Exhibit 13 a
[LETTERHEAD OF WIEN & MALKIN LLP]





                                                April 10, 2000

TO PARTICIPANTS IN EMPIRE STATE BUILDING ASSOCIATES
Federal Identification Number 13-6084254

        We enclose the annual report of Empire State Building Associates for
the year ended December 31, 1999 and the comparative statement of operations
under the sublease for the years 1999 and 1998.
        The sublease provides for the payment of additional rent equal to 50% of
the sublessee's profit in excess of $1,000,000.  The profit for 1999 was
$16,164,218, so that the sublessee paid additional rent of $7,582,109.  The
profit for 1998 was $9,219,704, so that the sublessee paid
additional rent of $4,109,852.
        There was $7,042,766 available for distribution.  In accordance with the
partnership agreement, 6% of the distribution, $422,566, has been paid to Wien
& Malkin LLP.  $6,620,200 was distributed to the participants on February 29,
2000 and represented about 20.1% on the original cash investment of $33,000,000.
Together with regular monthly distributions during the year 1999, total
distributions to participants for 1999 were at the rate of about 31.9%.  Details
are as follows:

   Additional rent for the year 1999                            $7,582,109
   Dividend income                                                 144,690
                                                                 7,726,799
     Less:
     Legal fees (Proskauer Rose LLP and
     Thelen, Reid & Priest LLP)  in connection
     with Empire State Liquidity Fund tender offer   $ 44,363
     Accrual for advance by Wien & Malkin LLP
     during 1999 in connection with the Studley
     litigation, about which participants have
     previously been advised                           39,670
     Reserve for future expenses in defending
     Trump and Studley litigations                    600,000  (   684,033)
     Balance                                                    $7,042,766
   Distribution to participants on February 29, 2000            $6,620,200
   Additional fee paid to Wien & Malkin LLP
       (6% of $7,042,766)                                          422,566
   Total                                                        $7,042,766

                               -38-
        Total distributions to the participants on the original cash investment
for the years 1999, 1998, 1997 and 1996 were at the rate of approximately
31.9%, 20.3%, 15% and 11.8%, respectively.
        For financial statement purposes, while the income of Empire State
Building Associates for the year 1999 was $10,901,065, distributions of
$10,509,533, including the additional distribution of $6,620,200, were made to
participants.  The difference arises mainly because of an addition to the
reserve for future expenses in defending litigations as described above.  Such
reserves are not deducted for tax purposes on Schedule K-1 until payments are
made.
        Taking into account that a portion of prior distributions constituted
a return of capital, the average capital investment for the year 1999 was
$9,243,163.  Distributions of $10,509,533 were about 113.7% on the average
capital.  The book value on December 31, 1999 of an original cash investment
of $10,000 was $3,436.
        Those participants who have voluntarily authorized additional
compensation to Wien & Malkin LLP pursuant to the consent solicitation letter
of September 13, 1991 will receive from Wien & Malkin LLP each year through
January 5, 2076, their pro rata shares of the originally scheduled increases
in additional payments to Wien & Malkin LLP from the reductions in master
lease rent effective in 1992 and 2013.  This amounts to $45,017 per annum
commencing in 1992 and $52,405 per annum commencing in 2013.  Each such
participant holding a $10,000 participation will receive each year $13.64 for
1992 through 2012 and $15.88 commencing 2013.  The first payment to consenting
participants on account of the year 1992 was included in the check distributed
on February 28, 1993.  The Schedule K-1 previously submitted to you noted the
amount you received on March 5, 1999 to be reported on your 1999 income tax
returns.  The payment for 1999 was mailed to you on February 29, 2000 and will
be reportable on your 2000 income tax returns.
        Schedule K-1 forms (Form 1065), containing 1999 tax information, were
mailed to the participants on March 8, 2000.
        If you have any question about the enclosed material, please communicate
with our office.
							Cordially yours,

							WIEN & MALKIN LLP

							By:  Stanley Katzman

SK:fm
Enc.


