Sidewalk Labs is working on a proposal to bring a large, sensor-driven “smart city” to Toronto’s waterfront — and the world is watching.
Yet Environics Research recently conducted a survey for the Toronto Region Board of Trade that found 50 per cent of Torontonians haven’t heard, or aren’t sure if they’ve heard about the project.
So, using the letters of the Alphabet (Alphabet is also the name of the company that owns Google and its sister firm Sidewalk Labs) the Star is providing a brief overview of the key names, issues, places and players in this ongoing and controversial story.
Alphabet, the parent company of Google and Sidewalk Labs is based in Mountain View Calif., northwest of San Jose. The company was born after the corporate restructuring of Google in October 2015. Sidewalk Labs, an “urban innovation” firm based in Manhattan, was formed later that year and is working with Waterfront Toronto to build a tech-driven smart city on Toronto’s waterfront. Alphabet is a company worth tens of billions of dollars U.S., revenues driven largely by Google. Aside from Google and Sidewalk, Alphabet includes Google Maps, Chrome, YouTube, mobile operating system Android and other entities. Late last year Sidewalk Labs began negotiating with Illinois to sell the state a tool called Replica that maps out commuting patterns using an individual’s de-identified cellphone location data. Illinois plans to use Replica to build a travel demand model that gives city planners the ability to “run alternative scenarios for where traffic would go if a new bridge or road were constructed.” Sidewalk has offered to bring the tool to Toronto for free.
Sidewalk Labs won a competitive request for proposals (RFP) that Waterfront Toronto, a tri-government corporation dedicated to revitalizing Toronto’s waterfront, issued in March 2017. The RFP calls for an innovation and funding partner to create a “globally significant” community that will highlight advanced technologies, sustainable practices, innovative building materials and business models and “climate positive” urban development. The RFP was for Quayside, a 12-acre development site near Queens Quay and Parliament St. The RFP says it might be beneficial to advance successful outcomes from the project beyond Quayside, to the eastern waterfront. Waterfront Toronto’s 12-member board of directors will approve or reject the project. (Other levels of government will likely weigh in on final approvals as well). Toronto developer Steve Diamond, the new chair, says the board is in no way obliged to give the green light to Sidewalk’s final plan. The Sidewalk file has been a contentious one for the board — one member, prominent Toronto developer Julie Di Lorenzo, resigned last summer, saying she felt Waterfront Toronto was too closely aligned with Sidewalk Labs and fell short of properly addressing concerns around Sidewalk’s data collection plans. Then in December, Ontario’s Infrastructure Minister Monte McNaughton fired three board members including the chair, after Bonnie Lysyk, Ontario’s auditor general, released a report slamming Waterfront Toronto and its handling of the Sidewalk file. The province recently made four new appointments to the Waterfront Toronto board.
Sidewalk Labs sees itself as a “catalyst” when it comes to its plan to bring a tech-driven, mostly residential neighbourhood to Toronto’s eastern waterfront. In a speech last October to Sidewalk’s advisory panel of Canadian executives, academics and urban experts, Sidewalk Labs CEO Dan Doctoroff described the firm’s role as being an “essential catalyst.” On a “beta site” — a 12-acre parcel near Queens Quay E. and Parliament St. and another parcel just south of there that Sidewalk calls “Villiers West” — the company wants to unveil data collecting sensors, autonomous vehicles and more. Doctoroff told the Star that after Quayside his company wants to expand these technologies and innovations across the eastern waterfront to the Port Lands. Doctoroff says Sidewalk intends to build on 10 per cent of land that can be developed in the eastern waterfront, property that will also take in Google’s new Canadian headquarters, and an “innovation hub” Sidewalk wants to create. Governments, private developers and others would build on the remaining lion’s share, Sidewalk says. Quayside alone would provide housing for about 5,000 residents, according to a site plan released in November. It would take about seven years to build, Sidewalk says.
