Construction is often a noisy business, but building a light-rail tunnel in a dense urban area — and near freight-train operations — can be downright challenging.

Add to the mix: Some neighbors who are, at best, wary of the $2 billion Southwest light-rail project that will pass through several of Minneapolis' most-desirable neighborhoods.

Work on the half-mile Kenilworth tunnel, which began late last year, is a key milestone on a project that has been fraught with controversy — and the result of tense negotiations between the city and the Metropolitan Council six years ago.

"Without the tunnel, we would not get light rail built through this corridor," said project director Jim Alexander. The contractor hired by the regional planning agency is using special equipment and methods to construct the tunnel, with hopes of minimizing noise and disruption. The tunnel will squeeze through a crowded area that will accommodate freight rail above ground and the Kenilworth trail, a popular thoroughfare for cyclists and pedestrians, that will be re-established on top.

The tunnel is also located just a few feet away from private homes in some spots, including the Calhoun Isles condominiums and the Cedar Lake Shores townhouses.

"We chose to do this method because we're so close to residences," Alexander said.

The 14.5-mile light-rail line — the most-expensive public works project in state history — will connect downtown Minneapolis to Eden Prairie. The Kenilworth tunnel will run northeast of West Lake Street, pass underneath Cedar Lake Parkway and return above ground just south of the channel connecting Lake of the Isles and Cedar Lake. Light-rail trains will then travel over the channel on a new bridge.

The construction method being used to build the tunnel involves Japanese equipment pressing (as opposed to pounding or vibrating) vertical steel sheet piles into the ground to create an interlocking wall that will serve as the framework for the concrete tunnel.

"This is a pretty specialized piece of equipment," said construction director Brian Runzel at the job site on Monday. As he spoke, an auger loosened a small pile of steaming molasses-colored earth, making way for the 63-foot steel sheet pile to be lowered into the ground.

The process was relatively quiet, except for the whir of a crane needed to lift and position the sheet piles.

But mistakes occurred early on, infuriating some neighbors.

A booming vibrating pile driver was used Nov. 15, causing damage to some property and prompting alarm, according to residents.

"It was like an earthquake," said Matthew Dahlquist, who owns a townhouse at Cedar Lake Shores. He's trying to get reimbursed for damage in his home that he said was caused by the construction gaffe.

"It created a little uproar, we had to get it contained," Alexander said. "It was a one-off."

Even if the piling work is being done by quieter machinery, Dahlquist said other construction equipment on the job site is noisy.

And once the pilings are set in place, a trench must be dug to make way for the tunnel.

"I know they're not going to stop the project or move it to where people will actually ride it," he said. "Now we're just trying to live with it."

Another challenge related to tunnel construction involves how it will affect the Calhoun Isles condominium towers, former grain elevators retrofitted in the 1980s for residential use.

The Southwest LRT's tunnel pilings are being driven 18 inches from the building's footings, and 6 inches from the garage footings, according to resident Jim Nikora.

It's unclear how light rail — with some 220 trains passing by daily — will affect Calhoun Isles' unique concrete silos. Construction of an apartment building farther from the condos five years ago caused walls to crack, though a different construction method was used.

Residents from the association have met weekly with Southwest LRT officials since last summer to discuss concerns about construction. Nikora describes the meetings as congenial and generally productive.

"The stance of the association is that the project is going to happen and we can either hold our breath and be angry, or we can participate and communicate and be involved in the conversation — and try to have as much control as we can," he said.

In recent years, the condominium association has spent $250,000 on legal and technical consulting fees related to the project.

However, five mediation sessions between the two — required by a state law passed last year — "went nowhere," Nikora said. Among the topics discussed was liability related to potential damage caused by the ongoing operation of the transit line.

Nikora isn't enamored of the route, but understands it's here to stay. "The Kenilworth trail and the Chain of Lakes is the crown jewel of Minneapolis," he said. "It would be like running a train through Central Park."

But, in the meantime, "all we want to do is protect our homes," he said.