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The Airport Way urban renewal area, one of Portland’s largest, could lose nearly a third of its land. The Portland City Council is scheduled Wednesday to consider removing 870 acres from the Northeast Portland renewal area.

That land can then be banked for an urban renewal area elsewhere.

When the 2,713-acre Airport Way urban renewal area was created, in 1986, its size wasn’t an issue. Planners formed a roughly rectangular area along the Columbia River, stretching from Portland International Airport to the Gresham border.

But Portland is now bumping up against an urban renewal ceiling: State law requires that renewal areas take up no more than 15 percent of the total area of cities such as Portland. Portland has only 700 acres left before it hits 15 percent.

That limit has caused officials at the Portland Development Commission to take another look at Airport Way. And much of the land in the renewal area either can’t be developed or probably won’t, said Bob Alexander, special projects manager with the PDC.

鈥淢ost of the areas (to be) removed are either wetlands or the levees themselves along the river or slough,鈥� Alexander said. 鈥淚t doesn’t make sense to put in those properties with very low value.鈥�

Some of the land proposed for removal has already been developed. The remaining land could be developed, Alexander said, but there is little money left for the district.

The land that PDC officials feel can attract the most development will remain in the renewal area, Alexander said. 鈥淲e met with the industrial and commercial brokers that represent that area, at least a dozen of them, so we got a pretty good reading on all those properties,鈥� he said.

鈥淔or the money we have left, I’m convinced we have some opportunity sites here.鈥�

Before the district was created, much of the area wasn’t even developable. Creation of the district provided money to widen and extend Airport Way and to build roads and bridges throughout the district.

鈥淭hat opened up a great deal of industrial land and brought a lot of jobs,鈥� Alexander said. 鈥淎lmost all of those came about through the urban renewal district.鈥�

LABfx, a bioscience research and development company, three years ago moved from Gresham to a site along Northeast 112th Avenue, in the Airport Way urban renewal area. Loans and other assistance from the PDC were instrumental in the decision to relocate, said Ray Miracle, the company’s president.

鈥淭hat was definitely a factor,鈥� Miracle said. 鈥淭hat (let us) be able to do the improvements we needed to move here.鈥�

The budding bioscience hub within the urban renewal area also made sense for business, Miracle said. LABfx shares a building with QuantRx Biomedical Corp., and the two companies frequently work together. QuantRx also got the PDC to help set up shop.

Between 1999 and 2007, the PDC loaned $7.2 million within the urban renewal area. The area also has raised enough money to help create the MAX red line, build trails and develop Cascade Station and the Riverside Parkway Corporate Center.

Money is raised for urban renewal areas through what’s called tax increment financing. Under this arrangement, property values within a renewal area are frozen when the district is created.

As investments in the renewal area cause property values to rise, property taxes above those that were collected when the values were frozen 鈥� the increment 鈥� are diverted to pay for improvements within the renewal area.

Airport Way now has little money left for improvements. The area reached its maximum indebtedness 鈥� its 鈥渃redit card limit,鈥� Alexander said 鈥� two or three years ago. Any new money to invest in the district would come through selling or leasing PDC-controlled land, and little of that remains in the renewal area.

While Airport Way’s reduction would be the largest, other areas have had their acreage cut, Alexander said. As Portland continues trying to spur development with urban renewal areas, City Council will be looking closely to determine the best land for potential redevelopment.

鈥淭hey realize that urban renewal is a limited resource,鈥� Alexander said. 鈥淭hey want to be careful how they use it to create jobs and housing.鈥