                                   -39-


[LETTERHEAD OF MCGRATH, DOYLE & PHAIR
 CERTIFIED PUBLIC ACCOUNTANTS]




Empire State Building Company
60 East 42nd Street
New York, NY  10165

	We have audited the accompanying Comparative Combined Statement of
Income of Empire State Building and Observatory for the years ended December
31, 1999 and 1998 for the purpose of determining "Net Operating Profit" and
"Overage Rent" as those terms are defined in Section 2.05 of Agreement of
Sublease dated December 27, 1961. During the years ended December 31, 1999 and
1998, the entire building, with the exception of the Observatory, was operated
by Empire State Building Company and the Observatory was operated by Empire
State Building, Inc.  The Combined Statement of Income is the responsibility of
the management of Empire State Building Company and Empire State Building, Inc.
Our responsibility is to express an opinion on the Combined Statement of Income
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 Combined Statement of Income is free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the Combined
Statement of Income.  We believe that our audit provides a reasonable basis for
our opinion.

	In our opinion, the accompanying Comparative Combined Statement of
Income of Empire State Building and Observatory presents fairly, in all material
respects, the Net Operating Profit and Overage Rent for the years ended December
31, 1999 and 1998, in conformity with Section 2.05 of the aforementioned
Agreement dated December 27, 1961.

	As discussed in Note 2 to the Combined Statement of Income, the Empire
State Building Company and other related parties have been named as defendants
in legal actions.  All defendants have denied all material allegations.  It is
not possible at this time to predict the outcome or range of potential loss, if
any, which might result from those actions.  No provision for any loss has been
made in the accompanying Combined Statement of Income.


New York, NY
March 16, 2000



                              -40-



                Empire State Building and Observatory
                COMPARATIVE COMBINED STATEMENT OF INCOME

                                                                     Increase
                                                1999       1998     (Decrease)
INCOME
 Rent, including electricity                $59,755,165 55,110,840  $4,644,325
 Observatory admissions                      18,420,734 17,803,746     616,988
 Other observatory income                     1,149,970  1,228,170     (78,200)
 Antenna rent                                 5,334,395  5,348,547     (14,152)
 Lease cancellation                                   0     19,184     (19,184)
 Percentage rent                                691,441    676,098      15,343
 Net credit on water charges (Note 4)                 0    366,094    (366,094)
 Other                                          840,707    739,511     101,196
 Total income                                86,192,412 81,292,190   4,900,222

OPERATING EXPENSES
 Rent                                         6,018,750  6,018,750           0
 Real estate taxes                           19,542,337 19,367,733     174,604
 Wages, contract cleaning and protection ser 12,625,802 12,386,259     239,543
 Electricity                                  5,101,519  4,857,861     243,658
 Tenants' and building alterations, repairs  10,555,096 11,157,243    (602,147)
 Management fees and leasing commissions      2,872,316  3,252,369    (380,053)
 Observatory:
  Wages                                       1,863,183  1,786,158      77,025
  Contracted  labor                           2,179,869  2,212,386     (32,517)
  Advertising and public relations              187,103    379,065    (191,962)
  Payroll taxes and other labor cost            656,856    656,879         (23)
  Other taxes and expenses                      188,767    247,833     (59,066)
 Steam                                        1,172,078  1,205,017     (32,939)
 Professional fees (Note 1)                   1,423,216  2,474,890  (1,051,674)
 Payroll taxes and other labor costs          3,560,811  2,980,013     580,798
 Insurance                                      334,288    540,241    (205,953)
 Water (Note 4)                                 453,032          0     453,032
 Rubbish removal                                189,003    399,546    (210,543)
 Advertising                                    430,427    339,632      90,795
 Telephone                                       56,730     84,702     (27,972)
 Sprinkler alarm service                        102,558     63,618      38,940
 Directory service                               17,235      9,219       8,016
 Interest on NYS utility tax (Note 3)            50,192    340,453    (290,261)
 Utility taxes (Note 3)                               0    968,729    (968,729)
 Paging and other intercommunication            110,028     86,578      23,450
 Dues                                            44,478     35,403       9,075
 Licenses and permits                                 0      4,372      (4,372)
 Other expenses                                 292,520    217,537      74,983
 Total expenses before overage rent          70,028,194 72,072,486  (2,044,292)

NET OPERATING PROFIT                        $16,164,218 $9,219,704  $6,944,514

OVERAGE RENT, 50% OF NET OPERATING PROFIT
 IN EXCESS OF $1,000,000                     $7,582,109 $4,109,852  $3,472,257
                                  -41-

                  Empire State Building and Observatory
                  NOTES TO COMBINED STATEMENT OF INCOME

NOTE

1.    Professional fees include payments to Wien & Malkin LLP.  A partner in
Wien &  Malkin  LLP is a partner in Company.

