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Managing Sidewalk Labs’ proposal just the latest worry for Toronto Port Lands businesses pushed out by redevelopment

Sidewalk Labs’s plan to build a high-tech innovation district in a neglected area of Toronto’s eastern waterfront has sparked concerns about privacy, governance and intellectual property, but business owners operating in the Port Lands area have more immediate concerns.

While Sidewalk, a Google sister company, has many hurdles to overcome before making its plans a reality, what’s certain is that long-standing businesses are being pushed out of the area to make room for development, and others are worried that they may be forced to leave against their will.

From the beginning of its partnership with government agency Waterfront Toronto, Sidewalk Labs planned to develop the 12-acre Quayside property. However, on June 24, when the company revealed its 190-acre master plan for the Port Lands, it included a proposal for a nearby 19-acre area it calls Villiers West. Sidewalk plans to directly develop both Quayside and Villiers West and act as an innovation and funding partner with government and real estate developers for the rest. Unlike Quayside, there are a number of existing businesses in Villiers.

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Sidewalk Labs’s vision is only one piece of the puzzle for businesses operating in the Port Lands. In the works for more than a decade, Waterfront Toronto’s $1.25-billion Port Lands Flood Protection (PLFP) project will reroute the Don River to form a second mouth at what is now the Polson Slip. Businesses across the Port Lands that stand in the way of this project will be displaced to make room for the waterway and planned infrastructure, and in their wake, the city plans to develop what will become Villiers Island into a mixed-use community.

There are a handful of privately held properties in the Port Lands, while the bulk of the land is owned by the City of Toronto through its Toronto Port Lands Company (TPLC). Many tenants on city properties are having their leases terminated while private landowners are worried about expropriation to make room for development.

One of those businesses is Soulmutts Toronto, a dog-walking and dog-daycare company co-owned by Jake Steinman. Soulmutts has been embroiled in a bitter fight over the city’s plans to relocate the business since autumn 2018 – a year after Mr. Steinman says he signed a five-year lease with the landowner, Urban Domain Inc., and sunk $200,000 into upgrading the site.

On June 10, City of Toronto Real Estate Services released a report asking city hall to approve the expropriation of the property. Mr. Steinman says that he was broadly aware of the plans to develop the Port Lands when Soulmutts signed its lease, although he did not discuss it with the landlord. “I can’t make business decisions based on what the city may or may not do in the next decade,” he said.

Mr. Steinman says Soulmutts chose its location in the Port Lands because of the unique opportunity to access so much space for dogs so close to downtown Toronto, where land is very expensive. If he loses the Port Lands location, it will leave the company looking at spaces much further from the core, and Mr. Steinman doesn’t believe any of his relocation options will be good for business.

Surrounded on three sides by city land where construction for the PLFP project is under way, he says Soulmutts has been subjected to intense petrochemical smells that peaked between one and two months ago. “The entire area reeked,” he said. “Our customers were making jokes that their dogs smelled like gasoline, and our staff felt uncomfortable in the workplace.”

As for Sidewalk Labs itself, he says that, apart from broader questions over data privacy, it doesn’t really matter who develops this land, although he says he feels like what has been proposed so far is “a lot of smoke and mirrors.”

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“I get that there’s a greater good for the city,” Mr. Steinman said. “But if this project is for the greater good, then they shouldn’t be messing around with small businesses.”

This feeling of inevitability is echoed by other small businesses in the area: Lawrence La Pianta, the owner of Cherry Street Bar-B-Que restaurant, which leases on a privately held plot, also doesn’t see much difference between Sidewalk Labs and other players. “This area is going to be developed by someone.”

Many leases held by the TPLC aren’t being renewed or are expected to be terminated in coming years. One of the better known of the businesses being forced to leave is T&T Supermarket, an Asian grocery located on Cherry Street. The store, part of a chain owned by Loblaw Companies, sits on land required for the new river channel.

The lease for the long-operating Keating Channel Pub and Grill, a family restaurant, will expire in 2020 and won’t be renewed, according to the company. CIMCO Refrigeration, an industrial refrigeration company that counts the NHL among its customers, says it will leave its city-owned lot in 2021. Go-Karts at Polson Pier expects to leave that year or shortly after.

The details of how exactly Sidewalk Labs would acquire the lands in Quayside and Villiers West remain unclear. Sidewalk Labs’ chief development officer Josh Sirefman said they “have not yet developed a detailed plan or design strategy,” and that the negotiation of leases and land is being handled by Waterfront Toronto. Mr. Sirefman insists that the Sidewalk Labs plan is an opportunity for businesses already located in the Port Lands.

On the issue of the Port Lands Flood Protection Project, Ellen Leesti, a spokeswoman for the City of Toronto, said the site of Soulmutts Toronto is the only private property that needs to be expropriated. Mira Shenker, a spokesperson for Waterfront Toronto, said that lease terminations on land owned by the TPLC were dispatched to affected tenants based on the project’s construction schedule. Both declined to comment on the negotiations with Soulmutts as well as specific lease agreements with TPLC tenants.

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Chris Guerrieri, whose family runs Port Lands recording studio Cherry Beach Sound and owns the building that houses it and other businesses, cautiously welcomes the development of the eastern waterfront. The studio operates out of a former First World War munitions factory that his great-grandfather purchased in 1979. Mr. Guerrieri is excited about the prospect of reinventing an area that has been neglected by the city for decades, and especially the job opportunities it could bring.

Chris Guerrieri, whose family runs Port Lands recording studio Cherry Beach Sound and owns the building that houses it and other businesses, cautiously welcomes the development of the eastern waterfront.

Christopher Katsarov/The Globe and Mail

But he’s concerned about how his privately owned land fits into Sidewalk Labs’s plans. He hasn’t ruled out selling the property if the right opportunity arises, but is happy to stay put until then. His hope is that, should he decide to sell, it would be a privately negotiated sale and not a government expropriation.

Mr. Guerrieri has spent a lot of effort going to consultations and asking that private businesses be respected, especially on maps that often fail to note that there are a handful of freehold properties in the neighbourhood.

“They create these big maps and show them to the public – and it’s like the World Fair or Disneyland,” Mr. Guerrieri said. “It gives the public misconception that all the land is theirs.”

“It’s not.”

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