The financial reality behind Toronto’s plan to build a tech-inspired city of the future has pushed at least one potential partner to the sidelines. 

“We refused to negotiate, as the financial terms were completely uneconomic,” one source involved in talks in recent months told BNN, requesting not to be named.

Waterfront Toronto, a Crown corporation which oversees the revitalization of the city’s waterfront, has been expected for months to reveal its chosen partner for the long-discussed Quayside development. Quayside is a 12-acre development site along Toronto’s eastern waterfront, earmarked to build what is often described as a digital city.

To make the project a reality, Waterfront Toronto — which was established by the Government of Canada, the Province of Ontario, and the City of Toronto — is seeking a partner to "create, realize and fund an unparalleled vision for sustainable urban development.”

As BNN previously reported, much of the attention has been focused on Sidewalk Labs. Owned by Google’s parent Alphabet, Sidewalk bills itself as “reimagining cities from the Internet up.” This week, the Wall Street Journal reported Sidewalk is nearing a deal to develop the area.  A source familiar with the matter told BNN Sidewalk still needs to negotiate the terms with Waterfront.

“We are still in the process of selecting the Innovation and Funding Partner, which includes the approval of the partner by our board of directors,” Waterfront Toronto spokesperson Carol Webb told BNN in an email, adding a formal announcement is expected later this fall.  

Webb did not comment on the financial terms being discussed.

Dan Levitan, a spokesperson for Sidewalk Labs, declined to comment.

Beyond creating a futuristic mini-city (think high-tech housing and self-driving cars in an area fueled by a high-speed Internet hub and, of course, free WiFi), Waterfront Toronto’s hope is to attract startups and create another tech hub for Toronto -- a city that is also lobbying to be the new home of Amazon’s planned second headquarters.

The potential push by both Google and Amazon to build their Canadian presence has been skeptically received by some business leaders.

“We already have Google, Facebook, Microsoft and Amazon tapping us as customers. They don’t need to be operating in Canada.  So we have to ask ourselves why are they coming up here?  And why are our top officials wooing up here?” Anthony Lacavera, chairman of Globalive Capital, told BNN in a recent television interview.

“What’s happening is they’re recruiting our top talent and paying them less than what they would have to pay them in the U.S.  And then the biggest and brightest stars get transferred down to the US. headquarters.”