Although Sidewalk Labs has dropped several of its demands, it still has much to gain from the opportunity to build a high-tech Toronto waterfront community.

That’s the opinion of the Google sister company, itself, and of independent observers, some of whom were surprised the company dropped requirements including access to a big zone outside the 12-acre site, the promise of a waterfront light-rail line and a proposed “civic trust” overseeing data issues.

Since Sidewalk Labs was announced as Waterfront Toronto’s preferred Quayside partner two years ago, Sidewalk chief executive Dan Doctoroff has raved about Toronto’s thriving tech sector, cosmopolitan approach to urban life and rare swath of undeveloped land near downtown.

None of that changed under the new terms, he suggested in an interview with the Star on Thursday.

“At the end of the day, what we are doing is proposing a really dramatic change in the way we approach the development of urban land, that we hope will be seen as an example for the rest of the waterfront,” Doctoroff said.

“I don’t think the tables have turned …. If we’re successful here, there’s every reason to believe that people will want to continue what we’re doing,” beyond the Queens Quay-Parliament St. site.

Mayor John Tory credited the attributes of his booming city with Sidewalk Labs’ decision to not walk away from tough negotiations with the waterfront agency for the city, province and Ottawa.

“I think we underestimated the degree to which this city right now is a magnet for smart people ... ,” including a booming tech sector that already includes Google offices, the mayor told reporters.

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“This city is quite unique in terms of what it has to offer: a way of life, a cost of doing business, a talent pool, a commitment to innovation that puts it in a rank that is almost by itself, and so I think (international companies) very much want to be here.”

Others suspect the urban innovation wing of one of the world’s biggest companies was willing to drop some demands because none change the chance to develop new technologies, in an established city environment, that could eventually, possibly, prove to be very profitable.

“I’m surprised,” the agreement seems so tilted toward Waterfront Toronto’s demands, said Renee Sieber, a McGill University expert on governments’ use of technology and data.

“But the devil’s probably in the details as to who gets influence and control. There’s still so much potential in the (business) verticals of urban planning,” said Sieber. This includes who controls, and profits from sensors and other public-realm tech to work with wifi-enabled in-home devices seamlessly.

Sidewalk Labs is “playing the long game and they have money to burn, but the potential is huge,” Sieber said. “I don’t think this new agreement is taking any of the analytic power out of what Sidewalk can build.”

Alex Ryan, vice-president of MaRS Discovery District’s Solutions Lab, which has worked with Sidewalk Labs and Waterfront Toronto, said focusing on 12-acre Quayside, without the surrounding Port Lands, limits the development potential and innovation scale the company seems to envision.

“The economics of Quayside alone probably aren’t enough for a traditional developer, but Sidewalk Labs is really trying to prove out a new thesis,” Ryan said. “The company Alphabet is Alpha-bet; it’s big bets.

“They’re trying to create a big bet on the future and I think that’s why they’re still interested even though most traditional developers would walk away. And (the terms) don’t categorically say they can’t develop the (Quayside adjacent) Villiers West site, just that they would have to competitively bid for that.”

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Abdullah Snobar, executive director of Ryerson University’s DMZ tech-startup accelerator, said Sidewalk Labs “realizes this is an incredible opportunity for them in a city that’s thriving, and just because the deal’s been adjusted, and probably rightfully so, they shouldn’t walk away from it.

“Torontonians wanted to see a lot more transparency; they didn’t want it to be a corporate takeover of land and data. And the fact that (negotiations) continue to move forward shows it’s a broad partnership.”

—With files from Marco Chown Oved and Francine Kopun

David Rider is the Star's City Hall bureau chief and a reporter covering city hall and municipal politics. Follow him on Twitter: @dmrider

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