In which I consider the line between fulfilling the RFP and overreaching it, reflect on the way Sidewalk Labs’ plan mirrors the long-discredited national-development strategies of the 1960s, dig a bit more into Sidewalk Labs’ desired rule-setting powers, and thank Sidewalk Labs for small mercies along the way.

Also: I have questions.

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

One down, three to go

As we move from the Overview to Volume 1, I’ve started to reflect on my decision to blog the entire Master Innovation and Development Plan. I’ve been something of a Negative Nancy when it comes to Sidewalk Labs’ literary style, which can only be described as “dauntingly unapproachable.”

But let no one say that Sidewalk Labs lacks compassion for the cursed souls doomed to read their masterwork from start to finish. Some 244 pages into Volume One, not even at the halfway point but exhausted and demoralized, Sidewalk Labs gave me exactly what my drained psyche needed.

A chapter (Public Engagement) repeated word-for-word from the Overview. The less charitable might whinge that this precise duplication is unnecessary padding designed to make the report seem both comprehensive (read: it’s so long it must be substantive) and unreadable, but I took it for what it obviously was: a quiet mercy for the weary, frustrated and exasperated reader.

I knew that this respite would be short-lived, but for those six pages (and in the many, many other instances of smaller repetitions) I could rest, secure in the knowledge that while these consultations ranged from problematic to laughable, I’d already covered them.

Thank you, Sidewalk Labs.

Introduction (pp. 16-23)

The RFP recognized the potential constraint of Quayside, at just five hectares, including a requirement to “describe your team’s ability and readiness to take the concepts and solutions deployed on Quayside to scale in future phases of waterfront revitalization.” The Plan Development Agreement describes the MIDP as including both plans for the Quayside parcel and “plans at scale.”

Consistent with these calls, Sidewalk Labs believes in a phased approach for testing, refining, and demonstrating the impact of core innovations, beginning with a smaller setting and working up to larger areas along the eastern waterfront as project objectives are achieved. Certain solutions cannot reach their full impact at the size of a small neighbourhood like Quayside while others do not become financially feasible at this smaller scale.

For these reasons, Sidewalk Labs has proposed a geography for the IDEA District that can meet or exceed the ambitious priority outcomes outlined by Waterfront Toronto, and do so in a way that is both financially achievable and replicable in other parts of Canada and around the world. (p. 18)

One’s thoughts on this section and its relationship with the Request for Proposals will determine whether you think that Sidewalk Labs is delivering on the RFP or overreaching it.

In the RFP, as Sidewalk Labs notes, Waterfront Toronto said it was looking for a partner that had thoughts on how to scale up any Quayside projects to the Eastern Waterfront, with the Plan Development Agreement calling for plans for Quayside and for “plans at scale.” (And recalling Waterfront Toronto’s pre-RFP interactions with Sidewalk Labs, as described by the Auditor General of Ontario.)

And Sidewalk Labs formally presents plans for Quayside and an overall “IDEA District.” However, whether or not you’re comfortable with Sidewalk Labs’ IDEA District plan will depend on whether you believe that Sidewalk Labs’ Quayside plans are functionally separate from their wider designs. This includes not only the “River District,” but most importantly “Villiers West,” where it wants to place Google’s Canadian branch headquarters.

For my part, my impression is that Sidewalk Labs in practice sees the IDEA District as being part of a single plan. This differs from what Waterfront Toronto was seeking in the original RFP, which envisioned the partner following Waterfront Toronto into the rest of the Eastern Waterfront, as parcels of land became available (i.e., to Waterfront Toronto), not a comprehensive development for more than Quayside.

That Sidewalk Labs is not presenting a Quayside development that might be expanded into the Eastern Waterfront, but rather a comprehensive plan for development of a huge swath of said waterfront is further reinforced by March 6, 2019, comments by Sidewalk Labs CEO Daniel L. Doctoroff. In a Canadian Press interview, Doctoroff indicated that Sidewalk Labs will abandon the entire project if light rail is not extended to the Eastern Waterfront: “At the end of the day, if there is no light rail through the project, then the project is not interesting to us, to be perfectly honest.”

