Monthly distributions January l, 1995 through December 31, 1995 $ 720,000 Distribution on November 30, 1995 of balance of additional rent for the lease year ended September 30, 1995 1,018,833 1,738,833 Partners' capital deficit, December 31, 1995 ($ 665,228) The accompanying notes are an integral part of these financial statements. 250 West 57th St. Associates Statement of Cash Flows For the Year Ended December 31, 1995 Cash flows from operating activities: Net income $1,781,573 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of mortgage refinancing costs 9,421 Change in interest accrued on first mortgage ( 960) Net cash provided by operating activities 1,790,034 Cash flows from financing activities: Monthly distributions to participants ($ 720,000) Distribution on November 30, 1995 of balance of additional rent for the lease year ended September 30, 1995 ( 1,018,833) Mortgage refinancing costs incurred ( 36,759) Amortization payments on first mortgage ( 14,803) Net cash used in financing activities ( 1,790,395) Net (decrease) in cash ( 361) Cash at beginning of year 84,485 Cash at end of year $ 84,124 Supplemental Cash Flow Disclosures Year Ended December 31, 1995 Cash paid during the year for interest $ 274,795 The accompanying notes are an integral part of these financial statements. 250 West 57th St. Associates Notes to Financial Statements December 31, 1995 1 - Depreciation: Depreciation of the cost of the building was computed by the straight-line method over estimated useful life of 30 years through September 30, 1983. The cost of the building improvements was depreciated by the straight-line method over various periods from date of completion of improvement through September 30, 1983. The cost of tenants' installations and improvements was amortised by the straight-line method over the terms of the leases. 2 - First mortgage: (a) Effective May 24, 1990, a first mortgage was placed on the property with the Apple Bank for Savings in the amount of $2,934,861. Annual mortgage charges were $293,486, payable in monthly installments, applied first to interest at the rate of 9 3/4% per annum and the balance to principal. The mortgage was refinanced on March l, 1995. (b) Effective March 1, 1995, a new first mortgage was placed on the property with the Apple Bank for Savings in the amount of $2,890,758. Annual mortgage charges are $289,157, payable in equal monthly installments, applied first to interest at the rate of 9.40% per annum and the balance to principal. The mortgage will mature on June l, 2000, with a balance of $2,777,754. (c) Prepayment privileges: The mortgage is not prepayable until March l, 1998. Thereafter, a 3% penalty will be imposed through February 28, 1999 and a 2% penalty will be imposed until March 2, 2000. There will be no prepayment penalty if the mortgage is paid in full during the last 90 days of the term of the mortgage. (d) Principal payments required to be made areas follows: Year Ending December 31, 1996 $19,369 1997 21,270 1998 23,358 1999 25,650 2000 2,789,171 $2,878,818 3 - Mortgage refinancing costs: Capitalized mortgage refinancing costs of $41,106 representing $36,759 incurred in connection with the refinanced mortgage on March 1, 1995, and the remaining balance of the costs of $4,347 for the Re: 250 West 57th St. Associates Notes to Financial Statements December 31, 1995 May 24, 1990 refinancing are being charged to expense ratably during the period of the new mortgage from March l, 1995 to June 1, 2000. 4 - Lease: (a) Effective May l, 1975, the lease between 250 West 57th St. Associates as lessor, and Fisk Building Associates, as lessee provides for basic rent equal to mortgage charges plus $28,000 payable to Wien, Malkin & Bettex for supervisory services. Basic rent is currently $317,157 a year to pay mortgage charges of $289,157 and $28,000 to Wien, Malkin & Bettex. Upon any refinancing of the first mortgage, the basic rent will be modified and will be equal to the sum of $28,000, plus an amount equal to the rate of constant payments for interest and amortization required under any such first mortgage immediately subsequent to refinancing computed on the principal balance of the mortgage immediately prior to such refinancing. Thus, in the event the first mortgage is refinanced so as to increase the principal balance, the basic rent will not be modified to include the charges on the additional portion of the mortgage. Associates will have to pay such charges out of primary additional rent described below. (b) In accordance with a lease modification, effective