Transaction Economics: Infrastructure

We have provided some information below about what is in the MIDP to help inform your feedback. The survey questions follow at the bottom of this page. Once you have filled in your answers, please click “Submit." You can then either click “Next Section” to continue taking the survey or click “Done” to finish.

What Waterfront Toronto asked for:

Waterfront Toronto’s RFP called for an Innovation and Funding Partner to advance a new market model for climate-positive urban developments, including new partnership models to secure funding for the infrastructure required to support future phases of revitalization.

We set out to explore alternative types of infrastructure that would achieve our policy objectives, and to develop funding and investment models with the private, public and not-for-profit sectors that could enable our projects and achieve these ambitious outcomes.

Sidewalk Labs’ Proposal:

In the MIDP Sidewalk Labs identifies two major types of infrastructure. There is municipal infrastructure, which includes things such as parks, water mains, sewers, and light-rail transit (LRT). There is also advanced infrastructure that focuses on new types of private infrastructure that would be dedicated to issues such as mobility and sustainability.

Sidewalk Labs has proposed optional models for financing for both the municipal infrastructure and advanced infrastructure required for the next phase of waterfront revitalization and to meet the project objectives.

i. Upfront Optional Financing for Municipal Infrastructure:

  • Sidewalk Labs indicates a willingness in the MIDP to explore various options with governments for implementing enabling infrastructure, such as the LRT

  • In one option, Sidewalk Labs offers upfront financing for the municipal infrastructure at a fixed rate of return to be negotiated in the future

  • In the MIDP, Sidewalk Labs reinforces that any such financing is presented as optional

  • Sidewalk Labs has proposed various value capture mechanisms to fund infrastructure. The proposed value capture mechanisms would be administered by the Public Administrator. It is important to note that the value capture mechanisms and the role of the Public Administrator are outside of Waterfront Toronto’s mandate and need to be explored further

ii. Implementation and Optional Financing for Advanced Systems:

In order to achieve the project objectives, Sidewalk Labs proposes that the following advanced infrastructure systems are required, and they are proposing to procure third-party operators for each:

  • Advanced power grid: Complementing Toronto Hydro’s electricity distribution, including rooftop solar photovoltaic generation, battery energy storage and energy management

  • Stormwater management upstream of municipal sewers: Sensors and controls of private stormwater systems from private buildings. This infrastructure would be in the public realm

  • Fiber-optic network: With existing partners, deliver Super-PON for internet connectivity

  • District parking management: New system to manage stacked parking equipment, EV charging, and attendant-based retrieval from off-site parking

  • Dynamic streets: Paving technology featuring lighting, heating during the winter and digital infrastructure for traffic management

  • Freight system: Underground self-driving dollies for the delivery of packages that would be connected to a consolidation centre

  • Vacuum waste system: A pneumatic waste collection system from buildings and public spaces, accompanied by a pay-as-you-throw waste chute with downstream monitoring

  • Thermal network: A fossil-fuel-free district energy network connecting buildings to low-grade waste heat sources such as Lake Ontario, or industrial facilities in the area

Sidewalk Labs proposes a framework for oversight of these companies to ensure they are acting in the best interest of the residents, including several management entities, some of which would fall under Public Administrator to fulfill that role, while others would be managed by a separate public body. These proposed entities include the Waterfront Transportation Management Association and Waterfront Sustainability Association.

At Quayside and Villiers West, Sidewalk Labs is proposing to design and construct the advanced infrastructure before transferring to the private operators. Throughout the remainder of the IDEA District, the advanced infrastructure would be constructed and operated by private operators selected by the Public Administrator.

The proposal outlines how these advanced systems would replace typical business-as-usual utility systems, such as natural gas distribution, and this would result in a payment (a local infrastructure charge) being made by vertical developers to the third-party advanced system operators to offset cost premiums.

Waterfront Toronto’s Note to Reader Review:

  • There is no privatization of public roles or assets proposed for infrastructure development or operations

  • The Sidewalk Labs proposal follows existing models where private operators, such as Enwave, Enbridge, Rogers, Bell and Beanfield Metroconnect, deliver certain infrastructure services with oversight by a public regulator (for example, the Ontario Energy Board and the CRTC)

  • The proposal from Sidewalk Labs indicates that the dynamic streets (including LED lighting, heating and digital traffic management) would replace typical municipal streets, however they would be owned by the City of Toronto as a public right-of-way and operated under the WTMA with oversight by the Public Administrator

  • The proposed municipal infrastructure would remain as municipal systems, with typical City of Toronto operations and maintenance

  • In order to achieve the project objectives, Sidewalk Labs proposes residents of the IDEA District would be required to use the services provided by the advanced infrastructure operators

  • The design, construction and approval of these systems would be funded by Sidewalk Labs and other private sector operators, but future user rates for utilities, such as electricity and thermal energy, would need to be paid for by consumers

  • Currently, Sidewalk Labs’ analysis show that they would need to make a Supplemental Innovation investment for Quayside and Villiers West, in order to maintain user rates within 5% to 10% of business-as-usual

  • Additionally, the proposed advanced infrastructure systems could be financed through Sidewalk Infrastructure Partners, a new infrastructure fund supported by Alphabet Inc. (the parent company of Sidewalk Labs) and Sidewalk Labs

Early thinking on risks to consider:

Within the infrastructure proposal, examples of risks to consider include:

  • Escalation of user utility rates beyond the projected 5% to 10%, as a result of cost overruns or failed infrastructure systems that must be replaced

  • Inherent complexities of the proposed governance model for mobility and sustainability infrastructure systems, which could affect viability of integrated infrastructure systems

Waterfront Toronto will ensure that concerns are captured in relation to the infrastructure proposal, and that mitigation measures and conditions for potential approval are explored.

Waterfront Toronto’s questions for you about Transaction Economics: Infrastructure

When you are finished, please make sure to click “submit” before moving to another section or exiting.

Our publicly-owned waterfront lands have enormous value. Sidewalk Labs is proposing that Waterfront Toronto reduce the price of public land in return for achieving policy outcomes, such as job creation, economic development, and sustainability (which Sidewalk Labs proposed to deliver).