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Paul Reichmann and Brian Mulroney look at a model of the proposed Canary Wharf in London. Reichmann has died at the age of 83. (Ron Poling/CANADIAN PRESS)
Paul Reichmann and Brian Mulroney look at a model of the proposed Canary Wharf in London. Reichmann has died at the age of 83. (Ron Poling/CANADIAN PRESS)

Obituary

Developer Paul Reichmann was driven by a sense of destiny Add to ...

That Paul would emerge as the leader of the Reichmanns’ Canadian dynasty is perhaps surprising, given that he was one of the youngest of the siblings, and was initially more devoted to religious studies than the family business. He was born in Vienna on Sept. 27, 1930. As the family was cast about by fate during the Second World War, being forced to move from Austria, Hungary, France, Spain and Morocco, Paul pursued religion. He eventually earned a Semikhah, entitling him to be a rabbi, a title he told the family’s biographer, Mr. Bianco, that he never desired. Instead, he viewed rigorous rabbinical studies as a “fun” challenge.

Eventually, Olympia Trading became his abiding professional quest. One of the many mysteries that shroud the intensely private family’s business history was the origin of the name. Depending which brother you talked to, Olympia was a reference either to antiquity, the 1956 Olympic Games or classical Greek studies.

When the growing tile business needed a new warehouse in 1958, Mr. Reichmann discovered a new fun challenge. Unimpressed with contractor quotes for building a new facility, he convinced his brothers he could save money by buying land and overseeing construction himself. The project saved the company more than $50,000. Soon Mr. Reichmann and his brother Albert had launched Olympia & York as a developer of industrial buildings that catered to North Toronto’s expanding Jewish community.

The company vaulted into the big leagues in the mid-1960s when Mr. Reichmann began assembling properties around a stalled Toronto apartment complex called Flemingdon Park. Construction on the multimillion-dollar project had been halted by the owner’s financial woes, and potential buyers doubted its potential. Mr. Reichmann, then almost unknown in the commercial real estate sector, talked his way into a deal after he secured a commercial tenant for a small office tower next to Flemingdon Park.

The project’s desperate owners agreed to sell Olympia & York a 50-per-cent stake in the apartment complex, earning the Reichmanns the respect of bankers and corporate tenants who would be essential partners in the company’s increasingly ambitious developments.

Mr. Reichmann initially honed his reputation as a conservative developer. He took advantage of tax deductions, corporate tenant commitments and limited liability contracts to minimize the amount of bank loans needed to finance Olympia & York’s major developments and acquisitions in Toronto and New York. When he proved skeptics wrong with his spectacularly successful contrarian bet on the Uris block of office towers in lower Manhattan in 1977, during the city’s financial crisis, bankers and financiers around the globe lined up to do business with him.

In their eagerness to finance Olympia & York’s developments, bankers suspended lending caution by agreeing to Mr. Reichmann’s terms that they be given only partial access to the private company’s financial statements. Terms were so restrictive that some investment bankers were forced to memorize financial data taped to tables in the company’s New York offices.

When bank debts ultimately toppled Olympia & York, draining much of the family’s fortune and entangling Mr. Reichmann in messy bankruptcy proceedings, he never veered from his conviction that Canary Wharf would succeed.

Mr. Brown said that although bank negotiations were “pretty fierce,” Mr. Reichmann “never gave up, he never lost his focus and there was never a sense of defeat that I could perceive.”

Ultimately Mr. Reichmann’s vision of Canary Wharf prevailed, but the office towers were completed by other developers after bankers carved up Olympia & York in bankruptcy proceedings. Mr. Reichmann took another run at the London project by acquiring a stake in one of the properties, but that too was reclaimed by a bank in 2009 after the financial crisis left him with insufficient cash flow to pay debts.

Other family members had more success reviving Olympia & York’s name. Albert Reichmann’s son Philip Reichmann, and Paul’s son-in-law Frank Hauer, refashioned the company as O&Y Properties Corp. in the 1990s. After several successful real estate investments, including the repurchase of First Canadian Place, the company was sold for $2-billion in 2005.

People close to the family said since then Mr. Reichmann’s health had declined, and he retreated to his family and religious studies. He leaves his wife, Lea, and five children, Vivian, Rachel, Libby, Barry and Henry.

 

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