Sidewalk Labs is proposing to collect and use data with the intention of helping to make everyday life more efficient for its residents, employees drawn to new jobs in the area and visitors who’ll be passing through. Using sensors and other data collection methods, noise levels could be measured, as could air quality, temperature, wind conditions, traffic (pedestrian, cyclist, vehicle), waste disposal habits and more, Sidewalk says. But critics charge all this data collection will eventually lead to massive breaches of personal privacy. Sidewalk has pledged not to control data gathered at the smart city, and is calling for an independent “civic data trust” to store and oversee that data. The trust will serve as a “sheriff” that acts to police the “wild west” of data collection that already exists in the public realm, CEO Dan Doctoroff says. The Toronto Region Board of Trade has suggested that the Toronto Public Library could be in charge of the data. Sidewalk says it will not sell personal information and any such information collected will be de-identified at source, unless express consent is knowingly and explicitly given. Sidewalk has also promised to base its technology on “open standards” that outside parties can build on and connect their services to. Kurtis McBride, who is part of the panel advising Waterfront Toronto on the Sidewalk Labs endeavour and who is CEO and co-founder of Miovision, a Kitchener-based firm specializing in smart city technology, says Waterfront Toronto, city council, the province and federal governments need to pay more attention to the potential “economic value creation” of data and digital infrastructures that will flow from the Quayside project. Meanwhile, critics remain deeply suspicious of Sidewalk’s long term intentions, given the firm’s ties to Google — which has made a lot of money from our personal data.
Sidewalk has the goal of being an “innovation manager for the entirety of the eastern waterfront.” In this role the firm says it would set design and innovation “guidelines for vertical and horizontal development” including a “radical rezoning of the entirety of the area needed to achieve Sidewalk’s economics.” Aside from the obvious goal of making money through increases in land value, investments in infrastructure, and licensing innovations that other jurisdictions could later adopt, Sidewalk Labs’ says its end game in broad terms is not about being a tech company, but rather “an urban place-making company” that uses technology to achieve objectives everyday people share, say CEO Dan Doctoroff. He says those objectives include wanting to live in less expensive homes, having reduced commuting times, a healthier environment, inclusive economic opportunities and a sense of community. “That is why we are doing this,” Doctoroff recently told the Star’s editorial board.
In February, Toronto city council unanimously endorsed a motion by Councillor Joe Cressy calling for the city to develop its own policy framework of rules and regulations to govern the storage and managing of data collected from smart city projects. Cressy wants to see a public consultation process and then a set of “data governance principles” hammered out. “It’s critical that as smart city proposals arrive, that it is cities and not private companies that lead the discussion,” Cressy tweeted after his motion was approved. Cressy says he’d like to see the final policy formalized and in force by year’s end or early next year. Right now the city doesn’t have an overall policy tailored to data collected through smart city technology. We’re behind cities such as Barcelona, where Francesca Bria, the city’s chief technology and digital innovation officer, helped launch the Barcelona Digital City Plan, which prioritizes the digital rights of its citizens.
Governments at all three levels have interacted in some way with the Sidewalk Labs project. In October 2017, Prime Minister Justin Trudeau, then-Ontario Premier Kathleen Wynne and Toronto Mayor John Tory gathered in Toronto to announce the launch of the Quayside proposal and Sidewalk’s involvement. All three leaders seemed generally positive about the news. Trudeau told the gathering that Waterfront Toronto has found an “extremely promising” partner in Sidewalk Labs, which “will create a test bed for new technologies at Quayside. Technologies that will help us build smarter, greener, more inclusive cities, which we hope to see scaled across Toronto’s eastern waterfront and eventually in other parts of Canada and around the world.” Wynne told the crowd, “Our goal is to build a complete urban community … a place where innovation of every variety can flourish.” Tory said, “Sidewalk will work to develop solutions to some of our city’s most pressing urban problems, from housing affordability, to mobility and sustainability.” Recently, with news the Star broke that Sidewalk wants to expand its vision beyond Quayside, a senior provincial government official at Queen’s Park told the Star “there is no way on God’s green earth” that current Premier Doug Ford would ever sign off on handing away hundreds of acres of “prime waterfront property to a foreign multinational company.” On the record, the province says its four new appointments to the Waterfront Toronto board will ensure any proposal Sidewalk presents passes muster with taxpayers, has strong oversight and privacy protection and puts the public first. These days Tory says he wants Sidewalk’s work conducted in a “healthy, transparent manner” but he is generally reserving judgment until he sees the firm’s final plan. Ottawa has taken a similar stance, adding that any proposal put forward must address privacy concerns and meet regulatory approvals from all levels of government.
