Gov. Mark Dayton on Tuesday announced support for a major delay in the Southwest Corridor light-rail project, keeping alive alternatives to a controversial plan to dig tunnels for the system in a recreational corridor of Minneapolis.

The governor's decision could delay for three months a crucial vote Wednesday on the Twin Cities' largest transit project while planners scrutinize the potential environmental effects of the two tunnels and explore other options. Dayton reacted to opposition from Minneapolis officials to the tunnel plan and indicated that sticking to the earlier schedule without answering key questions could jeopardize the project.

"This is on a collision course with the opposition that exists now and the emotions as high as they are and … we need to step back and everybody take a deep breath," the governor said. He made his remarks after a private meeting that included Minneapolis Mayor R.T. Rybak, Minnesota House Speaker Paul Thissen and Metropolitan Council Chairwoman Susan Haigh, whose agency is overseeing the project.

Dayton said that unless the $1.55 billion project gained acceptance in Minneapolis, its prospects for advancing in the Legislature were "slim to none."

But business groups that support the Southwest Corridor light-rail line as spurring economic development said the delay could put the project at risk.

"We are disappointed in Governor Dayton's decision," leaders of the Minneapolis Regional Chamber of Commerce and St. Paul Area Chamber of Commerce said in a statement. "This delay imperils … federal support and could mean tens of millions of dollars in increased costs."

The Met Council had been expected to vote Wednesday on approving the project, but the decision could postpone that vote for 60 to 90 days.

As an alternative to digging tunnels in the Kenilworth corridor, Minneapolis officials had pushed for another look at rerouting freight train traffic out of the area to make room for the light-rail line. They also pressed the Met Council to conduct a more in-depth study of the tunnels' effects on nearby lakes and groundwater.

Haigh to call for a delay

Rybak voted against the tunnels at a meeting of metro officials last week, saying there hadn't been adequate study of them or possibilities for rerouting freight traffic.

That foreshadowed a contentious process if the Met Council went forward Wednesday with the existing plan. The project must be submitted to each of the five cities along the line from Minneapolis to Eden Prairie for their consent. Dayton said proceeding with the plan over the objections of any of the cities was impractical.

Haigh said she will recommend Wednesday that the 17-member Met Council put off a final vote until more studies are completed. The delay could put decisions in the hands of newly elected municipal leaders in 2014.

Also attending the meeting in the governor's office were Hennepin County Commissioners Gail Dorfman and Peter McLaughlin, who leads a board that funds metro transit, and Rep. Frank Hornstein and Sen. Scott Dibble, DFLers from Minneapolis who are chairmen of transportation committees.

Dayton said they reached a consensus that the project wasn't ready. "We have questions that need to be answered," he said. He stressed that the public needs assurance that "this is the best … for the region and the only option."

Tuesday's move to reconsider options opens the door for taking another look at rerouting freight traffic from the Kenilworth corridor to tracks in St. Louis Park. Officials and some residents in that suburb have strongly opposed an option for routing freight trains onto two-story berms there.

Some St. Louis Park opponents expected the Met Council to approve the tunnels costing $160 million on Wednesday and make a freight reroute unnecessary. "We've canceled our celebration that was scheduled for tomorrow evening due to this news," they said in an e-mail after Dayton's announcement.

But Thissen and others at the meeting made it clear that they will explore new options for rerouting freight trains, not just ideas rejected at earlier steps in the process.

Alternatives scarce

None of the participants at the meeting speculated on the odds of finding a suitable reroute. The Met Council struggled to find options for rerouting freight traffic after the Twin Cities & Western Railroad last year rejected earlier plans for it. Railroads have considerable clout under federal law over decisions to discontinue or move rail lines.

The railroad said it could accept the reroute onto berms at a cost of $200 million because it would smooth out grades and unwind curves of existing track that otherwise could cause a safety hazard. Numerous studies of reroute options have failed to identify other acceptable reroutes.

And a hydrologist hired by the Minnehaha Creek Watershed District said he "does not have serious concerns" about the effects of the tunnels on Lake of the Isles, Cedar Lake and a channel connecting them. The light-rail trains would emerge from the tunnels on either side of the channel to cross a bridge over it.

Haigh had opposed more studies of possible freight routes, but after the Tuesday meeting said, "We want to … bring in another expert to look at the work that's been done and see if in fact there is anything we missed."

Dayton said months of additional studies on environmental impact and reroute options might leave light-rail planners with no practical alternatives to the tunnels.

"If there's only one viable option and this is it, then people will have to understand that's the reality," he said.

The Minneapolis and St. Paul chambers of commerce said the tunnel plan is the least disruptive option for light rail and suggested officials were paying too much concern to residents in the Kenilworth corridor who object to the light-rail.

"Our leaders are going to have to think in terms of the entire region, not just one neighborhood," said Todd Klingel and Matt Kramer, presidents of the Minneapolis and St. Paul chambers.

Rybak and Minneapolis City Council members have pushed to reroute the freight trains in exchange for accepting the light-rail line. But Haigh and others at the Met Council argue that the tunnels are a better option for nearby residents because 220 light-rail trains a day would be hidden in nearly a mile of tunnels next to the current freight rails, which handle a couple of trains a day. If the freight trains were rerouted, the light-rail line would be built at ground level throughout the corridor next to biking and hiking trails.