-----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, TReO1J2NmTqEgctoCB4/zR2oMCUTt1BSrdb0mJb2rKICqF6b6yDtI2vpA98o/VWJ QhcQF8vkLu+7ZjFGGeSo/g== 0000100412-96-000005.txt : 19960517 0000100412-96-000005.hdr.sgml : 19960517 ACCESSION NUMBER: 0000100412-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-02666 FILM NUMBER: 96566912 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-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ___________ Commission file number 0-2666 250 WEST 57th ST. ASSOCIATES (Exact name of registrant as specified in its charter) A New York Partnership 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) (212) 687-8700 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ]. No [ ] . An Exhibit Index is located on Page 13 of this Report. Number of pages (including exhibits) in this filing: 13 PART I. FINANCIAL INFORMATION Item 1. Financial Statements. 250 West 57th St. Associates Condensed Statement of Income (Unaudited) For the Three Months Ended March 31, 1996 1995 Income: Basic rent, from a related party (Note B) $ 79,289 $ 93,823 Advance of primary overage rent, from a related party (Note B) 188,000 188,000 ---------- ---------- Total income 267,289 281,823 ---------- ---------- Expenses: Interest on mortgage 67,579 70,454 Supervisory services, to a related party (Note C) 15,000 15,000 Amortization of mortgage refinancing costs 1,957 3,545 ---------- ---------- Total expenses 84,536 88,999 ---------- ---------- Net income $ 182,753 $ 192,824 ---------- ========== Earnings per $5,000 partici- pation unit, based on 720 participation units out- standing during the year $ 253.82 $ 267.81 ========= ========= Distributions per $5,000 participation: Distributions per $5,000 participation consisted of the following: Income $ 253.82 $ 267.81 Increase (Decrease) in capital deficit (3.82) (17.81) --------- ---------- Total distributions $ 250.00 $ 250.00 ========= ========== At March 31, 1996 and 1995, there were $3,600,000 of participations outstanding. 250 West 57th St. Associates Condensed Balance Sheet (Unaudited) March 31, 1996 December 31, 1995 Assets Current assets: Cash $ 84,124 $ 84,124 ---------- ---------- Total current assets 84,124 84,124 ---------- ---------- Real estate, at cost: Property situated at 250-264 West 57th Street, New York, New York: Land 2,117,435 2,117,435 Building 4,940,682 4,940,682 Less: Accumulated depreciation 4,940,682 4,940,682 ---------- ---------- -0- -0- Building improvements 688,000 688,000 Less: Accumulated depreciation 688,000 688,000 ---------- ---------- -0- -0- Tenants' installations and improvements 249,791 249,791 Less: Accumulated amortization 249,791 249,791 ---------- ---------- -0- -0- Other assets: Mortgage refinancing costs 41,106 41,106 Less: Accumulated amortization 8,482 6,524 ---------- ---------- 32,624 34,582 ---------- ---------- Total assets $2,234,183 $2,236,141 ========== ========== Liabilities and Capital Current liabilities: Accrued interest payable $ 22,514 $ 22,551 First mortgage principal payments due within one year (Note B) 19,827 19,369 ---------- ---------- Total current liabilities 42,341 41,920 Long-term debt (Note B) 2,854,317 2,859,449 Capital (deficit) (See analysis, page 4): March 31, 1996 (662,475) -0- December 31, 1995 -0- (665,228) ---------- ---------- Total liabilities and capital: March 31, 1996 $2,234,183 December 31, 1995 ========== $2,236,141 ========== 250 West 57th St. Associates Analysis of Capital (Deficit) (Unaudited) March 31, 1996 December 31, 1995 Capital: January 1, 1995 $ (665,228) January 1, 1994 $ (707,968) Add, Net income: January 1, 1996 through March 31, 1996 182,753 -0- January 1, 1995 through December 31, 1995 -0- 1,781,573 ---------- ---------- (482,475) 1,073,605 Less, Distributions: Distribution, November 30, 1995 of Secondary Overage Rent for the lease year ended September 30, 1995 -0- 1,018,833 Distributions January 1, 1996 through March 31, 1996 180,000 -0- Distributions, January 1, 1995 through December 31, 1995 -0- 720,000 ---------- ---------- 180,000 1,738,833 ---------- ---------- Capital (deficit): March 31, 1996 $ (662,475) December 31, 1995 ========== $ (665,228) ========== 250 West 57th St. Associates Condensed Statements of Cash Flows (Unaudited) January 1, 1996 January 1, 1995 through through March 31, 1996 March 31, 1995 Cash flows from operating activities: Net income $ 182,753 $ 192,824 Adjustments to reconcile net income to cash provided by operating activities: Amortization of mortgage refinancing costs 1,957 3,545 Change in mortgage refinancing costs -0- (36,558) Change in accrued interest payable (37) (23,511) Change in deferred credit -0- 46,562 ----------- ----------- Net cash provided by operating activities 184,673 182,862 ----------- ----------- Cash flows from financing activities: Cash distributions (180,000) (180,000) Principal payments on long-term debt (4,673) (2,863) ----------- ----------- Net cash used in financing activities (184,673) (182,863) ----------- ----------- Net increase (decrease) in cash -0- (1) Cash, beginning of period 84,124 84,485 ----------- ----------- Cash, end of period 84,124 $ 84,484 =========== =========== January 1, 1996 January 1, 1995 through through March 31, 1996 March 31, 1995 Cash paid for: Interest $ 67,616 $ 93,964 =========== =========== 250 West 57th St. Associates 6. March 31, 1996 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) Note A - Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and statement of cash flows in conformity with generally accepted accounting principles. The accompanying unaudited condensed financial statements include all adjustments (consisting only of normal recurring accruals) which are, in the opinion of the joint venturers in Registrant, necessary for a fair statement of the results for such interim periods. The joint venturers in