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Brothers, Can You Spare a Dime?
Gil Kezwer
The financial earthquake that is tumbling Olympia & York's real- estate empire is also sending tremors through philanthropies around the world and particularly in Toronto
The Reichmann brothers are in over their heads and philanthropies and religious institutions from Toronto to Moscow are in distress. In May, the billionaire brothers' massive private real-estate firm, Olympia & York Developments, filed for bankruptcy protection in courts in Toronto, and in London, the huge Canary Wharf project went into administration and is threatened with liquidation.
The maneuvers were bad news for the world's bankers, but not just them. For there was a time not long ago before the Reichmann's ambitious 28-hectare Canary Wharf development in London's docklands turned into a financial albatross when the three Orthodox Jewish brothers could afford to indulge their penchant for philanthropy freely.
At the peak of their giving in the last decade, the Reichmanns reportedly contributed between 25 million and 33 million U.S. dollars annually through their family's charitable trust to Canadian organizations alone.
But in recent weeks, as O&Y; defaulted on more than $1.25 billion in debts,the torrent of giving has slowed to less than a trickle.
In Toronto, institutions that have been hurt include Yeshivah Yesodei Hatorah and its sister Bais Yaakov school for girls, collectively home to 1,200 students. Until recently, the nursery-to-grade 7 religious school which the late parents of Albert, Paul and Ralph Reichmann helped found, was heavily supported by the family. Now it has taken the unprecedented step of holding a fundraising dinner. And a hike in tuition, already around $5,000 annually, is expected.
The Kolel Avreichim (Institute of Advanced Talmudic Study) lost its funding "literally overnight," says co-dean Rabbi Yaakov Hirschman. The Reichmanns had provided "the lion's share" of the institute's $900,000 annual operating budget. The institute has 25 full-time and 15 part-time students, mostly married, who receive a stipend to devote themselves to Talmud study. Kolel Avreichim is only one of the elements in a cradle-to-grave network of ultra-Orthodox facilities that have been supported here by the Reichmanns.
Among the institutions hard hit by the Reichmann drought is their local synagogue, popularly known as the Boat Shul. The name is an allusion to the building's former use as a marina showroom and to the Schiff Schule in Vienna where the Reichmanns lived for a decade, before fleeing to Tangier following the 1938 Anschluss. They arrived in Canada in 1956 and, through hard work and a large dose of risk-taking, parlayed a modest tile business into one of the world's largest family-owned empires. The Reichmanns have reportedly cancelled their $4,200 a month support for the synagogue.
When it comes to philanthropy, 63-year-old Albert Reichmann is most in the public eye. Last June, he was given an honorary doctoral degree by the University of Toronto. He is currently chairman of Mount Sinai Hospital, where the Reichmanns have maintained a kosher-equipped apartment nearby free-of-charge for Orthodox families who couldn't otherwise visit ailing relatives on the Sabbath.
Albert Reichmann also serves on the boards of several secular institutions. His brothers Paul, 61, and Ralph, 59, have preferred to avoid the limelight. The fourth and oldest brother, Edward, 67, lives in Jerusalem where he is involved in development projects.
The brothers have generously supported the Miok Jewish Charity Home and Hospital in their native Budapest, as well as Orthodox shuls and schools in the former Soviet Union.
In Israel, the Reichmanns have already dropped plans for a 2,200-unit housing development for ultra-Orthodox Jews in north Jerusalem. Also scrapped was a promised $30-million loan to the capital for the construction of its new City Hall (The Jerusalem Report, April 16). Sources close to the ultra-Orthodox community also report that a special Reichmann fund for housing loans to young Orthodox couples is evaporating.
Response to the Reichmann debacle has been mostly muted in the Canadian Jewish community though, with typical irreverence, Toronto's Hebrew language biweekly Hamekomon ran a Page-1 headline, "Rahmanut al ha-Reichmannim" ("Mercy for the Reichmanns").
Except for a story in The Canadian Jewish News headlined "O&Y; Crisis Takes Its Toll on Institutions," the Jewish media have otherwise been silent on the crisis. The papers, most subsidized by their local UJA-Federation, are traditionally reluctant to report on news that reflects negatively on major donors.
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