In the MIDP Overview, Sidewalk Labs frames the light rail as part of its Quayside-plus plans to develop at “geographic scale”:

Quayside alone is not large enough to support the financing of the proposed LRT extension, a major, new public work; the density across a larger area is needed to cover the projected cost. (p. 225)

Doctoroff’s comments, combined with Sidewalk Labs’ positioning of light rail in terms of its overall project, make it pretty clear that Sidewalk Labs is not proposing a self-contained Quayside development phase that could be scaled up as land becomes available, but rather a comprehensive Eastern Waterfront development project, of which Quayside is only one district, not a project in and of itself as envisioned in the RFP.

(Another question, which I could ask anywhere in this document: If Sidewalk Labs needs to change everything about these neighbourhoods, including ripping up all existing infrastructure, introducing new government authorities, and changing so many rules, how exportable will their technologies and processes be to cities that aren’t willing to change everything about themselves to satisfy Sidewalk Labs?)

Governance responsibilities: River District (not Quayside and Villiers West) (p. 21)

This part repeats much of what we’ve already seen in the Overview, but they’re worth noting again:

Planning and development: Led by Waterfront Toronto and the City of Toronto “working with various development partners.”

Waterfront Toronto would “lead the urban planning, design, infrastructure delivery, and real estate development associated with broader geographies along the eastern waterfront.” (p. 21) This sentence isn’t particularly clear, but it seems to give Waterfront Toronto responsibility for the non-River District lands (where it already has this authority).

“Revitalization lead for the IDEA District (the whole shebang): a new “public entity to serve – or in the case of Waterfront Toronto, continue to serve”

Sidewalk Labs would be responsible for:

• Planning, design and implementation, including co-development (with Waterfront Toronto) of the “Innovative Design Guidelines and Standards” that will act as bylaws for the IDEA district. Given the skills mismatch between Waterfront Toronto and Sidewalk Labs, this power would effectively give Sidewalk Labs key governance powers in this district. Unanswered questions: Bylaws are more than just technical standards. How will they be set respecting fundamental principles of democratic accountability?
• Tech support, deploying their key technologies – which assumes that they will conform to standards (set by Sidewalk Labs), including standardized (proprietary?) mount systems (created by Sidewalk Labs) which third parties would have to adapt.
• “Optional infrastructure financing”

Applying this innovative planning approach across the full proposed IDEA District could spark a global hub for urban innovation along the eastern waterfront. (p. 21)

Question: How much of the anticipated global hub activity would be sparked by Google’s mere presence as opposed to these technologies? If the answer is Google’s presence is the catalyst, then why the need for such comprehensive regulatory reforms as envisioned by the MIDP?

To ensure that digital innovation aligns with the public interest, all digital proposals — including those by Sidewalk Labs — would be subject to approval from an independent entity tasked with over- seeing a transparent process for resposible data use, which would apply in addition to existing Canadian privacy laws. (p. 22)

Sidewalk Labs’ approach would integrate physical spaces, trusted delivery partners, and digital complements to enable a healthy and engaged community where every- one can grow, thrive, and belong. (p. 23)

Doing so would be an exercise in rule-setting, a governance function: another example of how Sidewalk Labs would privatize a city’s basic governance functions.

Underlying assumptions

urban development efforts have been stymied by the inability to deploy technology at geographic or (coordinated) administrative scale, non-existent technology, and market forces working against their deployment. (p. 22)

Each of these assumptions is open to question. Most generally it smacks of long-outdated 1960s, development theory associated with the late Samuel Huntington, where underdeveloped countries needed technocratic (i.e., dictatorial) governments and big industrial projects to spur a one-size-fits-all development. Spoiler: it didn’t’ work.

The assumption that merging a bunch of bureaucracies into a single entity (the “scale of coordination”) will make things better is also not as commonsensical as it seems. See, for example, Slate’s Fred Kaplan’s dissection of the U.S. Department of Homeland Security, which was created to try to solve a similar coordination problem for U.S. National Security. It’s been an organizational disaster.

As engineering professor Shoshanna Saxe remarked recently in the New York Times, smart city solutions take a complex problem – how to improve cities – and assume that there is only one possible solution: technology. It’s a utopian solution that ignores the bureaucracies that would be needed to run these centrally run systems, and the existence of lo-tech solutions.

In short, Sidewalk Labs is making a lot of assumptions that don’t hold up to scrutiny once the viewer is no longer dazzled by shiny (vapourware) tech.

