The so-called S Line now runs from TRAX Central Station at 2100 South and 200 West to 2250 S. McClelland Ave. (1050 East) in Sugar House. The 2-mile line cost $37 million.
But since its December debut, the streetcar has had significantly fewer riders than projected.
City Councilwoman Erin Mendenhall believes that will change once the S Line is extended to 2100 South and Highland Drive.
"We have to put a head on the body," she said of the streetcar line. "It makes no sense to end that where it is and not connect it to the heart of Sugar House."
Soon, about 1,000 new residential units will open in Sugar House, she said, referring to several high-density apartment and condominium projects under construction.
"When those units get open, the sooner we can provide the streetcar as a viable transportation option, the more success we will see in S-Line ridership," Mendenhall said.
The extension also would dictate that City Hall coordinate with businesses along Highland that will be impacted by construction, Mendenhall noted.
"It will be a great opportunity for us to help sustain those businesses through the potential construction," she said.
But Jill Haskell, at Sugar House Furniture, 2198 Highland Drive, said S-Line construction in front of her shop would be "devastating."
Sugar House Furniture has been in that location since 1985. It is located just south of the high-density Sugar House Crossing development that has been under construction for several years and has included lane closures along Highland Drive.
That project along with two others in the area, she said, have hurt her business.
"We can't afford one more construction project before our business is gone," Haskell said. "If the streetcar [construction] comes next year, we'll just have to go."
Salt Lake City should know by the end of September or early October whether it will be a TIGER grant recipient, said City Hall spokesman Art Raymond.
If it does land the funding, a best-case scenario would have construction begin in fall of 2015, he said.
The next phase of the S Line would travel north from 2100 South along 1100 East to 1700 South. Funding for that section of the line has yet to be identified.