Today is the first meeting of Waterfront Toronto’s Digital Strategy Advisory Panel. It’s an open meeting, save for one closed portion recently added to the agenda about part of the deal currently being negotiated, the plan development agreement (PDA). Before this meeting, there is a two hour Quayside committee meeting that is almost entirely closed. I’ll be attending the open meeting today and will share an update afterwards. A few thoughts heading into this meeting.
The Closed Contract and the Project Timeline.
David Rider at the Star recently reported on the status of negotiations between Sidewalk Labs and Waterfront Toronto as “not a done deal”. From the article, Helen Burstyn, Chair of Waterfront Toronto’s board:
“We’re making good progress,” and hope to have a deal signed by midsummer to pave the way to further negotiations on a more involved master innovation development plan expected to be completed by the end of 2018 and taken to all stakeholders for final agreement, she said. But if by midsummer “we don’t arrive at a planned development agreement with Sidewalk Labs, that leaves us open to look at other options and partners,” Burstyn said, adding “Sidewalk is our preferred partner, not our assured partner.”
Good to hear Waterfront Toronto remind everyone that this deal is not the sole path to the development of Quayside. The problem with Burstyn’s statement is that the project team appears to be doubling down on the end of 2018 timeline for the final deliverable. It’s not possible to have a defensible consultation during this window. Seeing this date promised again continues to make me think that the new narrative will be “we’ll consult more if the plan is approved, this isn’t the end.” This is not the way forward. There cannot be a reward for six months of running the clock and sharing nothing concrete about the plan and the business model, which require intensive scrutiny and levels of public consultation that include public education. The project team got the timing wrong. No problem. Extend the process. The first contract, signed by both parties, included a commitment to “robust consultation” in line with the “high standard of all of Waterfront Toronto’s work to date.”
Back to the Beginning
The summary of the first contract signed between Waterfront Toronto and Sidewalk Labs broke the deal into four stages:
Stage 0: This stage began with Waterfront Toronto’s selection through a competitive RFP process of Sidewalk Labs as its selected Proponent, and included contract negotiations and the development of the Framework Agreement. This stage ended with the execution of the Framework Agreement on October 16, 2017.
Stage 1: Started upon signing the Framework Agreement and will end with the satisfaction of the following three conditions: (1) the signing of a Plan Development Agreement to provide a work plan for creating the Master Innovation and Development Plan (MIDP, the end deliverable), (2) agreement on a Development Plan Budget for anticipated expenses during stages 1–3, and (3) agreement on a methodology for the valuation of any future transfers of land.
Note: WE ARE HERE.
Stage 2: Starts at the end of Stage 1 and ends upon the achievement of the initial plan milestones as set out above. These are targeted to be completed by the Spring, 2018.
Note: Past due.
Stage 3: Starts at the end of Stage 2 and ends upon finalization and approval or rejection of the MIDP which will require Board approval of both Sidewalk Labs and Waterfront Toronto. If the MIDP is approved, an Implementation Agreement and Collaboration Agreement, and perhaps other agreements, will then be executed by the parties to govern the longer-term relationship and implementation of the MIDP. This stage is targeted to be completed by Fall, 2018.
Note: Now targeted for end of year.
The Real Estate Deal
You’ll remember early on when Dan Doctoroff, CEO of Sidewalk Labs, said that this is “primarily a real estate play.” It lines up with what Sidewalk has consistently said, that its business model would include a mix of real estate, infrastructure, technology, and venture capital.
Anthony Townsend, author of Smart Cities, has studied a decade’s worth of projects that came before Sidewalk Toronto, and says the model largely follows those precedents. These types of projects can be considered through three layers of business models — real estate, managed services, and speculative tech — each with different assets, capital requirements, and risk profiles.
After recent details on the district energy plan emerged in John Lorinc’s piece at Spacing, the concept of infrastructure became more tangible. And as the closed negotiations on the Plan Development Agreement continue, it’s helpful to keep thinking about the real estate play here — where it’s typical and where it’s not.
Real estate and land is its own track of business and I’m not going to dig into that here but that by itself is one big and real thing. Next, think for a moment about commercial real estate — office buildings — and how tech, data, and/or infrastructure products could be part of their services. Townsend counts everything from Automated Vehicles such as the self-driving shuttles talked about frequently (think Union Station to your office) to green energy as part of the possible managed services layer. Just as condos come with a bundle of services, so do office buildings. This is not new, but perhaps the products on offer will be. Finally, speculative tech ideas, well — the proposal is full of those.
The project is complex. It needs a diagram and I am going to draw one (spoiler: it will be bad art). There are so many possibilities for the business models — it’s not either/or — it’s real estate and and and and and and and and and. We don’t know where Sidewalk Labs and Waterfront Toronto, as partners, are at right now with negotiating the many governance complexities inherent to all three layers of this deal. We should. Back to the key point here — the process needs to be extended, maybe even beyond Spring 2019.
Data is a key element of many of the possible business models within the managed services and speculative tech layers — ownership and control of that data are the starting gates for that discussion, not privacy. And the true starting point for the public conversation we should be having is not even ownership and control, but what data do we want to allow *anyone* to collect in the first place. Based on the agenda for the meeting, today’s discussion will include a chance for the panel members to weigh in on the draft framework for data use that was presented on May 1st. More soon.