Want to own a piece of the Empire State Building? Soon you might be able to.
The Malkin Group, the controlling shareholders in the iconic building, announced Wednesday that they have the votes to move ahead with plans to take the building public.
The group has been pushing for an IPO for months and said in a filing Wednesday that they now have the support of 80% of shareholders, which is required by law.
But the proposal, to roll the skyscraper and 17 other Manhattan buildings into a common ownership group known as a real estate investment trust, or REIT, has sparked a bitter fight led by some of the building's minority shareholders. They argue that the Malkin Group and the heirs of late former owner Harry Helmsley stand to unfairly benefit more than the other shareholders.
Richard Edelman, one of the leading critics of the deal, said he's not discouraged by the news that support crossed the 80% threshold.
"When Peter and Tony Malkin started calling investors individually, we knew it was likely they would get 80%," said Edelman, referring to the chairman and president of the Malkin Group. "But the deciding vote will be by judges."
A New York Superior Court judge declined to block the IPO plans last month, but Edelman said the case is now before the appellate court.
The Empire State Building was the tallest in the world from its opening in 1931 until the completion of the World Trade Center in 1973. It has played a central part in numerous movies, including "King Kong," "An Affair to Remember" and "Sleepless in Seattle."
It was last sold in 1961 to Helmsley and partner Lawrence Wien. Numerous small shareholders bought one share or, in some cases, half a share. There were 3,300 shares in the building priced at $10,000 per share in 1961, which valued the building $33 million. A December IPO filing values the building at $1.1 billion, with each of the shares now worth $323,803.
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Wien was Anthony Malkin's grandfather and the father-in-law of Peter Malkin.
Helmsley's widow, Leona, died in 2007, and her will ordered that her real estate holdings be sold and proceeds given to a charitable trust. The need to sell those holdings is one of the reasons the Malkin Group argues that the REIT is the best idea for all shareholders.
Each of the original 3,300 shares is now worth more than $300,000, according to Malkin's valuations on file. But critics of the deal argue that the shares -- and the landmark building -- might be worth a great deal more, and that the other properties to be included in the REIT are overvalued. Edelman said the REIT will return far less to Empire State shareholders than if they simply keep their current shares.
"We're being asked to trade two birds in the hand for one in the bush," he said.