Liveblogging Sidewalk Labs’ Master Innovation and Development Plan, Entry 2: Waterfront Toronto’s Original Request for Proposals

Previous Master Innovation and Development Plan liveblog entries available here

I’ve previously written, with Zachary Spicer, about the problems with Waterfront Toronto’s original Request for Proposals, namely that they outsourced the decision-making about data and intellectual property to the Google company Sidewalk Labs. As I mentioned in my previous entry, the Ontario Auditor General’s report confirmed our initial suspicion that Waterfront Toronto had no clue, when they began all this, about the importance of data and intellectual property in the context of an innovation-focused smart-city project.

This is particularly problematic since smart cities are smart through their use of data. To be absolutely clear, the collection, control and use of data is the whole point of a smart city. It’s all about the data; it’s all about the surveillance. Leaving these to the side is like designing a rooftop swimming pool and treating any water-related issues as something to be worked out later. (Spoiler: It will not end well.)

And innovation – the embrace of which was a key rationale for this whole unfortunate project – is intimately tied up with intellectual property. As we’ll see below, Waterfront Toronto left it to their commercial partner to set the terms on which Waterfront Toronto and Canada would benefit (or not) from any Quayside-related IP. For a government agency that, as we learned from the Auditor General’s report, was required (and failing) to come up with independent revenue sources, not to have a plan to capture the economic benefits of any IP developed in Quayside was remarkably short-sighted, to say the least.

The Auditor General’s report, and my last post, deal with the many irregularities and oddities surrounding the issuing of the Request for Proposals. However, although I’ve already focused on the key parts of a smart city in my previous analysis – data and IP – it’s probably useful to revisit the Request for Proposals to see how well what Sidewalk Labs’ Master Innovation and Development Plan reflects what Waterfront Toronto initially requested.

Beyond Quayside

On the big land grab, Waterfront Toronto clearly indicates that the 12-acre Quayside is the focus of this tender. However, in the RFP it also reserves to itself the right to advance Quayside-developed “solutions, processes and partnerships across the eastern waterfront “as those lands become available to Waterfront Toronto (as per the established protocols with the City of Toronto)” (p. 6, emphasis added). Sidewalk Labs’ push to control the entire eastern waterfront has its roots in the RFP.

Fundamental problems

In reviewing the original RFP, it becomes quite clear that the origins of this entire mess – the confusion, Sidewalk Labs’ overreach – are rooted in Waterfront Toronto’s Quayside RFP. The RFP outsources almost every key governance aspect – from specific issues like data and intellectual property governance to more foundational things such as the definition of targets and key performance indicators, to the “Partner” (e.g., p. 14).

The fundamental flaw in the RFP can be traced to one objective in particular, that

the Partner will work closely with Waterfront Toronto to … Create the required governance constructs to stimulate the growth of an urban innovation cluster, including legal frameworks (e.g. Intellectual Property, privacy, data sharing), financial considerations (including investment opportunities and revenue sharing expectations), deployment testbeds and project monitoring (KPI’s, reporting requirements and tools to capture data). (p. 17)

It is, to put it lightly, a terrible, unbelievably horrible idea to let the company responsible for designing a smart city define the parameters under which it will work and by which it will be evaluated. Although these and other requirements envision a partnership with Waterfront Toronto, and although Waterfront Toronto sees itself as responsible for reviewing, for example, proposed technologies and methodologies, nothing Waterfront Toronto has done in the past few years suggests that it has the expertise to be an effective contributor to this project in this area. The creation of a part-time Digital Strategy Advisory Panel of limited effectiveness can’t make up for this fundamental lack of expertise.

If Waterfront Toronto knew what it was doing regarding data, IP and the very scope and definition of the project, it wouldn’t have had to ask an outside group to define it for them. That doing so, especially in the absence of any in-house ability to understand that the project, would create an enormous, insurmountable conflict of interest for the successful partner, does not seem to have occurred to Waterfront Toronto.

