The Big Read

The man who stood up to Sidewalk

Stephen Diamond. Illustration by John Hemminger
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By fall 2018, Stephen Diamond was ready to quit. He had been on the Waterfront Toronto board since April 2016 but, in the last year, the job had gotten tense. The organization had initiated a partnership with Sidewalk Labs, the Google sister company with smart-city ambitions for Toronto’s neglected Quayside neighbourhood. The arrangement, which had sailed through the bidding process in 2017, was now attracting fierce scrutiny from policymakers, residents and civic activists concerned with Google’s potential influence on the city. At 67 years old and nearing the later stages of his career, Diamond was ready to spend fewer hours politicking and more time cycling with his wife Karen and golfing with his brother Carey. 

Toronto Mayor John Tory had a different idea. “‘You cannot step off this board,’” says Tory, recalling his phone call with Diamond after learning of his plan to leave. “‘Not only do I see you staying on the board, I see you becoming chair.’”

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Talking Point

Stephen Diamond has had a prolific career as a Toronto city builder, earning near-universal respect from his peers and opponents alike. But Diamond has put that reputation on the line to chair Waterfront Toronto during the most turbulent period of the organization’s 18-year history, as it wrestles with the proposal from Google sister company Sidewalk Labs to develop a portion of the city’s waterfront.

In his more than 40-year career working in development—first as a lawyer, then a developer—Diamond has honed a knack for finding compromise in contentious scenarios.

“He wasn’t a fighter. He didn’t go and duke it out at the [Ontario Municipal Board],” says Ken Tanenbaum, Diamond’s partner at Diamond Kilmer Developments, lauding his colleague’s skill at avoiding the tribunal that hears planning disputes by managing to find common ground between cities and residents. “He was about finding compromise where neighbours and communities all felt like they were being heard.” 

But in assuming leadership of Waterfront Toronto during the most turbulent period of the organization’s 18-year history, Diamond has put that reputation on the line. Critics of the smart-city project have excoriated Waterfront for giving Sidewalk too much control over the process, while powerful leaders in business and government have pressed the organization to strike a deal with the tech company. For the latter group, Alphabet’s interest in Toronto represents a rare opportunity: a chance not just to revitalize a neglected neighbourhood, but for the city to stake its claim as a global centre of urban innovation. 

Multiple sources on either side of the debate tell The Logic that Diamond’s work as chair has given the project a degree of credibility that wasn’t there before. But however well-intentioned and respected he may be, its critics say his good reputation can’t override the bad one Waterfront earned in the early days of the deal. 

“The underlying problem that Stephen Diamond cannot escape is that Waterfront Toronto worked closely with Sidewalk Labs on its proposal,” says Natasha Tusikov, a regulation and global governance professor at York University. “It’s very difficult to then say, ‘We have separated ourselves from the tech vendor; we are now the independent evaluator of that tech vendor.’”

Diamond declined to be interviewed for this article, citing the sensitivity of ongoing negotiations between Waterfront and Sidewalk over the smart-city plan. Those negotiations hinge largely on a disagreement over the amount of land Sidewalk hopes to develop. If the parties can’t reach an agreement on land size and other sticking points by October 31, either side can walk away from the deal. As the deadline looms, a divided city is ratcheting up the pressure on Diamond: either approve Waterfront’s partnership with the tech giant, or walk away from what might be one of the most unique opportunities in the city’s history.

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Quayside, the former industrial neighbourhood along Toronto’s eastern waterfront and site of Sidewalk Labs’ proposed smart-city development. Sidewalk Labs

Quayside is a stark swathe of land that cuts across the southern border of downtown Toronto, isolating it from Lake Ontario. The former industrial area accounts for about 12 of the 2,000 acres of brownfield whose development the municipal, provincial and federal governments have tasked Waterfront Toronto with overseeing. 

Waterfront first crossed paths with Alphabet’s smart-city division in 2016. Dan Doctoroff, New York’s former deputy mayor for economic development, and a team at Google headed by then-CEO Larry Page launched Sidewalk in 2015 to “accelerate urban innovation and serve as a beacon for cities around the world.” Waterfront quickly became intrigued: “My new CEO [Will Fleissig] and I are very interested in what you are doing at Google and would like to talk to you about a potential pilot in Toronto,” Waterfront’s chief planner Christopher Glaisek told Doctoroff in a June 2016 email.

Less than a year later, Waterfront issued a Request for Proposals for an “innovation and funding partner” to develop Quayside. Sidewalk responded with a 200-page winning proposal detailing its vision for a high-tech, low-carbon city where people would travel by self-driving cars and live and work in modular buildings. A “digital layer” would run unseen through the city, collecting behavioural data that feeds back into the system to optimize sensors that would heat the sidewalks and time the traffic lights. 

Political leaders were exuberant. Prime Minister Justin Trudeau thanked Waterfront for “welcoming Sidewalk Labs to Toronto,” something he and Eric Schmidt, Google’s former CEO, had discussed “for a few years now,” he told press at the deal’s October 2017 announcement. 

