Exhibit 20(a)

                        GYRODYNE COMPANY OF AMERICA, INC.
                                 102 FLOWERFIELD
                               ST. JAMES NY 11780
                     TEL: (631) 584-5400 FAX: (631) 584-7075

January 08, 2002

To our Shareholders:

In an effort to keep you informed as to current events and the status of recent
announcements, we are forwarding this update which is in part an excerpt from
our Message to Shareholders from the soon to be released 2001 Annual Report.

Subsequent to the close of business for the fiscal year in July of 2001, a major
shareholder filed an amended Form 13-D with the Securities and Exchange
Commission. The filing outlined the K Capital Partners, LLC proposal to acquire
all of the outstanding shares of Gyrodyne at a price of $19.00 per share along
with providing for the issuance of bonds with a higher future value. This
proposal was amended by K Capital on August 8, 2001 to reflect the removal of
the issuance of bonds but added a requirement that the Board of Directors waive
certain provisions of the New York Business Corporation law which were enacted
to provide various shareholder protections. The Board determined that the
waiving of such provisions was in direct conflict with their responsibility to
shareholders and in addition to finding the per share offer inadequate, rejected
K Capital's proposal. Dialogue has continued between the two parties but no new
reportable developments have occurred at this writing.

The Company's most significant asset, the 326 acre Flowerfield property located
on the North Shore of Long Island remains the focal point of attention by
management and the Board of Directors. There are approximately 275 acres of
vacant land available for development with the balance currently used to house
the industrial park tenants.

The Company continues to explore opportunities to achieve the recognition of
maximum shareholder value through various scenarios including but not limited to
joint ventures, sales or development of Flowerfield acreage, or the sale of the
Company itself.

Evaluations of the Flowerfield property based on achieving several "highest and
best use" scenarios have confirmed the need to accomplish a change of zone from
its present light industrial classification. Financial analysis, prepared by the
Company's investment bankers, also concludes that shareholder value can best be
enhanced by pursuing development of the property while continuing to explore the
scenarios mentioned above; the theory here being that the value of Flowerfield
grows significantly as development entitlements appear to be in sight or are
actually obtained.

Toward that end, the Company has entered into an initial agreement with Landmark
National, a Maryland based firm, to prepare a proposal and feasibility plan for
a world-class golf course community with appropriate single and/or multi family
housing at Flowerfield. Compared with other development alternatives the golf
course community, if properly implemented, combines


high ultimate value and low environmental impact with community acceptability.
Landmark has been selected for the project based on its proven track record for
design and development of similar communities throughout the United States and
has had five courses ranked by Golf Digest to be among the top one hundred golf
courses in America and in the world. Among some of the more notable Landmark
projects are La Quinta Golf and Tennis Resort, Mission Hills Country Club, PGA
West and Carmel Valley Ranch, all in California; The Ocean Course at Kiawah
Island, South Carolina; The Palm Beach Polo and Country Club in Florida, and
numerous others. Landmark courses have been the chosen venue for various
professional tour events such as the PGA Championship and the Ryder Cup matches.

Their plan, which will include conceptual design criteria and pro forma
financial projections should be completed by early spring of 2002. If the plan
is accepted and approved by management and the Board of Directors, the Company
will move forward with Landmark and other professionals to prepare and file an
application to rezone the property in accordance with the development plan.

Management believes that the Company's liquidity is sufficient to maintain
existing operations and to service its current debt obligations but may need to
be enhanced to internally fund these development costs through the rezoning
process. To accomplish this, the sale of certain acreage at Flowerfield, not
needed for the cited golf course community, is under consideration. This would
provide Gyrodyne with capital to fund the project and possibly pave the way for
the introduction of a stock redemption program for shareholders seeking
liquidity.

As stated earlier, the Company will continue to entertain good faith offers,
that are not subject to subdivision approvals, from qualified parties for the
acquisition or merger of Gyrodyne during the process described above. It is our
position that embarking on this program can only have beneficial results. These
past two years have demonstrated that the overwhelming majority of prospective,
qualified developers and investors require that zoning be in place for the
intended improvements and that absent those development entitlements, proposals
to acquire the Company or the Flowerfield property have been at deep discounts
to estimated value.

We remain committed to representing the best interest of our shareholders and
achieving the maximum value and return on your investment in Gyrodyne.

Sincerely,


/s/ Stephen V. Maroney

Stephen V. Maroney
President & Chief Executive Officer