(More evidence that data governance wasn’t on Waterfront Toronto’s radar: the word “data” as something produced and used by this innovative project appears only twice in the main text, both on page 17: “The Partner shall “Create the required governance constructs to stimulate the growth of an urban innovation cluster, including legal frameworks (e.g., … data sharing) … and project monitoring (KPI’s, reporting requirements and tools to capture data).”)

The communications lead

And on the easiest deliverable – ensuring that Waterfront Toronto serves “as the communications lead” (p. 15) for this project – Waterfront Toronto has clearly failed to do so. We don’t need to consult the MIDP to know that Sidewalk Labs has controlled the narrative from the very beginning.

Really, this all reads like it was written by an agency that wanted to get in on the Smart City game but had no real idea what doing so would entail. The tell is their outsourcing of everything to do with IP and data governance to the company that stands to profit enormously from data and IP. Even without getting to the MIDP, and even without knowing about the Auditor General’s damning report, it’s hard not to argue that this RFP should never have been issued. It does not make Waterfront Toronto look good. At all. It makes them look like an easy mark.

What follows below are the key parts of the RFP, against which I’m going to compare the MIDP. Near the end I just quote whole parts of the RFP because it’ll be helpful (to me, at least) to be able to refer quickly to the main criteria.

Waterfront Toronto, “Quayside: Request for Proposals: Innovation and Funding Partner for the Quayside Development Opportunity,” RFP No.: 2017-13, March 17, 2017.

Note: Waterfront Toronto was looking for a company with a development plan, and one with money or connections that could get them money.

Part A: Overview of the Opportunity

The initial proposal should include a “benchmark climate positive approach that will lead the world in city building practices” (p. 6)

  • “showcase advanced technologies, building materials, sustainable practices and innovative business models that demonstrate pragmatic solutions toward climate positive urban development.” (p. 6)
  • “highly sustainable, mixed-use, mixed-income neighbourhood … as well as addressing the need for mobility and accessibility.” (p. 7)
  • Contribution to emerging tech and urban innovation clusters (p. 7)

Confusion of scope

Toronto’s eastern waterfront, with more than 300 hectares (750 acres) of land subject to future revitalization (see Figure 1), presents a unique opportunity for governments, private enterprise, technology providers, investors and academic institutions to collaborate on these critical challenges and create a new global benchmark for sustainable, inclusive and accessible urban development. (p. 6)

The RFP officially focuses on the 12-acre Quayside Development (p. 6), although it is envisioned as “a pilot environment for the broader eastern waterfront reviatlization” (p. 14).

The acquisition of more land seems to have played a part in Waterfront Toronto’s thinking:

 As the directing agency of the waterfront lands, Waterfront Toronto, therefore, reserves the right to” advance Quayside-developed “solutions, processes and partnerships across the eastern waterfront “as those lands become available to Waterfront Toronto (as per the established protocols with the City of Toronto) (p. 6, emphasis added).

What the partner needs to deliver

  • “a clear vision and action plan for creating a vibrant, climate-positive and prosperous community”
  • “a national and global model to encourage market transformation towards climate-positive [i.e., greenhouse gas-reducing] city building.” (p. 6)
  • Between 500-800 units of “Affordable Rental Housing” (p. 9)
  • work with Waterfront Toronto “to identify progressive solutions to deliver high-quality, moderately priced, purpose-built rental housing” (p. 9)
  • “beautifully designed public spaces, compelling cultural amenities, innovative solutions, active programing, and integrated transportation and mobility infrastructure” that people will want to visit year-round. (p. 9)
  • Provide “an environment in which an urban innovation cluster can be established and thrive.”
    • Leverage “demonstration spaces, project testbeds, and industry-academic partnerships” to do so.
    • “help create opportunities for job creation, entrepreneurial enterprise and the growth of established industries” in the surrounding community. (p. 9)
  • A funding model to deliver funding for future waterfront projects

Relationship with Waterfront Toronto

The Partner will work directly with Waterfront Toronto in the conceptualization, business planning and implementation stages of the Project … . This includes identifying and defining the necessary technologies, infrastructure, strategies, measurable outcomes and downstream partners that will ensure the Project’s success. (p. 7)

Of course, if only one partner has the relevant experience and understanding of the project, that partner will end up driving the project.

