The first line in St. Paul’s return to streetcars could run from the former 3M Co.’s campus on the east side to a stop near the Schmidt Artist Lofts on the west side, but the project is still unfunded and unfamiliar to some developers.

City planners have recommended a route along Seventh Street, from Arcade Street east of downtown to Randolph Avenue west of downtown, as the first in St. Paul’s long-term streetcar network. The project would be 4.1 miles from end to end and would cost about $246 million to build.

The route was chosen in part for its high redevelopment potential. Michelle Beaulieu, a city planner, said that a study of seven streetcar lines in or near St. Paul’s downtown showed that $134 million in increased property values along the route could be captured if the area were redeveloped for higher-density and mixed uses. That number was highest among routes with comparable ridership and capital costs.

But project planners still need to answer some questions.

For one, it’s still unclear how the line would be funded. A $246 million project would qualify for the Federal Transit Administration’s “Small Starts” grant program for funding smaller transit improvements. The federal contribution would be no more than $75 million, or about 30 percent of the project’s cost.

Beaulieu said that the city is also in talks with other government entities, including the Metropolitan Council and Ramsey County, to see what options could be used to fund streetcars.

“A lot of this is going to depend on funding sources,” Beaulieu said. “A lot of execution questions are still up in the air.”

The city of Minneapolis, which also is planning a streetcar line, created a special tax capture district for its project. That district is expected to contribute about $60 million to a roughly $220 million project.

The St. Paul line, even in the best-case scenario, wouldn’t see construction until 2018 or 2019. Jim Stolpestad, a St. Paul developer and chief manager of the Ironton Asset Fund, said that development wouldn’t come until more about the project is set in stone.

“Frankly, it doesn’t seem very real to me,” Stolpestad said. “It’s very early in the game here.”

Stolpestad owns multiple properties on the east end of the line, including the former 3M headquarters building and the site for Loomis, an armored car company just east of where East Seventh Street meets Arcade Street.

Both were acquired from the St. Paul Port Authority, which is still looking to develop parts of the campus just east of the streetcar line’s end.

Despite the timeline, some developers with projects along Seventh Street are bullish about what a streetcar could do for the area.

“I can’t think of how it wouldn’t benefit the neighborhood and our site,” said Owen Metz, a developer for Dominium. The Plymouth-based company recently moved the first tenants into its 260-unit affordable apartment redevelopment of the former Schmidt Brewery at 882 W. Seventh St., at the line’s western end.

Beaulieu listed several sites as potential targets for redevelopment. Much of West Seventh Street is covered by single-story buildings with surface parking, properties she said could be redeveloped as denser mixed-use projects. To the east, the Port Authority’s Beacon Bluff Business Center along parts of East Seventh Street, Phalen Boulevard and Minnehaha Avenue is about half full.

The Seventh Street alignment stood out from others on the list because it has the power to attract ridership and development interest.

“This is a good, strong line, both in terms of population nearby and potential to see some exciting new developments for the city,” Beaulieu said.

Beaulieu said much of the alignment to the west is covered by single-story buildings with surface parking. Redevelopment of the area would mean building denser projects covering a mix of uses.

Planners have yet to choose the project’s route through downtown St. Paul, and that portion of the line was excluded from the development analysis.

Metz said he saw potential up and down Seventh Street for new development.

“That whole area is very under-utilized,” he said. “It seems like an area that has opportunity for growth.”

Dominium is already planning a senior housing project on East Seventh Street, he said, adding that he expects the Schmidt Brewery renovation to set a market for apartments on the west side.

Metz said that the company didn’t expect streetcars to be part of the Schmidt project’s long-term sales pitch, but will take advantage of the project once in place.

“The access to transportation allows people to reduce transportation expenses and have access to downtown,” he said. “It adds up to an amenity for our residents.”

Others lines, including paths along Payne Avenue, Grand Avenue and Selby Avenue, are still part of the city’s long-term planned network. Alignments along Robert Street and Rice Street are next in line, according to Beaulieu.

The streetcar plan was due for review from the city’s Transportation Committee on Monday evening. Beaulieu said she expects the recommended streetcar line to go before the city’s Planning Commission sometime in January for a public hearing. The City Council would then consider it sometime in February or March.