Liveblogging Sidewalk Labs’ Master Innovation and Development Plan, Entry 42: The MIDP Volume 3, Partnership Overview: Chapters 3-7; Supplemental Tables

Could it be? Is this the end? Finally?

Again, these chapters contain summary information of what we’ve already seen, supplemented with some specific details that I’ve noted. The best way to use this post is as a guide to specific topics that you may be interested in.

Previous Master Innovation and Development Plan liveblog entries and relevant documents available here

Chapter 3: Transaction Economics (pp. 148-179)

This chapter comprehensively reviews the financial terms associated with the proposed project, including the assumptions underlying the expected revenue, expenses, and returns associated with the overall transaction. (p. 39)

Introduction (pp. 150-155)

  • Summary of foreseen benefits and commitments by Sidewalk Labs.
  • A reminder, not often stated in this report, that this is a $39 billion project.
  • Table of sources and uses of funds: pages 154-155

Part 1: Sources and Uses of Funds (pp. 156-165)

Real estate at Quayside and Villiers West (pp. 157-160)

This Part discusses how Quayside and Villiers West could be valued. I’m not an expert in land valuation, so I will leave this to others, but it seems to be based on whether you concentrate on the returns it could currently generate based on existing zoning, etc. rules; whether you deliver a scenario that fits Waterfront Toronto’s stated objectives; or whether you take into account all the amazing innovation and economic development this project will deliver for the city.

I think the argument here is that Waterfront Toronto should give Sidewalk Labs a discount based on the amazing-innovation scenario for Quayside. And that “To protect Waterfront Toronto if Quayside’s returns are higher than anticipated, Sidewalk Labs proposes to pay Waterfront Toronto an earnout — a share of upside value above an agreed-upon return threshold — from the Quayside proceeds.” (p. 159)

A question for building and municipal experts: is this type of payout usual?

Infrastructure finance (pp. 161-163)

The proposal: leverage future growth to fund current infrastructure investment. Or governments could do public investment.

LRT financing, which we’ve previously discussed, is on page 161.  Municipal infrastructure financing is on page 162, and advanced systems financing on pages 162-163.

Additional Sidewalk Labs investments (p. 164)

  • Timber factory: up to $80 million (alongside partners)
  • Venture capital: $10 million, alongside partners, including one or more local venture capital firms
  • To create the MIDP: $65 million ($US50 million)
  • Urban Innovation Institute: $10 million grant

Third-party real estate catalyzation (p. 165)

Sidewalk Labs’ internal analysis suggests that beyond Quayside and Villiers West, the IDEA District could generate an additional $29 billion in real estate investment. (p. 165)

Part 2: Public Sector Impact (pp. 166-173)

Measured in terms of property taxes, development charges and total proceeds from the sale of public land, measured through 2050. (p. 167)

A reminder: The further out your projections, the more of a fantasy they become. And as far as I can tell from the charts in this part, the biggest advances don’t happen until the mid-2040s, over 20 years from now. Or, in other words, after self-driving cars have conquered the streets.

Discount these numbers as you see fit.

Part 3: Sidewalk Labs’ Returns (pp. 174-179)

I think we’ve covered this sufficiently. Market returns for financing and real estate, investment in a mass-timber factory, fees for services. Oh, and three performance payments:

Sidewalk Labs would receive an initial payment in 2028 and additional payments in 2032 and 2035, if it achieves additional project milestones. To earn these performance payments Sidewalk Labs must meet growth and performance targets related to the acceleration of development and the achievement of Waterfront Toronto’s priority outcomes. (p. 178)

The targets:

  • 2028: Delivery of Google Canada HQ (A hard one to miss, given that Google and Sidewalk Labs are pretty much the same company)
  • 2032 and 2035: increased development activity measured against a TBD baseline.

In advance of signing Implementation Agreements, the parties would negotiate metrics and target thresholds tied to each priority outcome — job creation, sustainability, mobility, affordability, and urban innovation — for each performance payment.

And also, though they don’t mention it (but should), one big return to Sidewalk Labs is the ability to use Toronto as a calling card for other projects and to develop the skills needed for Sidewalk Labs to get work in other cities.

Page 179 provides a table of their proposed potential revenue sources.

Chapter 4: Achieving Waterfront Toronto’s Priority Outcomes (pp. 180-193)

This chapter presents a series of tables indicating how the various elements of the MIDP advance” Waterfront Toronto objectives, as “first identified in its RFP and elaborated on in the PDA. (p. 49)

There’s nothing here we haven’t seen a million times already, so feel free to check out whatever interests you. The only thing I can think to add is that this Chapter doesn’t even bother to report results at the Quayside level – it’s all IDEA District, all the time.

Introduction (pp. 182-183)

Part 1: Job Creation and Economic Development (pp. 184-185)

Confirming once again that the economic anchor of this proposal is the Villiers West-located Google Branch headquarters and the Urban Innovation Institute. (p. 184) These two projects don’t have much to do with Quayside, do they?

Part 2: Sustainability and Climate-Positive Development (pp. 186-187)

Part 3: Housing Affordability (pp. 188-189)

Part 4: New Mobility (pp. 190-191)

Part 5: Urban Innovation (pp. 192-193)

Ah! The Urban Data Trust is about “protecting … the public good.” (p. 192)

Sigh. This makes as much sense now as it did before.

Chapter 5: Implementation (pp. 194-205)

This chapter describes how the MIDP would be implemented, describing the Implementation Agreements, timelines, and approval processes. (p. 49)

Check it out. My takeaway is that they want this to happen quickly, but I’m not sure how fast various levels of government can (or will) move to accommodate Sidewalk Labs/Google’s wishes.