Waterfront Toronto will review technologies and methodologies proposed by Sidewalk Labs (p. 11). However, given Waterfront Toronto’s lack of expertise in this area, it is unlikely that they have the ability to actually provide any meaningful input in this area.

Relationship with data and ICT

The project will leverage the strength of existing world-class digital infrastructure within the waterfront to realize fully the benefits of emerging technologies –including but not limited to the Industrial Internet of Things (“IIoT”) analytics, and artificial intelligence (“AI”) – to support data-informed decision-making for residents, visitors, investors, employers, and service providers. (p. 8)

In the Project Vision and Business Implementation Plan (Appendix C), data governance is not mentioned.

Intellectual property

Transferability: Describe the projected transferability of the Project’s best practices, solutions and intellectual property beyond Toronto’s waterfront. How will the Project demonstrate the capacity to drive market transformation? (p. C2)

Lack of government money identified as a problem

A lack of government funding requires “new and innovative partnerships, funding and investment models.” (p. 9)

The original timeline

First, undertake

broad market engagement to secure infrastructure design and delivery partners for critical infrastructure elements. This may include working with multiple sectors and industries who are involved with various aspects of designing and delivering sustainable communities; including technology and systems firms, utilities, transit authorities, lenders, materials suppliers, constructors, and others who are active in the infrastructure development process. (p. 11)

Then, engage

innovative real estate development teams with the vision, capacity, and commitment to deliver a distinctive and ambitious, mixed-use community that is consistent with Waterfront Toronto’s high design and performance standards, and aligned with the vision and objectives of the Project. (p. 11)

Light rail

The provision of light rail transit (“LRT”) in a dedicated right-of-way, as part of a revitalized Queens Quay, has been approved through a Class Environmental Assessment (available in the Electronic Data Room) and will ultimately connect the eastern waterfront to the downtown core. Waterfront Toronto is actively pursuing funding options to extend the LRT along Queens Quay East, including private sector contributions and a phased implementation plan that could include interim bus rapid transit (BRT). (p. 12)

Note that light rail is provided in terms of the context of the lands to be developed, not as something for the partner to address.

The actual land

It is intended that the future developers will be responsible for removing existing structures, as part of the redevelopment plans. (p. 12)

VII. Partner Scope and Deliverables

Vision

identify and define the necessary technologies, infrastructure, strategies, measurable outcomes and downstream partners that will ensure the delivery of a globally significant demonstration project that addresses the challenges” of “sustainability, resiliency and urban innovation; complete communities”; and “economic development and prosperity. (p. 14)

“The Partner will work with Waterfront Toronto to (Note: following lists are from pp. 14-15):

  • Review and refine the work undertaken by the Team. Waterfront Toronto and the Partner will then further engage the Team to finalize the goals for the Project as they relate to financial, sustainability and innovation objectives.
  • Create the overall vision and goals for the Project with the Team. This will include, but not be limited to, deep-dive workshops, industry consultations, additional market sounding and community engagement efforts as appropriate.
  • Define measurable outcomes … including the necessary Key Performance Indicators (“KPI’s”) and measurement techniques to evaluate success.”
  • Analyze and articulate the potential risks and viability of implementing the vision.
  • Identify potential barriers to implementation and assist in preparing the necessary mitigation strategies to overcome those barriers.
  • Evaluate feasibility to transfer best practices and lessons learned from the Project to future developments and other jurisdictions as an exemplar of best practices and breakthrough solutions of global significance.
  • Identify and engage additional potential partners in downstream opportunities as they relate to investment, horizontal infrastructure development and vertical development opportunities.
  • Collaborate on developing strategies, tactics and methodologies for establishing and promoting ongoing thought leadership related to the project and its objectives.
  • Create a clear, compelling vision statement and communications materials that will be shared with stakeholders and potential additional participants in the Project.
  • Support and collaborate with Waterfront Toronto, which will serve as the communications lead, to ensure the significance of the Project and its desired outcomes are effectively communicated. [emphasis added]
  • Provide financial support and required materials for community and stakeholder engagement undertakings. The Partner will be an active contributor in these discussions.

