The Interview

Sidewalk Labs CEO Dan Doctoroff on the future of Toronto’s smart city project

Dan Doctoroff at Collision Tech Conference in Toronto on May 22, 2019. Iain Sherriff-Scott for The Logic
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On October 17, 2017, Sidewalk Labs CEO Dan Doctoroff came to Toronto for the celebratory announcement of a plan to build a smart city on the lakeshore. 

A lot has changed since. The project has polarized Torontonians, and immediately after the Google sister company released its Master Innovation and Development Plan (MIDP) in June, Stephen Diamond, chair of the board of Waterfront Toronto—the organization overseeing the redevelopment of that part of the city—raised a number of concerns.

On Thursday, Waterfront announced that Sidewalk had agreed to scale back its plans significantly—limiting the project to just the 12-acre Quayside neighbourhood rather than the 190 acre “IDEA District” Sidewalk had proposed, scrapping the company’s controversial data governance proposal and making clear that despite Sidewalk’s insistence, there are no guarantees of a transit line to the site.

Later that afternoon, Doctoroff sat down with The Logic for the first time to discuss the company’s evolving relationship with Waterfront Toronto, what he would have done differently and whether the smaller scale of the project will let him realize Sidewalk’s vision.

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Talking Point

In his first interview with The Logic, Sidewalk Labs CEO Dan Doctoroff reflected on his relationship with Waterfront Toronto CEO Stephen Diamond. “I probably could have been more sensitive to the pressures that he was under,” Doctoroff said, while calling their relationship “constructive.” Doctoroff also acknowledged that “people want to see us prove that what we say can be done can be done,” but insisted that many of the innovations Sidewalk had proposed as part of its vision for a Toronto development are still possible on the smaller scale of the deal agreed to this week.

This interview has been edited for length and clarity.

You’ve said previously that transit was a bit of a deal-breaker. What, if anything, has changed?

I think everyone agrees—Waterfront Toronto and us—that it is a priority to extend mass transit into the eastern waterfront, and we agree that we’re going to work toward making that happen. The second thing that has happened, which has given us more confidence that there will be transit, is the public agencies and orders of government are much more focused on it into this area. Whether that is light rail, subway, a combination of the two, the intensity of the conversations about it has grown—I think, candidly, in large part because we’ve focused on it a lot. We made the case for the economic development potential of the area based on mass transit, as well as the need for density in the area and that need to service that density. So we’re actually quite encouraged that there’s growing alignment and we’re optimistic that at the end of the day, there will be mass transit.

It’s been reported that when Stephen Diamond took over as chair of Waterfront Toronto, the two of you didn’t see completely eye to eye on some aspects of the project. Is there anything you would have done differently to navigate that relationship from the outset? 

In retrospect, I probably could have been more sensitive to the pressures that he was under. And, my guess is he would probably say the same thing. That I do regret, in a way. But we’ve had a very constructive relationship. I think it really was important for Steve to establish himself as a real steward of the public interest. And it took a little while for me to understand just how important that really was to getting something done, because when we started with Waterfront Toronto, it was a very different relationship. Going back two years ago, they were more of a partner and that clearly wasn’t gonna work in a way that we had intended. Steve reset things in a way that ultimately has enabled us to get to this place.

It’s clear that this wasn’t the amount of land that you were hoping for, in terms of—

But to be clear, we never proposed 170 or 190 [acres]. Just to be very clear. That was never a part of what we proposed.

To independently develop it?

Or us having any right to anything, actually beyond the 30 [acres].

But the IDEA District was 190 acres, correct?

Yeah, but that was, again, completely for government to adopt or not. Not up to us. I think everyone has acknowledged at the end of the day that scale is a good thing. But I think we have become much more sensitized to the need to prove ourselves first. And, I think that was sort of a revelation or just took a while for us to get there. People want to see us prove that what we say can be done can be done. And we respect that. It’s taken us time, maybe too much time, to recognize that, but we do. The mechanisms for ensuring that we can work with government to ensure that the innovations and the regulations needed to implement them are going to get the appropriate attention, we’ve established in this agreement with the innovation plan and the task force on multiple governments. George Zegarec, [Waterfront Toronto’s] new CEO, has been phenomenal at thinking through that. He’s the perfect person to help execute on that given his long-term relationships with the multiple levels of government. So, what we care about at the end of the day is that there’s a project that can meet the bold innovation agenda and at the same time enable us to earn a reasonable return, given the risks that we’re taking. I’m optimistic that we should be able to do both.

Do you think it’s possible to prove out the innovations that you’ve talked about on those 12 acres?

Not 100 per cent of them, for sure. I’ll give you an example of that: When we talked about the 30 acres—

The 30 acres being Quayside and the Villiers West area you also wanted to develop.

Yes. We, to some extent, picked that scale because we felt that that was necessary to reach Waterfront Toronto’s priority objective of a climate-positive district. We didn’t feel we could do that on 12 acres. We still don’t feel that we can do that on 12 acres, meaning we won’t be exporting clean energy back into the grid. Can we reduce carbon emissions by 85 per cent at the scale of Quayside? Yes. Would that be historic? Yes. Is it meeting those objectives that scale requires? No. That said, we still think we can create the most innovative district in the world, one that bends the curve on quality of life and across most dimensions of urban life in a material way that will be looked to—not just, hopefully, for the rest of the development of the eastern waterfront, but by the rest of the world as a new approach to inclusive growth. We believe that is possible, but it’s not going to be exactly the same as it would have been at a bigger scale.

Have you met with any private landowners downtown, especially in the eastern waterfront, to explore the option of purchasing additional land?

We have talked to a large number of landowners, but really much more about partnering with us— 

In terms of a real estate partner for Quayside?

Or, multiple partners, yeah.

What role do you see the Ontario Teachers’ Pension Plan playing in this project?

Well, they’re an investor in the new company we formed—Sidewalk Infrastructure Partners. We do believe that Sidewalk Infrastructure Partners can play a role in financing some of the next-generation infrastructure systems. So, right now, that’s the role that we foresee. It’s an indirect one through Sidewalk Infrastructure Partners. 

Are there any other cities that you’re interested in?

Yes, there are. Let me be very clear, we really view Toronto as our flagship project. But it would be premature for me to talk about others.

I understand Alphabet [parent company to both Sidewalk Labs and Google] had to approve this agreement. Did you have any pressure from Alphabet to negotiate a favourable deal for Sidewalk? 

I mean, obviously we have walked them through our progress and sometimes lack of progress every step along the way. But they’ve really been nothing but supportive.

Was there anything in particular Alphabet was pushing for, especially in terms of data?

No. We certainly consulted them, but they were very supportive of the approach and recognize that data gathered in public or semi-public spaces is sort of a category unto itself. It’s been an incredibly collaborative relationship.

Is that to say Alphabet is encouraged by today’s news?

Absolutely.

Will you be CEO of Sidewalk Labs a year from now?

Yeah, absolutely. I’m curious why you even asked that question.

Mostly in terms of a level of accountability, having a representative of a company that the public can count on.

Absolutely, yeah.

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Is there anything else you’d like to say? 

For us, the focus here is on achieving the objectives. One is the kind of boldness of the innovation agenda, with the ultimate goal of demonstrating there is new ways of achieving affordability and sustainability, etc. And the second is achieving reasonable financial results. And that’s what we focus on at the end of the day. We will be testing that over the course of the coming months. But we are reasonably confident that we can get that done. We understood the pressures that government was under and since we don’t feel that we’re going to be compromising our ultimate objectives, it made sense to work with them to achieve something that works for everybody.