2.    Litigation
(a)  On October 21, 1991, Julien J. Studley ("Studley"), the holder of a $20,000
original participation in Empire State Building Associates ("Associates"), the
master lessee of the Empire State Building, brought suit against the Agents for
Associates (Peter L. Malkin, Donald A. Bettex and Alvin Silverman); Company;
Harry B. Helmsley, a partner in Company; and Wien, Malkin & Bettex, supervisor
to Associates. The suit claimed that the defendants have engaged in breaches of
fiduciary duty and acts of self-dealing in relation to the Agents' solicitation
of consents and authorizations of the Participants in Associates in September,
1991, and in relation to other unrelated acts of the Agents and the Sublessee.
The suit is styled as a class action, but the Court was not asked to grant class
certification.  The suit seeks relief including an injunction and an accounting.
In 1994, the action was dismissed against Company and Mr. Helmsley.  In 1995,
the plaintiff amended the complaint to allege, amongst other things, the
underpayment by Company of overage rent due to Associates. In June 1996,
plaintiff applied for partial summary judgment. In September 1996, defendants
applied for summary judgment and dismissal of the action in its entirety.  By
order and decision dated July 14, 1997, the Court denied the plaintiff's motion
for partial summary judgment, granted the defendants' motion for summary
judgment, and dismissed the action.  The plaintiff filed an appeal with respect
to the foregoing order.  By decision and order entered April 2, 1998, the
Appellate Division of the Supreme Court unanimously affirmed the order
dismissing the action.  The plaintiff has applied for permission to appeal the
Appellate Division's determination to the New York Court of Appeals, and that
application has been denied by both the Appellate Division and the Court of
Appeals.  The plaintiff has filed a new complaint, which alleges claims similar
to those asserted in the previously dismissed complaint.  The defendants have
applied for dismissal of the new complaint based on the prior dismissal orders
and on other grounds.  In April 1999, the Court granted defendants motion to
dismiss the complaint.  In May 1999, the plaintiff filed a Notice of Appeal.
It is not possible at this time to predict the outcome or range of potential
loss, if any, which results from this action.  No provision for any liability
that may result upon adjudication has been made in the accompanying financial
statements.

(b)  In December 1994, Empire State Building Associates ("Associates") received
a notice of default ("Notice I") from Trump Empire State Partners ("Trump"). The
Trump default notice to Associates claims that Associates is in violation of its
master lease because of extensive work Company has undertaken as part of an
improvement program that commenced before Trump reportedly acquired its interest
in the property in 1994.  Trump's notice also complains that the building is in
need of repairs.



                                 -42-


                Empire State Building and Observatory
                NOTES TO COMBINED STATEMENT OF INCOME


2.    Litigation - Continued

On February 14, 1995, Associates and Company filed an action in the New York
State Supreme Court against Trump for a declaratory judgment that none of the
matters set forth in the notice of default constitutes a violation of the
master lease or sublease, and that the notice of default is without merit.
Associates' and Company's suit also seeks an injunction to prevent Trump from
implementing the notice of default.

On March 24, 1995, the New York State Supreme Court, in the foregoing action,
granted Associates a preliminary injunction against Trump.  Trump, thereafter,
served two additional default notices ("Notices II and III") for which the
Court had granted additional injunctions against Trump.

The injunctions prohibit Trump from acting on its notices of default to
Associates, at any time, pending the prosecution of claims by Associates and
Company for a final judgment granting a permanent injunction and other relief
against the Trump defendants.  On April 8, 1996, the Court granted Associates
additional injunctions against Trump, which further prohibit Trump from seeking
to terminate Associates' Master Lease.  On August 19, 1996, the Court denied a
motion by Trump to set aside the injunction granted in favor of Associates and
against Trump on March 24, 1995.  The Court has directed the parties in the
foregoing action to proceed with pretrial discovery.  Trump has appealed the
Court's injunction orders, and the Appellate Court has unanimously affirmed
the appealed orders.

On February 15, 1995, Trump filed an action against Associates, Company, Wien
& Malkin LLP, Harry B. Helmsley, Helmsley Spear, Inc. (the management company
of the Building engaged by Company), and the Partners, in New York State Supreme
Court, alleging that the notice of default is valid and seeking damages and
related relief based thereon.  On October 24, 1996, the Court dismissed all of
Trump's claims in their entirety as against Associates and all other defendants
in the foregoing action.  Trump appealed this ruling and the Appellate Court
unanimously affirmed dismissal of Trump's claims.