Sidewalk Labs is vowing to create a “new standard for affordable housing” on the 12-acre Quayside area and beyond. In a press briefing last November, Sidewalk says of the estimated 2,500 new units of housing that will be built on the site, 40 per cent will be below market housing, including 20 per cent affordable housing, which will include 5 per cent “deep affordable” units. The city defines affordable as less than the Canada Mortgage and Housing Corporation’s average market rent for the GTA, which currently for a one bedroom is $1,270 a month. Deep affordable generally refers to nonmarket social housing, which accounts for about 8 per cent of the total housing in the city. Another 20 per cent of the units at Quayside would be middle income units, Sidewalk Labs says, including 5 per cent “shared equity purchases” for middle income households who can’t afford the full down payment for a condo. Sidewalk says it is looking to partner with government at all levels, as well as housing non-profits, to “leverage existing programs that are typically used to support affordable housing development” across the city. Sidewalk CEO Dan Doctoroff says the project needs to “scale” beyond Quayside and into the Port Lands to achieve these affordability targets. But University of Toronto professor David Hulchanski, an expert on affordable housing and homelessness, says given that Sidewalk’s proposal calls for development to take place on public land, the firm’s affordable housing targets fall far short, in his view. “I’m just saying on publicly owned land we should do a lot for people unable to afford what the market has to offer. Five per cent (deep affordable) is laughable — it’s not serious,” he said in an interview, pointing to the nearby St. Lawrence neighbourhood, which Hulchanski points out has 50 per cent social housing — a mix of affordable to deep affordable. He added that Sidewalk’s 40 per cent below market housing targets will also be hampered by the fact social housing supply programs from Ottawa and the province aren’t there. Hulchanski also worries that despite these affordable housing targets, the tech neighbourhood Sidewalk envisions will in the end only be a magnet for the well-to-do. “Google, like many firms, (doesn’t) have much interest in people who don’t have much money. They have an interest in having middle and high income people,” Hulchanski adds.
Innovation, everything from self-driving cars, streets that get rid of snow and ice, or roads where pieces needing repair can be removed and replaced rather than dug up are some of the many features Sidewalk Labs is promising. Recently at its head office on Queens Quay E., Sidewalk held an open house to show off prototypes of hexagonal sidewalks that light up to show changes to how a street is being used, in addition to having the ability to melt snow. The open house also featured Sidewalk Labs’ “building raincoat” covers, which can be opened when the weather is warmer or closed to give cover when it’s cold, snowing or raining. Sidewalk also wants to use timber to construct all of the 12 buildings in the neighbourhood. In addition, Sidewalk wants to pilot a thermal grid that would tap into multiple sources of energy for the purposes of circulation and reuse, which, the firm says in its documents, would enable the heating and cooling of its buildings without the use of fossil fuels. Sidewalk also wants to establish an “urban freight transit system” that could utilize robots to make deliveries to homes and businesses in the area or haul solid waste. In its “Project Vision” document, Sidewalk says “pallet-shaped” robots would be able to deliver a wide variety of items through tunnels or “channels,” which would mean fewer trucks on the streets. “Few if any deliveries would arrive on traditional trucks; virtually all arriving deliveries would be routed into a consolidation or distribution centre that would sort packages and then distribute them on the underground robot network,” Sidewalk says.
Sidewalk says its project has the potential to create tens of thousands of jobs. In its site plan, released in November, Sidewalk states that 9,000, direct and indirect jobs will be created in Ontario as a result of building construction at Quayside alone. Much of that will come from a new timber factory Sidewalk wants launched — the company says its final plan, due in the coming weeks, will detail who would launch the factory — to supply wood for the buildings at Quayside. With concrete foundations and timber skeletons, the buildings would together create the largest concentration of timber structures in the world, Sidewalk says. The factory is vital because the reason timber buildings and timber construction has never reached “critical mass” is there’s never been the supply chain — actually producing enough timber to justify a factory, says Sidewalk Labs CEO Dan Doctoroff. “We think it’s possible here,” Doctoroff says referring to Quayside and beyond. When Quayside is completed, the mix of jobs “on site” including office and retail will total 3,900, according to Sidewalk. In phases two and three of the project, Sidewalk hopes to spread its vision out to the Port Lands, where the firm estimates up to 70,000 jobs could exist “on site” upon completion of construction, including at the new Google Canada head office and a new innovation hub. But in an interview last year, Rana Foroohar, a Financial Times writer and author of Makers and Takers: The Rise of Finance and the Fall of American Business, said “these firms sell themselves as innovators and job creators, but they create far fewer jobs than even the previous generation of tech firms such as Microsoft or IBM.”
