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Last year, developers of the planned Foothills District in Lake Oswego said the project would largely hinge on arrival of a new streetcar line. But those tracks won’t be laid.

Now, the project is moving forward, but with a much smaller scope 鈥� 60 percent smaller.

鈥淲ithout the streetcar, we pulled out of (certain areas), and we envision that redevelopment of those areas will be much further down the road now,鈥� said Brant Williams, director of economic and capital development for Lake Oswego.

Originally, the district, which will be an urban renewal area, was supposed to be 107 acres and essentially connect Lake Oswego to the Willamette River. Now, it will be 53 acres.

The city’s investment in the project will drop by $8 million to about $49 million; it will come from tax increment financing and system development charges. More notably, private investment in the district will decrease from $1.4 billion to around $500 million.

The streetcar was needed to connect the district’s southern and northern portions. The southern part, which encompasses an area beyond the Oswego Pointe apartments and the Oswego Village shopping center, is more underdeveloped than the industrial area north of it.

Without a transit line, luring developers and residents to the area would be difficult, according to Matt Brown of Williams/Dame and White, which is working with the city to develop the project.

鈥淪ome parts of the district won’t redevelop over the next 20 or 30 years without that kind of catalyst,鈥� Brown said. 鈥淭here may be some development activity, but it’s not going to have the chance of what was proposed initially.鈥�

As a result, the southern portion is being eliminated for now, Brown said. Originally, it was expected to include a large number of residential units near the Willamette River and development around Foothills Park, an underused park built by the city seven years ago.

Now, the focus will be primarily on the northern portion, which surrounds the Tryon Creek Wastewater Treatment Plant. It will look slightly different than proposed previously 鈥� with 15 percent less retail development, for example, Brown said. Commercial development may be scaled back similarly.

But the primary objective 鈥� new housing 鈥� is still realistic, Williams said. Thousands of units 鈥� including studios and apartments, which the city lacks 鈥� are in the works.

鈥淲e would like to provide additional housing for younger professionals and younger people that want to live in Lake Oswego, as well as seniors,鈥� he said. 鈥淲e are mostly a developed city 鈥� very little undeveloped properties 鈥� so the redevelopment of these underutilized parcels would be a benefit to Lake Oswego to add more housing and more housing options.鈥�

The district is expected to generate upgraded connections to 16 existing acres of parks and improve infrastructure, including the wastewater treatment plant.

Additionally, the Foothills District would be expected to increase significantly in value, meaning more property taxes would go back to the city; when the URA expires in 2035, the city estimates it will get back $2.9 million annually. And because of shared revenue, the URA would benefit other taxing jurisdictions outside of the city.

鈥淭his is exactly what urban renewal was created for 鈥� to take challenging property for redevelopment and turn it from low valued, underdeveloped areas into much higher valued property that benefits not only the city but all of the taxing districts in the area,鈥� Williams said.

The original plan called for the district being 鈥渋mplemented quickly,鈥� according to plan documents. Without the streetcar, however, urgency won’t be as great, Williams said.

The city is finalizing its plan for the district boundaries. Officials are hoping that a few of the associated projects will start within the next two years.

鈥淕oing back to the conversations we had last year, we said the streetcar is really driving the form of the project, and without the streetcar, it would probably be something much different than what was being proposed,鈥� Brown said. 鈥淭hat’s pretty much true.鈥