In May 1995, Associates and Company filed a separate legal action against Trump
and various affiliated persons for breach of the Master Lease and Sublease and
for disparagement of the property in violation of Associates' and Company's
leasehold rights.  The action was amended to include additional claims by
Associates and Company seeking a declaratory judgment that they may act as an
owner of the Property for purposes of making applications and related activities
pursuant to the New York City Building Code.  Trump moved to dismiss the claims
concerning the Building Code.  By decision and order of October 24, 1996,  the
Court rejected Trump's motion and sustained Associates' and Company's claims
concerning the parties who may act as owner of the Property under the Building
Code.  The Court directed that the claims should proceed to trial.  At the same
time, the Court dismissed Associates' and Company's claims against Trump and
co-defendants for money damages.  The Appellate Court has affirmed that portion
of the Court's order dismissing the claims for money damages.

                                 -43-


Empire State Building and Observatory
NOTES TO COMBINED STATEMENT OF INCOME


2.    Litigation - Continued

On June 5, 1998, Associates and Company filed a motion for summary judgment
against Trump and various affiliates that they may act as owner of the
Property in dealing with the New York City Department of Buildings.

In a decision and order dated March 10, 1999, the court awarded partial summary
judgment to Associates and Company in the action, declaring that Notices II and
III were invalid and of no force and effect, and further declaring that there
was no legal or factual basis for many of the defaults alleged in Notice I.
The court also stated that Trump appeared to concede that many of the remaining
defaults alleged in Notice I had been corrected, and that Trump would be
permitted to inspect the Building within 30 days of the date of the order to
determine whether these claimed violations had in fact been corrected.  Finally,
the court directed Trump to notify plaintiffs, within 30 days of the completion
of its inspection, as to which defaults it claims still exist, and the court
granted plaintiffs' permission to renew their motion for summary judgment with
respect to any such remaining claims of default within 30 days of the receipt
of Trump's notice.  Plaintiffs intend to challenge any such claims of default
by Trump and, if appropriate, to renew their motion for summary judgment.

In its March 10, 1999 decision and order, the Court also awarded summary
judgment to Associates in the Companion Action, declaring that Associates is
entitled to act as "owner" of the Building for purposes of dealing with the
Buildings Department and enjoining Trump from interfering with such right.

On December 16, 1999, the New York State Supreme Court dismissed entirely the
attempt by Trump to terminate the leasehold.  The dismissal order was entered
on January 12, 2000.  Trump has appealed the Supreme Court's decision.

In connection with the Studley and Trump litigations, Associates may be entitled
to reimbursement of its legal and accounting expenses from Company.  Through
December 31, 1999, such legal and accounting expenses in connection with the
Studley suit have amounted to $1,179,714, of which $867,410 has been advanced
by Wien & Malkin LLP (a related party) to third-party professional firms, and
$312,304 represents accumulated professional time of  Wien & Malkin LLP.  In
addition, through December 31, 1999 the accrual for accumulated professional
time by Wien & Malkin LLP amounted to $312,172 in connection with the Trump
suits.  Substantial additional legal and accounting costs may be incurred in
both cases.

The determination of the allocable share of the net legal and accounting costs
and disbursements chargeable to Company involve complex issues of fact and law.
Because of uncertainties concerning these issues, an amount for professional
fees payable by Company cannot be estimated, and therefore, have not been
provided for.  Resolutions unfavorable to Company could result in material
liabilities and charges which have not been reflected in the accompanying
financial statements.
                                 -44-


                Empire State Building and Observatory
                NOTES TO COMBINED STATEMENT OF INCOME


2.    Litigation - Continued

(c)  Company is a defendant in an action instituted in the Supreme Court of
the State of New York, County of New York, entitled Robert D. Gould P.C. v.
Empire State Building Company, et al. This lawsuit, which is brought by a tenant
in the building, seeks $5,000,000 in damages for an alleged breach of lease and
tortious conduct.  The Supreme Court entered an order precluding plaintiff from
proving damages by reason of its failure to serve an adequate bill of
particulars. Plaintiff's motion to vacate the order of preclusion was denied,
and its time to appeal from the order of preclusion expired.  The action has
been transferred to the New York City Civil Court.  Plaintiff has taken no step
to prosecute the case subsequent to the transfer.  The case has been dormant
since 1996.

