SALT LAKE CITY — In October 2007, Ralph Becker stood on the corner of McClelland Street and Sugarmont Drive and announced his intentions to make a light-rail or trolley route to Sugar House a high priority under his administration.

Becker, then a candidate for mayor, insisted that by working together with the Utah Transit Authority and South Salt Lake, the line could move forward much sooner than what then was a 20- to 25-year timetable.

A few days shy of three years later, Mayor Becker returned to that same corner Wednesday to celebrate a $26 million federal grant that will allow the Sugar House streetcar project to move forward immediately and possibly be operational within three years.

"I am pleased to announce that by securing the TIGER II grant, we have identified a crucial piece of federal funding to take the Sugar House streetcar from vision to reality," he said.

The Sugar House streetcar line was one of 42 capital construction projects awarded federal funding Wednesday through the Transportation Investment Generating Economic Recovery program. The second round of the federal stimulus funding, known as TIGER II grants, will put nearly $600 million toward major infrastructure projects in 40 states, ranging from highways and bridges to transit, rail and ports.

City leaders say the $26 million awarded to the Sugar House project will jump-start construction of the two-mile streetcar line from the 2100 South TRAX station to the old Granite Furniture building.

Only three projects received more TIGER II funding than the Sugar House streetcar line. The largest grant, nearly $47.7 million, went to a streetcar project in Atlanta.

"These are innovative, 21st century projects that will change the U.S. transportation landscape by strengthening the economy and creating jobs, reducing gridlock and providing safe, affordable and environmentally sustainable transportation choices," U.S. Department of Transportation Secretary Ray LaHood said in a news release. "Many of these projects could not have been funded without this program.

Ralph Jackson, UTA's deputy chief of major program development, said project officials had applied for a $31 million grant, though he noted that the $26 million will be sufficient for the project to get under way immediately.

The full cost of the streetcar project has been estimated at $46 million, a figure that doesn't include the right of way for the line acquired years ago by UTA. But Salt Lake City transportation officials have been working with UTA to find ways to trim that price tag, Becker said.

One example of that is the possibility that cars already being acquired for UTA's TRAX system could be converted for streetcar use. That would also eliminate the need for separate maintenance facilities and operations, he said.

"That saves an enormous amount of money in terms of development of the system," Becker said.

Salt Lake City Councilman S?ren Simonsen described plans for a streetcar in Sugar House as "going back to the future," noting that the community was built on trolley lines that operated in the early part of the 20th century.

"We're bringing back technologies," Simonsen said, "but this will be a very modern trolley system. It will have a lot of things that historic trolleys didn't have in terms of accessibility for people with disabilities and our ability to integrate and tie in with other modes of transportation, pedestrians and bicyclists."

The project also will be unique in that the streetcar won't actually run on a street, he noted. Project plans call for the streetcar or trolley to use the abandoned railroad corridor between 2100 South and I-80.

The streetcar line also will be integrated with the Parleys Trail, creating what Simonsen says has the "opportunity to become a tremendous corridor that's really focused on transit and pedestrians."

The slower-moving streetcar would stop more frequently than a TRAX train, picking up and dropping off riders every other block. Streetcars in U.S. cities, including Portland, Ore., have shown to increase foot traffic to shops and restaurants along the line, city officials said. The permanency of the tracks spurs development in areas because the system guarantees people will have easy access specific locations.

It's a twist on the popular model of transit-oriented development, Becker said, in that the transit element is the catalyst for surrounding development.

City leaders have visited Portland and other U.S. cities with streetcar systems and have seen firsthand what they can do for an area.

"If it follows the examples of what we've seen in other areas in the country that have had (streetcars), you're going to see housing and apartments. You're going to see businesses," said JT Martin, City Council chairman. "You're going to see Sugar House come back like it was in its glory day."

In addition to encouraging development in the area, Jackson said the streetcar line will make it possible for people in Sugar House to connect with the rest of UTA's 150-mile rail system — and vice versa.

"(People will be able to) go anywhere in the valley right from this location," he said.

The Department of Transportation received nearly 1,000 construction grant applications for more than $19 billion from all 50 states, U.S. territories and Washington, D.C.

The high volume of requests for TIGER II project dollars follows a similar demand for the $1.5 billion awarded in February 2009 through the TIGER I program. The Sugar House project also was a candidate for those funds but was not selected.

Jackson said UTA and city officials were "quite optimistic" the Sugar House streetcar project would be among those receiving funding in the second round of grants.

"When we talked to the federal people when the last set of grants were issued, they told us we were right at the top of the list; we were just below the cutoff," he said. "So we were feeling quite positive in this next go-round that this project would be included and receive a grant."