Chapter 1: The Quayside Plan (pp. 24-253)

Introduction (pp. 26-45)

In which we are provided with some historical and geographical context for the Eastern Waterfront and Quayside.

This section also introduces the key aspects of their vision. I’m listing the main points below. This would’ve been a nice place to include hyperlinks to the detailed presentations of each section. But, as I’ve previously noted, this document is less technologically sophisticated than a Lonely Planet travel guide.

I’ll probably get into more detail in each, but what stands out about a lot of these proposals is how banal and non-techy they are. Light-rail extension has been on the books for years. Wide sidewalks, multi-purpose open spaces, traffic-flow don’t seem to require any special insights.

In other cases, they’re simply putting an appy sheen on such low-tech concepts as the landlord, multipurpose spaces, and community-centre schedulers.

Mobility (p. 40)

• A self-financing light rail extension
• A vast network of pedestrian and cycling infrastructure
• New mobility services (ride hail, e-scooters, etc.)
• An integrated mobility subscription (pay for all your transportation in one app)
• A neighbourhood freight “logistics hub”
• Mobility management system: including demand-based pricing for curb and parking spaces (read: Uber-style surge pricing)
• Flexible street spaces called “dynamic” curbs (they’re loading zones! they’re public spaces!)
• Adaptive traffic signals (“prioritize pedestrians who need more time to cross a street or transit vehicles running behind schedule”) – I’m certain this won’t cause any political headaches or frustrations from other pedestrians/drivers
• A set of “people-first” street types (or, rather, prioritizing cars on some streets, bikes on others, and pedestrians elsewhere. Not exactly “people-first”)

Public Realm (p. 41)

• People-first street designs (no curbside parking, wider sidewalks, more trees! Forward e-thinking from Sidewalk Labs)
• Modular pavement (to allow for easier utility access. Maintenance costs?)
• A proposed outdoor-comfort system (includes “Lanterns to block wind between buildings.” I will admit that I did not know that this was a problem.)
• Flexible ground-floor “stoa” spaces: it’s not just retail! It covers “a lively mix of shops, restaurants, cafés, art installations, community gatherings, and maker studios.” Again, having been to actual cities that have exactly these types of mixes, I had no idea that this required a currently non-existent design innovation solution.
• A leasing platform called Seed Space to book these spaces (Sidewalk Labs invents the monopoly real estate agent platform!)
• Three primary open spaces … infused with flexibility (“a dynamic water feature and performance space … , barges on Parliament Slip, and multi-sport fields”)
• Shared programming infrastructure (“would enable the community to program open spaces themselves.” Again, I had no idea that the ability for someone to control a park’s lighting and PA system (rather than a park superintendent) was an issue.
• A real-time map of public realm assets (for maintenance purposes. Not a bad idea, but again, what’s the cost-benefit compared to the current way cities deal with broken streetlights?)

Buildings (p. 42)

• the first neighbourhood built entirely of “mass timber” (issues: regulatory – will it be approved? technological: is this tech ready for mass use? overall: what does it mean for Sidewalk Labs’ plans if this technology doesn’t work out?)
• An Ontario-based mass-timber factory (issue: what happens when other factories come online? Guaranteed production deal? Would such a deal stand up to a World Trade Organization challenge?)
• A digital coordination system (Sidewalk Digital Fabrication) to coordinate the mass timber supply chain (this is awfully inside baseball; why is it here?)
• Quayside: adaptable “Loft” spaces to accommodate residential, commercial, light manufacturing (issue: this is more of a regulatory challenge than a technological one. Why is this currently not allowed?)
• A system of flexible wall panels to allow for easy Loft renovations and adaptations to “market conditions.” This is how office spaces are currently organized.
• Low-voltage digital power connections (over ethernet cables) to reduce fire risks “and facilitate quicker renovations”
• Mist-based sprinklers
• New form of fire protection (Shikkui plaster); “with a fraction of the waste”
• A proposed “outcome-based” building code system (basically changing the standards used to regulate neighbourhoods). Claim: it can be done “without sacrificing public safety or comfort.” But this assumes that everyone will agree on what these standards should be. Prediction: This type of agreement is a pipe dream. There will always be tradeoffs between public safety and comfort because people honestly don’t agree on how these should be prioritized.

