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When Portland City Council adopted the North Reach portion of the River Plan in April, environmentalists cheered and industry groups hissed. But the council’s recent efforts to create a development agreement for the first potential development within the North Reach zone have both sides upset.

Siltronic, a silicon wafer chip manufacturer, wants to develop the final 38 undeveloped acres of the company’s 80-acre waterfront site. On Thursday, the council heard the first reading of an ordinance that would allow the company to develop the land while bypassing what opponents have called a lengthy and costly River Review process. In return, Siltronic would grant the city a seven-acre conservation easement that the city would use as a special habitat area to connect wildlife from Forest Park to the Willamette River.

The fact that Siltronic, one of the largest employers along the riverfront, can’t develop its remaining land without bypassing the River Plan exposes one of its flaws, according to Ann Gardner, an opponent of the plan.

“This agreement proves our point that there is something fundamentally wrong with the River Plan,” said Gardner, executive director of the Working Waterfront Coalition, an industry group opposed to the River Plan.

The River Plan, meant to accommodate an economically prosperous waterfront and preserve the natural habitat of the Willamette River, is a city-driven review process that must be gone through before development can occur along the river.

Siltronic presently has two chip manufacturing plants on the site. While potential development opportunities on the site have been discussed over the past three years, Siltronic spokesman Tom Fahey said there are no active projects in the works.

“This is all about certainty,” Fahey said. “When a development opportunity comes up, we don’t want to be bogged down by this process if we don’t have to.

“I think the city is OK with this because we are in a different place from most of the companies along the river. We aren’t river dependent.”

Mayor Sam Adams agrees that certainty is a valid reason to create the development agreement.

During the first reading of the ordinance, Adams said the agreement and the conservation easement would assure creation of a full habitat corridor on one of the city’s key restoration sites. The agreement also would give Siltronic certainty while it pursues development opportunities, he said.

Bob Sallinger, conservation director for the Audubon Society of Portland, supported the River Plan when it was adopted by the city in April. However, based on what he has seen with the Siltronic situation, he worries the plan will lose its teeth because the city will allow itself to be “intimidated by industry.”

“This deal has been done entirely behind closed doors and is setting terrible precedent,” he said. “This agreement has bypassed the public process until now, and the city has accommodated it.”

Sallinger’s concern is that the city will negate the River Plan process every time an economically viable development is proposed along the waterfront. Sallinger believes the precedent will hurt the restoration of the river in the long run.

“If one of these development agreements is done correctly, it isn’t necessarily a bad thing,” he said. “But it needs to be done in a thoughtful way where all of the stakeholders are allowed to take part in the conversation.”

City Council is poised to vote on the development agreement at its Wednesday meeting. If approved, the agreement would go into effect on July 1 and would mean that any development on the property thereafter would not be subject to the River Plan process.

“I think the (councillors) need to ask themselves if this plan is going to leave the river healthier than when they found it,” Sallinger said. “This is going to be their legacy, and if they aren’t going to implement the plan the way it is meant to, I would rather see them go back to the old greenway code.”