Relationship with Vornado

9 Months Ended

Sep. 30, 2011

Relationship with Vornado [Abstract]

Relationship with Vornado

3.       Relationship with Vornado

At September 30,2011, 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 income from the Kings Plaza Regional Shopping Center, (iii) $0.50 per square foot of the tenant-occupied office and retail space at 731 Lexington Avenue and (iv) $256,000, 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, with minimum guaranteed fees of $750,000 per annum.

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% (1.78% at September 30, 2011).

3.       Relationship with Vornado – continued

Other Agreements

We have also entered into agreements with Building Maintenance Services, a wholly owned subsidiary of Vornado, to supervise cleaning, engineering and security services at our Lexington Avenue and KingsPlaza properties for an annual fee of the cost for such services plus 6%.

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

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(Amounts in thousands)		2011		2010		2011		2010
Company management fees		$	750	$	750	$	2,250	$	2,250
Development fees			187		188		563		563
Leasing fees			539		1,159		3,819		3,979
Property management fees and payments for cleaning, engineering
	and security services		1,131		1,075		3,264		3,163
		$	2,607	$	3,172	$	9,896	$	9,955

At September 30, 2011, we owed Vornado $41,307,000 for leasing fees and $2,001,000 for management, property management and cleaning fees.