My 2 cents:
It would be a shame to see any sort of dirt fill project go forward. If you look at any cities that have been revitalized in the past 15-20 years, key elements to those successes incorporate older design elements and structural reuse. We have become such a wasteful society, just tear it down and build something new. IMHO, everything built today is done very cheaply, with little architectural class or care, just cinderblock, sheet board and concrete. And is useless 20 years later. Just lok at all of the school buildings from the 60' & 70's, gone already & being torn down.
The city would be better off investing in measures to preserve the infrastructure until a good and well financed plan comes forward. For all of you who think Rochester is in the dumps, just wait, you'll see that parts will transform over time into nice and desirable places again. 25 years ago, San Diego, CA, Philadelphia, PA and Portland, Maine had terribly dumpy cities and crime ridden areas, all of which have been redeveloped and property values have soared, and people live, work and walk in these areas. It happens, investors see reasonable real estate, and they start to make it happen.
Will happen in the next five years, probably not, but efforts such as the Rail-Trail initiative and ferry have to be appreciated. How they are financed is another story entirely, but that is not the subject of this post.
I have friends in their lates 20's who are trying to move back to Rochester who currently live in Philly because even though they bought a brick row house and make good $$$$, they miss having a yard, and affordable groceries, and could have 3x as big a place for half the price they paid in Philly.
In closing, the best use for that tunnel would be to stabilize whatever needs such urgent attention until a better reuse can be found, whether light-rail, shopping, water-way, whatever.
Brooks