Campeau, Rescuers Are Contrast in Style
When it comes to odd couples, Paul Reichmann, the low-key and deliberate financial wizard whose family controls Olympia & York Developments Ltd., is about as far away as you can get from the flamboyant and adventurous Robert Campeau.
“One is pure logic and one is pure emotion,” said a Toronto stock analyst who follows Campeau Corp.
Analysts say the Reichmanns, who Tuesday gained the power to lead the troubled company through a massive overhaul, should have a powerful effect in straightening it out.
Paul Reichmann, 58, along with brothers Albert, 60, and Ralph, 56, have turned a series of shrewd, well-timed investments and innovative financing into an empire, including more than $5 billion worth of property in Manhattan, where they are the biggest commercial landlords. Fortune magazine estimates their net worth at $8.4 billion.
Paul Reichmann, a Talmudic scholar who is the guiding force and chief strategist of the family operation, is noted for his ability to be fiscally cautious and exhaustively analytical and yet take apparently huge risks. “He is the ultimate rational economic man,” said a Manhattan real estate industry executive who has dealt with the Reichmanns.
Albert, who sits on the Campeau board and whose specialties include building design, is the other chief force in the real estate and investment operations, while Ralph sticks to the building tile business.
Long Business Ties
Earlier this month, Albert Reichmann signed a preliminary agreement to develop a 70-acre site in Moscow, including the largest building in the Soviet Union, plus hotel and office space. The Reichmanns are also looking at joining a consortium to develop a huge office project on islands in Tokyo Bay.
The Reichmanns and Campeau have had business ties for more than a decade. “It’s a relationship that many people have a difficult time understanding, but it’s a solid and longstanding relationship,” said Carol Sanger, a Campeau spokeswoman. “They are there for each other when it matters.”
Analysts said the Reichmanns will not get involved in day-to-day operation of Campeau’s retail empire but will play a strong role in setting a new direction and tightening fiscal controls.
The Reichmanns, including Paul, who started out in social work, have a history of stepping in when a buddy is in trouble--but on very businesslike terms. They are also used to stepping into troubled situations where--after intense analysis--they see bargains and opportunities.
“They do meticulous research and they know where they want to go before they start out on the journey,” said Meyer S. Frucher, executive vice president of Olympia & York in Manhattan. “They’re not afraid of making a deal that others will not make.”
Like Tall Buildings
Among their early successes, in 1977, the Reichmanns bought eight buildings in Manhattan formerly owned by the Uris family--paying $320 million for what is now worth more than $3 billion. They have interests in 100 million square feet of office space in North America and England, including 25 million in New York.
They are developing Canary Wharf, a $6-billion-plus project that will replace deserted wharves and warehouses in London’s East End with 24 buildings, including the tallest in Britain. When other developers wanted to develop the World Financial Center at Manhattan’s Battery Park building by building, the Reichmanns were willing to proceed with all four buildings, totaling 8 million square feet, at once.
In Toronto, they built the 5-million-square-foot First Canadian Place, including Canada’s tallest building. They are fond of tall buildings, but a tentative $1-billion deal to buy the Sears Tower in Chicago, the world’s tallest building, has stalled.
The Reichmanns have gobbled up stakes in energy and timber resources, holding a 73% stake in Gulf Canada Resources, 82% in newsprint producer Abitibi-Price, 89% of GW Utilities and 19.4% in Santa Fe Southern Pacific, among their $5-billion stock portfolio.
