Exhibit 20(b)

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

January 22, 2002

To our shareholders:

For some time now, Gyrodyne ("the Company") has actively considered proposals,
including some for the sale of the Company from local and national groups, in an
effort to create maximum value and liquidity for our shareholders. At the same
time, the Company has taken definitive measures towards achieving development
entitlements which would serve to expedite that goal.

As noted in my January 8, 2002 letter to shareholders, "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 these entitlements, proposals to acquire the
Company or the Flowerfield property have been at deep discounts to estimated
value."

Last summer, the Company rejected a $19 per share proposal from K Capital
Partners, LLC ("K Capital"), a manager of offshore funds. Since that time, the
Company has been negotiating with K Capital to facilitate a transaction, as
noted in K Capital's Schedule 13D which was recently filed with the Securities
and Exchange Commission. K Capital reported that it had "contemplated" a $22 per
share offer. For clarification purposes, there has never been a written
agreement committing K Capital to go forward at that price. In their January 11,
2002 filing, they proffer that recent announcements by the Company regarding a
feasibility study have diminished the value of the Flowerfield Property and are
now willing to offer $20 per share. The Company has communicated to K Capital
that a proposal of $20 per share, coupled with other substantive issues, does
not warrant further consideration. In addition, if agreed to by Gyrodyne, K
Capital's requirements for negotiations and due diligence would impede the
Company's ability to consider other offers for the Company.

The Company will continue to consider proposals for the purchase of all of its
shares provided that they reflect a fair evaluation of Gyrodyne's assets . At
this juncture, no entity, including K Capital, has committed to such an offer.

The Board has engaged independent professionals to prepare various valuation
studies which indicate that the Company stock has a current minimum value range
that exceeds all past and present proposals and that the value should increase
as entitlements for development are achieved. Towards that end, the Company
prepared a Planned Development District Pre-Application for a mixed use
development at Flowerfield. Prior to submitting the Pre-Application to the
municipal agencies involved in the permitting process, the Company seeks to
further examine the potential for increased value by incorporating a golf course
into the development plan. The Company entered into an agreement with Landmark
National to prepare a golf course proposal and feasibility plan as a basis for
comparison with other development alternatives. Landmark National is working
diligently to complete the proposal and plan within the next 60 days. After
analyzing the proposal, the Company intends to seek development entitlements
that best provide shareholders with timely realization of maximum value.

As mentioned earlier, K Capital has noted in its Schedule 13D that management's
recent actions regarding Landmark National, "diminished the value of the company
to the Reporting Persons." (Emphasis added.) Curiously, K Capital has not
accepted an offer from a third party to acquire all of its 209,350 shares at $22
which was made as recently as December 2001 and has publicly embraced a mixed
use plan (Newsday,


January 16, 2002) seemingly similar to the current direction of Gyrodyne. It
would follow that they have reached similar conclusions to our own. Their claim
that the Landmark National study has diminished the value of the Flowerfield
Property is without merit and is perceived as another attempt to acquire the
Company at a deep discount to its real value.

The Company's responsibility is to enhance value for all of the shareholders of
Gyrodyne, not merely K Capital. Landmark National's plan and analysis will
provide the Company with information necessary to take actions which are in the
best interests of all shareholders.

It should also be noted that K Capital has submitted two nominees to be
considered for election to the Gyrodyne Board of Directors at the next annual
meeting of shareholders. Clearly, it would not be in the best interests of the
Company's shareholders to place representatives of a potential acquirer on the
Board of Directors.

We will continue to inform you of new developments as they occur.

Sincerely,


/s/ Stephen V. Maroney

Stephen V. Maroney
President & Chief Executive Officer