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January 29, 2008

Hospital's Real-Estate Deal Prompts Concern

The North Shore-Long Island Jewish Health System, in New York, is facing questions about potential conflicts of interest on its board after it made a $300-million lease deal through its vice chairman’s real-estate partnership, reports Newsday.

William Mack, both a leading donor and a longtime member of the health system’s executive committee, is a general partner of a private-equity real estate fund that owns a former defense plant that sits across the street from the Long Island Jewish Medical Center, in New Hyde Park, N.Y.

The factory property was purchased for $20.5-million in 2000 in a deal led by Mr. Mack’s son, Richard, and a third of the property is now being leased to the health system for $300-million in base rent over 25 years.

The dual role of the Macks, who said they have spent “several hundred million dollars” renovating the property, has prompted concerns by current and former health-system officials about the effects of the deal on the group’s governance.

William Mack defended the arrangement.

“My family has worked for this institution for 50 years,” Mr. Mack said. “The level of the service and the level of the philanthropy pales by thousands any possible financial advantage we could gain.”

Tuesday January 29, 2008 | Permalink

Comments

1. Mr. Mack talks about “any possible financial advantage we could gain.” The point is that he should not gain anything from a transaction with a nonprofit organization. What doesn’t he understand about the words “conflict of interest”?

   — Philanthro Joe    Jan 29, 05:09 PM    #

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