45. Extensions and additional lines. a. Whenever the board of transportation shall determine that the public interests so require, it may with the approval of the board of estimate and the mayor, without advertising for proposals, but only after a public hearing under section thirty-four of this chapter, enter into a contract with the person owning, operating or agreeing to operate, any existing railroad for the construction, equipment, maintenance and operation, or for the equipment, maintenance and operation of any additional or proposed railroad to be owned by the city for which necessary consents as provided in section twenty-one of this chapter shall have been obtained, provided that such proposed railroad shall be operated in conjunction with such existing railroad for a single fare. Such contract for the equipment, maintenance and operation of such road or any portion thereof may be made and entered into before consents shall have been obtained therefor as provided in section twenty-one of this chapter. In such case such contract for equipment, maintenance and operation of such road or any portion thereof shall be upon condition that such contract shall not become operative or go into effect as to such road or such portion thereof unless and until the city shall acquire the right to construct such road or portion thereof by obtaining such consents.
b. Such contract for construction, equipment, maintenance and operation or for equipment, maintenance and operation may be made in either of the two following ways:
1. If such existing railroad be wholly or in part within the limits of the city, such contract may be made under and pursuant to the provisions of sections thirty-one, forty, and forty-two, so far as such sections shall be applicable, with the railroad corporation owning or actually operating or agreeing to operate such existing railroad, but the term for equipment, maintenance and operation of such proposed road, as specified in such contract, pursuant to such sections, shall not be for a period longer than the unexpired term of the franchise or contract for the maintenance and operation of such existing railroad and any renewals provided for in such franchise or contract.
2. If such existing railroad be a rapid transit railroad constructed wholly or in part at the public expense under the provisions of the rapid transit act or this chapter and wholly or in part in operation such contract may be made with the person having the contract for the construction and operation of such existing rapid transit railroad by the terms of which such proposed rapid transit railroad if not constructed or to be constructed by the board of transportation under separate construction contracts shall be constructed as extra work under the terms of such existing contract either without expense to the city or for such sum of money or such proportion of the actual cost thereof as may be agreed upon to be paid by such city for or toward the construction thereof, the railroad when so completed as extra work to be subject to the terms and conditions of such original contract except so far as shall be otherwise specified and agreed.
c. Every such contract for such construction, equipment, maintenance and operation or for such equipment, maintenance and operation of such proposed railroad made in either of the foregoing specified ways, shall also make provision that the city, upon giving a specified notice, may terminate the contract for equipment, maintenance and operation of any such proposed railroad as to all and if deemed advisable as to any specified portion thereof at any time after the expiration of ten years from the date when operation of any part of such proposed railroad or of such specified portion thereof shall actually begin, but such right of termination of any such contract shall be upon condition as follows:
1. If the title to the equipment of such proposed railroad shall not be vested in the city then that the equipment of the proposed railroad or portion thereof suitable to and used for the purposes of such railroad as apportioned pursuant to the contract, shall be purchased and taken by the city at an amount which shall be ascertained as provided in the contract, but which shall not be greater than the actual cost thereof, plus fifteen per centum thereof, and such equipment, upon such termination of such contract, shall become and be the property of the city on paying to the contractor such amount. In case the title to the equipment of such proposed railroad shall be vested in the city then that the city shall pay to the contractor an amount for his investment in the equipment of such proposed railroad, or portion thereof, which shall not exceed the actual cost to the contractor of equipment of such railroad or portion, plus fifteen per centum thereof, and shall decrease under provisions of the contract as the term thereof continues so that at the end of the full term of the contract no such amount shall be paid except that if additional equipment shall be required and supplied after the railroad, or portion thereof, shall have been put in operation, and if the contract shall provide that title to such additional equipment shall vest in the city when supplied, then the city shall pay an amount for the investment of the contractor in such additional equipment which amount shall not exceed the actual cost to the contractor of such additional equipment plus fifteen percentum thereof and shall diminish so that at the end of the full term of the contract the city shall be required to pay for such investment in additional equipment only such amount as shall be provided in such contract.
