The agreement was approved by the council. Before the vote, a couple of council candidates criticized it as not being in the best interest of residents.

Under the agreement, the city will give the private development corporation $100,000 a year for five years.

That money will come from tax increment financing, which occurs when increased property tax revenue in a designated area is set aside to be reinvested in that area.

There are no single family homes in the center city and industrial park urban renewal area, which is the source of the tax increment financing money, according to City Manager David Fierke.

“If you own a house, your property taxes are not going to this,” he said.

He said the city is using a comparatively small amount of its money to leverage larger investments that will benefit the downtown.

All buildings in downtown Fort Dodge will be eligible for this program, he added.

The loan program is separate from a recently awarded state grant for the Boston Center, he said.

The development corporation was established in 1981. Its mission is to attract businesses to downtown, improve the property values of downtown and improve the image of downtown.

It is led by a nine-member board whose current chairman is Mike McCarville. Three bankers on the board will review the loan applications. No one on the board is paid.

Councilman Cameron Nelson was absent from the otherwise unanimous vote to approve the agreement.

Dr. Ed Touney, who is running for the Ward 4 council seat, said he believes the loan program amounts to taking money from the taxpayers to pay for things the building owners should pay for.

When Mayor Matt Bemrich told him the money was coming from tax increment financing, Touney replied by asking, “Could that tax money go to the general fund to take care of the needs of Fort Dodge?”

Dennis Mernka, who is running for the Ward 3 council seat, said the loan program could result in more businesses essentially asking for a handout from the city government.

Downtown business owner John Daniel spoke in favor of the program.

“Our downtown needs a big shot in the arm,” he said.

He said he supports efforts to preserve downtown and make it better.