Tunnel construction began in 1892. The project was difficult due to complex geological formations beneath the river, and there were frequent blowouts and floods. Construction stopped in 1893 due to financial problems and flooding. The project was revived in 1902 with financial support from August Belmont, Jr., and completed in 1907. Some demonstration trolley car runs were conducted through the tunnels in 1907; however Belmont did not have a franchise to operate a transit line. The tunnels remained idle until Belmont sold them to the city in 1913.
The tunnels were modified to accommodate IRT subway cars in 1914. The first IRT Steinway test train between Grand Central and Vernon Avenue (today's Vernon Boulevard – Jackson Avenue station) ran June 13, 1915, with regularly scheduled service beginning June 22.