Tucson got federal approval this week to start spending its $63 million grant for the modern-streetcar project. Until now, the money was allocated to the city, but one last hurdle stood in the way of spending it.

The city's environmental review was still pending, keeping the city from spending down the grant money. The Federal Transit Administration approved the city's environmental assessment this week, saying the project has "no significant adverse impacts on the environment" as long as it sticks to plans submitted.

Those plans include keeping vibration to a minimum near an astronomical observatory on campus, and designing the Cushing Street bridge across the Santa Cruz River so the streetcar has no impact on the recreation use of Santa Cruz River Park.

"It means it's in our bank," said Tucson Mayor Bob Walkup, who added that the news is "very significant" and allows the city to move forward and meet its schedule for the project.

The city plans to go to bid within weeks on four contracts for the project, including construction of the Cushing Street bridge, said Jim Glock, city transportation director.

"It's a big yay, maybe even a hallelujah," the mayor said.

The Federal Transit Administration awarded the $63 million grant in February 2010 for the project to put in a modern streetcar line from University Medical Center to the west side of downtown. In December, the city got final approval for the grant money, but it still needed its environmental assessment approved before it could start spending the money.

"We are through the majority of the hurdles one has to endure with any federal aid project," Glock told the Regional Transportation Authority Thursday.

City officials already have ordered streetcars from Oregon Iron Works and have spent more than $25 million on design and materials for the project. The RTA is kicking in the largest amount of funding, with $75 million from a half-cent-per-dollar sales tax for transportation projects in the metro area. The RTA and the city are jointly managing the project.

Contact reporter Andrea Kelly at akelly@azstarnet.com or 807-7790.