Relationship with Vornado

9 Months Ended

Sep. 30, 2012

Related party transactions [Abstract]

Relationship with Vornado [Text Block]

4.       Relationship with Vornado

At September 30,2012, Vornado owned 32.4% of our outstanding common stock. We are managed by, and our properties are leased and developed by, Vornado, pursuant to the agreements described below which expire in March of each year and are automatically renewable.

Management and Development Agreements

We pay Vornado an annual management fee equal to the sum of (i) $3,000,000, (ii) 3% of gross revenue from the Kings Plaza Regional Shopping Center (see Note 5 - Discontinued Operations), (iii) 2% of gross revenue from the Rego Park II Shopping Center, (iv)$0.50 per square foot of the tenant-occupied office and retail space at 731 Lexington Avenue and (v) $264,000, escalating at 3% per annum, for managing the common area of 731 Lexington Avenue.

In addition, Vornado is entitled to a development fee of 6% of development costs, as defined.

Leasing Agreements

Vornado also provides us with leasing services for a fee of 3% of rent for the first ten years of a lease term, 2% of rent for the eleventh through the twentieth year of a lease term, and 1% of rent for the twenty-first through thirtieth year of a lease term, subject to the payment of rents by tenants. In the event third-party real estate brokers are used, the fees to Vornado increase by 1% and Vornado is responsible for the fees to the third-party real estate brokers. Vornado is also entitled to a commission upon the sale of any of our assets equal to 3% of gross proceeds, as defined, for asset sales less than $50,000,000 and 1% of gross proceeds, as defined, for asset sales of $50,000,000 or more. The total of these amounts is payable in annual installments in an amount not to exceed $4,000,000, with interest on the unpaid balance at one-year LIBOR plus 1.0% (2.13% at September 30, 2012).

Other Agreements

We have also entered into agreements with Building Maintenance Services, a wholly owned subsidiary of Vornado, to (i) supervise cleaning, engineering and security services at our Lexington Avenue and Kings Plaza properties (see Note 5 – Discontinued Operations), and (ii) supervise security services at our Rego Park I and Rego Park II properties, for an annual fee of the cost for such services plus 6%.

The following is a summary of fees to Vornado under the various agreements discussed above.

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(Amounts in thousands)		2012		2011		2012		2011
Company management fees		$	750	$	750	$	2,250	$	2,250
Development fees			63		187		438		563
Leasing fees			320		539		1,949		3,819
Property management fees and payments for cleaning, engineering
	and security services		1,369		1,131		3,911		3,264
		$	2,502	$	2,607	$	8,548	$	9,896

At September 30, 2012, we owed Vornado $39,059,000 for leasing fees and $735,000 for management, property management and cleaning fees.