Waterfront Toronto agrees to press forward on Sidewalk Labs Quayside project

sidewalk labs

At a board of directors meeting on Thursday morning, Waterfront Toronto agreed to move forward with Sidewalk Labs on the development of the lakeside property at Quayside, but with major revisions to Sidewalk Labs’ June proposal.

“Whether the Quayside project proceeds or not, the conversation we are having is important for all of Toronto.”

With a deadline of October 31 to resolve differences, Waterfront Toronto approved its final offer to Sidewalk Labs. The two groups will now move forward to formal evaluation and public consultation with a final vote deadline of March 2020.

News broke on Wednesday that Waterfront Toronto, the public advocacy agency tasked with overseeing the implementation of the development of the Quayside project, and for approving Sidewalk Labs smart city proposal, had sent its final offer to Sidewalk on Monday. The offer, finalized by the board on Thursday morning, was a more subdued version of Sidewalk Labs’ four-part Master Innovation and Development Plan (MIDP) tabled over the summer.

Waterfront Toronto’s new agreement addresses key concerns expressed by Waterfront Toronto board chair Steve Diamond in his open letter that was issued immediately after Sidewalk Labs publicly presented its MIDP.

Diamond’s letter outlined major issues, at the time, including geography, data governance, and procurement around a developer partner.

“This project has stirred vigorous debate and, regardless of the outcome, raises issues to consider,” Diamond wrote in June. “Whether the Quayside project proceeds or not, the conversation we are having is important for all of Toronto.”

No IDEA District

The plan the Waterfront Toronto’s board agreed to and finalized on Thursday morning is more aligned with Diamond’s concerns. After Sidewalk Labs’ MIDP proposed development on a 190-acre plot, Waterfront decided to limit Sidewalk Labs to the originally agreed upon 12-acre Quayside plot.

The project originally faced backlash when documents leaked to the Toronto Star revealed that Sidewalk Labs was looking to possibly redevelop 350 acres in the Port Lands area, nearly 30 times larger than its original 12-acre proposal. Waterfront Toronto has reduced the scope of the project, removing Sidewalk Labs’ Innovative Design and Economic Acceleration (IDEA) District concept.

Sidewalk Labs had been hoping to develop the IDEA District as an innovation hub for entrepreneurs and businesses, which would also house sister company Google’s new headquarters.

The realigned agreement between Waterfront Toronto and Sidewalk Labs did agree to develop an Innovation Plan, as per the MIDP. According to the documents, the plan would be a way of responding to emerging technologies, as well as to address regulatory issues or barriers to implementation and adoption of that technology. Any plan would be subject to the results of Waterfront Toronto’s evaluation and further public consultation, the group stated.

Waterfront Toronto also killed Sidewalk Labs’ proposal that it be the lead vertical real estate developer at Quayside, with the revised agreement stating Waterfront Toronto would lead a competitive procurement process for vertical development teams and that Sidewalk Labs would partner with any such team.

Venture funding

The new agreement reaffirmed Sidewalk Labs’ commitment to creating what it has called an urban innovation cluster. In its MIDP, Sidewalk Labs committed to investing $10 million (all numbers CAD) in an applied research institute, as well as $10 million to establish a new venture fund for local startups.

Sidewalk Labs has been in talks with local partners about the venture fund.

Waterfront Toronto stated that Sidewalk Labs has committed to raising at least 50 percent of that venture fund from Canadian investors, with “substantive” Canadian representation on the board. Waterfront Toronto also requires “visibility” into the fund and that it be managed with a local partner to secure additional capital.

Sidewalk Labs has already stated plans to seek additional funding and has been in talks with local partners to increase the size of the fund and find managers and partners.

It was also agreed on Thursday that Sidewalk would offer a global patent pledge for Canadian innovators to use all of the company’s Canadian and foreign patents, covering hardware and software innovations. In its MIDP Sidewalk Labs also proposed that the public sector receive 10 percent of the company’s profits from its ‘Testbed-Enabled Technology’ for a 10 year period.

The new agreement would entitle the public sector to a revenue stream on products and services piloted through the testbed program. It also stated that Waterfront Toronto will be granted irrecoverable, perpetual license to use any Site-SPecific IP created through the process of developing the MIDP, whether or not the MIDP is ultimately approved.