In February, the Star published an exclusive story based on leaked documents from a presentation Sidewalk Labs gave near the end of October or early November to its parent company Alphabet. The documents outline Sidewalk’s interest in spreading out into the Port Lands and paying upfront for big ticket items such as an LRT line and getting paid back through development charges or tax increment financing — money that usually goes to city governments to build things such as roads and transit. Sidewalk Labs’ CEO Dan Doctoroff says the headline for the story, which stated the firm is planning a “massive expansion to its waterfront vision,” left the impression Sidewalk was hiding information the public didn’t know. “That, to be perfectly blunt, was ridiculous,” he told the Star’s editorial board recently. Sidewalk has always been upfront about the notion their project only works if it is “scaled up” beyond Quayside, he said. He went on to add that Waterfront Toronto’s original RFP from 2017 mentions the notion of “scaling” beyond Quayside 20 times, Sidewalk’s response to the RFP mentions it more than 100 times, and city documents and the July 2018 Plan Development Agreement between Waterfront Toronto and Sidewalk talk about the concept too. But Doctoroff was asked by the Star to explain why Sidewalk’s Nov. 29 site plan, which came about a month after the presentation to Alphabet, mentions Quayside over a dozen times, yet makes no reference to expanding beyond Quayside into the Port Lands. Doctoroff replied that the concepts in the leaked documents weren’t fully baked at the time. “I don’t like to promise things we don’t have any intention of doing,” he said.
Sidewalk says its Quayside and Villiers West project can’t work without a new LRT line built near the waterfront. Sidewalk is proposing to finance the line upfront and be paid back later through tax increment financing or development charges that would accrue through increased land values created by the LRT and new infrastructure projects. Financing the construction of a new LRT to serve the Port Lands would allow the line to enter service “years, if not decades sooner” than if the company didn’t intervene, Sidewalk says. Sidewalk doesn’t want to own the LRT and says it would stay in public hands. The city has been planning to build an LRT on the east waterfront for at least a decade, but it is currently unfunded and has less political support than transit projects such as the Relief Line or Scarborough Subway extension. The city has estimated its version could cost more than $1.2 billion. Sidewalk Labs spokesperson Keerthana Rang said “ideally the LRT would be built with public dollars,” but Sidewalk is “developing options for Waterfront Toronto and governments to consider as alternatives if public funding is not available.” According to diagrams Sidewalk has published, the LRT would mostly follow the route envisioned by the city, and would run along Queens Quay, Cherry St., Commissioners St. and an extension of Broadview Ave. Sidewalk also envisions a second phase that would push the LRT further south to Unwin Ave.
Sidewalk Labs is busy working on a final Master Innovation and Development Plan that will lay out the design and development vision for their Quayside beta site. According to the city of Toronto’s website the MIDP will “make specific proposals in the areas of affordable housing, mobility, buildings, sustainability, public realm, community facilities, digital governance and data applications,” for the project. The MIDP will also contain financial plans for the project, Sidewalk says, adding it hopes to have the document finished sometime this spring. It’s expected to be hundreds of pages long. Once the MIDP document is released, Waterfront Toronto says there will be an evaluation period that includes input from external experts, government partners, and consultations with the general public. After that, Waterfront Toronto’s board will vote to accept or reject its evaluation team’s recommendations. The city of Toronto is also expected to produce a staff report on the MIDP which could go before city council for a vote. The province and Ottawa will also likely weigh in.
