The Federal Transit Administration has approved the start of environmental study on the proposed Southwest Corridor Light Rail Transit line from Minneapolis to Eden Prairie.

That means the federal agency finds enough merit in the project to allow it to proceed in the study and evaluation process, said Katie Walker, Hennepin County's chief planner for the rail line.

To be eligible for 50 percent federal funding and to open as proposed between 2015 and 2017, the project ultimately would have to meet FTA cost and ridership requirements and to be listed as a priority by the Metropolitan Council.

The environmental impact study -- expected to take 18 months and cost about $2 million -- will deliver more refined estimates of cost, ridership and environmental effects on several routes under consideration.

The next step would be preliminary engineering of a selected route.

Within the next two months, Hennepin County will ask consultants to submit bids to do the study, Walker said. Hennepin is seeking grants from the state and federal governments to pay for the study, but the county has budgeted to cover the cost if necessary, Walker said.

The recent passage of the state transportation bill, which allows metro counties to levy a quarter-cent sales tax for transit, puts the project in better standing with the FTA because it gives Minnesota a guaranteed source of funding for rail and bus improvements, Walker said. To compete for federal funds with other rail projects around the country, a project has to be backed by state and local funding to cover half its costs.

The sales tax proceeds are expected to keep the project on track to open shortly after the proposed Central Corridor LRT line between downtown Minneapolis and downtown St. Paul opens, said Jason Flohrs of the Twin West Chamber of Commerce, a key supporter of the rail line. "Before this was passed, we were worried that it would be delayed.''

Because roads are congested, light rail service will be critical to continued economic development along the corridor, Flohrs said.

With a new sales tax for transit, Hennepin County has changed the funding equation for the proposed southwest line, Walker said.

Originally, the county planned rail construction with 33 percent of the funding from the state, 17 percent from the Hennepin County Railroad Authority's property tax collections, and 50 percent from the federal government.

With the sales tax, the county will seek 10 percent of the funding from the state, with 10 percent from the county railroad authority property tax, 30 percent from sales tax revenues and 50 percent from the federal government, Walker said. The sales tax proceeds also would help pay the county's share of operating costs on the new line.

The federal government looks for a state financial contribution to projects as proof that the state has a commitment to the projects, she said.

Laurie Blake • 612-673-1711