Housing (p. 43)

• A mixed-income housing program (20% affordable; 25% of this would be for “‘deep’ affordability”; 20% middle-income units)
• Middle income housing options would include “shared-equity” units (no idea what this is; will return to this)
• Half of all proposed housing: “‘purpose-built’ rentals”
• A set of efficient and ultra-efficient units. Read: really, really, ridiculously small apartments
• This approach of “affordability by design” would enable the creation of 87 more units than in a conventional development. Claim: this will create “$37 million of value that could be applied toward below-market housing.” To look out for: do they claim credit for this supposed savings? How do they account for it in their figures.
• A set of co-living units. How is this different from a rooming house or a house with roommates? Also: does anyone outside their twenties enjoy having roommates?
• 40% of housing: two bedrooms or more.

Sustainability (p. 44)

• Low-energy battery design
• A proposed suite of energy “schedulers”
• A district energy system called a thermal grid (no fossil fuels)
• Advanced power grid (solar energy, battery storage (status of technology?), time-based energy pricing (discounts for lower-income?)
• Innovative bill structure modeled on mobile phone plans. Because everyone loves and understand their mobile phone plans.
• A smart disposal chain (“real-time feedback to improve waste sorting and ‘pay-as-you-throw’ chutes to reduce household and business waste.”) Many cities already have per-bag garbage disposal. Waste sorting’s problems aren’t at the community level; the entire system is broken.
• An underground pneumatic tub system (to help with the waste sorting).
• An active stormwater system.

Social infrastructure (p. 45)

• A Care Collective: space for health care and social services (not sure who would run or regulate it)
• A Civic Assembly: same questions.
• An elementary school, co-located with a childcare centre
• A proposed collaboration with the Toronto Public Library, such as “potential pop-up lending services” (aka an eBookmobile).
• An online resource called Collab could allow community members to decide on public space programming (Sidewalk Labs reinvents the scheduler!)
• The Sidewalk Labs jobs program

Digital Innovation (p.46)

• A ubiquitous connectivity network.
• Standardized physical mounts (proprietary?).
• Open, published standard to make “properly protected urban data accessible to the community in real time, and make it easy for third parties to build new services or competitive alternatives to existing ones.” (On which much more later, but for now, note the assumption privileging competition and churn over stability in public services. Choice might work for pizza companies, it doesn’t necessarily hold that it works for basic public services.)
• A best-in-class approach to security and resiliency (although if it’s online, it can be hacked.)
• Build on existing privacy laws, a proposed independent Urban Data Trust (on which more later) (new bureaucracy)
• The proposed Urban Data Trust would be tasked with establishing clear Responsible Data Use Guidelines (new rules)
• A publicly transparent Responsible Data Use Assessment (new rules)

The need for regulatory changes (covered in Volume 3)

Sidewalk Labs also recognizes that these types of changes require significant review and analysis by public agencies at multiple levels and understands how challenging this process can be. (p. 47)

Sidewalk Labs has begun discussions with Waterfront Toronto and government officials and looks forward to working through these complex challenges with the applicable authorities within each order of government.

Suggested Questions

1. How do these discussions fit with Sidewalk Labs’ and Waterfront Toronto’s timelines, which currently sees approval preceding regulatory changes?
2. Waterfront Toronto and Sidewalk Labs have no power or authority to compel these changes. What happens if some or all of them are denied?
3. How will they affect Sidewalk Labs’ calculation of project benefits, which currently assume the best possible outcomes?
4. Which approvals are essential to this project? Which ones are desirable but not essential?

Tomorrow: Volume 1, Part 1: Development Plan. I can hardly wait.

In which Sidewalk Labs drops the sunny language and tells us how they want to get paid for their $39 billion plan, including for a very heavily qualified promise not to sell your personal information, the many, many new bureaucracies they want to create (and  Torontonians to pay for), and the laws they want changed in order to make their dreams a reality.

Also, suggested questions for Waterfront Toronto! And an ultra-obscure 80s Canadian comedy reference.

