The Southwest light-rail line, already the state’s largest transportation project, may be in peril now that its price tag has ballooned to close to $2 billion.

The escalating costs for the controversial 16-mile line from Minneapolis to Eden Prairie provoked a “shocked and appalled” Gov. Mark Dayton to express “serious questions about its viability and affordability.” Metropolitan Council Chair Adam Duininck did not rule out the possibility that the project could be scuttled.

“When I say all options are on the table, I really mean that,” said Duininck, who won the recommendation of the Senate Committee on State and Local Government Monday to run the regional planning agency. “We need to take a pause to see how to proceed because this project is on uncertain ground right now.”

An analysis released Monday by the Metropolitan Council indicated that the transit project, which has been dogged by disputes over its route out of Minneapolis, would cost an additional $341 million. Opening day would be delayed a year, to sometime in 2020.The escalating costs are driven by poor ground conditions along its pathway from downtown Minneapolis to Eden Prairie, as well as soil contamination in St. Louis Park and Hopkins.

The fate of metro area transit projects is already uncertain at the State Capitol. A bill passed by the Republican-controlled House last week caps spending on Twin Cities transit projects, while a Senate bill calls for an increase in the metro-area sales tax for transit, as did Dayton’s initial transportation package.

On Monday, Senate Majority Leader Tom Bakk, DFL-Cook, described the turn of events as “very problematic. I’m interested in exploring the option of additional bus routes, doing a little cost comparison. Is that more feasible?”

Graphic: Interactive: Mass transit options in Twin Cities Graphic: Interactive: Mass transit options in Twin Cities

Dayton and Duininck also questioned whether the southwestern suburbs could be better served by other modes of transit.

House Transportation Committee Chair Tim Kelly, R-Red Wing, said the news means “maybe we need to go back and try to get buy-in from the whole community before we go any further.”

$59 million spent so far

To date, $59 million has been spent on the project, according to Metro Transit. Of that amount, a local government group, the Counties Transit Improvement Board (CTIB), has spent $37 million, raised through a five-county metro sales tax. Another $11 million came from the state and the Hennepin County Regional Railroad Authority.

Dayton also said he will hold off recommending additional public money for the project “until I am satisfied that its cost can be justified and properly managed.”

Duininck, a Dayton appointee, said he will spend the coming weeks meeting with “funding partners, local communities and legislative leaders to determine the future of this project.”

In addition, Duininck said he has ordered the council’s engineers and contractors “to pursue every possible efficiency to achieve cost savings.” He conceded that if substantial changes to the project are needed, it would likely push out the timeline even further. And that could require cities and counties along the line to consent once again to the project, a time-consuming and unpredictable process.

“This could be an opportunity to determine whether this is the right corridor, the right service, and whether the region has a commitment to transit,” he said at a news conference. “It’s a time for reflection.”

Peter McLaughlin, a Hennepin County commissioner who leads the CTIB, said “$2 billion dollars is a big number, no question about it. We need to go back to our experience with the Hiawatha and Central Corridor lines and find ways to tighten down on the budget. It’s time for the sharpest of pencils now.”

Opponents feel ‘vindicated’

Not everyone was discouraged by the news, however.

A spokeswoman for the Lakes and Parks Alliance, which filed suit in U.S. District Court last fall to block the line, said the group feels “vindicated” by the development.

“This is the whole reason why we sued the Met Council,” said Mary Pattock, a spokeswoman for the Alliance. “We knew from the get-go there were environmental problems, and sued because the council failed to share the environmental impact statement with city leaders before forcing them to give municipal consent — as required by law.” The suit is pending.

Another suit, filed a group of Minnetonka residents, alleged that the Met Council excluded an area of serene woods, wetlands and trails in its city from environmental reviews. The group’s attorney, William Griffith, declined to comment on Monday’s announcement.

A supplemental draft environmental impact statement is expected to be released in late May by the Federal Transit Administration, a key funding source for the project.

But “the magnitude of the dollars” in the statement prompted the council to accelerate the disclosure, according to Met Council spokeswoman Bonnie Kollodge. She said the affected cities were notified Sunday night.

Adam Duininck: “We need to take a pause to see how to proceed.”

Despite the burgeoning cost, Hopkins Mayor Gene Maxwell said he’s still a supporter. “I think it’s worthwhile for the whole community and the whole state,” he said. “If we’re going to do it, we should do it right.”

While the governor questioned whether the council’s staff is able “to manage a project of this magnitude,” he expressed “complete confidence” in the council board, which he recently appointed, and in Duininck.

Behind the numbers

Recent engineering and environmental studies assessed the soil’s ability to support the project and the impact of construction on wetlands and flood plains.

“This phase is when the greatest level of change occurs in a project due to underground testing results, which eliminates many engineering unknowns,” a council statement read.

One significant finding was a much greater need for retaining walls “to hold back hillsides and slopes, and hold up the track,” Kollodge said.

The original plans called for 149,000 square feet of retaining walls. That number is now at 273,000 square feet, she said.

The analysis also found that design changes would be needed because of poor ground conditions corridor-wide and soil contamination in St. Louis Park and Hopkins.

RAIL’S ESCALATING PRICETAG 2003: $430M to $925M • 2006-2009: $1.2B • 2013: $1.55B • 2014-2015: $1.65B to $1.68B • 2015: $1.99B

The Met Council also said changes are needed to address operational and safety requirements, including five gated light-rail crossings and improvements at five shared freight and light-rail crossings.