Part 1: Approval Process, Transaction, and Implementation Timeline (pp. 196-201)

In which we are treated to a timeline of the development of the MIDP and future implementation, if accepted. Here, we learn that Waterfront Toronto in December 2018 “introduced a series of goals and objectives as well as a set of priority outcomes for the MIDP,” and “shared a list of process-focused requirements for the implementation of proposals included in the MIDP, with particular focus on an approach to data privacy and governance.” (p. 196)

This would seem to contradict Waterfront Toronto CEO Stephen Diamond’s claim that

Waterfront Toronto did not co-create the MIDP. While Waterfront Toronto and Sidewalk Labs did work together earlier in the process to do research, generate ideas, and consult the public, the roles of the two organizations then separated, allowing Waterfront Toronto to focus on creating a robust framework for review and evaluation of the MIDP. Sidewalk Labs’ responsibility is to prepare and submit the MIDP. (Open Letter from Waterfront Toronto Board Chair, Stephen Diamond regarding Quayside)

On the MIDP evaluation process

We also get some interesting details on what Sidewalk Labs expects the consultation process would look like:

Sidewalk Labs anticipates that Waterfront Toronto will undertake additional public consultation and analysis as part of its formal review and assessment of the draft MIDP. This assessment will likely inform further revisions to the MIDP by Sidewalk Labs. (p. 197)

Depending on when Waterfront Toronto issues its formal MIDP review, the three-week July consultations may be the most consequential input the public gets into this process.

Lending even more credence to the notion that the summer consultations were the most important ones is Sidewalk Labs’ note that it

estimates that the initial approvals for the project [by all three levels of government, I believe]  could be completed by Q1 2020. (p. 197)

That does not leave a lot of time for consultation or consideration, by several levels of government.

 [Note: This post was written mere minutes before Waterfront Toronto announced that it and Sidewalk Labs would be extending the review process. Given that I’m doing these posts on my own time, I decided to let them stand as they were rather than figure out how to revise all these posts in light of this new uncertainty. As I write this particular note, it’s unclear when the public review will happen, or whether it will be focused on this MIDP or a later version, or whether or when Waterfront Toronto will issue a formal reply to this MIDP. Basically, who knows what’s going to happen!]

Part 2: Phase 1 Project Delivery Timeline: Quayside Plan (pp. 202-203)

Page 203 has the Quayside timeline. [Note: The above note holds for all of these timelines.]

Part 3: Phase 2 Project Delivery Timeline: Villiers West Urban Innovation Campus (pp. 204-205)

Page 205 has the Villiers West timeline.

Chapter 6: Stage Gates and Risk Mitigation (pp. 206-215)

This chapter addresses the mechanisms in the transaction designed to ensure that the project advances in phases and limits risks to government and the public, including by requiring Sidewalk Labs to achieve a series of project milestones before advancing to successive stages of the project. (p. 49)

Introduction [listed in Table of Contents as “Stage Gates and Risk Mitigation” (pp. 208-215)

The milestones that would need to be met for everything to continue are listed in a table on page 210.

Additional strategies for managing the risks of innovation (pp. 212-215)

Pages 214 and 215 list the ways Sidewalk Labs would mitigate risks in this project. Worth a look if you’re interested. It doesn’t really have any more details about, say, realistic staffing levels for its proposed agencies.

Chapter 7: Overview of the Participants in IDEA District Development (pp. 216-219)

This chapter summarizes the roles and responsibilities proposed for Sidewalk Labs, Water- front Toronto, the public administrator, the City of Toronto, and other third parties in the success of the MIDP. (p 49)

Participants in the development of the IDEA District [Listed in the Table of Contents as “Overview of the Participants in IDEA District Development”] (pp. 218-219)

All here in two convenient pages. Covered elsewhere; summarized here.

Supplemental Tables (pp. 220-231)

This addendum provides informational tables with further details related to certain aspects of the proposal. (p. 49)

You know what would’ve looked great next to these supplemental tables? The Technical Appendix.

I. Management Entities (pp. 222-223)

We’ve covered all of these ad nauseum, and they don’t provide any answers to our most pressing questions (resources needed to do the job, how to address the inexperience issue). But it’s all in one place, so that’s something.

  • Open Space Alliance: p. 222
  • Urban Data Trust: p. 223
  • Waterfront Housing Trust: p. 223
  • Waterfront Sustainability Association: p. 223
  • Waterfront Transportation Management Association: p. 223

II. Regulatory Adjustments (pp. 224-226)

Again, covered in great detail above, but it’s all here over three pages. That’s a lot of laws to change adjust.

  • Mobility: p. 224
  • Public realm: p. 225
  • Buildings and housing: p. 225
  • Sustainability: p. 226

III. Initial Innovation Design Standards and Guidelines (pp. 227-229)

As they relate to:

  • Mobility: p. 227
  • Public realm: p. 227
  • Buildings and housing: p. 228
  • Sustainability: p. 228
  • Social infrastructure: p. 229

IV. Upfront Permissions (pp. 230-231)

These are the rules that need to change before they start the project. Check them out.

As they relate to:

  • Mobility: p. 230
  • Public realm: p. 231
  • Buildings and housing: p. 231
  • Sustainability: p. 232
  • Social infrastructure: p. 232

And that’s the entire MIDP.

My journey, however, is not yet complete. Up next is the final document on our journey, Waterfront Toronto’s oft-referenced Note to Reader. And then maybe a final summing-up post. Or I might just go curl up somewhere dry and dark and dream of a world without Byzantine smart city plans.

See you tomorrow for the dénouement.



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