A federal judge will soon decide whether to issue a court order that would essentially halt the city’s rail project and its federal funding, or issue a more limited injunction suggested by the city to stop construction only in the project’s final downtown segment of the 20-mile rail line.

Visiting federal Judge A. Wallace Tashima heard about an hour and a half of arguments Wednesday and said he would issue a ruling “in short order.”

The group challenging the $5.26 billion project wants the judge to vacate at least part of the Federal Transit Administration’s decision approving the project until the city explains why a downtown route under Beretania Street is not a viable alternative to the elevated rail route.

But city lawyers said such an order would deliver a crippling blow to the project by delaying it for seven months, putting thousands out of work, jeopardizing $1.5 billion in federal funding and adding $149 million in costs.

Tashima did not say which way he will rule, but expressed concerns at the start of the hearing that ongoing work on the project might undermine his Nov. 1 ruling that the city must reconsider alternatives to the downtown route.

The segment runs from Middle Street to Ala Moana Center, along Dillingham Boulevard, Nimitz Highway and Halekauwila Street.

The judge said his concern is that he wants federal officials to review the city studies with “an open mind.”

“We find that very encouraging,” Nicholas Yost, a San Francisco lawyer representing the anti-rail group, said after the hearing.

Tashima had ruled Nov. 1 that the city must reconsider the underground route below Beretania Street and the project’s impact on Mother Waldron Park in Kakaako and on traditional and cultural Native Hawaiian sites along the entire route from East Kapolei to Ala Moana.

Robert Thornton, an Irvine, Calif., lawyer hired to represent the city, told the judge that both the transit administration and the city will keep an open mind.

He urged the judge to limit an order halting construction of the rail’s fourth and final segment until the city completes its study for the federal officials, but to not set aside any portion of the transit administration’s “record of decision” approving the project and clearing the way for federal funding.

The decision, he said, is “critical to keeping the project on schedule and on budget.”

Yost told the judge that the city shouldn’t be allowed to do work on the first three phases from East Kapolei to Middle Street that would essentially restrict the consideration of the alternatives, including the underground Beretania route.

Gary Takeuchi, city corporation counsel, later said if all goes well, the city could complete the studies and evaluations during the current delay in construction mandated by a Hawaii Supreme Court ruling in August.

The high court had ruled that construction that started in the Kapolei segment cannot resume until the city conducts an archaeological survey on the entire 20-mile route.

The survey is running ahead of schedule and should be completed this month, according to the Honolulu Authority for Rapid Transportation, which hopes to get approvals and resume construction next year.

The members of the anti-rail group include former Gov. Ben Cayetano, longtime rail opponent Cliff Slater, former state Judge Walter Heen and University of Hawaii law school professor Randall Roth.

On Nov. 1, Tashima ruled the city was justified in rejecting another underground route along King Street because it would cost an additional $650 million.

But the cost for the Beretania alternative was less clear, although the city admitted it might be less costly than the King Street route, the judge said.

Federal attorneys agree with the city that the transit administration’s decision should not be set aside and the order should be limited to stopping construction for the downtown route.

Tashima’s Nov. 1 ruling rejected the group’s claims under the National Environmental Policy Act and the National Historic Preservation Act.

But he ordered the city to do more work in the three areas under the Department of Transportation Act’s 4(f) provision that seeks to protect public parks and historic sites from transportation projects.

Both sides indicated that they may appeal to the U.S. 9th Circuit Court of Appeals if Tashima’s ruling is unfavorable to their case.