Sidewalk Labs’ story is heavily steeped in New York. The firm is based in Manhattan, and its New Jersey-born CEO, Dan Doctoroff, 60, is the former deputy mayor for economic development of New York City from 2002 to 2008, most of that time under then mayor and billionaire Michael Bloomberg. After that, Doctoroff went on to serve as president and CEO of Bloomberg’s company Bloomberg L.P., a media, data, software and financial firm in Manhattan, before leaving to become head of Sidewalk Labs. While deputy mayor, Doctoroff began working on the rebuild of New York after the devastating Sept. 11, 2001 terrorist attack on the World Trade Center. Behind the scenes he helped guide numerous initiatives in the city, including the recently opened Hudson Yards development, a massive $25-billion complex of soaring residential and office towers. As recently reported in the New York Times, tax breaks and funding from the city for Hudson Yards have reached nearly $6 billion, according to public records and analysis from the New School, a research university in Manhattan. Doctoroff recently told Bloomberg news service in Toronto that, similar to the Hudson Yards approach, when it comes to financing Quayside and beyond, Sidewalk could “go to bondholders and get them to put up the money (up front) on the hope that there would be development in the area,” then use incremental tax revenues and other funds to pay the debt on the bonds. “In effect, investors would only get paid back, with a negotiated return, if the project sends significant additional revenue flowing into public coffers,” Doctoroff stated in an op-ed he penned for the Star in February. He later told the Star’s editorial board that “creative financing alternatives” like this broke the logjam when it came to developing Hudson Yards, and the same could be done to finance a new waterfront LRT and more. But critics say governments shouldn’t allow this type of funding or tax incentives for big business. Amazon recently pulled out of setting up a headquarters in Queens after similar concerns from the public there resulted in a backlash against the company.
Opposition to the Sidewalk Labs project in Toronto has been fierce. Individuals and groups here are regularly criticizing the project or outright trying to get it shut down. Notable among the critics is former Research In Motion (later rebranded as BlackBerry) CEO Jim Balsillie, who last year penned an opinion piece for the Globe and Mail saying that Sidewalk Toronto is not a smart city, but rather a “colonizing experiment in surveillance capitalism attempting to bulldoze important urban, civic and political issues.” Around this time, Saadia Muzaffar, a Toronto tech expert and member of the Digital Strategy Advisory Panel, a group of technology and privacy experts advising Waterfront Toronto on the Sidewalk project, suddenly resigned, complaining among other things that Waterfront Toronto’s senior members are “consistently dodging important questions” about the project and failing to show leadership on the file. Bianca Wylie, an advocate for open government and a tech specialist, is another prominent critic. She is a member of #Blocksidewalk, a Toronto group that is trying to shut down the project. The group is trying to achieve a “reset” — scrap the RFP that brought Sidewalk on board and start over — which would put Torontonians, not Sidewalk Labs in the “driver’s seat,” the group says. They want public consultations to gather input on what the city wants for the waterfront and then a new RFP process based on those findings. “Torontonians were not asked what they wanted for the waterfront. We should have been consulted,” says Nasma Ahmed, a #Blocksidewalk member and director of the Toronto non-profit Digital Justice Lab. And joining the fray recently was the Canadian Civil Liberties Association, an independent, national, non-partisan rights group, which is threatening to launch legal action to block the project until the city, province and federal government establish “digital data governance policies” for the proper use and storage of personal data collected in the smart city.
Sidewalk Labs wants to expand into the Port Lands. The area, southeast of the downtown core, is comprised of 800 acres of mostly publicly owned waterfront land. “Holistic thinking is what can accelerate the provision of infrastructure on the eastern waterfront and more quickly unlock the value of the Port Lands,” Sidewalk Labs argues. The Port Lands was once large wetlands in Lake Ontario, but in the 1880s the area was filled in to create additional land for shipping, sawmills, cattle processing, an electrical generating station, and storage facilities for coal, oil and cement. As a result, much of the land is contaminated and lengthy remediation will need to happen. Currently, the Port Lands has huge unused portions, though there are some active industries, retail outlets, a large music rehearsal factory, restaurants, a night club, recreational areas, film studios and other uses. Parts of the Port Lands and other nearby sections of the city are at risk for a major flood event, and so all three levels of government have pitched in toward a $1.25-billion flood protection plan underway in the area, a necessary step before any major redevelopment. The plan includes establishing a river mouth and a greenway — an environmental protection zone — that can absorb floodwater. Among a lengthy list of changes, the project calls for the grade to be raised in most parts of the Port Lands by about two metres. The area falls under the mandate of Waterfront Toronto. The flood protection work should be completed by 2024, the corporation says. No development would likely happen before that.
