MILWAUKEE – The construction of the $40 million downtown Milwaukee streetcar extension project to the new Milwaukee Bucks arena may be in jeopardy after the city failed to win a competitive federal grant for the second time.

According to a report by TODAY’S TMJ4 partner the Milwaukee Business Journal, the city of Milwaukee was seeking $20 million in Federal Department of Transportation grant money to pay for the next phase of the streetcar extension -- which would connect the Milwaukee Intermodal Station to the new Milwaukee Bucks arena.

On Friday, the grant awards were announced -- and only a bus transfer station project in Eau Claire was awarded that grant money in the state of Wisconsin.

“While we obviously had hoped to receive this grant, we’re going to continue to work to get federal funding for this important route extension," said Ghassan Korban, commissioner of the city of Milwaukee Department of Public Works told the Milwaukee Business Journal. "We’re very optimistic that with operations of the streetcar starting later this year, we’ll be in a strong position to get a federal investment to expand the benefits of the streetcar to more Milwaukee neighborhoods and residents.”

Milwaukee previously applied for this grant in 2016 for this project but was unsuccessful. It took two attempts for Milwaukee to win a federal grant for the streetcar’s extension to the lakefront. That grant was awarded in 2015, when the streetcar construction first started.

The Business Journal reports Milwaukee’s Common Council in July 2016 approved $20 million in tax incremental financing to pay for the city’s local share of the arena extension. Of that spending, $8 million is dependent on a new development happening on the city parking lot at the corner Fourth Street and West Wisconsin Avenue. However, no private development has moved forward.

A federal grant is covering half the cost of the first streetcar phase. Milwaukee is using tax incremental financing (TIF) to cover its share of the project’s cost.

For more on this story, visit the Milwaukee Business Journal's website.