NYC in talks to keep Times Square billboards after federal law called for lights out

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Federal regulations target Times Square billboards

Brad Blakeman and Joe Lestingi react to outcry over government policy

Times Square -- the "crossroads of the world" -- is beautiful just as it is, thank you.

That's New York City's official response following reports that the city was facing pressure under a federal law to remove its iconic oversized billboards from the site, perhaps best known as the backdrop to the country's New Year's Eve celebrations.

Officials now say the signs aren't going anywhere.

Capital New York and CBS2 first reported that a 2012 federal transportation law had ensnared Times Square by declaring that the storied Broadway and 7th Avenue intersection -- and other city streets -- fell under the 1965 Highway Beautification Act, because they were arterial routes to the federal highway system.

The 1965 law says billboards within 660 feet of a highway can't be more than 1,200 square feet. And Times Square's looming luminous signs certainly fall outside those restrictions.

But federal and city officials said Wednesday they're trying to work it out. Representatives with the city and the Federal Highway Administration told FoxNews.com they don't plan to take the signs down.

"The signage will not be removed," the city DOT official said in an email. The official noted that these streets must comply with federal regulations, but said the city is in "direct contact with the Federal Highway Administration on the matter and are working with New York State DOT and New York City Department of Buildings to identify a solution in which signage will remain unchanged."

Federal Highway Administration spokesman Doug Hecox also said the agency has been working with state and city officials "for nearly a year to correct this unintentional consequence" of the 2012 law.

It's unclear how the city might be able to get out of it. City Transportation Commissioner Polly Trottenberg reportedly said the city has been under pressure to get rid of the billboards -- or give up part of the state's federal highway funds.

CBS2 reports that the city is looking at simply trying to get an exemption from the federal law, with roughly $90 million in federal highway money at stake.

But Hecox denied the claim, saying "at no time has FHWA asked NYCDOT to remove the billboards from Times Square or threatened to withhold federal funds."

He said officials have discussed the possibility of removing the national highway system designation from certain roadways, "and FHWA stands ready to act if we receive that request from the state."

Bringing Times Square under the Beautification Act may not have been intentional, as Hecox notes. After all, the Johnson administration-era law was originally meant to clean up rural areas of the country.

"The signs in Times Square are wonderful. They're iconic. They're not only a global tourist attraction, they're important to the economy," Trottenberg told CBS2, vowing to fight to keep them.

According to The Wall Street Journal, One Times Square brings in more than $23 million annually from the signs, with companies paying several million apiece for the coveted ad real estate.