Canary Wharf, the massive complex of office-filled obelisks in the East London docklands, was the greatest accomplishment of Canadian businessman Paul Reichmann's real-estate empire in the 1980s, the cause of his financial demise in the 1990s and the vehicle with which he launched at least one rehabilitation attempt in later years.
Its central tower, One Canada Square, remains the tallest building in Britain, but as of Friday it appears that Mr. Reichmann, in his late 70s, has been forced to end his 22-year involvement.
London newspapers reported this weekend that that Songbird Enterprises, the consortium of Chinese, Qatari and American investors that gained majority control of the project from Mr. Reichmann in 2005, had acquired a further 8.45-per-cent stake from Germany's Commerzbank for £112.5-million, or $196-million.
Those shares had been Mr. Reichmann's, the Daily Telegraph reported on Saturday citing "sources close to Canary Wharf," but had been pledged against loans to Dresdner, a Commerzbank subsidiary. Those loans were called by Commerzbank and the shares were put on the market.
If so, this would mark the second time Mr. Reichmann has left the project in a global financial downturn.
His company Olympia & York, founded in Toronto with his brothers Albert and Ralph, began work on the project in 1988.
It was the cornerstone of the redevelopment of London's abandoned docklands district and prime minister Margaret Thatcher, who gave the project major tax breaks, personally advocated for it as the destination for many financial-sector companies during the great boom of the 1980s.
But by 1991, when construction was complete, the world was in a deep recession. Much of Canary Wharf's commercial office space failed to find tenants, and debts from the project drove Olympia & York into bankruptcy in 1992.
Three years later, Mr. Reichmann launched a dramatic comeback by building a consortium of investors including Saudi prince Alwaheed bin Talal, purchasing the project back from creditors for £800-million. Major banks including Lehman Brothers, HSBS and Citigroup moved their London operations into its offices.
In 2004, Canary Wharf was subject to a buyout bid launched Songbird and backed by some of Mr. Reichmann's partners. He launched his own rival bid with the Canadian conglomerate Brascan, but Songbird won the day.
Mr. Reichmann maintained his small stake of 8.45 per cent of the Class B shares.
Last year, the debt-driven collapse of the international financial industry dealt a devastating blow to Canary Wharf.
Lehman Brothers, which went bankrupt a year ago, had located most of its 5,000 British employees in its offices, as did numerous other banking and insurance companies that shed large portions of their work force.
In danger of breaching the covenant on an 880-million pound loan from Citigroup, this summer Songbird won a 1 billion pound refinancing plan from Qatari and Chinese investors, who were reportedly interested in the value of the retail space located in the mall underneath the development.
The purchase of Mr. Reichmann's shares raises Songbird's stake in Canary Wharf to 69.3 per cent.
Mr. Reichmann could not be reached for comment.
Doug Saunders