46. Franchise for private construction, maintenance and operation. a. If or when the necessary consents have been obtained and the detailed plans and specifications have been prepared by the board of transportation for a railroad, such board, with the approval of the board of estimate and the mayor, may grant a franchise to construct, maintain and operate such a railroad. The board of transportation shall have power to prescribe all such terms and conditions of such grant and to require such security to be given and filed for the keeping and performance of such terms and conditions as it may deem to be for the interest of the public and of the city and may provide that in connection with the construction of such railroad by the grantee at its own expense any galleries, ways, subways or tunnels for sub-surface structures which may be included in any such plans shall be also constructed by the grantee at the public expense, and in such case the sum to be paid therefor shall be separately stated and the amount appropriated and paid out of the funds hereafter authorized to be provided in case of such construction, and such board may provide separately for the maintenance, supervision, care and operation thereof as authorized by the provisions of section forty of this chapter.
b. The grant shall provide that such railroad shall be constructed by and at the expense of the grantee under the direction and supervision of the board of transportation and in accordance with such detailed plans and specifications; that the construction shall be begun within a time to be specified and shall be finished within a specified time thereafter; and that operation of such railroad shall be begun within a specified time, and may fix the time within which portions of such railroad shall be begun and finished and put in operation, and may provide that such board may extend the time of beginning, of completion and of operation of such railroad or portion thereof, and that if the grantee shall fail to begin or to finish the construction or begin the operation of such road or portion thereof at or within any time so fixed, or shall fail to comply with any of the terms or conditions of such grant, a penalty specified, or the grant and any construction pursuant thereto, may be forfeited to the city.
c. Such grant shall contain a reservation to the city of the privilege upon giving a specified notice to terminate such franchise and to purchase and take the plant and property of the grantee suitable to and used for the purpose of such railroad at any time after the expiration of ten years from the date when operation of any part of such railroad shall begin upon paying an amount for such plant and property as property, excluding any value for the franchise, which amount shall not exceed actual cost of such plant and property, plus fifteen per centum thereof, and shall decrease under provisions of the grant as the franchise continues so that at the end of the full term of the grant no amount shall be paid except for equipment as hereinafter provided. The grant shall provide a method of ascertaining the amount to be paid for such plant and property upon termination by the city of such franchise and for the equipment of such railroad at the end of the full term of the grant. The grant may provide for determining from time to time, in default of agreement, by arbitration or by the court, a valuation of such plant and property, or any part or portion thereof, for any purpose under such grant. The grant shall make adequate provision for lien upon plant and property and by way of penalty or forfeiture of the grant and any construction pursuant thereto or otherwise to secure compliance with the terms of such grant, efficiency of service at reasonable rates and the maintenance of the property in good condition throughout the full term of the grant.
d. The grant shall provide that any and all income and increase derived by the grantee or his assignee or any successive holder of the grant or on his or their behalf in any manner from or in connection with the enterprise of constructing, equipping and operating such railroad, after deducting operating expenses, taxes, payments to reserve and amortization funds as provided for in such grant, and not exceeding six per centum interest per annum payable quarterly upon the actual cost of construction and equipment of such road, shall be divided share and share alike between the grantee and the city, and that upon the expiration of the period specified in the grant the franchise shall end and the plant and property suitable to and used for the purposes of such railroad, except equipment as defined in the grant, shall become the property of the city without compensation to the grantee, and that such equipment shall also become the property of the city upon payment to the grantee of an amount to be ascertained as provided in the grant. The grant may also provide for assuring that in case a new grant of a franchise to maintain and operate such railroad is made after any such determination of such franchise and purchase and taking of such plant and property pursuant to such notice or after the expiration of the full term of the grant, that the title to and possession of the plant and property so taken and of the equipment at the end of such full term may be transferred directly to the new grantee upon his paying the amount required as aforesaid. At any time within one year prior to the date when the franchise shall be terminated or forfeited by the city or shall come to an end by the expiration of its full term or at any time thereafter, the board of transportation with the approval of the board of estimate and the mayor, may grant a new franchise under the provisions of this section for the construction wholly or in part of such railroad and for the maintenance and operation thereof from and after the date of such termination, forfeiture or end of such grant, or the board of transportation, with like approval, may enter into contracts for the equipment, maintenance or operation of such railroad, or may itself operate such road, after such termination, forfeiture or end of such grant as provided in sections thirty-two, forty, forty-one, forty-two and forty-three of this chapter in respect of railroads constructed at the public expense.
