Representatives of a competitor used words like “predatory” and “predatory” in describing the tactics of New York Blood Center, which is raising money for an $80 million Manhattan building.
John W. Knoll Jr., president and chief executive of the Acumen Fund, an investor-led organization that manages a fortune of more than $5 billion, was critical of New York Blood Center’s aggressive tactics, and its recent offer to lease the actual blood center itself back to continue making a profit from the business.
“NYBC has been on a retail-type business, buying surplus blood from its vendors, and selling it back to the health care community to supply blood collections for blood drives,” Knoll said in an interview. “Their model is predatory, and a lot of people are pissed off.”
Knoll’s comments came in response to a New York Times article published earlier this month describing the more than a decade-long rivalry between the two big New York City organizations, which are based in the same office tower, and their various conflicts over sales and the scale of their operations.
Knoll and his investors had already invested in New York Blood Center, which had also needed their help in trying to secure the funding for the project, which The Times also reported.
Knoll said the Acumen Fund agreed to invest $50 million into a new building for New York Blood Center that will serve as a home for offices, and an outpatient facility that specializes in stem-cell testing and using that material to make medicines for diabetes and other diseases. Knoll also said the building’s $80 million price tag represented a good deal for his company, given that he said it could not find a better deal with the Times.
“It was not a free market,” Knoll said. “It was a rich offering, not because of rent, but because of other considerations.”
His comments come at a time when New York Blood Center has faced budget constraints and is seeking to raise money to cover the cost of building and operating a new building. But Knoll said that a building of this magnitude had not been constructed since the 1980s. He also predicted that the real estate market is more healthy now, and that it was unlikely that large developers would offer the development at a lower price.
“When there’s interest in a large project, the price that is offered goes up,” Knoll said. “It’s not because no one wants it, but because the market dictates the price.”
He said that Acumen Fund’s willingness to make that investment reflected how the company had grown.
“They got a lot bigger in the past 15 years, so they’re very efficient with their resources,” Knoll said. “They know when to raise capital.”