But in the following months, questions grew about the partnership and what critics called a lack of public consultation and transparency around how Sidewalk landed the deal in the first place. 

In July 2018, Fleissig resigned as Waterfront’s CEO—pushed out amid internal pressure, according to sources who spoke to The Logic at the time. His was the first in a string of high-profile exits surrounding the project, ahead of a scathing report from Bonnie Lysyk, Ontario’s auditor general, of how Waterfront had handled the process to that point. Lysyk said the agency had failed to “adequately consult” with any level of government about the project; that Sidewalk’s plan lacked detail on its intentions to collect and use data, including who would own it and whether it could be sold; and that Waterfront offered Sidewalk more information about the project than its competitors ahead of the bidding deadline.

Opposition to the project coalesced around the #BlockSidewalk campaign, launched by a group of residents, entrepreneurs and civic activists with a mission to compel Waterfront to reject doing business with Sidewalk “and re-set the planning for Toronto’s eastern waterfront, this time with planning, procurement and consultation remaining firmly in public hands.” 

For someone like Diamond, who’s made a career of being a diplomat instead of a fighter, the invitation to wade deeper into the fray by becoming Waterfront’s chair may have been unappealing. “He’s generally someone who is low-key and wants to solve problems, but not in a public way,” says Cynthia MacDougall, Diamond’s former colleague at law firm McCarthy Tétrault. “I always worry about good people taking public positions because they sometimes are not treated fairly by the media. But for the public interest, I think it’s fabulous.”

But as Tanenbaum puts it, the Quayside project represents a once-in-a-career city-building opportunity for which, regardless of how uncomfortable, Diamond is willing to contribute his time and good name. “I wasn’t surprised he took the job,” he says. “It’s meaty and meaningful. Think about the size of that canvas and what it means for the future of Toronto, and you know why it’s attractive to somebody who’s spent their whole life thinking about urban planning and with a love for the city.” 

City-building runs deep in Diamond’s history. His father, the late Ephraim Diamond, co-founded and then chaired Cadillac Fairview, helping grow the development giant’s Canadian portfolio to the approximately $31 billion it’s worth today. 

Ephraim’s success meant Stephen and his three brothers grew up with means. He spent summers at Camp White Pine in Haliburton, Ont., and socialized with wealthy Torontonians. But his parents, who struggled economically through the Great Depression, taught their sons to value fairness and honesty above all else. “We were always taught that if you were honest in your dealings and you treated people well, it would come back to benefit you,” says Carey Diamond, Stephen’s younger brother. “Your legacy is really your reputation as a person.” 

Diamond’s own development career started in commercial real estate where, as a lawyer, he earned a reputation as a rezoning whiz, deftly negotiating well over a hundred exemptions to municipal zoning bylaws and master development plans.

His legal experience exposed him to controversial city-building that required navigating the often conflicting interests of governments, developers and community members. In 2000, Minto Development, an Ottawa-based firm, proposed building two condo behemoths in midtown Toronto, and hired Diamond as its lawyer. At 54 and 47 storeys high, the Minto towers would dwarf the surrounding buildings at Yonge Street and Eglinton Avenue and require substantial zoning amendments. The proposed development attracted fierce pushback from local neighbourhood associations and divided city councillors for and against it. “That was considered a big, controversial development at the time,” says MacDougall, who worked with Diamond on the Minto file. 

Minto hired Peter Ellis, an architect from the prestigious Chicago-based firm Skidmore, Owings and Merrill, who promised the towers would bring “architectural drama” to Toronto and would exceed “the highest standards for residential development throughout the world.” Community members, meanwhile, were convinced the towers were too big. At a 750-person public meeting, some of the crowd “booed and heckled” Ellis as he described the towers that critics said would “dominate their neighbourhoods, block the sun and flood the area with people and cars,” according to a June 2001 Globe and Mail article. A conglomerate of 13 residents’ groups formed the Federation of North Toronto Residents’ Associations to protest the development. Toronto planning staff said it “represents an overly aggressive and inappropriate approach to intensification.” 

After about a year of back and forth at council, Diamond appealed to the OMB. The board ultimately sided with Minto after the company agreed to shave down both towers and contribute $1.2 million to affordable housing and transit developments. 

The buildings set a new standard for development in the neighbourhood, both legally and culturally. Today, about eight kilometres due north of Quayside, the Minto towers melt into the midtown Toronto skyline.

The Minto Midtown complex in Toronto. SimonP/Wikimedia Commons

One of the first things Diamond did when he became Waterfront Toronto chair in February was reprimand Doctoroff. Details of the company’s plans for Quayside had been trickling out to the media before Waterfront learned about them, and Diamond was getting frustrated. He wrote to Doctoroff instructing him to stop talking publicly about plans yet to be submitted to Waterfront, and addressed the issue at his first board meeting, as well. It was Diamond asserting Waterfront’s authority in a process that, until then, Sidewalk was perceived to be steering. 