Previous Master Innovation and Development Plan liveblog entries available here

Here are the section titles in this part of the Overview:

Section D: The Partnership

• Part 1: A New Type of Partnership to Catalyze Inclusive Growth in the Digital Age (pp. 196-201)
• Part 2: Summary of the Proposed Innovation and Funding Partnership (pp. 202-211)
• Part 3: Summary of the Financial Terms (pp, 212-221)
• Part 4: How the Proposal Reflects the Transaction Principles (p. 222-239)

A Vision of the Waterfront in 2050: A Global Model for Inclusive Growth (p. 240-249)

From the start, there was an unusual — and, for some, almost hard to imagine — alignment between the subsidiary of an American tech giant and an innovative revitalization agency in Toronto. Both shared an aspiration to deliver a project that served multiple bottom lines: measured not just in dollars but in the vibrancy and inclusivity of the community it would create, in the solutions it would pursue to address pressing urban challenges, and in the path forward it would illuminate for Toronto and cities around the world (The Partnership, p. 198)

Despite the collegial talk of shared visions and unlikely alignments, Section D is where Sidewalk Labs drops the sunny, techno-utopian sales job and lays bare the extent of its outsized ambitions, reducing Waterfront Toronto to an afterthought to be eliminated or retrofitted to suit Sidewalk Labs’ needs. Waterfront Toronto had Quayside, but the IDEA District and the River District belong to Sidewalk Labs. Their rules; their game.

This section’s no-nonsense tone and total lack of artwork, save for a map of Sidewalk Labs’ desired domain on page 227, make it clear that these pages are the real overview, so one best pay attention.

Land-related issues

As the run-up to this section made clear, Sidewalk Labs wants to create an IDEA District, which would include Quayside plus a “River District.”

• Of course, this proposal goes far beyond the original RFP, which only envisioned Waterfront Toronto using anything developed in Quayside, and possibly (likely?) working with its Quayside partner, to expand the Quayside development into the rest of the Eastern Waterfront. That Sidewalk Labs is not presenting a true standalone Quayside proposal should be grounds to argue that it has not fulfilled Waterfront Toronto’s stated objectives.
• That said, this is probably why Sidewalk Labs has argued in the MIDP Overview that it is accelerating Waterfront Toronto’s desired timeline (p. 156).

Sidewalk Labs wants Google’s Canadian branch headquarters to be located on Villiers Island (500,000 square feet).

• Given the actual Google’s central role in this bid, can we please stop pretending that Sidewalk Labs is anything but a division of Google, Inc.?

Sidewalk Labs would be the lead developer for Quayside and “Villiers West,” home of the Google Canadian branch headquarters. As lead developer in these areas, it would identify and oversee “sophisticated third-party operators and partners” (p. 206). Specifically, it would assume

responsibility for identifying operators and partners to implement the advanced power grid, thermal grid, and the other systems identified as vital to the success of Quayside and the Villiers West urban innovation campus, and to achieving the priority outcomes identified by Waterfront Toronto (p. 230).

• This would put it, and not Waterfront Toronto, in a position to provide preferential treatment to its preferred partners.

Other companies can develop the rest of the River District.

As we’ve already seen, this land grab is justified on the grounds that Quayside isn’t enough to justify Sidewalk Labs’ time or money:

Quayside cannot support the estimated 6 million square feet of buildable area needed to catalyze the wood construction supply chain. A condo resale fee would likewise require time and unit resales to generate value to redeploy towards the below-market housing program. (p. 224)

i.e., they can’t deliver on the original RFP.

But while Quayside’s four blocks can serve as an effective demonstration project, the solutions offered in the plan only begin to meaningfully affect mobility patterns when linked to a larger street and transit network. Additionally, Quayside alone is not large enough to support the financing of the proposed LRT extension, a major, new public work; the density across a larger area is needed to cover the projected cost (p. 224).

delivering on this promise [of economic development] and creating new jobs requires a critical mass of space, resources, and investment, and a holistic approach to economic development that extends into broader geography (pp. 224-225).

Oh, and I almost forgot! It wants Quayside and Villiers West at a substantial discount, because of all the awesome things it is going to do for Toronto!

Sidewalk Labs expects to purchase (or long-term lease) the land in Quayside and Villiers West from Waterfront Toronto at a price such that the innovation risk and cost would be borne by Sidewalk Labs, but that also fairly accounts for the heightened public policy outcomes required, such as levels of sustainability and affordability unprecedented in any commercial development (p. 208).

No word on whether Sidewalk Labs will refund Toronto if its myriad promises don’t pay off. Remember: for Sidewalk Labs’ plans to work, self-driving cars have to become a reality, factory-produced timber skyscrapers have to become a thing, and the various levels of government have to agree to many, many legal changes.