(d)  Company is a defendant in an action pending in the United States District
Court for the Southern District of New York, entitled R. Gene Smith and Turbo
Vision Limited Partnership vs. Neil H. Kessner, Richard C. O'Conor, Neil H.
Kessner and Associates, Steven M. Durels, The Empire State Building Company and
Stephen A. Tole.  This lawsuit, which is brought by the principals of a tenant
in the Empire State Building, alleges various claims for damages against the six
named defendants in connection with plaintiffs' alleged construction and
operation of an entertainment facility in the building.  As against the Company,
plaintiffs allege fraudulent inducement in connection with matters pertaining
to the making of a lease agreement in connection with the foregoing
entertainment facility, and to the construction and operation of the foregoing
entertainment facility; and breach of the covenant of quiet enjoyment contained
in the lease, which was entered into in connection with the foregoing
entertainment facility.  Plaintiffs allege that they expended funds and incurred
future liabilities in connection with the construction and operation of the
foregoing entertainment facility, and on each of their claims against the
Company, plaintiffs allege damages in an amount not less than $5,000,000 and
punitive damages in an amount not less that $10,000,000 (together with interest,
attorney's fees, and the costs  and disbursements of the action).

The Company has denied the material allegations of the complaint against it and
has asserted various affirmative defenses.  The Company has also asserted a
cross-claim against defendant Stephen A. Tole for indemnification and/or
contribution for the entire amount of any damages awarded in plaintiffs' favor
against the Company, as well as a cross-claim against defendants Tole, Neil H.
Kessner, Richard C. O'Conor, Steven M. Durels and Neil H. Kessner and
Associates, jointly and severally, for contribution and/or indemnification for
part or all of any such damages.  The Company has furthermore filed a third-
party complaint against Helmsley-Spear, Inc., as an agent of the Company and
the employer of defendant Tole, asserting claims for indemnification,
contribution and/or respondeat superior for the entire amount, or part thereof,
of any damages awarded in plaintiffs' favor against the Company.  The co-
defendants and the third-party defendant have denied the material allegations
of the cross-claims and third-party complaint.

By a Stipulation and Order of Dismissal filed April 10, 1998, the Federal Court
Action was dismissed, without prejudice, as against Company.  (Because of that
dismissal, certain cross-claims and a third-party complaint asserted by Company
were also dismissed without prejudice.)  Accordingly, the Federal Court Action
is no longer pending against Company.
                                 -45-


                Empire State Building and Observatory
                NOTES TO COMBINED STATEMENT OF INCOME


2.    Litigation - Continued

On April 23, 1998, certain of the plaintiffs in the Federal Court Action
(together with other parties) filed a new complaint in New York State court
against Company, which was principally the same as the complaint originally
filed in the Federal Court Action.  Plaintiffs never served that state court
complaint on Company and have not prosecuted that action.

In August 1999, Company moved to dismiss the complaint as against it in its
entirety.  By order dated November 9, 1999, the Supreme Court granted Company's
motion and dismissed the complaint.  On December 8, 1999, plaintiffs filed a
Notice of Appeal of the dismissal order.

The Company intends, and has begun, to defend the action vigorously.  The action
is presently at a discovery stage, and counsel is not able to express an opinion
as to the likely outcome or to estimate amounts or a range of potential losses
or gains.

(e)	Company is a defendant in an action instituted in the Supreme Court of
the State of New York, County of New York, entitled New York Skyline Inc. v.
Empire State Building Company, Empire State Building Associates, Neil H.
Kessner, Helmsley-Spear, Inc. and Stephen A. Tole.  This lawsuit which is
brought by a tenant in the building and commenced on December 23, 1997 seeks at
least $205,000,000 in damages.  In its complaint, plaintiff-tenant asserts
thirteen causes of action (twelve of which are against the Company) in
connection with its leases and license agreements of space in the Building and
alleges that it is entitled to, among other things, specific performance as to
its alleged rights under its leases and licensing agreements with the Company,
a declaratory judgment as to the rights of the parties under the leases and
licensing agreements as well as any monies allegedly due plaintiff under those
agreements, as well as injunctive relief and additional money damages.