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

Sidewalk skeptics applauded Diamond for standing up to the company, calling his appointment as chair a turning point in the relationship between the two organizations. “Steve brought much needed leadership, competence, diligence and seriousness to an unruly situation,” says Jim Balsillie, former co-CEO of Research In Motion (now BlackBerry) and one of Sidewalk’s most vocal critics.I am not sure Waterfront Toronto would have survived Sidewalk’s bullying without Steve at the helm.” 

But as Waterfront enters the final weeks of negotiating with the Google sister company, Diamond’s authority faces its biggest test yet. 

On June 24, Sidewalk Labs delivered its long-awaited Master Innovation and Development Plan (MIDP), detailing what it claimed would be “the most innovative district in the world.” The project would include an IDEA District, featuring 20 acres of city-owned land called Villiers West, and an “urban innovation campus” that would house Google’s Canadian headquarters. The plan would require new regulatory authorities, including one for transit, separate from the city’s own regulator. All told, Sidewalk would develop 190 acres of downtown Toronto real estate over two decades—well beyond the 12 acres of agreed-upon Quayside land.

Diamond had concerns. He published an open letter instructing Sidewalk to revise the MIDP and fall in line with the development agreement both parties signed in July 2018. Sidewalk’s plan to build beyond Quayside was “premature” and outside Waterfront’s mandate, Diamond wrote. The chairman also noted that Sidewalk’s approximately 1,500-page proposal still lacked detail on whether its plans to collect, use and manage data were lawful and compliant with Waterfront’s principles.

Sidewalk declined to answer questions for the article, including whether it will address the specific issues Diamond raised. Waterfront Toronto also declined to comment, and board members who spoke to The Logic wouldn’t say whether the organization will walk away from the plan if Sidewalk fails to address Diamond’s sticking points. “We have established some red lines as a board—the minimum thresholds that need to be met,” says Mazyar Mortazavi, CEO of Toronto development firm Tas and who has been on Waterfront’s board since January 2017. Mortazavi would not say where those lines are drawn, however, because doing so would “have an adverse impact on where we’re trying to go in the negotiations.” 

Critics argue that pro-Sidewalk pressure on the board has already compromised the talks. At the height of negotiations in early October, Tory told The Financial Times he would “very much like there to be a deal,” and that he was open to Sidewalk developing beyond Quayside. His remarks echoed an open letter from 30 civic leaders released the week after Diamond went public with his concerns. Dominic Barton, the former managing director of McKinsey & Company, and Richard Florida, the University of Toronto professor and author of The Rise of the Creative Class, were among those asking residents and public officials to “evaluate [Sidewalk’s] proposal for the many positives it can bring.” Government, the leaders suggested, will have “more than enough room” to “respond, negotiate, or adjust plans with the company.”  

“That was a misstep on behalf of a whole bunch of civic institutions that should have been lining up with Stephen Diamond and Waterfront Toronto in terms of negotiating power,” says Bianca Wylie, a member of #BlockSidewalk and co-founder of Tech Reset Canada, which advocates for policy and funding for technology that benefits the public. “If I were [Diamond] in that position, I’d be thinking, ‘You’re throwing my negotiating power under the bus.’” 

Wylie says Diamond’s challenges as chair, however, go beyond stakeholders’ competing interests in the Quayside project. She says the organization is fundamentally ill-equipped to assess the kind of project Sidewalk has proposed. “This is a real estate development deal and a whole bunch of other stuff that is not Waterfront Toronto’s mandate,” she says, suggesting democratically elected officials might be better suited for the job than the real estate- and developer-heavy board appointees. “It’s not so much Diamond as an individual; it’s that Waterfront Toronto should have never been asking for something with this sort of omnibus scope.”

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A rendering of Sidewalk Labs’ proposed development along Toronto’s eastern waterfront. Sidewalk Labs

Toronto’s population grew faster in 2018 than that of any other major city in North America, according to an analysis from Ryerson University’s Centre for Urban Research and Land Development. It added 90,002 units to its housing stock between 2014 and 2018, and has more than 11 million square metres in non-residential gross floor area proposed for development. This summer, more active construction cranes dotted its skyline than those of New York, Los Angeles, Boston and Chicago combined. 

The city has long sought global stature, a goal that seems closer than ever. Hosting Sidewalk’s smart-city experiment would offer Toronto the imprimatur of one of the most powerful companies in the world. But the opportunity has also catalyzed a long-running conversation about what kind of city Toronto wants to be, and what some fear it might give up in pursuit of its ambitions.

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Carey Diamond says his brother was prepared for the “no-win situation” he signed up for as chair. Whatever Waterfront’s decision, he says, “There’s not going to be this exclamation of resounding approval. It’s complex and new and different, and change is always frightening to some groups.” 

Tanenbaum, meanwhile, calls Sidewalk’s interest in the site “a moment.” He worries that if Waterfront, at Diamond’s direction, walks away from the deal now, the opportunity to develop Quayside and its neighbouring land—whether into a smart city or something else—will be missed. “Absent a moment, things could linger for a long time,” he says. “We could be looking out at those lands in a decade and it not being halfway close to where we might have been with Sidewalk.”