CROWN POINT — The Regional Development Authority voted Thursday to contribute $20 million to fund the next stage of planning for the South Shore Line’s West Lake Corridor project, which would extend the commuter rail line’s service south to Dyer from Hammond.

The $20 million will pay for engineering and environmental work required by the Federal Transit Administration to put the $600 million project in position for final federal approval.

“The critical time period is the next 18 months,” RDA President and CEO Bill Hanna said.

The first phase of planning involved writing a draft environmental impact statement, which is expected to be published in late September or early October. The second phase, to be funded by the $20 million grant, will take that draft to final status, and complete 50 percent of the project engineering.

Michael Noland, general manager of South Shore operator Northern Indiana Commuter Transportation District, said railroad officials are negotiating with potential engineers for that next phase of the project, with the hope of awarding a contract at the NICTD board’s Sept. 30 meeting.

The federal government would pay roughly half the total project cost; the rest must come from local and state sources. The state has committed $6 million annually for up to 30 years; the RDA has committed as much as $8.3 million annually; and 16 local governments have pledged several million dollars annually.

The state’s commitment comes with the stipulation that the RDA show a return on investment equal to at least double its contribution in the 20th year, which would be $6 million.

An updated RDA comprehensive strategic plan, a summary of which was presented at Thursday’s meeting, concludes that the state would collect an additional $26.2 million in sales and income taxes in 2038 as a result of the West Lake project, well above the required ROI.

The RDA links the West Lake extension tightly to NICTD’s proposed “double tracking” project that would add a second rail line along a stretch from Gary to Michigan City.

That project, expected to cost more than $200 million, would open stations from Gary eastward to residential and commercial development commonly known as transit oriented development, RDA officials argue, by significantly reducing commuting times for rail riders and making those areas more attractive to commuters.

The two projects would add $52.9 million to the state’s sales and income tax revenue in the year 2038, the RDA’s new comprehensive plan concludes. It projects a total public and private capital investment of $2.3 billion around the eight major stations in Lake and Porter counties.

“Instead of just getting in cars and going home, we’re retaining economic activity” in the area of the stations, Hanna argued. “Each community offers a different niche in the market.”

The RDA board authorized its staff Thursday to negotiate a consulting agreement with KPMG to assist in planning for transit oriented development at the locations of the four new West Lake stations, and at stations along the existing east-west rail line. The approval came with a limit of $475,000.

Outbrain