2. Upon the further condition if such proposed railroad shall be constructed wholly or in part at the cost of the contractor that the city shall also pay to the contractor an amount for his investment in the construction of such proposed road or portion thereof, which shall not exceed the actual cost to the contractor of constructing such road or portion, plus fifteen per centum thereof, and shall decrease under provisions of the contract as the term thereof continues so that at the end of the full term of the contract no such amount shall be paid, except that if betterments, additions or improvements shall be required by the board of transportation or approved by such board prior to the construction thereof and be constructed wholly or in part at the cost of the contractor, then that the city shall pay an amount for the investment of the contractor in such betterments, additions or improvements which shall not exceed the actual cost to the contractor of constructing such betterments, additions or improvements plus fifteen per centum thereof and which amount shall diminish so that at the end of the full term of the contract the city shall be required to pay for such investment in betterments, additions or improvements only such amount as shall be provided in the contract.
d. The contract shall provide a method of ascertaining the amount to be paid for such equipment and for the investment of the contractor in the construction of such proposed road upon a termination by the city of such contract and for the equipment of such proposed railroad at the end of the full term of the contract. The contract may provide for determining from time to time, in default of agreement, by arbitration or by the court, a valuation of such investment of the contractor in the construction of such proposed road and of the equipment or any part or portion of either thereof for any purpose under such contract. The contract may provide that the title to the equipment as well as to such road shall vest in the city from the beginning and that the amount to be paid by the city for the investment of the contractor in such equipment shall decrease as the terms of the contract continues so that at the end of the full term of the contract no amount shall be payable therefor except for additional equipment as aforesaid. The contract shall provide that upon the expiration of the term fixed in the contract, the contract shall end without compensation to the contractor except as provided in the contract, for betterments, additions or improvements to any such railroad required to be made or approved by the board of transportation prior to the construction thereof during the term of any such contract, and, if the title to the equipment be not vested in the city, for equipment suitable to and used for the purposes of such contract to the amount, if any, ascertained as provided in the contract, and that in such event such equipment shall become the property of the city upon payment to the contractor of such amount, or, if the title to the equipment be vested in the city, then an amount for the investment of the contractor in additional equipment for any such railroad to be ascertained as provided in the contract.
e. The contract also may include a provision for modification of the lease or contract for equipment, maintenance and operation of such existing railroad so that such latter lease or contract may be terminated by the city upon giving a specified notice at the same time and in connection with the termination of the contract as to such proposed railroad, but such right of termination of any such contract as to such existing railroad shall be upon condition:
1. That the equipment of such railroad suitable to and used for the purposes of such contract shall be purchased and taken by the city at an amount which shall be ascertained as provided in the contract, but shall not be greater than the actual cost thereof plus fifteen per centum thereof, and such equipment, upon such termination of such contract, shall become and be the property of the city on paying to the contractor such amount, or
2. Upon the further condition, if such existing railroad shall have been constructed wholly or in part at the cost of the contractor, that the city also shall pay to the contractor or to his assignee in possession an amount for the investment in the construction of such existing road which shall not exceed the actual cost to the contractor of constructing such road plus fifteen per centum thereof, and shall decrease under the provisions of the contract as the term thereof continues, so that at the end of the full term of the contract, and of any renewal thereof contained therein, no such amount shall be paid.
The contract as so modified shall provide a method of ascertaining the amount to be paid for such equipment and for the investment of the contractor in the construction of such road upon a termination by the city of such contract, and for the equipment of such existing railroad at the end of the full term of the contract. Such contract as so modified may provide for determining from time to time, in default of agreement, by arbitration or by the court, a valuation of such investment of the contractor in the construction of such road and of the equipment, or any part or portion of either thereof, for any purpose under such contract. The contract also may provide for assuring that in case a new contract for equipment, and for maintenance and operation of such existing railroad, or proposed railroad, is made after such termination, pursuant to notice, or after the expiration of the full term of such contract, that the title to and possession of the equipment so taken and the right to the possession of the railroad so constructed may be transferred directly to the new contractor upon his paying the amount so required.
Last modified: February 3, 2019