ARLINGTON — It might still appear rural, but if you stop for coffee at Island Crossing on Wednesday you’re now within the city limits.

When the state Supreme Court decided in October that Dwayne Lane can build a car dealership along I-5 south of Island Crossing, the ruling paved the way for the city of Arlington to annex the area.

The 210-acre area includes the Island Crossing restaurants and gas stations on Highway 530 to the north and mostly unused farmland along Smokey Point Boulevard in the middle. On the south end, it brings into the city the homes and businesses along the bluff north of 188th Street NE.

The annexation becomes official at midnight and opens the opportunity for other businesses to build in the area.

The city won’t be able to collect property taxes from landowners in the annexed area until 2010, but Arlington should see a slight increase in sales tax revenue from some businesses in the area, city spokeswoman Kristin Banfield said. As the area develops, and if a new car dealership is built, the city could see a huge increase in new sales tax revenue.

“This is a huge step for the city and we know there is an awful lot of work ahead,” Banfield said. “While there is interest in development of the area, it won’t happen overnight. People still have to plan and go through the process to mitigate environmental impacts.”

The Island Crossing annexation is welcomed by most property owners and had been pending in various forms for about 17 years.

The city already provides water and other services in the area, and most people identify themselves as Arlington residents, Banfield said.

The City Council’s recent unanimous decision to annex the area is a historic event for the property owners who worked hard to become a part of Arlington, Mayor Margaret Larson said.

“We are excited about the opportunities this has for the city,” Larson said.

The recent Supreme Court decision about car dealer Dwayne Lane’s property affirmed an appellate court ruling from April 2007. That ruling reversed a 2005 Snohomish County Superior Court decision that found that a movement by landowners and the city of Arlington to annex and urbanize Island Crossing violated the state’s Growth Management Act.

The city, Snohomish County and Lane all appealed the decision and won. Then the state appealed to the state Supreme Court. The state and a half-dozen other groups argued that the land historically had been used for farming, is prone to flooding and should not be zoned for commercial use.

City attorney Steve Peiffle said the court’s final decision was a boost for local governments to decide what’s best for their communities.

“The highest court of our state heard the case and determined that the county was right to put the disputed property into Arlington’s urban growth area” and make way for the city to annex it, Peiffle said.

Reporter Gale Fiege: 425-339-3427 or gfiege@heraldnet.com,