Alphabet unit seeks share of property taxes for Toronto smart city

A courtyard, part of a proposed redevelopment of Toronto's downtown waterfront is seen in an undated artist rendering provided by Alphabet Inc's Sidewalk Labs unit February 15, 2019. Sidewalk Labs/Picture Plane Ltd/Handout via REUTERS

TORONTO (Reuters) – Alphabet Inc’s Sidewalk Labs unit is proposing it get a share of property taxes, development fees, and the rising value of Toronto city land as part of a deal to build a smart city, according to the company’s slide presentation made public on Friday.

Sidewalk Labs, which provides urban technology infrastructure, is planning a 4.9-acre smart city along Toronto’s harbor front, a project that has already faced opposition from locals over concerns of data privacy.

Sidewalk Labs said the proposal was yet to the evaluated by Toronto city and the public and has the potential to generate around C$6 billion ($4.5 billion) to pay for the infrastructure over 30 years.

The proposal suggests that a light rail transit and infrastructure be financed by a mix of development charges, incremental property taxes and increased land value.

Sidewalk Labs outlined its project for a light railway transit, 2,500 homes where 40 percent would be below market price, and a tall-timber factory they project will create 4,000 jobs.

These would be initially financed by Sidewalk, and the company plans to recoup its investment through the various taxes, the proposals showed.

Alphabet is the parent company of Google.

“We’re prepared to take the risk up front of developing a model to help make that happen, and we’re prepared to essentially get paid back when we’ve demonstrated that it can be successful,” Sidewalk Labs CEO Dan Doctoroff told Toronto Star newspaper, which first reported the proposal.

On Thursday, Amazon scrapped its plans to set up its second headquarters in New York after facing public outcry.

When asked if Sidewalk’s proposal could face similar backlash, Micah Lasher, head of policy and communications at Sidewalk Labs, said he expected people would not pre-judge what the company is proposing, and that public discussion would be an important part of the process.

“The City and Waterfront Toronto have not received any formal proposal at this time and no permissions or dispensations have been granted,” Toronto Mayor John Tory said in a statement. “Any final proposal … will be given full public scrutiny … and, ultimately, consideration by Waterfront Toronto and City Council.”

Toronto City Councillor Paula Fletcher expressed concerns about the proposal.

“I was terribly shocked because this was not within the scope of the project. I think it’s a big credibility problem for everybody.”

(Reporting by Tyler Choi; Editing by Jeffrey Benkoe and Phil Berlowitz)

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