Transaction Economics: Real Estate
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:
Instead of seeking a traditional real estate developer, Waterfront Toronto’s RFP sought an Innovation and Funding Partner that would help to create a vision and business model for a transformational, mixed-use project.
Sidewalk Labs’ Proposal:
Sidewalk Labs is proposing the lands in Quayside and Villiers West be sold or leased directly to them with Sidewalk Labs acting as the lead developer, in partnership with other developers and investors
In the MIDP Sidewalk Labs outlines three scenarios for calculating the land value:
“Highest and best use”, which is a real estate industry term and seeks to maximizes profit within the allowable land use policy
“Policy proposal” scenario that aligns with Waterfront Toronto’s existing practice (Waterfront Toronto’s traditional approach to land valuation begins with a fair market value assessment of the land and allows for deductions based on achieving agreed to public policy objectives)
“Innovation” scenario, in which the innovations Sidewalk Labs intends to implement at Quayside would likely increase construction cost beyond the “policy proposal” and reduce land value to an even greater extent. Sidewalk Labs states that they are prepared to fund this category of innovations and is proposing that the land be sold under the “policy proposal” value
Sidewalk Labs indicates that they are intending to calculate land value using scenario 2 “Policy proposal”
Lastly, should Sidewalk Labs turn greater than expected profits, they are proposing that these profits would be shared with Waterfront Toronto and its government partners
Waterfront Toronto’s Note to Reader Review:
Waterfront Toronto’s mandate is to revitalize the former industrial lands on the waterfront, which requires bringing these lands to market while achieving public policy objectives, including sustainability, affordable housing, design excellence and digital inclusion
Waterfront Toronto will be undertaking a comprehensive review to assess the extent to which the adjustments to land value proposed by Sidewalk Labs are aligned with Waterfront Toronto’s priority outcomes as well as whether the financial tradeoffs to land value are financially justifiable
Should the MIDP go forward, it would be on the basis that Waterfront Toronto lead a competitive, public procurement process for developer(s) to partner with Waterfront Toronto and Sidewalk Labs (as our Innovation and Funding Partner)
Early thinking on risks to consider:
Within the real estate proposal, examples of risks to consider include:
If Waterfront Toronto transacts at the “policy proposal” value, we need to be confident that the purchaser of the land can deliver on the agreed to policy objectives
There is a risk that there will be insufficient market interest from private sector developers to partner with Waterfront Toronto and Sidewalk Labs (as our Innovation and Funding Partner) given the lower than average developer profits that the Quayside project is currently expected to generate
Waterfront Toronto’s questions for you about Transaction Economics: Real Estate
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).