On or about February 5, 1998, plaintiff served an amended complaint which, among
other things, added Kessner & Cyruli, f/n/a Neil H. Kessner & Associates, former
landlord-tenant counsel for the building, and Eileen Aluska, a former Helmsley-
Spear, Inc. employee and Peter L. Malkin,  as third party-defendants.  The
amended complaint asserted eleven causes of action against the Company, similar
to those asserted in the original complaint.


By order and decision dated April 3, 1998 (the "April 3, 1998 Order"), the Court
granted plaintiff a Yellowstone injunction on the condition that plaintiff pay
$878,000 in back rent to the Company and ordered that a hearing be held to
determine the amount due on disputed rent and license fees.  Plaintiff made
timely payment of the $878,000 to the Company.  The hearing to determine the
amount due on disputed rent and license fees has not yet been held.

On March 16, 1998 the Company moved to dismiss the second, third, fifth, sixth,
eighth, ninth and eleventh causes of action with respect to the amended
complaint.  By decision and order dated February 25, 1999, the Court granted
the Company's motion to dismiss the second, fifth, sixth, eighth, ninth and
eleventh causes of action, and denied the Company's motion to dismiss the
third cause of action.
                                -46-

                Empire State Building and Observatory
                NOTES TO COMBINED STATEMENT OF INCOME



2.    Litigation - Continued

By order to show cause dated December 22, 1998, plaintiff moved for a temporary
restraining order and preliminary injunction preventing the Company from seeking
to enforce a Notice of Default that the Company had served on plaintiff with
respect to certain space leased to plaintiff under the lease dated as of March
1996 covering Rooms 209-214, 233-250 and 340-346 in the Building.  The Company
has opposed the motion and oral argument on the motion has not yet taken place.


Company and plaintiff entered into a settlement agreement (the "Settlement
Agreement") dated as of December 30, 1999.  Pursuant to the Settlement
Agreement, the parties entered into a stipulation dismissing with prejudice
the plaintiff's action against Company and all of the other defendants.

Under the Settlement Agreement, plaintiff and each of the defendants in the
Action exchanged mutual general releases.  In particular, the release from
Company released plaintiff from, among other things, "any and all claims for
rent, additional rent and/or license fees due through December 1999 under
[Skyline's] leases and license agreements with Company".  The amount Company
claimed was owed from plaintiff through December 1999 exceeded $1.5 million.
The Company release to plaintiff does not cover plaintiff 's rent and license
obligations on a going forward basis under plaintiff 's remaining leases and
license agreement with Company.  Those obligations continue.

Simultaneously with entering into the Settlement  Agreement, Company and
plaintiff entered into a Surrender Agreement (dated as of December 30, 1999)
pursuant to which plaintiff surrendered to Company space it had leased on the
2nd and 3rd floor of the Empire State Building under a lease running through
July 2016.

As a further part of the Settlement Agreement, Company and plaintiff entered
into a Second Modification of License Agreement which changed certain of the
parties' obligations to each other under the existing license agreement and
may, under certain circumstances, lead to additional license fees being paid
to Company.

Finally, as part of the Settlement Agreement, Company and plaintiff entered
into a Third Amendment of Lease which changed an additional rent escalation
clause from an operating expense calculation to one using the Consumer Price
Index.

                               -47-


                Empire State Building and Observatory
                NOTES TO COMBINED STATEMENT OF INCOME



2.    Litigation - Continued

(f)	Company is a defendant in an action instituted in the Supreme Court of
the State of New York, County of New York, entitled Magnifique Parfumes And
Cosmetics, Inc. d/b/a Perfumania v. Empire State Building Inc.

This is an action commenced on or about October 15, 1998 against Company
(incorrectly named in the action as "Empire State Building, Inc.").

This lawsuit which is brought by a tenant in the building seeks at least
$700,000 in damages.  In its complaint, plaintiff-tenant alleges that the
Company breached its lease with plaintiff by, among other things, charging
plaintiff for electricity on a submetering basis at a rate which far exceeds
the rate permissable under the lease.

On or about February 2, 1999, the Company served an answer to the complaint.
The answer denied the material allegations of the complaint and asserted eight
affirmative defenses.

On or about February 22, 1999, the Company served an amended answer and
counterclaim.  The amended answer denied the material allegations of the
complaint and asserted nine affirmative defenses.

