Empire State Building Has a Tangled History

Last week, Peter L. Malkin and his son Anthony E. Malkin, who currently control the Empire State Building, drew closer to their goal of bundling the 102-story tower with 19 other properties to create a $5.2 billion company called Empire State Realty Trust that would offer shares to the public.

The Malkins, whose stake in the new company is valued at $730 million, have spent the last year trying to convince shareholders to approve the consolidation. In what has turned into an ugly public feud, some shareholders have opposed the plan, saying that while it would be a rich deal for the Malkins, it could expose other investors to the ups and downs of the stock market.

But on Tuesday, Justice O. Peter Sherwood in State Supreme Court in Manhattan rejected an investor group’s challenge to the initial public offering. Two days later, he approved a $55 million settlement between a separate group of dissenting shareholders and Malkin Holdings. Stephen Meister, a lawyer for some stakeholders in the Empire State Building, has vowed to appeal both decisions.

So far, more than 75 percent of the 3,000 shareholders in the Empire State Building have voted in favor of the Malkins’ deal; they need 80 percent. If the Malkins succeed, it will cap a long history of struggle to control what was memorably described in film as “the nearest thing we have to heaven in New York.”

Richard Drew/Associated Press

1930 Construction starts, eventually employing 3,400 workers, using 10 million bricks, 57,000 tons of steel, 473 miles of electrical wire and 200,000 cubic feet of Indiana limestone.

1931 The $41 million Empire State Building opens on May 1, with Gov.Franklin D. Roosevelt and former Gov.Alfred E. Smith, president of the Empire State Company, addressing more than 2,000 guests.

1933 King Kong ascends the 102-story tower (at least on film).

1945 On July 28, a B-25 on a routine flight to Newark crashes into the north side of the fog-shrouded skyscraper, leaving a gash between the 78th and 80th floors and killing 14 people.

1951 In a deal valued at $34 million, the estate of John J. Raskob, who owned a controlling interest until his death in 1950, sells his stake to to a group headed by Roger I. Stevens and Col. Henry J. Crown. The group sells the ground, or title, to Prudential Insurance Company for $17 million.

1954 Colonel Crown buys out his partners, becoming the sole owner of the building.

1961Harry B. Helmsley, Lawrence A. Wien and his son-in-law Peter Malkin buy control of the building in a $65 million syndication deal. Mr. Wien raises $33 million from more than 3,000 small investors who paid $10,000 for a single share in Empire State Building Associates; that entity subleases the building to a company controlled by Mr. Helmsley and Mr. Wien. At the same time, the group resells the land, or title, to Prudential Insurance for $29 million.

1991 Prudential sells the building’s title for $42 million to Oliver Grace Jr., who was secretly acting on behalf of Hideki Yokoi, a Japanese hotelier then serving a prison sentence in connection with a deadly fire at one of his hotels.

1995Donald J. Trump, acting in concert with Mr. Yokoi’s daughter, Kiiko Nakahara, sues Empire State Building Associates, contending that Mr. Helmsley and Peter Malkin had turned the landmark tower into a “high-rise slum.” The legal battle would go on for seven years.

1997 Mr. Helmsley dies on Jan. 4. A nine-year struggle for control begins when Peter Malkin and his son Anthony Malkin sue Mr. Helmsley’s widow, Leona, and her husband’s former partners at Helmsley-Spear.

2002 Having failed to break the lease, Mr. Yokoi, Ms. Nakahara and their agent, Mr. Trump, sell the title to the Malkins’ partnership, Empire State Building Associates, for $57.5 million.

2006 The Malkins wrest control of the property from Helmsley-Spear.

2008 The owners embark on a $550 million upgrade of the tower and begin replacing hundreds of small tenants with higher-paying corporate tenants like Skanska, Lufthansa and LinkedIn.

2012 The Malkins file plans to form a $5.2 billion publicly traded real estate investment trust comprising 19 properties in the New York area, with the Empire State Building as the centerpiece. A small group of investors opposes the consolidation.

Article source: http://www.nytimes.com/2013/05/05/business/empire-state-building-has-a-tangled-history.html?partner=rss&emc=rss