2. Sustainability, Resilience and Urban Innovation

“The Partner will work with Waterfront Toronto to assess and confirm that the solutions and technologies proposed by Arup will help create a sustainable community (striving to achieve a climate positive outcome), and help to meet the carbon reduction targets of all three orders of government (Government of Canada, Province of Ontario, City of Toronto):

  • Conduct a thorough economic and technical critical analysis of the solutions and technologies recommended by Arup to achieve our climate positive objectives for the Project. This review should also include alternative and additional technologies for consideration, as appropriate, which will then be factored into the evolved models and projections prepared by Arup.
  • Refine the sustainability objectives, strategies and targets for the Project. In addition to the work already completed, specific efforts will be taken to identify the potential roadmap for these solutions to be included in future phases of eastern waterfront revitalization.
  • Define an approach to delivering the confirmed carbon reduction strategies, solutions and technologies, including a schedule/phasing plan (including, but not limited to energy, transportation, waste, materials and water) to support the overall objectives of the Project as they relate to Waterfront Toronto’s broader revitalization mandate.
  • Contribute appropriate financial resources and/or solution components to support building and district level solutions for the eastern waterfront including pilot projects that demonstrate innovative, emerging technologies.
  • the Partner will help refine and update Waterfront Toronto’s Minimum Green Building Requirements to ensure that they reflect the principles of our Resiliency and Innovation Framework, and support the aspirations for the Project and future phases of revitalization.” (p. 15)

3. Complete Communities

a) Mixed-income and Affordable Housing

“The Partner and Waterfront Toronto will explore and create a development model that leverages the strong demand for market condominiums and rental housing to deliver enhanced affordable housing options and mitigate housing inequality.”

“Waterfront Toronto has a mandate to set aside sufficient land to accommodate 20 percent of residential units as Affordable Rental Housing. We anticipate the Project can achieve a broader mix of housing affordability beyond this mandate.” (p. 15; emphasis added)

  • Develop a viable and implementable delivery model for additional mixed-income housing, particularly moderately-priced workforce rental housing that engages the private sector and requires minimal government funding.
  • Explore using new smart technologies, building systems, materials and design approaches that can help lower the cost of construction, utilities and operations, while advancing our low carbon/climate positive objectives.
  • Identify financing strategies for a pilot mixed- income housing development that integrates market rate, workforce and Affordable Rental Housing units.
  • The Partner will support Waterfront Toronto as it champions this model with governments.”

b) Transit

“The Partner will actively participate in planning and securing funding for integrated transit solutions and the related public realm together with Waterfront Toronto and in partnership with other landowners and developers in the Bay Street to Cherry Street corridor.

  • Assist in developing a viable and implementable model for sustainable transit along the eastern waterfront into the Port Lands that can be supported by a combination of government and private sector funding.
  • Assist in championing this model with governments and approval agencies having jurisdiction over transit delivery.
  • Contribute appropriate financial resources and/or solution components to support transit solutions for the eastern waterfront including pilot projects that demonstrate innovative, emerging transit technologies.”

c) Amenities

“The Partner will work with Waterfront Toronto to identify appropriate and required retail, cultural and community amenities for the Project and adjacent precincts to ensure the creation of a vibrant complete community.”

d) Design

“The Partner and Waterfront Toronto will work together to achieve new standards for architecture and the public realm that leverage Waterfront Toronto’s history as a leader in delivering quality of place and high impact designs that attract creative talent and increase overall project value.

“The partner will work with Waterfront Toronto to ensure an integrated design process is used to deliver sustainable technology that includes innovative building design and architectural expression.”

