The city of Portland's been looking for ways to build out the scrubby acreages southwest of the Marquam Bridge for decades. Commissioner Dan Saltzman, dean of the Portland City Council, recalls puzzling over the problem in the 90s under then-Mayor Vera Katz.

"Nobody thought anything could be done with it," Saltzman said at this morning's city council meeting. "It was all snarled land."

That's no longer the case, of course. Glimmering high-rises house rich professionals, and retirees, and medical students in the South Waterfront these days. A neighborhood once envisioned as holding a cross-section of Portland's incomes and demographic has become largely the province of the privileged, though it's still sort of desolate down there—particularly as you head north of the condo cluster.

Look for that to change in the next couple decades. City council this morning unanimously approved a huge development agreement that will transform 33 still-rough acres into something akin to the Pearl District.

The agreement, between the Portland Development Commissioner and the moneyed Zidell family, incited all manner of developer-style backslapping and shaking of hands in council chambers this morning. People are psyched about it.

The development agreement sets the stage for at least two phases of development, which would involve something like 1.5 million square feet of new housing and commercial space, a park, and a greenway trail along the river. All that building's expected to bolster the tax increment financing (TIF) money the PDC collects to reinvest back in the neighborhood by more than $23 million. In all, the city plans on spending $35 million to move the plan ($28 million of it TIF money), and Zidell's planning about the same. Things are going to get fancy.

But as we've reported, it's not all going to be reserved for the well-to-do. A highlight of the agreement is that it forces Zidell to sell a plot of land to the Portland Housing Bureau (PHB) that will be reserved specifically for housing people who make 60 percent of the median income or below. The PHB envisions roughly 200 affordable units in the still-undetermined space sometime after 2021 (a baseline price will be hammered out next year, before the property shoots further up in value).

Taken along with another affordable housing development being readied down the road (to the horror of some Riverplace residents), the South Waterfront may have something like 600 affordable housing units a decade from now, which will be 600 more than it had in 2010.

"Four hundred families who cannot afford to live in our city are going to have a chance to live in a very desirable neighborhood," Commissioner Nick Fish said this morning (he wasn't counting the 209 affordable units that already exist in South Waterfront). "Folks who don’t have a lot should have a choice of where to raise their families."

The agreement, as I say, was the subject of much verbal backslapping. You got the feeling that a few people in the room might have liked to light up a stogie right there.

"We engaged in some deep soul searching," said Jay Zidell, President of Zidell Companies, about his family's vision for their acreage. "We concluded that our desire is to see the site become something quite special for our family and the city."

But there were concerns, too—most substantively from Debbie Aiona, chair of the League of Women Voters of Portland, which has been calling the city out for flubbing the South Waterfront project for years.

Aiona was worried about loose deadlines for constructing a park, and that the city might be putting too much faith in the Zidell family's ZRZ Realty Company, which she says is under no obligation to actually build the projects it's proposing.

"If development does not occur, TIF fails to materialize, and the city does not meet (its goals), what happens?" Aiona asked, urging the city council to inject some further safeguards into the agreement. Instead, council sped the thing up. Commissioner Nick Fish suggested commissioners' assent be passed as an "emergency," meaning it won't get a second reading in a week and goes into effect immediately. Everyone agreed.

"This development agreement is the make or break for the entire area," Commissioner Amanda Fritz said, noting South Waterfront is still fairly spare, 15 years after its development was set in motion.

Mayor Charlie Hales was unflinchingly optimistic, saying Portland's got an exceptionally rare chance to build a neighborhood out of nothing (a job he says the city's done better than similar projects in San Francisco, New York, and Vancouver, BC). And the mayor knows what he'd like that neighborhood to look like a decade or two down the line.

"I look forward to the day when the South Waterfront as a neighborhood is as far along as the Pearl District is today," he said.