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Waterfront Toronto chair expects Sidewalk Labs final plan to be a few months late

Stephen Diamond, chair of Waterfront Toronto’s board of directors Waterfront Toronto
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The chair of Waterfront Toronto is expecting Sidewalk Labs’ final plan for its contentious smart city development to be a few months late.

Stephen Diamond said he was “somewhat disappointed” that he hadn’t yet received material from Sidewalk Labs.

“We thought we might even get some material before, but now, I believe that—in terms of their view—they have to dot the i’s and cross the t’s,” he said.

In an hour-long interview with The Logic—Diamond’s first since his inaugural meeting as Waterfront Toronto board’s new chair—he discussed some of the concerns that he raised with Sidewalk Labs, what he believes is needed to make the project work once the plan has been delivered and why he wants his organization to reassert itself.

“It is important for Waterfront Toronto to take much more of a lead in terms of where we’re headed with this proposal,” said Diamond.

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Talking Point

While the final plan was expected to be received by Waterfront Toronto in mid-spring, Diamond told The Logic that he hopes to update the public on when they can expect to see the plans sometime next month.

Sidewalk Labs was originally meant to deliver the Master Innovation and Development Plan (MIDP) to Waterfront Toronto after a year-long public consultation process. In July 2018, that deadline was pushed to mid-spring 2019. Diamond now hopes to have an updated timeline by early May and the MIDP itself in hand by early June.

In a meeting with Sidewalk Labs CEO Dan Doctoroff a few weeks ago, Diamond said he raised concerns about Sidewalk Labs disclosing certain details of its plans to the media before bringing them to Waterfront Toronto.

“I think to make comments about if there’s transit or no transit here, we’re walking or not walking or whatever parts of the plan—it’s not only not fair to Waterfront, it’s not fair to the public,” said Diamond. “That was a disappointment and, in my view, that put us in a very difficult position.”

Diamond said he relayed that concern to the board at its first meeting since his appointment, and in a letter to Sidewalk Labs. “Moving forward … we do expect them to comply with the spirit of the agreement,” he said.

In February, a presentation leaked to the Toronto Star and the National Observer showed that Sidewalk Labs was looking into ways to finance light rail transit through the Quayside land.

“Looking for a transit partner, in my humble opinion, wasn’t the intent about where we were headed, in terms of looking at the proposal for these lands,” said Diamond

In early March, Doctoroff told The Canadian Press that Sidewalk Labs may lose interest in the Quayside project if waterfront transit isn’t built.

“Infrastructure, to me, is important, but there’s an issue as to whether or not we’re looking for an infrastructure partner or an innovation partner,” said Diamond.

Diamond plans to meet with Doctoroff again in the coming weeks to get what Diamond called a “better understanding” of the timing of the MIDP and where the plans are headed.

Meanwhile, Doctoroff will be on a speaking tour over the next week arguing his case for the Sidewalk Toronto project. He has two speaking events in Toronto on Thursday and a speech next Tuesday at the Canadian Club of Toronto.

Diamond said he hopes Doctoroff won’t use the time to continue discussing elements of the plan.

“[The public] can’t evaluate those comments in a vacuum without knowing the details of the plan, and it puts everybody in an awkward position.” said Diamond. “I’m hoping that he will refrain, and we’ll have to see whether they do or they do not, in terms of their conduct moving forward.”

Toronto's eastern waterfront.
Toronto's eastern waterfront

The project has attracted the attention of Ottawa, with Sidewalk Labs and Waterfront Toronto officials appearing at a parliamentary ethics committee last month to defend the RFP process, which Ontario’s auditor general said took place over six weeks, which NDP MP Charlie Angus described as being an “unusually short timeline.”

Meg Davis, Waterfront Toronto’s chief development officer, told the committee last February that the entire RFP process took seven months.

Diamond called the issue a “red herring.”

“Whatever happened there is no longer relevant, because there’s a completely new operating agreement,” he said.

The first agreement, signed by the board of Waterfront Toronto ahead of the October 2017 announcement, was superseded by the current agreement,which the board signed in July 2018.

Diamond was first presented with the Sidewalk Labs proposal in September 2017 while serving on the agency’s investment and real estate committee (IREC).

“When it went to the investment committee, I was generally satisfied with where the agreement was headed,” said Diamond.

“My own personal perspective was that it was to relate as a first test bed on 12 to 15 acres of land, and to review and see where it was going.”

In his testimony at the House of Commons ethics committee earlier this month, Doctoroff said that from Sidewalk Labs’ perspective, the original RFP was always about scaling the project beyond the Quayside’s 12 acres across the broader eastern waterfront.

“The original RFP that Waterfront Toronto issued mentioned not just Quayside, but the broader eastern waterfront at least 20 times. It was right there from the beginning,” Doctoroff told Conservative MP Peter Kent.

Diamond said he never communicated with John Brodhead, Sidewalk Labs’ director of policy and strategy, while serving as a board member and on IREC during the selection process.

Brodhead, a former senior federal staffer, was questioned by the House ethics committee in early April about whether he had any conversations with Sidewalk Labs during the Request for Proposals (RFP) process ahead of joining the company. Brodhead denied any such conversations took place.

The waterfront project bears similarities to the Hudson Yards Project in New York City.

The Sidewalk Labs CEO spearheaded the launch of the US$25-billion complex while serving as deputy mayor of New York City in 2002. The Manhattan real estate project was developed by Oxford Properties, the real estate arm of OMERS. OMERS was also part of a consortium that, along with Manulife Financial and Mattamy Homes, unsuccessfully bid on Waterfront Toronto’s RFP.

Doctoroff told Bloomberg News last month that Sidewalk Labs is exploring financing options that could replicate what was used to fund the Hudson Yards project, including the sale of bonds backed by tax revenue and development charges from the commercial site along the shores of Lake Ontario.

Diamond said he has never visited the Hudson Yards complex and that no one from Oxford Properties has contacted him about the Quayside development.

Diamond also said he has not been approached by Mattamy Homes, which, as The Logic reported in January, was quietly shopping around a development proposal for the Quayside neighbourhood. Diamond said he had also not held any discussions with the Canada Infrastructure Bank (CIB); The Globe and Mail reported in March that the CIB had discussed the financing of capital projects with Sidewalk Labs.

Asked about the #BlockSidewalk citizens group that is calling for a reset to the RFP process, Diamond said, “I think I would say [to #BlockSidewalk] that we do not have an agreement to proceed with anything today with Sidewalk Labs; that there will be a clearly stated criteria to ensure that if anything goes forward, then it will be in the public interest.”

Diamond also said that while there are strong opinions both for and against the project, he hopes that once more details of Sidewalk Labs proposal are made public, people will be able to reach a consensus on whether to proceed.

“My hope is that, at the end of the day here, that once appropriate information is made available and appropriate consultation, I believe that the right answers will come to people, and—maybe not everybody, but hopefully the majority of people will come to the same conclusion at the end of the day.”

Diamond is the president and CEO of DiamondCorp and a veteran real estate developer. His father, Ephraim Diamond, was a founding partner of Cadillac Fairview. Diamond said reaching consensus is always important to him when working on controversial projects.

“I’ve worked really hard with all of my projects to work on a consensus basis, even when they’ve been very controversial. I’m very proud of our record, we’ve built some very quality projects, and we’ve managed to work with communities who, at the beginning, may have had concerns, but most of the time, by the end of the project, we have reached a consensus.”

The Sidewalk Labs partnership has put a huge amount of pressure on Waterfront Toronto’s staff, said Diamond, and has distracted the public from the agency’s other work.

“One of my frustrations as chair is this: it seems that the issue that’s grabbed the public attention is Sidewalk,” said Diamond. He said that Waterfront Toronto’s Port Lands flood protection efforts—the $1.25-billion effort he called the largest civil works project in North America today—doesn’t receive the attention it deserves.

“It’s a huge project, and it’s going to reshape everything that’s going down on the waterfront.”

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Diamond also spoke about why he accepted the role as the board’s chair. He first joined the agency’s board of directors in April 2016, but came close to resigning in December 2018 before Toronto Mayor John Tory talked him out of it.

“When the mayor approached me and said, ‘Look, I know you’re on your way out, but you seem to be someone who could take over and run the organization,’ it put that possibility into a different light for me, because there is a difference between being one of 12 board members, or having a certain amount of influence,” said Diamond.

It was important to Diamond that, before he would commit to the role, he had the support of all three levels of government. “I understand it is actually the first time in the history of the corporation that this has been done,” he said, referring to all three levels of government agreeing to appoint an independent chair separate from their allotted directors.

In preparation for his new role, he spoke to outgoing chair Helen Burstyn and former chair Mark Wilson, who served from 2007 to 2016, and some other staff. However, he said he never met with former Waterfront Toronto CEO Will Fleissig, who was pressured out by the board following concerns about his communications with the board and his decision to allow Sidewalk Labs personnel to temporarily work out of Waterfront Toronto’s offices. He also said he had discussions with incoming board member and city councillor Joe Cressy, Tory, Ontario Premier Doug Ford, as well as federal representatives.

In February, the province appointed four new members to Waterfront Toronto’s board: Andrew MacLeod, CEO of Postmedia; Patrick Sheils, Laurentian Bank Securities co-president and co-CEO; Kevin Sullivan, deputy chairman of GMP Capital; and Christopher Voutsinas, former head of international real estate investments at SEDCO Capital. Diamond said he was encouraged by what the agency’s new board members bring to the table.

“The new provincial board members are a group of very bright and hardworking people,” said Diamond.

The appointments come three months after the province dismissed all of its representatives on the board in the wake of a damning provincial auditor general report and a change in government.

“Between the provincial, the city and the federal members right now, there’s a lot of common ground between us all in terms of where we want to head.” said Diamond, adding that the group understands the importance of engaging with the public.  

“There seems to be very good consensus that’s emerging.”

Diamond said Waterfront Toronto’s interests as a corporation should come before the interests—which are sometimes competing—of its government partners.

“It shouldn’t necessarily be, ‘Oh, I’m trying to put forward a provincial position, a city position or a federal position.’ That, to me, is the way the organization should be run,” he said.

When asked if board members risk being personally sued if Waterfront Toronto were to walk away from the partnership prematurely, Diamond said he had wondered about that himself while acting as a board member and had even requested a legal analysis of the agency’s insurance policies.

“There are some personal liabilities as a board member,” he said. “If the board was extremely negligent on a matter … you could be sued.

“But there always are those risks.”

Whether the smart city project goes ahead or not, Diamond believes the Quayside project has sparked healthy conversation around funding transit in creative ways and how citizens and the country deal with data privacy and commercialization that could inform how other municipalities approach these issues.

“This particular proposal has brought both of those into [the] light of public discussion,” said Diamond. “I think that that’s been a benefit to the city—maybe the province, and maybe even in the country.”

Diamond said he can’t discuss what other plans the agency is considering if its partnership with Sidewalk Labs were to end. But he said, “We certainly have ideas in the event that it doesn’t go forward.”

With files from David Skok