Plans to revitalize the Union Street Station have been derailed once again.

The plans, which involve a three-tiered redevelopment of the train station and its surrounding neighborhood, are now facing proposals for major cutbacks by Gov. M. Jodi Rell in light of the city’s growing debt and $17 million annual budget shortfall.

The first phase of the project called for the construction of a 667-space parking garage, the building of a pedestrian bridge to Union Street Station and the creation of 50,000 square feet of mixed-use development, to be completed in 2011. The new proposal calls for the substitution of the proposed parking garage with adjacent, at-grade parking and the relocation of anticipated warehouses to off-site lots. Other alterations include the reduction of the scope of planned retail space and the elimination of the proposed pedestrian bridge.

The estimated cost of the first phase would have been $849.3 million, according to a recent release from the Connecticut Department of Transportation.

The second phase involved the construction of another parking garage — with 500 spaces — and the addition of 14,000 square feet of store frontage. The third phase called for the construction of yet another 500-space garage, 20,000 square feet of retail space, 90,000 square feet of office space and the development of 138 units of loft-style apartments. Now, the first and second phases, estimated at $234.8 million, according to the Connecticut DOT release, are being deferred or eliminated.

While the current economic downturn has aggravated the issue, according to representatives of Jones Lang LaSalle — the development firm commissioned for the project — major budgetary reductions have long been in sight.

Rell’s proposals for restructuring the project came after an audit completed in June by Hill International, Inc., a construction consulting firm, which reviewed budgetary estimations and nonessential spending.

Rell ordered the Connecticut Office of Policy and Management to begin a review of the project in hopes of bringing the costs closer to the original budget. This came after new estimates of the project’s price tag rang in at quadruple the original budget — from approximately $300 million to $1.2 billion.

But not everyone is disappointed by the cutbacks. Anstress Farwell GRD ’78 of the New Haven Urban Design League said she sees the construction of more parking garages as potentially hazardous “dead spaces” in the city.

“Spending the $40 million it would cost to build the first garage would be much better spent on light rail or public transportation,” she said.

Regardless, this project, Yale architecture professor Alan Plattus said, holds much potential.

“At the end of the day, more mixed-use development around the train station and more train service is always a good thing,” he said.

The mixed-use complex originally planned for Union Street Station is based on the design of Grand Central Terminal.