What was once Louise Neveleson Plaza on Liberty Street in lower Manhattan is now a nicely maintained crater.

A renovation project, which began in April 2008 and was supposed to be completed in the fall, has languished as work crews have tried to upgrade the city’s notoriously labyrinthine plumbing while officials chase after funding that’s gone up in recessionary smoke.

With no end in sight, the project has become a potentially dangerous eyesore and a drain on citizen morale, a not-so-subtle symbol cavernously broadcasting the stuck economy to the masses.

At least that’s how it’s viewed by The Alliance for Downtown New York. Formed in 1995, the Alliance is one of the city’s “64 BIDs,” the neighborhood business improvement districts made up of property-and-business owners who pay into a special fund set up to promote business development, make capital improvements, and monitor the city’s quality of life.

The Alliance is devoted to all things Lower Manhattan. It has overseen major improvements projects, like the renovation of Stone Street, to the installation of elegant street lamps, fancy bike bollards (racks), and sleek trash cans.

In 2007, the Alliance began furthering its beautifying projects by hiring artists to decorate construction sites all over lower Manhattan. Now the project has gained urgency as the number of delayed construction projects has flourished like so many weeds under the fiscal compost formerly known as the country’s economy. The art installations, known as “construction mitigation and beautification” in urban planner speak, are meant to ensure safety and boost morale during these difficult financial times.

As of December 6, 2009, 515 stalled construction sites are languishing in all five boroughs of New York, up from 398 in July 2009, when the The New York City Department of Buildings began maintaining a list. Manhattan has 80 stalled sites, Brooklyn has 237, Queens boasts 140, the Bronx stands at 24, and Staten Island has 34. So the downtown alliance has decided to do something about these eyesores. At the moment, it has four public art installations up, and is planning 30 more. On the Louise Nevelson Place on Liberty Street site, the Lower Manhattan Development Corporation is trying to restore seven Nevelson sculptures and upgrade the plaza’s water mains, sanitary sewers, benches and sidewalks. Meanwhile, the Alliance hired artist Rachel Hayes for $2,000 to figure out a way to both camouflage and decorate the hole. Her solution: wrap it in a rainbow.

Hayes erected her work, “Rainbow Conversation,” on August 8th, decorating the 30 wooden fences surrounding the construction zone with panels made of strips of raw silk, polyester and other colorful materials. The panels make the excavated site look as if it’s wrapped in the Gay Pride Rainbow flag, a connotation Hayes agrees is apt. Larry Summers, 57, the doorman at 10 Liberty Plaza, across the street from the work, looks at the rainbow fence for eight hours every work day. He said he hadn’t realized it was a public work of art and is surprised when the small sign with its title is shown to him.

“I guess I’ll take it over looking at a big hole,” he says while opening the door for a resident. “But it really doesn’t do anything for me.”

On the other hand, Hanna Alsdorf, 29, who works nearby, said she enjoys the sculpture and has grown to appreciate it more each day. “It reminds me of Tibetan prayer flags,” she said. “It’s really grown on me.”

Chris Mirabile, a 25-year-old entrepreneur, lives across the street and also looks at the Hayes work every day. Lifting his sunglasses to view it on a recent afternoon, he said he too hadn’t realized it was an art work.

Mulling it over, he said, “I would have thought they’d use more colorful patterns, made more unique, maybe graphic, images to capture my attention more.” