Item Description:
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Hennepin County Funding Commitment for the METRO Blue Line Extension LRT Project (CP 1005877)
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Resolution:
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BE IT RESOLVED, that Hennepin County hereby commits to increase its funding share for the METRO Blue Line Extension light rail transit capital project (CP 1005877), up to a new not to exceed amount of $1,896,000,000, and that this funding commitment will be fulfilled from proceeds of the County’s 0.5 percent transportation sales and use tax, authorized by Minnesota Statutes, section 297A.993, and associated financings; and
BE IT FURTHER RESOLVED, that Hennepin County commits to providing a combined total contribution with the Hennepin County Regional Railroad Authority, in the amount of $2,254,000,000, and that the County’s 0.5 percent transportation sales and use tax will be used to replace any decreased funding, reflected in HCRRA resolution 26-HCRRA-0012R1; and
BE IT FURTHER RESOLVED, that Hennepin County’s funding commitments to the METRO Blue Line Extension Light Rail Transit Project will follow all terms and conditions addressed in the Capital Grant Agreement between Hennepin County, HCRRA, and Metropolitan Council (PR00005488) and future amendments.
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Background:
The Metropolitan Council is the formal project sponsor for the Blue Line Extension light rail transit capital project (BLE) and will be the federal grantee for any funding received from the Federal Transit Administration (FTA). This project is eligible for funding through the congressionally authorized Capital Investment Grant program, an important federal funding source for large transit capital projects. Later this year, the Metropolitan Council plans to submit a grant application to the FTA for $752 million. To support this grant application, all local funding partners need to demonstrate their commitment to provide their respective funding shares for the project. This resolution is intended to satisfy federal requirements for Hennepin County’s commitment as a local funding partner.
Resolution 17-0207 terminated the Counties Transit Improvement Board (CTIB) joint powers agreement, terminated the 0.25% CTIB sales tax, and authorized the 0.5% Hennepin County Transportation Sales and Use Tax for the purpose of funding designated transit and transportation improvements (as authorized by Minnesota statutes, section 297A.993). In addition, Hennepin County assumed the commitment to fund the capital costs for the METRO Blue Line Extension Light Rail Transit Project (the “BLE”) (CP 1005877) in an amount not to exceed $530.1 million.
Resolution 18-0500 committed up to an additional 10% beyond the total project budget, for both the Green Line Extension and Blue Line Extension light rail capital projects. This resolution was required by the Federal Transit Administration (the “FTA”) in preparation for the Green Line Extension Full Funding Grant Agreement. The FTA explained that in order to receive a Full Funding Grant Agreement, the Metropolitan Council would need to demonstrate its financial capability to address a cost increase or funding shortfall of 10% of the total project budget, in addition to contingency funds already included in the budget. The FTA was clear that a commitment to meet a 10% cost increase beyond budget will be required of all future projects in the New Starts program throughout the country, prior to award of an FFGA.
The BLE project design has undergone several community-informed revisions, to modify the previous route and advance the project, per the following completed and anticipated milestones:
• September 2020, the BLE project office was directed by Hennepin County and Metropolitan Council to find a new route for the BLE with the corridor communities that did not include freight rail.
• October 2024, the local cities along the corridor granted Municipal Consent to proceed with the engineering of the recommended route from Target Field Station northward into the communities of Minneapolis, Robbinsdale, Crystal and Brooklyn Park. The project then advanced the thirty percent design.
• May 2025, the Supplemental Final Environmental Impact Study was reviewed by the FTA and received public comments.
• May-October 2025, the sixty percent design plans were sent to local agencies for review/comment/approval.
• August 2025, the Amended Record of Decision was issued by FTA.
• April-June 2026, the ninety percent design plans were sent to local agencies for review/comment/approval.
• June 2026, the Rating Application and Pre-Risk Assessment was completed with the FTA and identified a project budget of $3,580,739,000.
