The city of Bloomington and the state signed an agreement to fund a $49 million rehab of Lindau Lane, a key component in the Mall of America's expansion plans.

According to a news release issued by the city and the Bloomington Port Authority Tuesday, the state will reimburse $15.45 million of the project's costs, with the $33.35 million balance coming from local sources, including tax-increment financing by the megamall. The state's portion came through the 2011 capital bonding bill.

The project calls for Lindau Lane to be reconfigured to make way for expansion of the mall on its north side, improving driver safety and extending a key development corridor through Bloomington's South Loop district, the city said.

The expansion includes a multilevel complex that will connect to the existing mall on all four levels. This includes the new $140 million Radisson Blu hotel, already under construction on the mall's south side, a Mayo Clinic outpost and more retail, hotel, entertainment and restaurant options.

Bloomington Mayor Gene Winstead said in a statement the city "secured two-thirds of the project funds, playing an essential role in getting construction going."

JANET MOORE