A major roadblock involving how Southwest light rail and freight trains operate close to one another has been resolved, freeing local transit planners to apply for nearly $1 billion in federal funds to help pay for the project.

The Hennepin County Regional Railroad Authority voted 5-1 Thursday to approve a series of agreements with Glencoe-based Twin Cities & Western Railroad (TC&W). The pact spells out how property transfers, light-rail construction and operations, and shared use of transit and freight corridors along part of the 14.5-mile Southwest route will work.

It calls for TC&W to be paid an $18.5 million settlement. In return, the railroad will drop a federal lawsuit it filed against the Metropolitan Council, Hennepin County and Canadian Pacific Railway last spring.

The federal Surface Transportation Board needs to approve the agreements, which were crafted after four mediation sessions. The Met Council approved the agreements Wednesday.

Gaining control of the land between the Kenilworth corridor in Minneapolis and Minnetonka along the Southwest route is critical to the Federal Transit Administration (FTA), which is expected to pay nearly half of the cost to build Southwest, said Hennepin County Commissioner Peter McLaughlin.

"I can guarantee that if we didn't get an agreement [with TC&W] in place, [Southwest] could not move forward," he said.

Dissenting vote

The dissenting vote came from Commissioner Jeff Johnson, a longtime opponent of Southwest light rail who is a Republican candidate for governor. He said there's no cost benefit to light rail, and "we have no idea whether the federal government will fund this. If it doesn't then we either scrap the project, wasting tens of millions of dollars, or we're told that someone else will pay for it and I'm fearful it will be Hennepin County taxpayers."

The Metropolitan Council is expected to apply for the federal money later this year.

Southwest light rail would link downtown Minneapolis with Eden Prairie, with stops in St. Louis Park, Hopkins and Minnetonka. Passenger service is expected to begin in 2023.

Janet Moore • 612-673-7752

Twitter: @MooreStrib