Red Line project awarded $75 million federal grant

IndyGo is breathing a sigh of relief: The feds have agreed to pay for most of the construction costs of the first portion of the planned $198 million “Red Line” Bus Rapid Transit project.

The Federal Transit Administration on Tuesday announced it awarded IndyGo a $75 million grant for the project through its Small Starts program, helping the organization overcome a major hurdle after  the city was not selected last year for funding through the state’s Regional Cities program.

IndyGo is thrilled to move forward with the Red Line,” said IndyGo President and CEO Mike Terry in a written statement. “This funding decision is a testament to the quality and importance of the Red Line project.”

The Red Line, which would be the nation's first battery-powered BRT system, is envisioned to eventually be a 35-mile, three-county rapid transit line running from Westfield through Carmel in Hamilton County, into downtown Indianapolis, and down to Greenwood in Johnson County.

The new grant specifically allows IndyGo to start building the first 13-mile phase, which will run from 66th Street in Broad Ripple to the University of Indianapolis. The first phase alone is expected to cost $96 million to build and another $6 million annually to operate. Construction is expected to start in spring 2017, with routes open for service in fall 2018.

The Red Line is one piece of a $1.2 billion regional transit plan called Indy Connect, which includes building more BRT lines in other areas of the region as well as increasing regular bus service.

Additional BRT routes and future additions to the Red Line after Phase One will hinge on approval by voters in referendums. Transportation officials in Marion County are expected to seek a 0.25 percent income-tax increase in a November referendum that would raise about $108 million per year. The City-County Council needs to vote first to put it on the ballot.

IndyGo says it needs about $18 million in local matching dollars to fund the first phase of the project. It expects to receive $6 million from the downtown tax-increment financing district and $6 million through the Department of Public Works’ budget.

Terry told IBJ he expects the remaining matching dollars to come from IndyGo’s capital funds and from its reserves.

“We need to develop our transit system here to make it more user-friendly,” Terry told IBJ. “Our area here is significantly low in the ability to move upward [into a higher economic class]. Transit is one of those key limiting factors to helping people move out of poverty. It’s going to have far-reaching effects for the rest of the region.”