According to the site plan for Quayside, Sidewalk wants to erect a series of bridges across the Parliament slip, a narrow body of water south of Queens Quay. The bridges would be for a new LRT line, a bicycle trail and pedestrian walkway over the slip. A tree-lined public square or plaza would also be established north of the bridges. What’s there now is the slip, Sidewalk Labs’ head office and old warehouses still in use. Sidewalk’s site plan — which requires approval from Waterfront Toronto — makes room for a new Toronto District School Board primary school. The plan also envisions an advanced power grid that would utilize features such as photovoltaic panels to access clean energy sources for electricity, and a thermal grid that could use so-called “waste” (reusable) heat. The project calls for 12 buildings, about 70 per cent of which would be residential with a split of roughly 50-50 between purpose-built rental units and condos. The neighbourhood would have minimal parking spaces. Sidewalk CEO Dan Doctoroff would not immediately provide a price tag for the project, but said financials will be included in the final plan. The Quayside site plan, released Nov. 29, does not discuss the Port Lands.
In March 2017, Waterfront Toronto launched its international request for proposals (RFP) for Quayside, and Sidewalk Labs was named the winner that October. But questions have been raised about the RFP process. For one thing, in her report this past December, Ontario’s Auditor General Bonnie Lysyk said, “Sidewalk Labs received more information from Waterfront Toronto prior to the RFP than other parties that would be responding to the RFP.” Lysyk went on to say applicants were given six weeks to respond to a “complex request for proposal” compared to 10 weeks Waterfront Toronto gave for unrelated public art projects in the West Don Lands area. Peter Kent, Conservative MP and member of the federal standing committee on access to information, privacy and ethics, grilled Meg Davis, Waterfront Toronto’s chief development officer, at the committee in February, suggesting the “fix was in” regarding the RFP. Waterfront Toronto countered that the RFP process was fair and transparent and that information provided to Sidewalk Labs and other proponents was available for all to see, including through the City of Toronto’s open data portal. There was a pre-RFP “market sounding” during which Waterfront Toronto met with 50 companies from March 2016 to February 2017 to gauge interest in the Quayside project, the corporation says. Waterfront Toronto says the actual RFP was a two-stage process, lasting a total of 159 days — not six weeks — from March 17, to Aug. 22, 2017. It consisted of a six week pre-qualification phase followed by a best and final offer stage for three shortlisted proponents, the corporation says, and an evaluation and approval period followed, with the preferred candidate named by a steering committee that included external third party experts. The 159 days was Waterfront Toronto’s second longest procurement, Davis said, adding the RFP process was governed by former Ontario associate chief justice and former Ontario integrity commissioner Coulter Osbourne and included legal opinions provided by two law firms in Toronto.
On its website, the city of Toronto describes a smart city as “a broad concept applied globally to describe, identify, and promote approaches and solution(s) that use technology and data to address major challenges that cities face to improve social, economic, and environmental outcomes for residents.” The goal of the technology is also to make cities run more efficiently, though critics say cities are often being led rather than leading when it comes to the privacy, financial and social implications of this technology. Smart city technology is already in use extensively in Toronto — think Presto smart cards used on the TTC, or devices that collect traffic signal data at intersections along the King St. pilot project route. The City of Toronto is currently working on a strategy to address how best to deal with emerging technologies in this area, particularly the question of which technologies to invest in to ensure modernization for the city. The city joined forces with the Toronto Region Board of Trade in 2016 to form a smart cities working group. The group’s goals include raising awareness about smart city projects both locally and abroad and creating a forum to “leverage” local smart city expertise. The working group has also organized three “Smart City Summits” between 2016 and 2018 to support dialogue and raise awareness about the subject. In addition, the group has been focused on developing a report, still in the works, aimed at better understanding the start-up landscape to help Toronto and TREB devise a “tech pitch” to promote trade. The group also focuses on what other city governments are doing to push tech forward. Markham recently joined forces with Bell Canada and IBM to launch a pilot project that will use smart city technology to improve city services by monitoring municipal buildings, vehicles and infrastructure — such as putting sensors on water mains where data about water system conditions will be collected. Mississauga uses smart city technology heavily — free public Wi-Fi throughout the city and an advanced traffic management system that uses data to improve traffic flow, for example — and the city is working on a smart city master plan it hopes to present for council approval in May. Internationally, there’s a large smart city in Songdo, near Seoul, South Korea, and other cities using sensors and data on a large scale include Barcelona, and Singapore. All of these cities use data to measure everything from traffic congestion, to weather, air quality and the waste habits of its citizens.
