A London Venture Is Falling Down

Once upon a time, in the heyday of junk bonds and booming real estate markets, big money developers sank fortunes into gleaming urban skyscrapers that stood as proud tributes to an age of avarice. Today a dismal economy has left many of these office towers half full and their developers slumping toward insolvency. Chief among them is Olympia & York, which made a grim return engagement in bankruptcy court last week, this time in Britain. The Canadian real estate giant sought protection from creditors of its London Canary Wharf project. No expense had been spared in this spectacular 71-acre building complex that was to become a shining epicenter of world finance.

The beleaguered Olympia & York, currently buried in a $12 billion debt, had asked banks for $540 million earlier in the month to salvage Canary Wharf. Lenders deemed the figure too low and responded that the project actually needed $900 million in rescue funding, but that seemed a bridge too far for the banks to reach. Another sorry note in the tale of this failing venture is % that O&Y had promised to contribute $720 million toward the construction of a subway line extending to Canary Wharf and beyond, a donation it's now unlikely to afford.