4. Economic Development and Prosperity

  • “Identify and engage institutions locally, nationally and internationally as long-term partners in the Project. This will include applied research opportunities as well as developing physical and virtual campuses, as appropriate.
  • Identify, engage and evaluate entrepreneurial companies that are developing new technologies consistent with delivering the goals and objectives of the Project.
  • Create the requirements for an urban innovation collaboration and innovation space with the appropriate programming and partners (including industry and academia) within the Project. This will include developing a full business plan for this environment, and may include outreach to additional public and private stakeholders to secure the necessary capital.
  • Assess the viability of creating a catalyst fund that will invest in emerging companies that are engaged in the Project to assist them in overcoming barriers to scaling up. If such a fund is deemed to be of significance and viable, work with Waterfront Toronto to identify and secure funders and design the framework for delivery.
  • Create the required governance constructs to stimulate the growth of an urban innovation cluster, including legal frameworks (e.g. Intellectual Property, privacy, data sharing), financial considerations (including investment opportunities and revenue sharing expectations), deployment testbeds and project monitoring (KPI’s, reporting requirements and tools to capture data).
  • Land revenues and the timing of payments to Waterfront Toronto, or other sources of revenue as proposed by the Partner.
  • Ownership and sharing of intellectual property resulting from the Project.” (pp. 15-17)

Appendix A: Background Information & Project Requirements

Pages A4-A5:

Developing a WTEI Workforce Development Plan

The Partner will attend a preliminary meeting with Waterfront Toronto and WTEI representatives to discuss the WTEI program, and to develop a WTEI Workforce Development plan, which may include:

  • Customized Recruitment – including working with the City of Toronto’s Partnership to Advance Youth Employment (PAYE) program and the United Way Toronto & York Region’s Career Navigator Program, to identify
  • jobs, training and work based learning opportunities for youths between the ages of 18-29.
  • Opportunities for registered apprenticeships, accessing newly trained youths through the Central Ontario Building Trades’ (COBT) Hammer Heads Program.
  • Opportunities to develop customized skill training initiatives.
  • Other learning, networking and skill development initiatives/workshops.

The Partner will be required to commit to the following:

  • Assign a liaison to work with a WTEI representative to further develop the WTEI plan details and an implementation plan, including opportunities, timelines and key performance indicators;
  • Meet with the WTEI representative on a quarterly basis to provide updates and feedback on the WTEI plan implementation;
  • Report progress and outcomes to Waterfront Toronto’s Project Manager in charge of the assignment on a quarterly basis for the term of the project; and
  • Work with Waterfront Toronto and downstream vendors and/or partners to further adapt this program as new opportunities arise.

Appendix C: RFP Particulars (Submission Requirements and Evaluation Criteria)

Section C, Rated Criteria covers the criteria Waterfront Toronto used to evaluate the initial submission (pp. C1-C7). It’s a lot to transcribe, so I won’t. But it’s worth reading in its entirety.

From this section, here are a few issues of interest:

A. Project Vision & Business Implementation Plan

The Project Vision and Business Implementation Plan should not exceed 25 pages (including images, diagrams and tables) (p. C2)

Interesting inclusion:

e. Broader Eastern Waterfront Revitalization:

Describe how your vision relates to the broader waterfront revitalization efforts. (p. C2)

A5. Approach to Business Case and Financial Requirements (p. C3)

a. Legal Structure Approach: Describe how you would approach the following:

i. Roles and Responsibilities: Provide an initial proposal of roles and responsibilities for Waterfront Toronto and the Partner, understanding that Waterfront Toronto intends to remain an active partner and investor in this and future phases of the Project through to its completion.

ii. Legal Structures & Documents: Describe required legal structure and documents required to implement the partnership.

iii. Risks & Benefits: Propose how risks and benefits will be shared. How will you create an assessment tool to allocate risks between Waterfront Toronto and the Partner?

iv. Intellectual Property: Provide a preliminary framework for a potential management approach for Intellectual Property introduced to or developed through the Project, and any revenue sharing between Waterfront Toronto and the Partner.

v. “Off-Ramps”: How could the venture be unwound in the event that the Project is not achieving its goals?

vi. “On-Ramps”: How could new partners / participants be included in the Project? Are there any ownership/equity considerations?

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