Sidewalk Labs pulling out of Quayside waterfront project

Sidewalk Labs is walking away from the Quayside waterfront project in Toronto, citing the “unprecedented economic uncertainty” around the world and in the Toronto real estate market.

Sidewalk CEO Dan Doctoroff says in a letter that the Google affiliated company is no longer pursuing the smart city because it has become too difficult to make the project financially viable without sacrificing core parts of its plan.

“For the last two-and-a-half years, we have been passionate about making Quayside happen,” said Doctoroff. “As unprecedented economic uncertainty has set in around the world and in the Toronto real estate market, it has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan we had developed together with Waterfront Toronto to build a truly inclusive, sustainable community.”

At one time, Sidewalk’s proposal involved spending $1.3 billion and decking out the neighbourhood with heated and illuminated sidewalks, affordable housing, tall timber structures and innovations to support sustainability.

The decision marked an end to the rocky relationship between Sidewalk and Waterfront Toronto as the project was met with criticism around privacy protections and intellectual property concerns from business leaders and security experts alike.

Last October, Sidewalk Labs agreed to reduce the scope of the project to a 4.8-hectare site rather than as much as 77 hectares it was hoping would be built up as part of its vision. The company also agreed to abandon its proposal that a new agency be established to manage data collected from the project after Ontario’s privacy commissioner raised concerns over the lack of independent public oversight.

Since that October decision, Waterfront had been weighing Sidewalk’s proposal and was meant to decide in March whether the project should move forward. COVID-19 pushed that decision back to May and even if Waterfront had given Sidewalk a green light, municipal, provincial and federal approvals would have been needed.

“The Quayside project was important to us, and this decision was a difficult one,” said Doctoroff.

“I believe that the ideas we have developed over the last two-and-a-half years will represent a meaningful contribution to the work of tackling big urban problems, particularly in the areas of affordability and sustainability.”

Waterfront Toronto said in a statement that it was not the outcome it hoped for, but it thanked Sidewalk for its efforts.

“Our collective efforts have given cities around the world new pathways to creating affordable, inclusive and climate positive communities,” it said. “Quayside remains an excellent opportunity to explore innovative solutions for affordable housing, improved mobility, climate change, and several other pressing urban challenges that Toronto — and cities around the world — must address in order to continue to grow and succeed.”

Mayor John Tory says while he regrets the decision by Sidewalk Labs, he notes the “tremendous new opportunity” this opens up to develop Quayside.

“This is a key untapped area of the city’s waterfront. I am extremely confident there are partners eager to undertake this endeavour,” said Tory. “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.”

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

“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.”

Michael Geist, a University of Ottawa law professor who chaired a panel providing Waterfront feedback on digital issues and the Sidewalk proposal, said it was long clear that the project was not a done deal, but he was nonetheless surprised by its abrupt end.

“From where I was sitting on the advisory panel, you’d see claims being made that the fix was in or that this was sure to happen and everything that I was seeing was really contrary to that,” he said.

“There was a real possibility that the project wouldn’t go forward and that was always lingering in the background, but at the same time you always think they came this far, won’t they find a way to bridge. I guess ultimately they didn’t.”

He was hopeful that the proposal had taught the city about what it will take to deal with emerging technologies and to question whether we have sufficient frameworks to address concerns with smart cities.

Files from The Canadian Press were used in this report