THREE major forces help drive progress: economic and legal institutions; people, especially risk-taking buccaneers and entrepreneurs; and chance. The creation of Canary Wharf is a case study of how all three factors interact: its rise from the ashes of the bankrupt Docklands transformed London’s economy, enabling it to build and retain a world class financial and business services sector, and helping to fuel the economic resurgence of vast swathes of East London, from Shoreditch to Stratford, spilling over the Thames into North Greenwich.
The reason why I’m writing about this today is that Paul Reichmann, builder of Canary Wharf, has just died aged 83. He was one the great architects of modern London, a hugely important figure who deserves to be remembered in much the same way as the Victorian engineers and business giants who helped make our great city what it is today.
A remarkable, deeply religious man with a brilliant mind and a knack for complex mental calculations who never sought the limelight, he left Vienna as a child in 1938 after the Nazis invaded, living briefly in Paris and then in Morocco. The family settled in Canada in 1956, where he and his brothers founded a flooring business which by the 1980s had grown into Olympia and York, the biggest property developer in the world.
Reichmann staked everything on Canary Wharf when he launched the project in 1987, a time when few believed in it: eventually, his family business went bust in 1992, wiping out all but $100m of a $9.2bn fortune. The Reichmanns fought back: together with partners, they subsequently bought back Canary Wharf from the administrators, though were hammered again in 2008. The Reichmanns seem to be doing well again today though they lost a fortune on Canary Wharf. As so often – with 19th century US railways or the dot.com pioneers – those who risk their money in mega-projects lose out; the rest of us inherit a great infrastructure.
Without Reichmann, there would have been no Canary Wharf – but there were other key players. The institutional and incentive side was driven by the London Docklands Development Corporation, set up by Michael Heseltine and Margaret Thatcher, and the whole area was turned into an enterprise zone. The LDCC was given land and planning powers. There are key lessons here: the best way to attract business to deprived areas is to sweep away planning restrictions and allow radical thinking. Low taxes are key. Canary Wharf’s biggest problem was transport links, something the UK political system remains very bad at.
Chance and London’s openness to overseas talent and capital is the final piece of the jigsaw. Albert and Michel Roux, the French chefs who did so much to reboot Britain’s culinary landscape, also have a part in the Canary Wharf story. In 1967, they borrowed money from Michael von Clemm, an American banker, allowing them to start their restaurants. By the 1980s, von Clemm was the chairman of Roux restaurants – but his main job was to chair Credit Suisse First Boston. He was invited to the derelict site by Reg Ward, boss of the LDCC, who knew the Roux were looking for space to make pre-prepared food; but von Clemm was used to converted warehouses from Boston, and saw the potential to build a bank back office there instead.
This soon mutated into a plan to build new front offices for Credit Suisse and Morgan Stanley, in a radical move out of a Square Mile which at the time was stuck in the past, unwilling to allow banks to build the offices they needed. This was the brainwave of Gooch Ware Travelstead, of Credit Suisse’s property unit, drafted in from the US by von Clemm; Travelstead wrote the original plans but failed to raise enough funds to launch the project himself. Reichmann quickly stepped in; and the rest is history.