The Daily Journal of Commerce reports Sound Transit will pay the city $120 million to build the line plus about $5 million a year to operate it.

Sound Transit spokesman Bruce Gray said the First Hill Streetcar Connector compensates for dropping plans for a light rail stop on First Hill.

The streetcar line will be funded by the $18 billion package regional voters approved last November.

The city's south Lake Union streetcar line opened in December 2007.