Governance issues

This is the most important part of the proposal. Sidewalk Labs isn’t just a developer (it’s hardly that at the moment anyway) or a provider of technological solutions (albeit one with no track record). It wants to set the rules and the governance framework for their desired section of the Eastern Waterfront, and not just Quayside and Google HQ.

New government entities

Sidewalk Labs proposes the creation of several new government agencies and very many regulatory changes. According to Dr. Tusikov, who’s reading ahead, we won’t get to the granular details until the last pages of the final volume – please enjoy my surprised face – but this Part foreshadows some incredibly audacious asks.

Such as the designation by “government” (which would have to be all three levels) of a public entity to serve — or in the case of Waterfront Toronto, continue to serve — as revitalization lead for the IDEA District” (p. 203).

It’s always a shock when one realizes that one does not fit with the décor.*

This new entity would:

• hold Sidewalk Labs and others working in the district accountable for performance;
• steer innovation strategy; and
• oversee the governance structures needed to manage new district systems.

It would also have “additional powers.” Rules (read: the laws of the land) would have to be changed “to enable critical infrastructure and innovative strategies” (p. 210).

I’m assuming that we’ll have to wait until the season finale of Volume 3 to see what these are. Still, bringing in the three levels of government and who knows how many agencies makes this proposal that much more difficult to implement. Laws cannot be changed overnight, even assuming that the political will exists.

Sidewalk Labs as co-equal level of government

Sidewalk Labs would work with this new entity to develop the Innovation Design Standards and Guidelines for the entire IDEA District.

Given Waterfront Toronto’s track record and Ontario’s lack of understanding of smart-city issues as laid out in the Auditor General’s report, it’s safe to assume that the development of these rules – which will govern development in the District – will be driven almost exclusively by Sidewalk Labs. Similarly, these agencies’ lack of independent technical capacity would threaten to create an unbalanced partnership.

Sidewalk Labs would also “support and advise the public administrator on achieving innovation objectives, providing advisory This role would involve advisory services, “limited technology deployment” (on which more below), and “optional infrastructure financing” (also see below) (p. 203).

It would also involve “preparing the technical specifications and performance requirements to guide innovative development” (p. 206). In other words, it would be responsible for setting standards that it could then export as a product, and which other companies and cities would have to adopt should it become a dominant standard.

“I ain’t in this for your revolution. … I expect to be well paid. I’m in it for the money.”–  Han Solo, Star Wars

And there, on pages 220 and 221, is what has long been the Holy Grail, or Ogopogo, of the Toronto Smart City Debate: A straightforward explanation of how Sidewalk Labs will make its money from this project, a subject on which the for-profit company has played coy since the very beginning. Of course, being a key player in what we’ve established is an urban development thriller, there are more than a few caveats, but for the moment, let’s enjoy the illusion of solidity.

Sidewalk Labs revenue streams

Real estate development: “In delivering Quayside and Villiers West, Sidewalk Labs expects to receive revenue from the sources traditionally associated with real estate projects: rental revenue, income from the sale of condominiums, and income from the sale of individual buildings.”

Technology deployment: “The limited number of its own technology products that Sidewalk Labs deploys in the project would be provided at cost. For technologies that Sidewalk Labs develops and deploys at scale in Toronto that meet the testbed criteria, Sidewalk Labs proposes to share 10 percent of the profits with the public sector when that product is sold in other cities.”

They provide a bit more detail on intellectual property on page 237:

The MIDP proposes a two-pronged test to distinguish technologies used in the project that would be developed by Sidewalk Labs in the normal course, even were the project not to proceed, from those that arise because of the conditions created by Sidewalk Labs’ public partners. For a product that passes that test, the MIDP proposes that the public sector receive 10 percent of profits over a 10-year period following the sale of the product to a second customer (p. 237, emphasis added).

I’m sure I’ll have more to say later when I reach the relevant section of the relevant volume. For now, the question is, is this an adequate return on Canada’s investment?

Advisory services: “Advisory services provided to Waterfront Toronto by Sidewalk Labs in its role as Innovation and Funding Partner are proposed to be paid back, at cost, to Sidewalk Labs.”

