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RELATED PARTY TRANSACTIONS | 12 Months Ended
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Dec. 31, 2018
RELATED PARTY TRANSACTIONS |
RELATED PARTY TRANSACTIONS | NOTE 11—RELATED PARTY TRANSACTIONS Compensation and Services Agreement Pursuant to the compensation and services agreement with Majestic Property Management Corp. (“Majestic”), Majestic provides the Company with the services of executive, administrative, legal, accounting, clerical and property management personnel, as well as property acquisition, sale and lease consulting and brokerage services, consulting services with respect to mortgage financings and construction supervisory services (collectively, the “Services”). Majestic is wholly-owned by the Company’s vice-chairman and certain of the Company’s executive officers are officers of, and are compensated by, Majestic. The amount the Company pays Majestic for the Services is approved each year by the Compensation and/or Audit Committees of the Company’s Board of Directors, and the independent directors. In consideration for the Services, the Company paid Majestic $2,745,000 in 2018, $2,673,000 in 2017 and $2,504,000 in 2016. Included in these amounts are $1,226,000 in 2018, $1,154,000 in 2017 and $1,057,000 in 2016, of property management costs. The amounts paid pursuant to the property management portion of the compensation and services agreement is paid based on 1.5% and 2.0% of the rental payments (including tenant reimbursements) actually received by the Company from net lease tenants and operating lease tenants, respectively. The Company does not pay Majestic with respect to properties managed by third parties. Majestic credits against the amounts due to it under the compensation and services agreement any management or other net payments received by it from any joint venture in which the Company is a joint venture partner. The compensation and services agreement also provides for an additional payment to Majestic of $216,000 in each of 2018 and 2017 and $196,000 in 2016 for the Company’s share of all direct office expenses, including rent, telephone, postage, computer services, internet usage and supplies. The Company does not pay Majestic for such services except as described in this paragraph. In 2019, the payments to Majestic will remain the same as the 2018 payments (exclusive of the property management costs, which are calculated as described above). Executive officers and others providing services to the Company under the compensation and services agreement were awarded shares of restricted stock and RSUs under the Company’s stock incentive plans (described in Note 12). The related expense charged to the Company’s operations was $1,765,000, $1,539,000 and $1,480,000 in 2018, 2017 and 2016, respectively. The amounts paid under the compensation and services agreement (except for the property management costs which are included in Real estate expenses) and the costs of the stock incentive plans are included in General and administrative expense on the consolidated statements of income for 2018, 2017 and 2016. Joint Venture Partners and Affiliates During 2018, 2017 and 2016, the Company paid an aggregate of $107,000, $143,000 and $185,000, respectively, to its consolidated joint venture partners or their affiliates (none of whom are officers, directors, or employees of the Company) for property management services, which are included in Real estate expenses on the consolidated statements of income. The Company’s unconsolidated joint ventures paid $169,000, $175,000 and $176,000 to the other partner of the venture for management services, which reduced Equity in earnings of unconsolidated joint ventures on the consolidated statements of income by $85,000, $88,000 and $88,000 during 2018, 2017 and 2016, respectively. Other During 2018, 2017 and 2016, the Company paid fees of (i) $276,000, $276,000 and $262,500, respectively, to the Company's chairman and (ii) $110,000, $110,000 and $105,000, respectively, to the Company’s vice-chairman. These fees are included in General and administrative expense on the consolidated statements of income. The Company agreed to pay $289,000 and $116,000 in 2019 to the Company’s chairman and vice-chairman, respectively. At December 31, 2018 and 2017, Gould Investors L.P. (“Gould Investors”), owned 1,785,976 shares of the outstanding common stock of the Company, or approximately 9.2% and 9.5%, respectively. The Company obtains its property insurance in conjunction with Gould Investors and reimburses Gould Investors annually for the Company’s insurance cost relating to its properties. Amounts reimbursed to Gould Investors were $912,000, $790,000 and $699,000 during 2018, 2017 and 2016, respectively. Included in Real estate expenses on the consolidated statements of income is insurance expense of $877,000, $757,000 and $645,000 during 2018, 2017 and 2016, respectively. The balance of the amounts reimbursed to Gould Investors represents prepaid insurance and is included in Other assets on the consolidated balance sheets.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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