Registrant believe that the accompanying unaudited condensed financial statements and the notes thereto fairly disclose the financial condition and results of Registrant's operations for the periods indicated and are adequate to make the information presented therein not misleading. Note B - Interim Period Reporting The results for the interim period are not necessarily indicative of the results to be expected for a full year. Registrant is a New York joint venture which was organized on May 25, 1953. On September 30, 1953, Registrant acquired fee title to the "Fisk Building" (the "Building") and the land thereunder located at 250-264 West 57th Street, New York, New York (hereinafter, collectively, the "Property"). Registrant's joint venturers are Peter L. Malkin, Stanley Katzman and Ralph W. Felsten (the "Joint Venturers"), each of whom also acts as an agent for holders of participations in their undivided joint venture interests in Registrant (the "Participants"). Registrant leases the Property to Fisk Building Associates (the "Net Lessee"), under a long-term net operating lease (the "Net Lease"), the current term of which expires on September 30, 2003. Net Lessee is a New York partnership in which Mr. Malkin is among its partners. In addition, each of the Joint Venturers is also among the members of the law firm of Wien, Malkin & Bettex, 60 East 42nd Street, New York, New York, counsel to Registrant and Net Lessee ("Counsel"). See Note C of this Item 1 ("Note C"). 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 preceding lease year or (2) $752,000 (the "Primary Overage Rent"), and (B) secondary 250 West 57th St. Associates 7. March 31, 1996 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 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 will be 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 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. 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. 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: (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; 250 West 57th St. Associates 8. March 31, 1996 (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 approximately $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 $14,454 of these expenses, as additional Basic Rent and advanced the balance of $22,304 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. It is anticipated that the refinancing of the Mortgage Loan will have no material effect on the amounts of Basic Rent, monthly advances against Primary Overage Rent, the annual basic payment for supervisory services made to Counsel or the regular monthly distributions to the Participants. See Note C. Note C - Supervisory Services Registrant pays Counsel for legal fees and supervisory services and disbursements: (i) $40,000 per annum (the "Basic Payment"); and (ii) an additional payment of 10% of all distributions to Participants in any year in excess of the amount representing a return to them at the rate of 15% per annum on their remaining cash investment (the "Additional Payment"). At March 31, 1996, the Participants' remaining cash investment was $3,600,000. Of the Basic Payment, $28,000 is payable from Basic Rent and $12,000 is payable from Primary Overage Rent received by Registrant. 250 West 57th St. Associates 9. March 31, 1996 No remuneration was paid during the three month period ended March 31, 1996 by Registrant to any of the Joint Venturers as such. Pursuant to the fee arrangements described herein, Registrant also paid Counsel $10,000 of the Basic Payment and $5,000 on account of the Additional Payment, for the three month period ended March 31, 1996. The supervisory services provided to Registrant by Counsel include legal, administrative services and financial services. The legal and administrative services include acting as general counsel to Registrant, maintaining all of its partnership records, performing physical inspections of the Building, reviewing insurance coverage and conducting annual partnership meetings. Financial services include monthly receipt of rent from the Net Lessee, payment of monthly and additional distributions to the Participants, payment of all other disbursements, confirmation of the payment of real estate taxes, and active review of financial statements submitted to Registrant by the Net Lessee and financial statements audited by and tax information prepared by Registrants' independent certified public accountant, and distribution of such materials to the Participants. Counsel also prepares quarterly, annual and other periodic filings with the Securities and Exchange Commission and applicable state authorities. Reference is made to Note B for a description of the terms of the Net Lease between Registrant and Net Lessee. The respective interests, if any, of each Joint Venturer in Registrant and in Net Lessee arise solely from such person's 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 in Net Lessee. However, each of the Joint Venturers by reason of his interest in Counsel, is entitled to receive his pro rata share of any legal fees or other remuneration paid to Counsel for legal services rendered to Registrant and Net Lessee. As of March 31, 1996, the Joint Venturers owned of record and beneficially $26,666.68 of Participations, representing less than 1% of the currently outstanding Participations in Registrant. In addition, as of March 31, 1996, certain of the Joint Venturers in Registrant (or their respective spouses) 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. 