This seems to include a 15-year agreement to provide ongoing technical, advisory, and management services for planning, design, and implementation in the IDEA District, including for advanced systems and certain other horizontal infrastructure (bullet list, p. 210; not in main text).

Implementation services (municipal infrastructure): “Third-party operators would compensate Sidewalk Labs directly for its role as lead developer of advanced systems in Quayside and Villiers West. This includes reimbursement for the costs to prepare the preliminary designs, plans, and specifications issued with the procurement documents for certain systems, as needed.

“In Quayside and Villiers West, third-party operators would also pay Sidewalk Labs an advanced system development fee applied as a percentage of project costs specified upfront in the procurement documents. This fee would vary based on the degree of Sidewalk Labs participation required.”

Implementation services (advanced systems): “For work managed by the public administrator in Quayside and Villiers West, and thereafter, Sidewalk Labs would receive a lower percentage (2 percent) of related soft costs for supporting the public administrator in integrating municipal infrastructure with advanced systems infrastructure.”

Venture fund seed funding: “This investment [$10 million], likely to be undertaken with partners, would have stand-alone economics and the same potential upside and risks as typical venture investing.”

Mass timber factory: “This investment, likely to be undertaken with partners, would have stand-alone economics and the same potential upside and risks as other investments in manufacturing.”

Optional LRT financing: “In the event government elects to utilize Sidewalk Labs’ optional LRT financing, Sidewalk Labs would receive revenue that reflects a market return for the magnitude and risk associated with the agreed-upon financing structure.”

Optional municipal infrastructure financing: “In the event government elects to utilize Sidewalk Labs’ optional municipal infrastructure financing, Sidewalk Labs would receive revenue that reflects a market return for the magnitude and risk associated with the agreed-upon financing structure.”

Optional advanced systems financing: “In the event a SIP financing package was utilized to implement an advanced infrastructure system, SIP would receive revenues related to the operation of that system, to provide SIP an opportunity to achieve a standard market return associated with the financing of a project of such magnitude and risk.”

Performance payment: “In the event of final stage-gate achievement and delivery of success for the overall project, as defined through a series of metrics agreed upon in the Implementation Agreements, Sidewalk Labs expects to receive revenue in the form of a performance payment.”

Nothing comes for free (I): Your privacy or your cash

Sidewalk Labs’ MIDP is an audacious document. Its most audacious aspect is doubtlessly its call for the elimination of the organization, Waterfront Toronto, to which Sidewalk Labs is submitting its report.

A close second, though, is Sidewalk Labs’ justification for a bonus “performance payment.” “This payment would compensate Sidewalk Labs for catalyzing the acceleration of development within the IDEA District, and its achievement of performance targets tied to Waterfront Toronto’s priority outcomes.” Performance payments would be “returns on investment above and beyond revenues tied to specific components of the project (such as real estate development on Quayside and Villiers West)” (p. 228). In other words, Sidewalk Labs wants more money for doing the job for which it was hired, above and beyond the sweet data, products and IP it will generate from what is, at the end of the day, a privatized urban laboratory.

Then again, CEOs are given bonuses for doing less all the time, so whatever.

No, what raises its demand from routine, numbing audacity into the realm of sublime audaciousness is its claim that it deserves these payments because it has structured the business model, in response to feedback from a range of stakeholders, in ways that limit its opportunity for upside elsewhere – by forgoing revenue streams that might be less directly connected to the public interest or sought by more conventional companies” (p. 238).

And what has Sidewalk Labs given up? Read on:

Sidewalk Labs limits the amount of real estate the company would develop to two small pieces of the overall project; seeks no real estate interest in the remainder of the IDEA District; puts urban data under the control of an independent entity; makes a number of constraining unilateral commitments with regard to the commercialization of data; and does not seek special tax subsidies.

It also reflects the unusual nature of certain early investments Sidewalk Labs will have made with no direct opportunity for a return, including its spending to develop this plan (acting as seed funding for the project), to subsidize advance infrastructure systems at the Quayside and Villers West scale in order to prove their viability while maintaining reasonable user rates, and offer advisory services at cost (p. 238).

This last part is a bit rich, since only a page later Sidewalk Labs claims that “This planning work was paid for by Sidewalk Labs with no promises of approval, because as a company, Sidewalk Labs believes there is no better opportunity in the world to show the way forward for the future of cities.” But if it can get paid on the back end for this work, then why not?

