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In a "major, major day for Tucson," the Secretary of Transportation Mary Peters phoned to tell Mayor Bob Walkup that the city's modern streetcar had been moved into the engineering phases.

The project's new status allows the city to begin building the new four-mile-long streetcar line.

"This was the key to moving on to all the things that happen next," Walkup said.

The city will be spending up to $25 million of Regional Transportation Authority money during this phase, and applying for matching Federal Transit Authority funds, Walkup told the City Council on Tuesday.

What's next is laying track, constructing a storage and maintenance facility and taking delivery of the streetcars, which take 25 months to build, according to Fran LaSala, an assistant to City Manager Mike Hein.

By fall of 2011, LaSala told the council, cars should be running.

"This is very cool," Hein said Friday. "Very cool. It's happening. For those who've been asking 'when?' and saying 'if', well, it's now and here it is."

When the streetcar goes into service, it will change Tucson by linking neighborhoods.

"I've always said it's all about connecting activity centers with activity centers, the University of Arizona A to Downtown," Hein told us Friday. "You do that and you'll be successful."

Homer Williams, a partner in the Portland, Ore. development firm Williams and Dame, told us that the streetcar plan was a key factor in bringing his firm to Tucson.

Williams and Dame redeveloped the former Martin Luther King housing project into One North Fifth, a mix of market-rate and affordable apartments with ground-level retail space on Congress Street across from Hotel Congress.

The firm also is one of a triad of developers that is negotiating with the city to earn land options by spending $12 million on master planning the zoning, infrastructure, land-use-codes and more in a 75-acre district on the east end of Downtown. They'll also upgrade the Rialto Theatre and its block, which they own, and provide money and expertise to save the warehouse arts district.

The streetcar is vital to the plans, Williams said.

"Two things drive urban redevelopment," Williams told us Monday. "Connections — in this case, your streetcar — and restaurants."

The streetcar line will run from University Medical Center at Helen Street, to Speedway, down Second Street to the Main Gate. Then it will run west on University Boulevard, down Fourth Avenue through the widened railroad underpass and onto Congress.

After passing through Downtown, it will run under the new Cushing Street underpass at Interstate-10, over a new Santa Cruz River bridge and into the museum, residential and commercial district under construction north of Congress at Avenida del Convento.

Some of the redevelopment projects the line passes through are city-run, some are the work of the state, some are financed by the Regional Transportation Authority, some are Rio Nuevo plans.

The streetcar will link them. You'll be able to hop a ride at UMC and disembark Downtown or on the West Side. If you live near the line, it may change the way you commute, shop and play.

"Historically, the neighborhoods along the line show enhanced value and increased density, which helps preserve some of the interior neighborhood," Hein said.

"We are on schedule," LaSala told the council Tuesday. "We believe that we will be completing this project in the first quarter of 2011. Testing of cars will take some time, a good two months. So we expect to be operating with full service in the fall of 2011."

Look for work this summer on the section that will run from Fifth Avenue and Congress to Cushing Street Then work will begin on the University section, between Fourth Avenue and the Main Gate.

On the West Side, The Gadsden Co., which is planning affordable housing, offices and markets there, is responsible for laying the tracks from Avenida del Convento to the western terminus of the Santa Cruz River bridge, partner Jerry Dixon said Friday.

"We'll have that done in the fall of 2011," he said. "We couldn't be more thrilled with the word from Mary Peters."

This phone call puts the streetcar on track, which is a positive, encouraging signal for Downtown development.