e. A certificate shall be prepared by the board of transportation attested by its seal and the signature of its presiding officer, setting forth in detail the action taken and grant made by such board with respect to such railroad, and the terms and conditions aforesaid which shall be delivered to such grantee upon the receipt by such board of a written acceptance of the terms, conditions and requirements of the grant duly executed by such grantee so as to entitle it to be recorded. Such certificate shall be filed in the office of the secretary of state and a duly certified copy thereof shall be filed in the office of the clerk of the county in which such railroad or some part thereof is situated. Upon the fulfillment by such grantee of such terms, conditions and requirements enumerated in such certificate as such board may require to be fulfilled as a condition precedent to commencing such work, the grantee shall in such cases possess in addition to its existing powers, all the powers conferred by this chapter upon corporations receiving a grant of a franchise thereunder with respect to the railroad so authorized to be constructed and when such certificate shall have been duly filed, such grantee may construct such railroad with all the rights provided in such certificate but in every case subject to all the provisions and conditions of such certificate. Such certificate, when delivered to and accepted by such grantee, shall be deemed to constitute a contract between the city and such grantee according to the terms of such certificate. Such contract shall be enforceable by the board of transportation acting in the name of and in behalf of the city, or by the grantee according to the terms thereof, but subject to the provisions of this chapter. The terms of such contract, from time to time with like approval and with the consent of the grantee, may be modified by such board.
f. Any existing railroad corporation owning or actually operating a railroad wholly or in part within the limits of the city and approved by such board shall be competent and is hereby authorized to bid for and receive any grant pursuant to the provisions of this section. If the successful bidder or bidders be not a corporation, then a corporation may be organized under the railroad law by him or them for the purpose of receiving such grant and of constructing, equipping, maintaining and operating a railroad pursuant to the terms of any such certificate and a corporation so organized shall not be required to procure the certificate or approval of the public service commission as provided for in section nine of the railroad law or section fifty-three of the public service law.
g. After the proposed certificate shall have been prepared and approved as to the form thereof by the board of estimate, the board of transportation, prior to the granting of any such franchise, shall advertise for proposals or bids for such franchise under such certificate by a notice to be printed once a week for two successive weeks in not less than two daily newspapers published in such city, and in such newspapers published elsewhere than in such city as such board shall determine, and may require security from bidders for the execution of their bids if accepted. Such notice shall set forth the points within such city between which such railroad is proposed to be operated, the route in general terms to be followed, and such other details and specifications as the board shall deem proper, and shall refer to such proposed certificate and such route, detailed plans and specifications on file in its office for further details. Such notice shall state the time and place at which proposals will be received and opened. All such proposals shall refer to such proposed certificate and shall offer the terms upon which any such proposer or bidder shall undertake to construct, maintain, equip and operate such railroad in so far as to set forth all or any of the following matters as may be required by the board of transportation:
1. The annual interest desired upon the cost of construction and equipment prior to payment of any part of income or increase to the city;
2. The period at the end of which the plant and equipment except equipment as aforesaid shall become the property of the city without compensation;
3. The amount of money for which galleries for subsurface structures to be paid for with public money in connection with the construction of such railroad will be constructed;
4. Such transfer conveniences with other roads, specifications as to the cost of construction and other provisions as such board may think proper to require.
The board of transportation shall attend at the time and place specified and shall publicly open all proposals that shall have been received, but such board shall not be bound to accept any proposals so received, but may reject all such proposals and readvertise for proposals in the manner hereinbefore provided, or may accept any of such proposals as will, in the judgment of such board, best promote the public interest, and grant a franchise and execute such certificate accordingly, subject to the approval of the board of estimate and of the mayor.
h. Every such corporation shall have power:
1. To take and hold such voluntary grants of property as shall be made to it, to aid in the construction, maintenance and accommodation of its railroad, but the real estate received by voluntary grant shall be held and used for the purposes of such grant only.
2. To purchase, lease, hold and use all such property as may be necessary for the construction and maintenance of its railroad and necessary devices and appurtenances.