It’s really hard to read this as saying anything other than this performance payment is the price Torontonians have to pay for Sidewalk Labs/Google not sucking up everyone’s data and plastering advertising upon every imaginable surface (unless people give their “explicit consent”). Those less generous of spirit might suggest that that Sidewalk Labs should not be compensated for heeding Torontonians’ wishes for their city, especially given the dubious nature of what they’re passing up – selling Torontonians’ data to shady third parties; subjecting IDEA District interlopers to inane personalized ads.

More positively, I’m looking forward to seeing Google’s determination of the cash equivalent of our privacy, i.e., how much it thinks our data is actually worth.

Nothing comes for free (II): Overall costs and Sidewalk Labs’ financing role

Conspicuously absent from this report until now has been the overall cost of the project, which Sidewalk Labs pegs at $39 billion on page 215. Costs and expected sources of the funds can be found on pages 216 and 217.

Of particular interest, and understanding that later volumes are needed to understand fully these numbers:

• Cost to taxpayers, light rail extension: Sidewalk Labs wants taxpayers to be on the hook for at least $430 million financing (plus interest) for the light rail transit. [Note: I think this number might be larger?] Sidewalk Labs is offering $100 million in possible financing (i.e., loan provision to taxpayers).
• Cost to taxpayers, municipal infrastructure: The infrastructure cost to the city would be $2.3 billion (Waterfront Toronto’s pet project is getting pricey).
• Mass timber: Sidewalk Labs (and partners) will invest $80 million in a mass timber factor.
• Sidewalk Labs’ investment: Sidewalk Labs (“and its partners”) commits “over $900 million” (much of this being the provision of financing, I believe) to the project, and to reinvest “over $2 billion of proceeds received as the project progresses”
• Urban Innovation Institute: It will provide an $10 million in seed funding for an Urban Innovation Institute
• Venture capital: $10 million, alongside other institutional funders, “including one or more local venture firms” to invest in local urban-innovation startups.

Waterfront Toronto: You had two jobs…

This Overview is a demonstration of Sidewalk Labs’ audacity, to be celebrated or regarded with amazed horror depending on your opinion of the specifics. It is also, however, a condemnation of Waterfront Toronto’s total lack of vision for its small parcel of land, and its abdication of its fundamental responsibility: to actually govern the land under its control.

The most revolutionary parts of this proposal aren’t technological – these technologies will either work or they won’t. Rather, they’re regulatory and bureaucratic. If Waterfront Toronto really wanted to build a smart city – and there are plenty of reasons why embracing this form of techno-utopianism is not a good idea and won’t age well – the should have studied the issue and brought the expertise in-house.

Instead, they outsourced their core regulatory responsibility to plan for the future. They are in the midst of outsourcing their other core responsibility, to regulate the land under their control, possibly leaving a private corporation in effective control over a significant part of Toronto’s waterfront. A corporation that, like all responsible corporations, will attend to its bottom line first and last and always.

Suggested questions

Obviously, there are a lot of moving parts in this proposal, and I’ll need to read the other volumes to grasp the finer details, but the main questions the MIDP poses seem clear enough at this point:

1. This is an expensive proposal for Toronto taxpayers. Is developing Quayside and the rest of what Sidewalk Labs want to do the best value for money?
2. Does it make sense to focus Toronto’s efforts and taxpayers’ money on this land rather than on, say, building a much-needed subway relief line?
3. The MIDP envisions the creation of several new bureaucracies and the diversion of existing funds to focus on a relatively small patch of Toronto. How much will these bureaucracies cost?
4. Can treating this small section of Toronto differently from everyone else be justified?
5. Do the myriad regulatory and legal changes that Sidewalk Labs is seeking make sense?
6. How will the failure of any of the many, many, many unproven technologies touted by Sidewalk Labs affect its promised outcomes?
7. Does Waterfront Toronto, or its successor organization, have the capacity to effectively oversee Sidewalk Labs?
8. How much standards-setting power should Sidewalk Labs hold?
9. Has Sidewalk Labs – has Google – proven itself to be a trustworthy partner? Has Waterfront Toronto?

 

 

 

*And if anyone recognizes that Frantics reference, I doff my cap to you. You’re welcome.