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Google Sibling Abandons Ambitious City of the Future in Toronto

OTTAWA — Citing the economic turmoil from the coronavirus pandemic, a corporate sibling of Google said on Thursday that it had abandoned ambitious plans to create a sensor-laden, data driven “city of tomorrow” out of a shabby district along Toronto’s Lake Ontario shoreline.

“It has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan we had developed together with Waterfront Toronto to build a truly inclusive, sustainable community,” Dan Doctoroff, the chief executive of the corporate sibling, Sidewalk Labs, wrote in a blog post.

But the struggle quickly became a public-relations debacle for Alphabet Inc., the technology conglomerate that is the parent company of Sidewalk and Google.

Urban activists also said the project would turn over critical decision making about the city to Google’s algorithms, when citizens and politicians should rightly make those choices.

On Thursday, many critics of the plan suggested that opposition to the project and its diminished viability, not the pandemic, lay behind the decision by Sidewalk to quit before Waterfront Toronto made its final decision on whether to go ahead with the plan in late June.

“This is a big step back for surveillance capitalism and a victory for making technology serve society rather than capture it,” said Jim Balsillie, the former co-chief executive of BlackBerry and one of the prominent critics of the plan. “Google learned that Canadians can’t be easily bullied.”

The company seemed to undermine its cause at times. Waterfront Toronto initially asked Sidewalk to present a proposal for 12 acres as a demonstration of what it would do.

But instead the company released a detailed concept last year for much of 800 acres, mostly owned by the federal government, adjacent to the smaller site. The larger tract is the largest undeveloped property in downtown Toronto.

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“The presentation of a project on a scale so much bigger than the demonstration site did not go over well in Toronto,” said Shoshanna Saxe, an assistant professor in the University of Toronto’s department of civil and mineral engineering who studies municipal infrastructure and development. “It was a go big or go home version of the project.”

In the company’s vision for Toronto, high-rises made from engineered wood would have filled what are now weed lots and underused warehouses along streets. Its bike paths would melt snow.

Pedestrians would be sheltered from rain, snow and blazing heat by giant, automated awnings. Sensors would track residents’ every movement to optimize everything from traffic signals to underground armies of robots delivering parcels and discarding trash.

Critics denounced it as an effort to extend what they called Google’s all-seeing eye on the online world into the physical one. And there were immediate concerns about the ownership of the data harvested by the developer and the privacy issues created, which Sidewalk was never able to fully quell despite repeated concessions.

At one point, Sidewalk backed away from a proposal to receive a cut of future property taxes from the neighborhood in exchange for building a rail transit line.

Ultimately Waterfront Toronto ordered Sidewalk to come back with a plan focused only on the initial 12 acres. The company acknowledged that the reduced scale would force it to abandon many of its ambitions.

In a statement, Waterfront Toronto said that while it was disappointed by Sidewalk’s decision, the move does not reflect the potential of the city’s economy and real estate.

“Today there is global financial uncertainty but Waterfront Toronto has confidence in the city’s economic future, and will take the long view when making real estate and development decisions on Toronto’s waterfront,” the agency said.

John Tory, Toronto’s mayor, also dismissed the idea that the cancellation was a vote of nonconfidence in the city’s future — and said the city was still committed to developing the property.

“Toronto’s economy will come back strong after Covid-19 and we will continue to be a magnet for smart people and smart companies,” he said in a statement.

Led by Mr. Doctoroff, the former president and chief executive of Bloomberg L.P., and the former deputy mayor of New York under Michael R. Bloomberg, Sidewalk and its Toronto plan were seen as a vanity projects for Alphabet.

After Google restructured into a holding company in 2015, Sidewalk became one of the first Alphabet companies — a laundry list of the company’s technologically ambitious but financially dubious bets.

While the Toronto project offers the type of futuristic vision that Alphabet loves to promote, it was never expected to be a significant moneymaker for the technology giant, which still derives the lion’s share of its profit from advertising.

Toronto was the first and, to date, only city to welcome a Sidewalk project. When it unveiled its sweeping plan last year for the 800 acres, Sidewalk, which has about 30 employees in Toronto, said it had spent $50 million on the project.

Last month, Alphabet warned investors about a slump in advertising as businesses pull back spending because of the coronavirus pandemic. Sundar Pichai, Alphabet’s chief executive, said the company would be more “thoughtful” about spending and suggested there would be some cutbacks on investments.

The Toronto project’s collapse underscores the deep suspicion that Alphabet and Google face in rolling out new technology initiatives. The concerns about Alphabet raised in Toronto over privacy and corporate control echoed many of those expressed by lawmakers and regulators around the world about the company’s other operations.

Professor Saxe said that Toronto’s suspicious attitude toward the project does not mean that data cannot help shape and improve cities. But she said the company was promising something it could not deliver.

“The idea of building a city from the internet up always seemed like a bad one,” she said. “A lot of the problems we’re facing in cities are hard and entrenched and difficult to deal with. We should be very skeptical of anything that sells us an easy, cheap solution using a newfangled technology gadget.”

Ian Austen reported from Ottawa and Daisuke Wakabayashi from Oakland, Calif.