3. To cross, intersect, join and unite its railroad with any other railroad at any point on its route and upon the grounds of such other railroad company, with the necessary devices and appurtenances.
4. To take and convey persons and property on its railroad by the power or force of electricity or compressed air so used as to involve no combustion or impurity of air in tunnels or cars or any other power of like description approved by the board of transportation, and to receive compensation therefor.
5. To enter upon and underneath the several streets designated by the board of transportation and enter into and upon the soil thereof; to construct, maintain, operate and use, in accordance with the plan adopted by such board, a railroad upon the route and to the points decided upon, and to secure the necessary foundations and erect the structures which may be required to secure safety and stability in the construction and maintenance of the railroads constructed upon the plan adopted by such board, and which may be necessary for the operation thereof, except that nothing in this chapter shall authorize the construction of a railroad crossing the track of any steam railroad in actual operation at the grade thereof. It shall be lawful to make such excavations and openings along the route through which such railroad shall be constructed as shall be necessary from time to time. In all cases the surface of such streets around such foundations, and structures shall be restored to the condition in which they were before such excavations were made, as near as may be, and under the direction of the proper local authorities. In all cases the use of the streets designated by such board, and the right of way through them, for the purpose of a railroad, as herein authorized and provided, shall be considered, and is hereby declared, to be a public use, consistent with the uses for which the streets are publicly held. Such corporation shall not have the right to acquire the use or occupancy of public parks or squares, or the use or occupancy of any of the streets, except such as may have been designated for the route of such railroad, and except such temporary privileges as the proper authorities may grant to such corporations to facilitate such construction.
i. Every corporation which shall have taken or shall take or hold any franchise or contract to construct, maintain and operate a railroad under the provisions of this chapter shall have the right to acquire and hold such property or property rights appurtenant thereto, as may be necessary to enable it to construct, maintain and operate such railroad and such as may be necessary for devices and appurtenances. In case any such corporation cannot agree with the owner or owners of such property it shall have the right to acquire title to the same in pursuance of the terms and in the manner prescribed in the condemnation law. The existence of an easement acquired or reserved by any such corporation for any of the purposes specified in this section, shall not be deemed an incumbrance under any law relating to investments in mortgages upon real property by corporations, trustees, executors, administrators, guardians or other persons holding trust funds, but the effect of such an easement upon the real property which it affects, shall be taken into consideration in determining the value thereof. When any corporation authorized under any provision of this chapter to construct, maintain or operate an additional track added to any elevated railroad in existence on the sixteenth day of June, nineteen hundred ten, or to construct, maintain or operate an extension of such railroad or to acquire terminal or other facilities for any such railroad or extension shall have duly instituted condemnation proceedings, under the provisions of the condemnation law, by serving a petition and notice in such proceedings, to acquire such property or property rights appurtenant thereto, as may be necessary to construct, maintain or operate such additional track, extension or terminal or other facilities, the court, upon due hearing had at a special term of the supreme court held in the judicial district where the property or some portion of it is situated, and upon notice in such proceedings served upon all the owners of the property at least eight days prior to such hearing, in the manner prescribed in the condemnation law for the service of the petition and notice, may, where it appears to its satisfaction that the public interests will be prejudiced by delay, direct that the plaintiff be permitted to enter immediately upon the property to be taken and devote it temporarily to the public use specified in the petition, upon depositing with the court such sum or giving an undertaking in such amount and subject to such conditions as the court may deem sufficient to secure the payment of the award that may be made, and the costs and the expenses of the proceedings and for the payment of any damages which the defendant in such proceedings may have sustained by such entry upon and use of his property. The sum so deposited or undertaking so given shall be at least equal to twice the assessed valuation, if any, of any real estate to be so taken. The court, at any time, upon like hearing and notice given by either party to such proceedings, may give such further directions in respect to any such deposit, undertaking or condition as it may deem just and proper, and in every case the owner may conduct the proceedings to a conclusion if the plaintiff delays or neglects to prosecute the same and if the sum so deposited or security so given shall be insufficient to pay such award and costs, expenses and damages, and if the plaintiff shall fail to pay the amount of such deficiency, judgment shall be entered against the plaintiff for the deficiency and the possession of the property shall be restored to the defendant.
Last modified: February 3, 2019