LRT not guaranteed

The Toronto Star documents also revealed that the company planned to build an underground infrastructure, a light rail transit (LRT), and was also looking for a share of the property taxes, development fees, and increased value of the land, in order to finance its concept. Sidewalk Labs later confirmed the LRT plans in its MIDP, promoting it as a key part of its plan to build on the underdeveloped lakefront area.

Waterfront Toronto’s finalized agreement offered no immediate guarantee that Toronto would build an LRT system, noting that the agency does not have the “jurisdiction or the approval of capital funding for public transit.” The agreement did note, however, that Waterfront Toronto would continue to support and advocate for a “higher-order transit solution.”

Data and digital governance

Sidewalk Lab’s proposed project has been marred by controversy since it was revealed, garnering concerns from public groups, politicians, and city individuals. Waterfront Toronto addressed one of the biggest concerns over data and privacy, calling for the data collected to be a public asset and removing Sidewalk Labs’ proposal for an Urban Data Trust.

The revisions have Sidewalk Labs agreeing to not use the term ‘Urban Data’ at all.

The MIDP’s data strategy involved the proposal of an Urban Data Trust that would manage data collected from the public and make “anonymized” or de-identified data open-source and publicly accessible. Waterfront Toronto was quick to point out that consent would be required but multiple levels of government for this type of undertaking.

Prior to Thursday’s finalized offer, Waterfront Toronto’s digital advisory panel issued preliminary commentary on Sidewalk Labs’ MIDP. The panel’s no-holds-barred report panned many proposals put forth by the Alphabet company over the summer. Panellists cited said it was not sure whether Sidewalk’s proposals would support Waterfront Toronto’s goals for Quayside. The panel said the MIDP was “frustratingly abstract,” “unwieldy and repetitive,” and “overly focused on the ‘what’ rather than the ‘how.’”

The report said the development of data governance mechanisms should be shifted from Sidewalk to Waterfront Toronto and governments, noting that consent for data collection is still required under Canadian law, adding that de-identification is notoriously difficult and that the risk of a privacy breach cannot be completely eliminated. The advisory panel added that Sidewalk Labs “should focus on elaborating on how it will make its own proposals for data collection, processing and use more transparent, accountable, and amenable to a robust privacy protection regime.” De-identification and data residency also remained of principal concern for the panel.

Other groups and individuals, like Ontario’s former privacy commissioner Ann Cavoukian and the Canadian Civil Liberties Association, have echoed concerns around how data will be collected, used, and distributed among third parties.

Waterfront Toronto and Sidewalk Labs revised agreement stated that the Alphabet company has reaffirmed its commitment to comply with all existing and future privacy legislation, regulation, and policy frameworks. To achieve the project, Sidewalk Labs would have to agree to store and process personal information in Canada, and do so in a non-personalized way. The revisions also have Sidewalk Labs agreeing to not use the term ‘Urban Data’ at all, “instead rely[ing] on existing terminology and legal construct.”

In the last week, a group of academics, business leaders, and experts penned their own open letter, criticizing Waterfront Toronto’s lack of transparency on the agency’s dealings with Sidewalk Labs. Many of these meetings have been held in-camera, which Waterfront told the Toronto Star were necessary to defend the privacy commercial confidentiality of some issues. The letter said the “the public seems to have been cut out of the process,” and that “brokering a deal about key threshold issues behind closed doors will not help restore public trust.”

Members of the group attended the media briefing on Thursday, attempting to speak to project leaders about their concerns moving the project forward.

The revised agreement between Sidewalk Labs and Waterfront Toronto has not only been majorly scaled down from the MIDP, but also early documents from 2016 that The Globe and Mail obtained. The Globe reported, the evening before the board meeting took place, that the 2016 documents lad out Sidewalk Labs having power to levy its own property taxes, control some public services, as well as track and predict people’s movements.

Now that Waterfront Toronto and Sidewalk Labs have realigned their agreement, there are still many hurdles to finalizing the project. Sidewalk Labs still has the opportunity to back out before December 2020.

With files from Isabelle Kirkwood

Meagan Simpson

Meagan Simpson

Meagan is the Senior Editor for BetaKit. A tech writer that is super proud to showcase the Canadian tech scene. Background in almost every type of journalism from sports to politics. Podcast and Harry Potter nerd, photographer and crazy cat lady.

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