GOOG Alphabet Inc

By Eliot Brown 

Google parent Alphabet Inc. has legions of web developers. Soon it might be in need of real-estate developers.

In coming weeks, top executives at the Mountain View, Calif., technology giant are set to weigh a pitch from Alphabet's urban technology-focused subsidiary, Sidewalk Labs, on a plan to delve into an ambitious new arena: city building.

According to people familiar with Sidewalk's plans, the division of Alphabet is putting the final touches on a proposal to get into the business of developing giant new districts of housing, offices and retail within existing cities.

The company would seek cities with large swaths of land they want redeveloped -- likely economically struggling municipalities grappling with decay -- perhaps through a bidding process, the people said. Sidewalk would partner with one or more of those cities to build up the districts, which are envisioned to hold tens of thousands of residents and employees, and to be heavily integrated with technology.

The aim is to create proving grounds for cities of the future, providing a demonstration area for ideas ranging from self-driving cars to more efficient infrastructure for electricity and water delivery, these people said.

Details on the effort, which was reported earlier this month by the technology news website the Information, are scant. Most important, it is unclear who would cover the cost of such an endeavor -- tens of billions of dollars -- since large-scale development typically requires buy-in by third-party investors over a period of years or decades.

But one key element is that Sidewalk would be seeking autonomy from many city regulations, so it could build without constraints that come with things like parking or street design or utilities, the people said.

If Alphabet greenlights the project, it would be in the same category of unlikely-but-promising moon-shot investments as its self-driving car division.

Sidewalk was formed last year, the brainchild of Alphabet Chief Executive Larry Page and Sidewalk CEO Daniel Doctoroff, New York City's economic development czar during the first six years of the administration of Mayor Michael Bloomberg. There Mr. Doctoroff was known for a technocratic approach to government and large ambitions for development, many of which involved converting formerly industrial parts of Manhattan and Brooklyn into neighborhoods where office and apartment towers have sprouted like mushrooms in the past decade.

Mr. Doctoroff went on to run Mr. Bloomberg's media company, Bloomberg LP, and last year started Sidewalk, describing it as a company that would use technology to help transform cities.

In recent months, Mr. Doctoroff and a flock of consultants and staff, including several of his former deputies at City Hall, have been racing to put together their game plan for the city-building initiative, people who have spoken to Mr. Doctoroff said.

He hinted at his ambitions in a February speech at New York University.

"What would you do if you could actually create a city from scratch," he said. "How would you think about the technological foundations?"

Past efforts to build "smart" cities or districts integrated with technology have failed, he said, because typically urban planners and tech executives don't understand each other.

"That is why the combination of Google, which focuses on the technology, and, me, who focuses on quality of life, urbanity, etc., we think is a relatively unique combination," he said.

One challenge the company would face would be that the history of city-building and large-scale urban development projects is full of failures and disappointments. Cities built from scratch, like Brasília or Canberra, Australia, are viewed as antiseptic and without the vibrancy of more organic cities.

"You can build a city from scratch and you can copy and emulate the great qualities of cities," said Glen Kuecker, a history professor at DePauw University who has studied the Songdo City district near Seoul and other smart cities. "It's still a very artificial and sterile place."

Large-scale development projects within cities, too, are often marked by frequent delay and failure. Battery Park City, a development in lower Manhattan, took four decades and a near-bankruptcy to be completed, as did the Playa Vista district of Los Angeles, north of the airport.

This is because developers aren't only facing swings of the market, but also of political dynamics that change frequently.

"You've got political barriers, you've got economic barriers, sometimes you've got environmental barriers," said Eugenie Birch, a city planning professor at the University of Pennsylvania.

Mr. Doctoroff ran into many of these headwinds in his tenure in New York, where he gathered together countless ideas that had been collecting dust on planners' shelves and tried to put them into action.

"He dares to dream big -- he's always pushing to do the next big thing," said Robert Lieber, who worked under Mr. Doctoroff in New York City government before succeeding him as deputy mayor.

Many of these ideas were successful, including his rezoning of Manhattan's far West Side, which today is becoming an office district serviced by a brand new subway extension, as well as multiple rezonings in Brooklyn that have spurred thousands of units of new housing.

One of his weaknesses, people who know him say, was legislative politics, at least in New York State government. His two highest-profile plans -- a stadium for the city's 2012 bid for the Olympic Games and a congestion-pricing charge on drivers in Manhattan -- were both defeated by the state legislature.

Write to Eliot Brown at eliot.brown@wsj.com

(END) Dow Jones Newswires

April 26, 2016 12:44 ET (16:44 GMT)

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