The Southwest Corridor light-rail line is approaching a critical deadline amid mounting challenges that threaten to delay the state’s most-expensive public works project.

The difficulty came into stark focus last week as cost estimates for the line rose yet again and an advisory panel of community leaders sidestepped the most contentious problem: what to do about nearby freight train traffic.

“They didn’t want to take a vote about freight,” said Jennifer Munt, who co-chairs the panel. “That’s because … they couldn’t reach consensus on something like that.”

The decision — or lack of one — underscores the rising tension over the LRT line between downtown Minneapolis and the southwest ­suburbs. Solving the freight dispute and design changes could raise the cost from $1.25 billion to as high as $1.82 billion. The Metropolitan Council, a regional agency overseeing the transit project, is expected to make a decision Aug. 28.

St. Louis Park doesn’t want the freight routed through some of its neighborhoods, while Minneapolis doesn’t want it running next to future LRT trains and recreational trails in cherished parkland in the Kenilworth corridor.

But in a hint of a potential compromise, Minneapolis city officials are focusing increasingly on plans for hiding the LRT in tunnels beneath the freight and trails in the corridor. A deep tunnel would add up to $420 million to the transit price tag, yet appease many Minneapolis and St. Louis Park residents by getting either the freight or the LRT out of their sight.

Trouble is, that option is by far the most expensive fix.

“I don’t really believe that the deep tunnel is a real option,” said Minneapolis City Council Member Sandy Colvin Roy, chairwoman of the city’s transportation committee. “Too expensive and it just seems technically risky.”

A deep tunnel for the light-rail line would run for 1.4 miles from south of Lake Street to north of 21st Street. The LRT would be mostly 30 feet below the surface but would reach a depth of 50 feet to get under the channel between Lake of the Isles and Cedar Lake.

A shorter, shallow tunnel has drawn special attention as a cheaper alternative, costing perhaps $250 million. Colvin Roy said she would consider it. “I need to see more of what’s possible,” she said.

Objections and fears

“The shallow tunnel is a fake option,” said City Council Member Lisa Goodman, who represents the Kenilworth area and earlier voted against running LRT through the corridor even if the freight were ­relocated. “Absolutely opposed to it,” she said of the shallow tunnel.

It would run nine-tenths of a mile. LRT trains would surface to go over the channel, a popular recreation area, and then head back into a tunnel on the other side. Goodman said the light rail would be above ground and adjacent to the freight traffic for too long a stretch.

“I’m more comfortable with a deep tunnel,” she said.

Allowing the freight to remain in the Kenilworth ­corridor with LRT running below it in a tunnel would mark a change for the Minneapolis City Council, which earlier approved LRT for the corridor only if the freight were rerouted.

But Goodman and other city officials say they won’t endorse a tunnel without guarantees that the Metropolitan Council won’t later scrap the option and run the LRT above ground next to the freight tracks and recreation trails. They point to the agency abandoning plans for a tunnel on the Central Corridor light-rail line at the University of Minnesota after it became too costly.

“There’s interest in a tunnel option,” said City Council Member Robert Lilligren, who represents Minneapolis on regional transportation panels. “What is the guarantee?”

Lilligren said the city has expressed those concerns to Met Council staff members. “I think there will be ongoing negotiations,” he said.

In St. Louis Park, city ­officials seem unmoved by a Met Council offer to drop a planned reroute of freight through its high school football stadium and instead route it near the stadium at a cost of up to $290 million.

“I can’t say that’s really changed our City Council’s official position on this,” said City Manager Tom Harmening, noting that St. Louis Park insists that keeping the freight in Minneapolis is preferable to any reroute.

Transportation maze

A web of community and business groups and government agencies will take up the freight dispute in the coming weeks, although not always decisively.

The Southwest LRT Community Advisory Committee has dozens of members and was co-chaired by Munt, who also is a Metropolitan Council member. It was the panel that mulled the freight issue Thursday night in St. Louis Park in a joint meeting with another Southwest LRT panel, the ­Business Advisory Committee.

St. Louis Park representatives were sometimes at odds with others on the panel over freight plans. A woman reminded everyone that they would act on consensus and not vote. A man wondered how they could establish a consensus without voting. Someone wrote major concerns on an easel for conveying later to other groups.

The freight issue will be taken up early next month by the Southwest LRT Corridor Management Committee, composed of mayors of Southwest Corridor cities, some Hennepin County commissioners and other officials.

Edina Mayor Jim Hovland said he expects the management committee to vote on whether to recommend that the Metropolitan Council keep the freight in Minneapolis or relocate it to St. Louis Park.

“I can’t imagine that any suburban mayor is going to recommend relocation,” Hovland said.