• Upcoming project milestones include:
o Submitting a grant application to the FTA for $752 million
o Receipt of the Full Funding Grant Agreement (FFGA), which secures the federal commitment
The Hennepin County board commitment includes the anticipated $56 million savings from Green Line Extension committed by the Metropolitan Council at the Project Decision Board meeting on July 22, 2026. Hennepin County board also directs staff to continue to work with Metropolitan Council to identify the remaining project funding through MnDOT participation, Light Rail Vehicle strategies, contingency reductions, available federal sources and other opportunities to ensure timely FFGA submission. In addition, partner to develop legislative strategies to seek a sales tax exemption for construction material for the Blue Line Extension Project.
The Blue Line Extension will bring transformational opportunities to Hennepin County cities and residents in working class communities that have experienced historic underinvestment and depressed tax base growth. The line will serve 83,000 residents within a half-mile of stations, of which 60% are residents of color and 37% are low-income residents. The Blue Line Extension will provide affordable transportation options for corridor residents, resulting in an estimated 10,000 plus daily riders, decreased vehicle miles travelled, and reduced congestion in the Northwest Metro. With half of projected riders expected to come from households without a car, it will give thousands of residents new freedom to travel with dignity and ease to access opportunities to work, learn, play, heal, and grow. It will directly connect job seekers in the corridor to more than 200,000 jobs throughout the Blue Line corridor and give workers access to one-third of all jobs in the region with no more than one transfer to another high-frequency transit service. Land near light rail generates 27 times more property tax revenue per acre than an average parcel due to new development, while reducing the relative tax burden of existing residents and offsetting the need for future levy increases. To date, more than $14 billion has been invested near Twin Cities light rail lines-$10.9 billion of that has been within Hennepin County, generating $186 million in property tax revenue annually. Similar development in cities along the Blue Line Extension will generate significant new revenue for local jurisdictions to invest in services, infrastructure, and schools. As the missing northern leg of the Twin Cities regional light rail system, the Blue Line Extension represents a generational opportunity to advance county priorities in disparity elimination, sustainable growth, and climate action.
In 2026, the Metropolitan Council identified an updated BLE project cost estimate of $3,580,739,000. This resolution would commit $1,896,000,000 of county transportation sales taxes towards the project, for an estimated funding share of 52.9%. This resolution increases the county’s commitment by $1.37 billion, from the 2017 amount of $530.1 million. In order to finance this commitment, the county has statutory authority pursuant to Minnesota Statutes, Section 297A.993 to issue general obligation bonds backed by sales tax revenues. As of June 2026, the county has already budgeted $326 million towards this capital project and has spent $132.8 million from county transportation sales taxes. No county property taxes will be used to fulfill this funding commitment.
The additional 10% contingency commitment from Resolution 18-0500 would provide an additional $358 million (or 10%) towards the project, if needed, but is not included in this funding commitment amount or the project budget. The Metropolitan Council and Hennepin County are currently seeking permission from the FTA to change certain project elements in order to reduce the project budget (also known as “scope reductions”). If the FTA approves those reductions before the federal grant application is submitted, then the amount of funding needed to satisfy the additional 10% contingency commitment from Resolution 18-0500 would also be reduced.
In addition to county funding sources, the Hennepin County Regional Railroad Authority will provide a separate funding commitment of $358 million, which represents its maximum contribution amount of 10% pursuant to Minnesota Statutes Section 398A.10.
Current Request: This action commits Hennepin County to increase its funding share for the METRO Blue Line Extension light rail transit project (CP 1005877), from a 2017 commitment amount of $530.1 million, up to a new not to exceed amount of $1.896 billion. This commitment is based on the revised cost estimate and construction schedule compiled by the Metropolitan Council, after municipal consent, and reviewed by the FTA. This commitment is an essential action for the project’s application to the FTA for the full funding grant agreement.
Impact/Outcomes: This action supports the county’s disparity elimination and climate action efforts by investing in clean-energy transit infrastructure that expands transportation options and strengthens regional connections to housing, jobs, education, healthcare, and other essential destinations.
This request funds services that are: core services
recommendation
Recommendation from County Administrator: Recommend Approval