Sidewalk Labs announces it’s no longer pursuing Toronto waterfront development

Click to play video: 'Sidewalk Labs pulls out of Quayside Toronto development'
Sidewalk Labs pulls out of Quayside Toronto development
WATCH ABOVE: Citing uncertainty in the global economic world, Google affiliate Sidewalk Labs will no longer develop 12 acres of Toronto waterfront. But with an agreement full of controversy, some think a reset was necessary. Matthew Bingley reports – May 7, 2020

Google affiliate Sidewalk Labs announced that it will no longer be pursuing the long-criticized Toronto waterfront development, despite having spent years and millions of dollars on the proposal.

Dan Doctoroff, Sidewalk Labs CEO, confirmed the company is walking away from the smart city project in a press release on Thursday, saying due to world events, it became too difficult to make the project “financially viable” without sacrificing key parts of the project.

“In October 2017, Sidewalk Labs and Waterfront Toronto set out to plan a shared vision for Quayside, a fundamentally more sustainable and affordable community resulting from innovations in technology and urban design,” Doctoroff said.

“…It is with great personal sadness and disappointment that Sidewalk Labs will no longer pursue the Quayside project.”

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The CEO said the decision was made “as unprecedented economic uncertainty has set in around the world and in the Toronto real estate market.”

The world is currently dealing with the COVID-19 pandemic, which has seen economies everywhere come to a standstill.

Click to play video: 'Toronto mayor reacts to cancellation of Sidewalk Labs’ Quayside project, optimistic for city’s economic recovery post-pandemic'
Toronto mayor reacts to cancellation of Sidewalk Labs’ Quayside project, optimistic for city’s economic recovery post-pandemic

Doctoroff said due to these circumstances, it was too difficult for the company to create the 12-acre project to be financially viable “without sacrificing core parts of the plan” they had created with its partner, Waterfront Toronto.

“And so, after a great deal of deliberation, we concluded that it no longer made sense to proceed with the Quayside project.”

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However, Peter Dugan from the Rotman School of Management said it could be possible that the company was just looking for an excuse to pull the plug on the project.

“I suspect they just decided that better let it go and let’s move our attention to things where there might be greater opportunity and less push back,” he told Global News.

Click to play video: 'Coronavirus outbreak: Ford says ‘endless opportunities’ remain for Toronto waterfront despite Sidewalk Labs pull out'
Coronavirus outbreak: Ford says ‘endless opportunities’ remain for Toronto waterfront despite Sidewalk Labs pull out

“It shouldn’t be taken as an indication of how strong Toronto’s tech sector is.”

Dugan went on to say that projects like the waterfront one are the ones that, once conditions lessen in the COVID-19 pandemic, will be reevaluated.

“Even a company that’s doing well, which I imagine Google and Alphabet are.”

In November 2019, the company released a 482-page document with an updated plan for the development in the hope that it would ease concerns over privacy that had circled the project since its proposal, including from Ontario’s privacy commissioner.

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It all began in 2017, after Sidewalk won the right to develop a proposal for the swath of lakefront land from Waterfront that was underdeveloped and underserved by transit and other key city amenities.

Critics instantly complained about a multibillion-dollar, American corporation creeping into the country and getting its hands on prime land that could have been developed by homegrown enterprises. They worried about what would happen with data collected form a myriad of sensors and devices throughout the neighbourhood.

Doctoroff and Sidewalk kept forging on and in June 2018 unveiled a 1,500-page plan showing Sidewalk was willing to spend $1.3 billion on the neighbourhood.

It would adorn it with “raincoats for buildings” that can provide cover or be opened with better weather, and heated and illuminated sidewalks, which it built prototypes of at its Lakeshore Boulevard office that employed 30 people.

Affordable housing, tall timber structures and innovations to support sustainability and environmentalism would be part of the neighbourhood too.

Sidewalk boasted that the project would create 44,000 jobs, generate $4.3 billion in annual tax revenues and add $14.2 billion annually in gross domestic product for Canada.

Instead of the nearly five hectares, most believed Sidewalk was working on a proposal that spanned 77 hectares – 16 times the original size.

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READ MORE: Ontario privacy commissioner recommends updating laws to prepare for smart cities

Diamond and Waterfront weren’t happy. By October, they had convinced Sidewalk and Doctoroff to scale back and refine their approach to five hectares.

Sidewalk also agreed to store and process data collected from the project in Canada, pay fair market value for the land at the time of sale, team up with one or more real estate partners and allow Canadian companies to use Sidewalk’s hardware and software patents.

If the smaller project was successful, Waterfront said Sidewalk could seek to develop more land, but a formal process would need to take place.

Click to play video: 'Sidewalk Labs points to possible solutions to security concerns'
Sidewalk Labs points to possible solutions to security concerns

“This is a major victory for the responsible citizens who fought to protect Canada’s democracy, civil and digital rights, as well as the economic development opportunity,” said Jim Balsillie, co-founder of Research in Motion and a vocal critic of the project.

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“Sidewalk Toronto will go down in history as one of the more disturbing planned experiments in surveillance capitalism and I hope Canadian policy-makers will reconsider how we build Canada in the 21st Century knowledge-based and data-driven economy.”

Waterfront Toronto released a statement Thursday in regard to the announcement.

“While this is not the outcome we had hoped for, Waterfront Toronto offers thanks and appreciation to Sidewalk Labs for its vision, effort, and the many commitments that both the company and its employees have made to the future of Toronto,” the statement read in part.

“Today is not the end of Quayside, but the first day of its future. Waterfront Toronto will continue to seek public and expert input as we make a next generation community at Quayside a reality.”

READ MORE: Sidewalk Labs faces criticism over Indigenous consultations for Toronto’s Quayside

Mayor John Tory echoed that sentiment saying he was disappointed.

“I will be pushing Waterfront Toronto – along with our provincial and federal partners – to make sure the new Quayside that emerges will create new jobs and economic development opportunities, a carbon-neutral neighbourhood with more housing including affordable housing units and better transportation and sustainability features.”

“Our goal remains to ultimately build a neighbourhood focused on innovation in Quayside that will be the envy of cities around the world and a beacon for the future.”

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Tory said he was “heartened” that although Sidewalk and Google may be walking away from the waterfront project, that both will keep offices, employing hundreds, in Toronto.

At an unrelated press conference Thursday afternoon, Ontario Premier Doug Ford said he was informed the day prior about Sidewalk’s decision.

“It’s unfortunate that they decided to pull out, but I have all the confidence in the world in our development people in Ontario,” Ford said. “I look at it as, now, an opportunity for other people to do something spectacular on the Toronto waterfront.”

“There’s endless opportunities.”

–With files from The Canadian Press


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