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Urban operation consortium is the main urban redevelopment policy in Brazil. Mixing land use and financial tools, the policy intends to provide urban services and infrastructure in a specific perimeter of the city by selling construction benefits to investors, including changes in construction rights, uses and parcels. On the one hand, the instrument gets its strength from the interests of the real estate market while, on the other, it captures the land value to be created by the public investments. The list of works, their priority, and the overall development of the urban operation are supposed also to be discussed and approved collectively in committees composed of stakeholders that include public institutions, professional and business associations, and local residents. Therefore, the instrument is an example of the new type of urban policy in Brazil that, after the enactment of its first federal urban legislation in 2001, intends to promote urban reform, public participation and more effective tools to deal with the extensive and intense problems of Brazilian cities. The difficulties emerge when we take into account the great urban inequality in the country and that the perimeters of the most important urban operations include significant numbers of informal communities. With the interest of the real estate market, additionally, the formal residents also suffer pressures from the new developments in the area, including being the target of strategies of displacement and suffering the burdens of the decline in the overall quality of life. It is on the committee of the urban operation, though, that these conflicts should be settled, including giving the priority to local community works and the construction of social housing. Using the case of the Urban Operation Consortium Água Espraiada in São Paulo, this paper analyses the works on its committee and exposes the several disputes among those groups, the strategies of different stakeholders and the challenges to effective participation and control over these projects in Brazil.