Paul Reichmann
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Paul Reichmann (born 1930) is a Canadian businessman best known for his leadership of the Olympia & York property development company.
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[edit] Formative years
Reichmann was born in Vienna in 1930 to Samuel Reichmann, a wealthy egg merchant and his wife René. His parents were Haredi Jews from a small town in Hungary, but his father had risen to prominence in Vienna as a successful merchant.
The family escaped the Nazi occupation of Austria by sheer chance, as they happened to leave the country on the day of Anschluss, to visit Paul's grandfather in Hungary who had suffered a stroke. Abandoning their lives in Vienna, they made their way from Hungary to Paris, where they settled. The Reichmann family fled when France fell to the Germans, eventually making their way to the neutral city of Tangier.
In Tangier, the family prospered as Samuel became a major currency trader. After the war Paul left home to study religion first in Britain and then in Israel. He was a brilliant pupil and became a Rabbi. In 1953 he returned to Morocco to become a teacher, and that same year he married Lea Feldman.
[edit] Rising success
Three years later Paul left Morocco to join his elder brother Edward in Canada. Edward had established a successful flooring and tile company in Montreal. Paul, along with his brothers Albert and Ralph, moved to Toronto to set up a branch of the flooring and tile company in that city.
Unsatisfied with the local builders, Paul Reichmann decided the company would construct its own warehouses and offices. Soon the company was building such facilities for others. In 1964, Olympia and York was founded as a separate building and property development firm.
The firm was soon profitable, and expanded rapidly. It also accepted difficult projects, including the construction of First Canadian Place, Canada's tallest building, in 1976. The company expanded to New York and Tokyo and by the mid-1980s it was the largest developer in the world, and the Reichmanns were one of the world's richest families.
His success had little impact on Paul Reichmann's lifestyle. He remained very private and unwilling to talk to the press. He retained his strong religious views, and used much of his fortune to support his religion. In Toronto he built a number of schools and synagogues which became the centre of a thriving Orthodox community. Shunning most luxuries, his one personal indulgence was a collection of rare and valuable Jewish texts. Pursuant to Jewish law, all of Olympia and York's construction projects halted on the Jewish Sabbath and all holy days.
[edit] Troubles
The company ran into severe trouble in the early 1990s. It was due in part to a general decline in the world economy, but the company was truly brought low by the Canary Wharf project. It was the world's largest property development, but remained half empty. Reichmann had taken the project as a major gamble. He had been impressed by Margaret Thatcher's reforms and obtained a personal promise from her that she would help the project, most importantly by extending the London Underground to reach it.
In Canada, Reichmann's once sterling reputation also began to suffer. In 1985 the company had bought Gulf Canada in a deal that included some $300 million in tax breaks. Many Canadian were infuriated that a massive corporation had been given such a lucrative deal. Toronto Life magazine also published a highly critical article on the Reichmanns. The family took offence at allegations that Samuel Reichmann had aided the Nazis with illegal smuggling operations during the Second World War. The family sued the magazine for an unprecedented $109 million. They were successful, and Toronto Life published a full retraction, but their heavy fisted response soured many in the Canadian media to the Reichmanns.
In 1992, Olympia and York collapsed under some $20 billion in debt. Paul Reichmann lost most of his personal fortune, and his business reputation was tarnished.
[edit] Recovery and retirement
Despite these setbacks, Reichmann successfully rebuilt a small portion of his empire. This included setting up a partnership with George Soros, Lawrence Tisch and Michael Price along with investors such as Saudi Prince Alaweed to purchase a controlling stake in the Canary Wharf from the banks that made the original construction loans to Reichmann and which had taken control of the development. Reichmann became Chairman of Canary Wharf again and remained so until 2004.
During 2004 a takeover battle began for the Canary Wharf Group in which Reichmann eventually sided with Canadian developer Brascan to attempt a purchase of the company. During this process he resigned his position on the Board. In March, 2005 a consortium of investors led by Morgan Stanley under the banner of Songbird Estates purchased Canary Wharf Group, and Reichmann was therefore no longer involved with Canary Wharf on a day to day basis. Reichmann, at the time 75, announced that he intended to retire from business and sold many of his property holdings, realising considerable value.
[edit] Current Activity
In September 2006 Reichmann announced that he was bored with retirement and that he would be setting up a new $4bn fund, based in Toronto, with offices in the UK and Netherlands. Aged 76 it appears that his enthusiasm for deals had been rekindled.