250 West 57th St. Associates 10. March 31, 1996 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Registrant was organized solely for the purposes of owning the Property subject to a net operating lease of the Property held by Net Lessee. Registrant is required to pay, from Basic Rent, the charges on the Mortgage Loan and amounts for supervisory services, and to then distribute the balance of such Basic Rent to holders of Participations. See Note C of Item 1. Pursuant to the Net Lease, Net Lessee has assumed sole respons- ibility 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. Registrant does not pay dividends. During the three month period ended March 31, 1996, 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, Registrant made an additional distribution for each $5,000 participation of $1,415. Such distribution represented the balance of Secondary Overage Rent payable by Net Lessee in accordance with the terms of the Net Lease after repayment of advances to the Net Lessee for expenses of the refinancing and Additional Payment to Counsel. See Notes B and C. There are no restrictions on Registrant's present or future ability to make distributions; however, the amount of such distributions depends solely on the ability of Net Lessee to make monthly payments of Basic Rent, Primary Overage Rent and Secondary Overage Rent to Registrant in accordance with the terms of the Net Lease. Registrant expects to make distributions so long as it receives the payments provided for under the Net Lease. See Note B. The following summarizes with respect to the current period and corresponding period of the previous year, the material factors affecting Registrant's results of operations for such periods: Total income decreased for the three-month period ended March 31, 1996 as compared with the three-month period ended March 31, 1995. Such decrease resulted from a decrease in the Basic Rent now payable under the Net Lease. Total expenses decreased for the three period ended March 31, 1996 as compared to the 250 West 57th St. Associates 11. March 31, 1996 three month period ended March 31, 1995. Such decrease resulted from both a decrease in interest expense on the Mortgage Loan and amortization of the costs incurred in connection with the Refinancing. Liquidity and Capital Resources There has been no significant change in Registrant's liquidity for the three month period ended March 31, 1996, as compared with the three month period ended March 31, 1995. The amortization payments due under the Mortgage Loan (see Note B of Item 1 hereof) will not be sufficient to fully liquidate the outstanding principal balance thereof at maturity in 2000. The Registrant does not maintain any reserve to cover the payment of any mortgage indebtedness at or prior to maturity. Therefore, repayment of such indebtedness will depend on Registrant's ability to arrange a further refinancing of the Mortgage Loan. The ability of Registrant to obtain any such refinancing will depend upon several factors, including the value of the Property at that time and future trends in the real estate market and the economy in the geographic area in which the Property is located. Registrant anticipates that funds for working capital will be provided by rental payments received from the Net Lessee and, to the extent necessary, from additional capital investment by the partners in the Net Lessee and/or external financing. However, as noted above, Registrant has no requirement to maintain substantial reserves to defray any operating expenses of the Property. Registrant foresees no need to make material commit- ments for capital expenditures while the Net Lease is in effect. Inflation Registrant believes that there has been no material change in the impact of inflation on its operations since the filing of its report on Form 10-K for the year ended December 31, 1995, which report and all exhibits thereto are incorporated herein by reference and made a part hereof. PART II. OTHER INFORMATION Item 1. Legal Proceedings. There are no material pending legal proceedings to which Registrant is a party. Item 6. Exhibits and Reports on Form 8-K. (a) The exhibits hereto are being incorporated by reference. (b) Registrant has not filed any report on Form 8-K during the quarter for which this report is being filed. 250 West 57th St. Associates March 31, 1996 12. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The individual signing this report on behalf of Registrant is Attorney-in-Fact for Registrant and each of the Joint Venturers in Registrant, pursuant to a Power of Attorney, dated March 29, 1996 (the "Power"). 250 WEST 57TH ST. ASSOCIATES (Registrant) By /s/ Richard A. Shapiro Richard A. Shapiro, Attorney-in-Fact* Date: May 14, 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 Registrant and as a Joint Venturer in Registrant on the date indicated. By /s/ Richard A. Shapiro Richard A. Shapiro, Attorney-in-Fact* Date: May 14, 1996 ______________________ * Mr. Shapiro supervises accounting functions for Registrant. 250 West 57th St. Associates March 31, 1996 13. EXHIBIT INDEX Number Document Page* 24 Power of Attorney dated March 29, 1996, which was filed as Exhibit 24 to year ended December 31, 1995 and is incorporated by reference as an exhibit hereto. ______________________ * Page references are based on sequential numbering system. EX-27 2 FINANCIAL DATA SCHEDULE FOR 250 WEST 57TH ST ASSOC
5 This schedule contains summary financial information extracted from the Company's Balance Sheet as of March 31, 1996 and the Statement Of Income for the period ended March 31, 1996, and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 84,124 0 0 0 0 84,124 7,995,908 5,878,473 2,234,183 42,341 0 0 0 0 (662,475) 2,234,183 267,289 267,289 0 0 16,957 0 67,579 182,753 0 182,753 0 0 0 182,753 253.82 253.82 Includes unamortized mortgage refinancing costs Accrued interest on mortgage, and first mortgage principal payments due within one year Includes long-term debt Rental income includes basic rent and advance of primary overage rent 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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