Neighborhood councils form an important and sometimes problematic layer in the governance system of many cities across the USA. The literature on these institutions has focused mainly on their hypothesized role in facilitating citizen participation in neighborhood and city planning. Less work has explored the experiences of neighborhood councils as placed-based institutions theoretically embedded within, and therefore ostensibly reflective of, the overall social and political geography of the city. In particular, little research documents the actual local development priorities, fund-raising capacities, project achievements and scalar tensions associated with neighborhood councils operating in different neighborhoods of the same city. Using a perspective based on extant literatures in urban politics and public administration, this paper offers an analysis of the neighborhood council experience in Tacoma, Washington, USA. While these councils are still "segmented" from the core of urban politics, the paper argues, certain institutional reforms could unlock their long term potential as more "transformative" spaces of local governance.