The counterclaim against plaintiff and Perfumania, Inc. (as guarantor) alleges
that plaintiff breached certain obligations under the lease to pay certain rent,
electricity and operating expense charges and owes the Company $37,312.11 in
arrears under the lease.

The Company intends to contest the case vigorously.

(g)	Company is a defendant in an action instituted in the Supreme Court of
the State of New York, County of New York, entitled Duane Reade v. Walgreen Co.
and Empire State Building.  This is an action which is brought by a tenant in
the building and commenced on February 14, 2000.

Plaintiff alleges, among other things, that Company misled plaintiff in
negotiations for a renewal of its current lease that expires on April 30, 2000,
and wrongfully entered into a lease with Walgreen for the space currently
occupied by plaintiff.

The complaint seeks no money damages, but instead seeks a judgment declaring
that the lease between Walgreen and Company be deemed a renewal of the lease
between Company and plaintiff, and that plaintiff be substituted for Walgreen
as the tenant under the Walgreen lease.  Alternatively, the complaint seeks a
judgment declaring that the Walgreen lease is a graft upon plaintiff's
existing lease for it's use and benefit and that plaintiff have all rights of
the tenant under the Walgreen lease.

Company's time to move or answer in response to the complaint has been extended
by written stipulation to March 20, 2000.  Company intends to contest the case
vigorously.
                                 -48-


                Empire State Building and Observatory
                NOTES TO COMBINED STATEMENT OF INCOME

NOTE
3.    Liabilities

The State of New York has asserted utility tax deficiencies of $1,528,816
through December 31, 1992 in connection with water, steam and non-metered
electricity rent inclusion charges to tenants, plus estimated accrued interest
of $797,713.

The Supreme Court, New York County  granted summary judgment in favor of the
State, holding that the State utility tax applies to such rent inclusion
charges.  The ruling was affirmed by the Appellate Division. Company sought
permission to appeal the Appellate Division's decision and order to the Court
of Appeals.  The Court of Appeals denied Company's motion. In May, 1996,
Company entered into a settlement agreement with the State.  Pursuant to the
terms of the settlement agreement, Company agreed to pay the State $979,109,
plus interest of approximately $605,000 through July 31, 1996.  The State has
agreed to payment of the aforesaid liability over a period of four years,
commencing August, 1996, in equal monthly installments of $40,000, including
interest on the unpaid balance at the statutory rate. Installment payments to
the State of $40,000 per month have been made by Company commencing on August
1, 1996. Company also is liable for New York State Utility Tax for periods
after December 31, 1992.  The state has asserted  tax for the years 1993
through 1995, in the sum of $243,270 plus interest of $114,918 through December
31, 1999.  Company is currently negotiating a payment schedule for the aforesaid
liability.  It is anticipated that New York State will seek to impose liability
on Company for state utility tax for periods after December 31, 1995 through
December 31, 1997.  The amount of such additional tax has yet to be determined.
The imposition of both New York State and New York City utility taxes on non-
metered electricity rent inclusion charges was repealed effective January 1,
1998.

The City of New York has asserted a utility tax deficiency in the amount of
$277,125 against Company, through December 31, 1994, in connection with water,
steam and non-metered electricity rent inclusion charges to tenants, plus
accrued interest of approximately $315,610 through December 31, 1999.  Company
is contesting the calculation of the City's proposed utility tax deficiency
before the New York City Tax Appeals Tribunal.  The final outcome of Company's
appeal cannot presently be determined.  Under a settlement proposed by New York
City for all taxpayers, Company will settle utility taxes for all open years by
paying the tax for only the year 1997, the determination of which is pending.

Wien & Malkin LLP and Peter L. Malkin are engaged in a dispute with Helmsley
Spear, Inc. concerning the management, leasing and supervision of the Company's
property.  In this connection, certain legal and professional fees and other
expenses have been paid and incurred and additional costs are expected to be
incurred.  The Company's allocable share of such costs is as yet undetermined.
Accordingly, the Company has not provided for the expense and related liability
with respect to such cost in these financial statements.

4.    Net credit re water charges

Prior to 1998, The City of New York had rendered estimated water charges for
approximately one and one-half years because it had not read the various water
meters.  During 1997, Company had received charges which were in excess of
previously rendered charges and Company then retained a water consultant.
The consultant determined that Company had been overcharged in prior years;
accordingly, the City of New York rendered credits, attributable to prior years,
which exceed the 1998 water expense.


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