October l, 1984 primary additional rent is equal to the lesser of $752,000 per annum or the net operating profit of the property, as defined, after deduction of basic rent. If the full primary additional rent of $752,000 is paid, it will equal 20% of the original $3,600,000 cash investment plus $32,000 payable to Wien, Malkin & Bettex for supervisory services. Advances against primary additional rent are paid by the lessee based on the net operating profit of the property for the prior year to a maximum amount of $752,000. Primary additional rent for the lease year ended September 30, 1995 was $752,000. Advances against primary additional rent of $752,000 per annum for the lease year ending September 30, 1996 are being paid. Secondary additional rent is equal to 50% of the net operating profit of the property after payment of basic rent and primary additional rent for lease years ending September 30. Secondary additional rent for the lease year ended September 30, 1995 was $1,154,342. (c) The lessee has exercised its option to renew the lease for a period of 25 years, from October l, 1978 through September 30, 2003. The lease modification effective October 1, 1984 provides for an additional renewal term of 25 years from October 1, 2003 through September 30, 2028; the holders of more than 80% of the participations in 250 West 57th St. Associates have consented to the granting of options to the lessee to extend the lease for three additional 25-year renewal terms. There is no change in the terms of the lease during the renewal periods. Re: 250 West 57th St. Associates Notes to Financial Statements December 31, 1995 5 - Supervisory services and related party transactions: Payments for supervisory services, including disbursements and cost of accounting services, are made to the firm of Wien, Malkin & Bettex. Some partners in that firm are also partners in Associates. 6 - Income taxes: Net income is computed without regard to income tax expense, since the partnership does not pay a tax on its income; instead, any such taxes are paid by the participants in their individual capacities. 7 - Concentration of credit risk: Associates maintains cash balances in a bank and in a distribution account held by Wien, Malkin & Bettex. The bank balance is insured by the Federal Deposit Insurance Corporation up to $100,000, and at December 31, 1995 was completely insured. The distribution account held by Wien, Malkin & Bettex is not insured. The funds held in the distribution account were paid to the participants on January l, 1996. EX-24 4 EXHIBIT 24 250 WEST 57TH STREET ASSOCIATES FILE NO. 0-2666 POWER OF ATTORNEY We, the undersigned general partners of 250 West 57th Street Associates ("Associates"), hereby severally constitute and appoint Stanley Katzman and Richard A. Shapiro and each of them, individually, our true and lawful attorneys with full power to them and each of them to sign for us, and in our names and in the capacities indicated below on behalf of Associates, any and all reports or other statements required to be filed with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934. Signature Title Date /s/Peter L. Malkin Peter L. Malkin General Partner March 29, 1996 /s/Stanley Katzman Stanley Katzman General Partner March 29, 1996 /s/Ralph W. Felsten Ralph W. Felsten General Partner March 29, 1996 STATE OF NEW YORK ) : ss.: COUNTY OF NEW YORK ) On the 29 day of March, 1996 before me personally came PETER L. MALKIN, STANLEY KATZMAN and RALPH W. FELSTEN, to me known to be the individuals described in and who executed the foregoing instrument, and acknowledged that they executed the same. /s/ NOTARY PUBLIC NOTARY PUBLIC EX-27 5
5 This schedule contains summary financial information extracted from the Company's Balance Sheet as of December 31, 1995 and the Statement Of Income for the year ended Decemeber 31, 1995, and is qualified in its entirety by reference to such financial staements. 12-MOS DEC-31-1995 JAN-01-1995 DEC-31-1995 84,125 0 0 0 0 84,125 2,117,435 0 2,236,141 41,920 0 0 0 0 (665,228) 2,236,141 2,338,033 2,338,033 0 0 456,460 0 273,835 1,781,573 0 1,781,573 0 0 0 1,781,573 2,474 2,474 Includes unamortized mortgage costs of $36,561 Accrued interest on mortgage and first mortgage principal payment due within one year Partnership capital Includes long-term debt Rental income Supervisory services and amortization of mortgage refinance costs Earnings per $5,000 participation unit, based on 720 participation units outstanding during the period
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