Sidewalk Labs says tax increment financing (TIF) — paying for a project now and getting money back later based on anticipated tax revenue from future development — could be used to finance the LRT and other infrastructure costs. Sidewalk estimates that if the city established “value-capture zones” in the eastern waterfront, areas in which development charges and incremental property taxes were reserved for this specific geography, it could generate $6 billion in value from the smart city project to pay for necessary infrastructure over the next 30 years. Sidewalk says it could also be reimbursed through development charges collected. Previous proposals to pay for transit projects using tax revenue from future development have met with little success. Mayor John Tory fell short on his campaign promise to use tax increment financing to pay for his SmartTrack plan, after city staff concluded taxes from future development near the line wouldn’t raise nearly enough money. But according to Cherise Burda, executive director of Ryerson University’s City Building Institute, the Waterfront LRT may be perfectly suited to be paid for using TIF or a similar plan, because it would be built in a low-density area expected to see massive new development. By contrast, SmartTrack was planned along existing GO Transit lines in already populated areas, limiting the potential for tax-generating new builds. “We know the development is coming” to the Port Lands, Burda said. “The difference between baseline property tax and what we can get is a lot bigger.” It’s rare, particularly in Canada, for a private company to take the lead on financing a public transit line. But Murtaza Haider, an associate professor at Ryerson’s Ted Rogers School of Management who has researched transit funding, said that’s not necessarily a bad thing. He argued the key is that government and public bodies involved in any deal ensure it’s transparent and protects the public interest. “The most important point is due diligence by public sector authorities,” he said. David Soknacki, previously a councillor and budget chief for the city, says TIF comes with risk, pointing out: “the only thing you’re sure of is the debt with TIF. You’re not sure of the increment, the amount of the increment, nor how long it will take you to get the increment back,” he says. Tax increment financing, a U.S.-born concept, is based on borrowing against anticipated increases in land value and the higher tax revenues that would be collected. Instead of devoting the higher amounts of revenue to a range of city services, the money goes to a single project. But research on the use of TIFs has shown they work best on smaller projects.
Instead of ripping up roads every time old infrastructure needs to be replaced, Sidewalk Labs says Quayside will feature a system of “utility channels” underground and under every floor of every building. This underground infrastructure will create space for electrical systems, water pipes, district heating and cooling infrastructure and telecommunications. This will do away with the need to excavate whenever a new “conduit” requires installation, Sidewalk says in its “Project Vision” document. The utility channels will give repair teams “easier access to those parts of the system that require the most frequent visits … where meters and valves must be checked and where optical switches need to be upgraded to process faster fibre optic signals,” Sidewalk says.
Sidewalk Labs says the autonomous or self-driving vehicle is the “most revolutionary transport technology under development” and will play a key role at Quayside. The neighbourhood will have limited parking for cars, and the design of its streets will be tailored for pedestrians, cyclists and shared self-driving vehicles, the firm says in its “Project Vision” document. Once built, Quayside will “immediately” be opened to allow controlled pilot projects with self-driving vehicles, with a shuttle between Quayside and Cherry Beach in the Port Lands, Sidewalk says. Quayside, and later the eastern waterfront as a whole, will become the “first place in the world where conventional vehicles will be a thing of the past,” Sidewalk promises. Three years ago, Ontario launched a 10-year pilot program allowing the testing of self-driving or automated vehicles on Ontario roads. Requirements include that “the driver must remain in the driver’s seat of the vehicle at all times and monitor the vehicle’s operation, unless approved for driverless testing. For driverless testing, full human oversight of the vehicle’s functionality is required while it is operating on a public roadway.” Waymo, a subsidiary of Sidewalk Labs’ parent company Alphabet, began a self-driving car service app that lets residents in Phoenix request one of these vehicles to get around in. Late last year unrelated firm Uber announced a limited relaunch of a few self-driving cars in Toronto. The company stopped testing them last year when one of its cars fatally struck a pedestrian in Arizona in March.
