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Veteran real estate developer Stephen Diamond has emerged as a leading contender to become chair of Waterfront Toronto ahead of a high-stakes vote over whether the agency will proceed with a smart-city project with Google sister company Sidewalk Labs.

The federal, Ontario and Toronto governments can each nominate four directors to the board, which oversees the revitalization of the city’s lakeshore, but the provincial act that guides the agency also allows for the three levels of government to collectively appoint a director as an independent chair. The most recent chair, Ontario appointee Helen Burstyn, was fired alongside other provincial directors in December by the province in response to a report by Ontario’s Auditor-General that found that Sidewalk Labs had been approved as a smart-city “innovation and funding partner” by Waterfront Toronto with insufficient timelines and government oversight.

The potential nomination comes as Waterfront Toronto’s leadership is undergoing a major shakeup. A search is underway for a permanent CEO to replace acting chief executive Michael Nobrega, who has led the organization since last summer but was fired from his board seat by the Ontario government in December. Meanwhile, Marisa Piattelli, Waterfront Toronto’s chief strategy officer and de facto No. 2, resigned this week, a source close to agency told The Globe and Mail. The source said Ms. Piattelli’s resignation had been planned for months after more than a decade and a half working for the organization.

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Two sources close to the nomination process said that all three levels of government have been courting Mr. Diamond to become chair – a rare collaborative move by Waterfront Toronto’s three government stakeholders. Mr. Diamond, the president and CEO of commercial real estate developer Diamond Corp., has been a city-appointed director since 2016, but his three-year term ends in April. Accepting the chair role would mark a turnaround for Mr. Diamond, who submitted his resignation from the board last fall but was persuaded to stay by Toronto Mayor John Tory in early December, as the board’s ranks were rapidly thinning.

Reached midday Thursday, Mr. Diamond confirmed that discussions have been under way with all three levels of government with respect to an ongoing role with the board, but he declined to comment further.

A source with knowledge of the matter, who was not authorized to speak publicly, said a motion asking Toronto City Council to approve Mr. Diamond’s appointment will be made at next week’s meeting. The source said all three levels of government had agreed on the choice, but that each government still has to formally sign off on the move.

The December firings marked a significant turning point for Quayside, Waterfront Toronto’s partnership with Sidewalk Labs to develop a 12-acre technology-driven neighbourhood on the city’s eastern lakeshore, which was announced in October, 2017. The dismissals accelerated a rapid reshaping of the board as it prepares to digest, then vote upon, a final agreement on the widely criticized partnership. That vote is expected to take place in September. The courting of Mr. Diamond for the chair position signals that government stakeholders hope to have an experienced, steady leader to navigate the board through the project’s approval process this year.

An artist's rendering of the high-tech community Sidewalk Labs is hoping to build in Toronto.

HO/The Canadian Press

In a December interview, Mr. Diamond cautioned that Waterfront Toronto’s deal with Sidewalk Labs was not a firm agreement to proceed and that the public agency would need to be satisfied with a final proposal after consultation with its government partners and the public.

The board has undergone a number of changes since December’s firings. Councillor Joe Cressy replaced Denzil Minnan-Wong, who publicly criticized aspects of project, after his term ended in December. The terms of two other city-appointed directors − Mohamed Dhanani, an adviser in Ryerson University’s president’s office, and Susie Henderson, an infrastructure expert with consultants GHD Advisory – end in April.

Infrastructure Canada, the federal department overseeing the agency, declined to say that Mr. Diamond would be named the new chair, but confirmed that it was working with both the provincial and municipal governments collaboratively to name an independent chair. Ontario’s Infrastructure Ministry did not immediately respond to requests for comment. Don Peat, a spokesman for Mr. Tory, declined to comment on what he called speculation about the appointment.

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At a news conference later, Mr. Tory would say only that his own views on Mr. Diamond are well known, since he previously phoned him to persuade him to stay on the board.

“If he emerged at some point in time as the chair of the board, I’d be delighted at that, because I think he is a most capable, balanced person who can get along with all three governments and with all the other stakeholders,” Mr. Tory said. “And so the universe will unfold as it should on that.”

Mr. Cressy would not comment on Mr. Diamond’s potential appointment when contacted Thursday morning. But he said he would welcome having an independent board chair approved by all three levels of government. “Waterfront revitalization only works when all three levels of government are working together,” Mr. Cressy said.

The Quayside project has the potential to be a bellwether for rethinking urban planning with new technologies in mind. Sidewalk Labs has proposed technologies such as an app-based parking reservation system to avoid congesting street curbs, and heating and cooling systems that use the artificial-intelligence technique of machine learning to help computers predict and optimize temperature regulation, reducing energy use.

But critics such as tech veteran Jim Balsillie have lambasted how the process has unfolded and how much wealth Sidewalk parent Alphabet Inc. – which has become one of the world’s most valuable companies through the collection and processing of data – could generate from Canadians moving about their own city. Last week, a Toronto Star report detailed internal Sidewalk development and monetization plans – including that the New York-based company would offer to help fund a Waterfront light-rail transit route in exchange for a cut of income streams, including property taxes and development fees.

Asked about Mr. Diamond’s potential appointment, Waterfront Toronto spokesman Andrew Tumilty said in an e-mail that “Waterfront Toronto’s efforts for the public good are built on the support of our government partners and the direction of our Board of Directors.” Asked further about Ms. Piattelli’s resignation, and if she would be available for an interview, the agency did not immediately respond.

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