Sidewalk Labs’ long-awaited master plan for the high-tech district it hopes to create on Toronto’s waterfront promises to produce an “economic windfall” for the city, province and Canada and outlines a new strategy to help governments fund a $1.2-billion LRT line the firm says is “essential” to the project.

The draft document — 1,524 pages in all including three volumes plus an overview — calls for 190 acres of the eastern waterfront to be turned into an Innovative Development and Economic Acceleration (IDEA) District — an area that includes the 12-acre Quayside site near Parliament St. and Queens Quay E. and 20 acres of the City of Toronto-owned, yet-to-be-developed property in the Port Lands called “Villiers West.”

Sidewalk Labs, a Manhattan-based sister firm of Google, says it would be the lead real estate developer along with “local partners” for Quayside and Villiers West, where Sidewalk Labs would “prove out” its innovations and, if successful, take them into the broader Port Lands area.

But critics of the proposal say the draft plan is an overreach.

A key source of friction continues to be Sidewalk’s position that a new LRT on the waterfront is “essential” to the project and that Waterfront Toronto’s goals of increased mobility, sustainability and affordability can’t happen without the new transit line.

The city has planned to build a new LRT on the waterfront for a decade, at a cost of more than $1.2 billion, but it’s unfunded at the moment.

Have Your Say!

In its master plan, Sidewalk is offering to help pay for a new LRT.

But Steve Diamond, chair of Waterfront Toronto — a tri-government body — and Sidewalk’s innovation partner on the project, says the LRT section of the proposal has an all-or-nothing feel to it that makes him uncomfortable.

“I don’t want an agreement that says if there’s no transit we (Sidewalk Labs) will walk. I can’t guarantee that (LRT line) and it’s unreasonable to put that” on Waterfront Toronto, Diamond said.

“Waterfront Toronto can’t guarantee transit,” Diamond said.

“What happens if we go through a public process, six months of negotiation, spend all this money and there’s no transit? I’m hoping this is a business issue, but we’re concerned this issue has been put out there. It was unanticipated.”

In an interview Monday, Sidewalk CEO Dan Doctoroff declined to comment directly about whether his firm would drop the project if an LRT isn’t approved.

Doctoroff said his firm has done “extensive modelling” and technical analysis of its project, all of which, he says, cries out for an LRT.

“It’s just not possible. The traffic jams at greater density levels would be terrible and cannot be supported” without an LRT, Doctoroff said, referring to the additional thousands of residents and employees who would populate the firm’s mixed-use development.

He went on to say that Sidewalk will act as a catalyst to get the neglected line built, and asked why Torontonians, businesses and other interests wouldn’t jump at that opportunity.

Toronto Councillor Paula Fletcher, who represents the Port Lands area, was visibly upset with Sidewalk’s pledge to have Google’s Canadian headquarters moved to Villiers West, which will be part of a new island that is being built on City of Toronto property in the Port Lands.

“This is a site on Villiers Island that is for Torontonians to design, not for Google to design,” Fletcher told reporters. “This is the biggest land grab Toronto has seen in a long time … this is a brand-new island that Torontonians need to imagine,” Fletcher said, adding the Villiers West project would happen on “prime land the City of Toronto owns. Waterfront Toronto doesn’t own any of that land.

“At what point did we decide to turn over some of the most valuable real estate in all of North America to the creation of a company town?” said federal New Democrat MP Charlie Angus, a critic of the project, referring to Sidewalk’s overall proposal.

“This is what this will be. Welcome to Googleville,” he added.

In the master plan, entitled Toronto Tomorrow: A New Approach for Inclusive Growth, Sidewalk Labs says it would provide, along with local partners, up to $1.3 billion in funding and financing for projects on the waterfront.

The firm says that money would include $900 million in “equity investment” with local partners; and $80 million in investment, again with local partners, in a tall timber factory that would make product for the wood buildings Sidewalk wants to construct in the tech district; and 10 per cent profit sharing with governments for 10 years for some technologies developed for and used in the IDEA District.

The $1.3 billion would also include up to $400 million in “optional credit financing” to help accelerate the delivery of a new LRT line on the waterfront and pay for “advanced development of municipal and advanced infrastructure systems.” Sidewalk says of that amount $100 million would be specifically for the LRT line.

The optional credit approach is a change from an earlier position Sidewalk proposed, which was financing the LRT entirely upfront and getting paid back later through tax revenue generated by the project.

This optional credit financing model would “alleviate the main risk that holds government back from using transit-oriented development to pay for transit infrastructure,” Sidewalk says, adding this proposal would be completely at government’s option and not involve private ownership or running of the LRT line.

The IDEA District would be, according to Sidewalk Labs’ plan, a new development model for how private and public interests can work together. The firm is calling for the district to be overseen by a “public administrator.”