Waterfront Toronto was formed in 2001 after a task force set up by the city and province in 1991 to explore the future of Toronto’s waterfront produced a sweeping report calling for $12 billion in public and private funds for the area. When Waterfront Toronto launched, the three levels of government gave a total of $1.5 billion to kick-start the corporation’s 25-year mandate to revitalize 2,000 acres of brownfields along the waterfront, an area that takes in the Port Lands, West Don Lands, East Bayfront, as well as the central and wider waterfronts. A 12-member board, with representatives from all three levels of government, oversees Waterfront Toronto. The chair of the board makes $30,000 a year; committee chairs, $7,500 a year; and regular board members, $5,000 annually. Members are paid $500 per board meeting and $500 per board committee meeting. Leveraging public money, the corporation works with private and public interests that purchase waterfront property. The money generated from these deals is then used to pay for public infrastructure. Waterfront Toronto’s funds come through “contribution agreements” with the three levels of government. Key projects that have sprung up along or near the waterfront include the Jack Layton Ferry Terminal, the West Don Lands neighbourhood, revitalization of the Harbourfront Centre site, the revitalization of Queens Quay W. and the Corus Entertainment site.
The x-factors that could make or break Sidewalk Labs in Toronto are politics, activism, community input, financing, public opinion, trust and relationships built around the project, argues Shauna Brail, an expert on tech and innovation and an associate professor in University of Toronto’s urban studies program. “It’s a delicate balance and a still uncertain outcome,” Brail says. She points out that as Canada’s biggest city, and one of the fastest growing in North America, Toronto struggles despite its many strengths. “Each year, during budget time, it is clear that we lack the political will to build the city we deserve. Property taxes are among the lowest in the region. This year we learned that more than half of the city’s state of good repair budget is dedicated to paying for a single stretch of downtown expressway. Capital projects, such as the Downtown Relief Line, remain unfunded,” Brail says. When it comes to Sidewalk Labs’ project, Brail says it’s “not at all clear” that the general public at large “cares much, one way or the other” about what happens at Quayside — or even the larger site in the Port Lands. “But Toronto must care and must act with care — taking into account the duelling needs of city-building and democracy,” Brail adds.
Whether Sidewalk Labs accomplishes its goal or fails, the outcome of Sidewalk Labs’ proposal will be a yardstick for other cities around the world, says Andrew Clement, professor emeritus in the faculty of information at the University of Toronto. Clement is an expert in privacy and data, and a member of the Digital Strategy Advisory Panel advising Waterfront Toronto on the Sidewalk Labs’ project. Clement says when he first joined the panel he was keen to play a role in the project’s goal of being innovative — “not just in terms of its technical features, but also innovative in terms of dealing with a range of thorny and interesting questions” raised by the digitization of everyday life, in particular the embedding of sensors or “surveillance” within an urban environment. He went on to say that worldwide attention has raised the stakes of the project. “Personally, I don’t want to be associated with a project that falls short in areas in which I know something and care about. Not just privacy but digital governance which covers a wider range of subjects — what happens with data and what purposes will it be used for,” Clement says. “Speaking as a researcher, an experiment is only a failure if you fail to learn anything from it. So I think it’s a magnificent learning opportunity and we need to think of it that way. It’s going to be messy and contentious — but I don’t want to frame it as or success or failure based on approval or nonapproval,” Clement adds. “The process can help inform other smart cities around the world on what to do and what not to do and how. That’s certainly what I’m working towards and I think others are as well,” says Clement.
Quayside is made up of three development blocks, with two totalling 10.5 acres owned by Waterfront Toronto and one at 1.5 acres controlled by various owners including the City of Toronto. All of the blocks are zoned CR(H) for commercial residential, with the “H” for ‘hold’ — meaning certain conditions must be met, such as paying a percentage to public art, before development can happen. According to a 2017 report to Toronto’s executive committee, zoning for the area designates the land as mixed use, which allows a wide range of uses — commercial, residential and community. With regards to housing however, the zoning bylaws for the area include Section 37 requirements calling for a “minimum land contribution sufficient for 20 per cent of the units on site to be affordable rental housing,” the city report says.
With files from Ben Spurr
Donovan Vincent is a housing reporter based in Toronto. Follow him on Twitter: @donovanvincent