Spending $157 million for a brand new vacant lot. Which is probably the point of the MTA pitting Lower Manhattan against West Side redevelopment proponents (and who is that exactly now that Dan Doctoroff is gone?):

Soaring construction costs could force the Metropolitan Transportation Authority to scrap plans for an architecturally ambitious glass-domed subway station in Lower Manhattan and lead to more than $1 billion in cost overruns for the authority’s major expansion projects, officials said Monday.

The rising costs could slow progress on the three so-called mega-projects needed to expand the capacity of the public transportation system, including a Long Island Rail Road link to Grand Central Terminal, a westward extension of the No. 7 subway line and the first leg of the Second Avenue subway.

The news represents another setback for the subway station project, known as the Fulton Street Transit Center, which was envisioned as a central element in the recovery of Lower Manhattan after the terror attack of Sept. 11, 2001.

. . .

Several underground portions of the Fulton Street subway project have been completed or are close to being finished, including a renovation of the platform and mezzanine serving the Nos. 2 and 3 trains.

The authority planned to finish the project by letting out a contract to cover the construction of the entrance building and oculus and several remaining pieces of the underground work.

But the authority received only one bid, of $870 million, far exceeding the $370 million the authority had budgeted for the contract.

Mysore L. Nagaraja, the authority’s president of capital construction, said the authority rejected the bid and would now split the project into smaller pieces, in the hope of attracting more bidders and greater competition.

He said the underground portions of the work could be completed by late 2009, which will make the connections between subway lines fully functional for riders.

But officials said that it was unclear now what would go on top.

“I’m sad to say that we cannot build the transit center as currently envisioned in this market with the budget that we have,” Mr. Sander said.

As it is, even without a station building, the project will reach a total cost of about $930 million, which is nearly $30 million more than the authority has in its overall budget for the project.

It is not the first time the project has run into budget trouble. The cost of acquiring real estate to make way for the project rose to $157 million from an early estimate of $50 million.

The authority has already razed several buildings at Fulton and Broadway to make way for the project, and Monday’s developments raised the prospect of the site’s remaining virtually vacant above ground for an extended time, or of a much more modest entrance building.