Sidewalk Labs pointed to a new report from Toronto consultancy urbanMetrics that says at its “fullest scale” Sidewalk’s proposal would create 44,000 jobs and generate $4.3 billion in annual tax revenue, along with $14.2 billion a year in Canadian gross domestic product.

“We are not interested in creating a corporate campus or a gated community, but rather a diverse neighbourhood that embraces the complexity and serendipity that makes cities great,” Doctoroff said in a statement accompanying the release of the document.

Among other promises in the document:

Half of all housing units would be purpose-built rentals, 40 per cent would be below-market rates — with 20 per cent of those meeting the traditional definition of affordable.

The first neighbourhood built entirely from timber.

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A “first-of-its-kind” profit-sharing arrangement with the public, in which Sidewalk Labs pledges that for certain technologies it develops and “proves out” on the eastern waterfront and that go on to achieve commercial success elsewhere, Waterfront Toronto and government stakeholders will receive 10 per cent of the profit for a decade.

Sidewalk proposed the creation of an independent, “government-sanctioned” urban data trust that would oversee all collection and use of “urban data” — data collected in the physical environment.

But Diamond, the chair of the board of Waterfront Toronto, went on to say that despite the fact the document is more than 1,500 pages, there are still “a number of unanswered questions” and important issues to be addressed.

“We have a concern over the suggestion the IDEA District should cover 190 acres of land,” he said.

“Our perspective is in light of the untested technology proposed, and the risks of implementation, we believe there should first be a degree of acceptance and success achieved at Quayside before moving forward,” Diamond said in an interview.

“In other words, is this something that’s going to work, before we commit to using the same practices and procedures over 190 acres of land?” he added.

In an open letter released Monday morning, Diamond also took issue with Sidewalk Labs proposing to be the “lead developer” of Quayside.

“Should the (draft master plan) go forward, it should be on the basis that Waterfront Toronto lead a competitive, public procurement process for a developer(s) to partner with Sidewalk Labs,” Diamond said.

On the subject of data collection and privacy, Diamond called it a complex and legitimate area, but said he remains “optimistic” that with input from the public as well as the experts working closely with Waterfront Toronto, “we as a society will come to grips with” the issue, and that aspect of Sidewalk’s proposal will be resolved.

“We acknowledge public concerns and take our roles seriously as the public stewards,” Diamond said.

With regards to the IDEA District, Diamond said the master plan suggests the district would be governed by a public administrator and a number of trusts that would report to that administrator.

“We don’t know who is intended to be the public administrator, how many people sit on (the body) who appoints them, and how it fits in with the existing legal framework, and where the City of Toronto and the province fit into that structure,” Diamond said.

An extensive public consultation process examining the Sidewalk proposal and directed by Waterfront Toronto will begin soon.

Mayor John Tory, in a cautious statement, said Monday marks another step forward in a “careful process” of the development of the waterfront.

“The Quayside project has the potential to accelerate the city's goals and objectives for the waterfront and the broader city through the implementation and demonstration of innovations in areas such as planning, design, construction, and information technology," Tory’s statement said.

“Done the right way, Quayside represents many exciting possibilities,” the mayor added.

The Toronto Region Board of Trade also weighed in on the proposal Monday:

“The Board of Trade believes the Sidewalk Labs proposal has great potential as a city-building investment for the Toronto economy,” said Brian Kelcey, a senior board spokesperson, in a statement. “Most importantly, two of the three main sticking points that remain are transit and data regulation which need to be addressed by the various levels of government irrespective of the negotiations taking place now with Waterfront Toronto because they are critical to a functioning city and our country’s economy.”

Councillor Joe Cressy, a member of the Waterfront Toronto board who represents the Quayside area, said in a statement that despite what he sees as several positive aspects of the plan, including the goal of sustainability and an “ambitious affordable housing component,” he has a “number of significant concerns, including the data privacy, collection and management, the scope of the project beyond Quayside, and requirements for future infrastructure investments.

“The public can take comfort in their proven ability to evaluate proposals in the public interest,” Cressy said of Waterfront Toronto.

“The City of Toronto will then conduct its own review of the proposal later this year,” Cressy said.

Gone from the master plan is any mention of Sidewalk Labs getting a cut of future taxes and developer fees, revenue sources discussed in an internal presentation that was published by the Star in February. In its place, Sidewalk Labs proposes receiving “performance payments” that would kick in after Quayside and Villiers West are built and certain benchmarks are met such as job creation.

“The proposed financial structure is designed to align the interests of Waterfront Toronto, Sidewalk Labs, and the public (and) to compensate Sidewalk Labs for serving as a catalyst for a new approach to urban development,” states the master plan.

In response to feedback from the public, Sidewalk Labs limited its ability to profit from many aspects of the project, including “forgoing revenue streams not as directly tied to the public interest,” such as commodification of data and seeking tax breaks.

The company estimates it will make early investments of more than $100 million, plus “the provision of advisory services and certain technology products entirely at cost.”