Pasadena’s proposed biotechnology zone, which was supposed to propel the city to the front ranks of U.S. biotech centers, has suffered a serious setback.

In response to opposition from neighborhood associations and local businesses, the size of the zone’s redevelopment area has been slashed from 120 acres to as little as 25 acres.

That downsizing means the amount of tax increment financing generated by the 120-acre zone will be less than the $35 million originally estimated. And since tax increment financing was to be used to fund incentives to draw companies into the zone and to pay for infrastructure improvements the ultimate success of the zone could be delayed or greatly diminished.

And that has some project supporters concerned.

“This will slow down the plan for the biotechnology corridor and how much of the area will ultimately be developed for biomedical use,” said Bob Leishman, co-owner of Leishman Management Co. and a biotechnology zone supporter.

While the portion of the zone designated as a redevelopment area has been slashed, the amount of square footage set aside remains considerable.

Specifically, 700,000 to 800,000 square feet of the zone’s total 1.2 million square feet of planned development is targeted for the area.

City planning officials have not set the exact redevelopment boundaries yet, but Eric Duyshart, project coordinator for the Pasadena Community Development Commission, said the parcels will be clustered around a city power generation facility at the north end of the zone and a proposed Metro Rail Blue Line station.

The zone itself is situated just west of the northern terminus of the Pasadena (110) Freeway.

Meanwhile, plans are going forward for the establishment of a formal specific plan for the biotechnology zone.

The specific plan is likely to include incentives for biotechnology and biomedical startup firms and other small firms seeking to move into the area. Those incentives might include lease discounts or rebates on utility bills (from the city-owned utility).

While the setbacks are causing concern among some zone supporters, others insist that a go-slow incremental approach to the zone makes sense.

“We’re not looking at this as a fast-track project. We’ve got a 10-year to 20-year time frame,” said Jim Goodell, a spokesman for Huntington Memorial Hospital, which, along with the California Institute of Technology, is one of the anchors of the zone.

Jacobs Engineering Co. and the Southern California Biomedical Council are among the other key backers of the project.

“The key part is to adopt a plan and get the first 200,000 to 300,000 square feet developed to get the whole project moving,” Goodell said. “Then we need to see how the market reacts. The only thing that redevelopment does is show to private investors that there will be improvements made over a long period of time. This might now take 10 years instead of five years, but it will still happen.”

The scaled-back redevelopment proposal is due to come before the Community Development Commission in two weeks and could go to the Pasadena City Council by the end of October.

The specific plan for the 120-acre zone, which last week went before the city’s planning commission and was returned to staff for minor changes, is also due to go the council in a few weeks.

Slashing the size of the redevelopment area was a concession to redevelopment opponents, which include several merchants within the zone and two adjacent neighborhood groups.

Almost three-fourths of merchants in the zone were opposed to the initial redevelopment proposal because they feared the city would use its eminent domain powers to force them to relocate.

However, earlier this year, the city agreed to insert a clause that would exempt existing businesses from eminent domain.

While that satisfied many business owners, some, including Brian O’Neil, owner of Dydee Diaper Service, were still skeptical that such language would hold up in court.

Leaders of two neighborhood groups, the West Pasadena and Madison Heights neighborhood associations, said that offering redevelopment financing is not the right mechanism to entice businesses into the zone.

“It doesn’t make sense for this area, which is already improving on its own without government involvement,” said Jeff Ellis, president of the Madison Heights Neighborhood Association. “We don’t think that government invests well in speculative projects like this one.”

Ellis said the marketplace should determine the pace of development in the zone.

The neighborhood groups challenged the city’s definition of “blight,” which is the basis under state law for declaring an area a redevelopment area. They contend that the area within the zone has seen some recent development and that land values have been rising.

Instead of pushing ahead with making the entire zone a redevelopment area and risking a court challenge to the “blight” designation, city planners instead opted for a stricter definition of blight, which led to the dramatic scaling back of the acreage, Duyshart said.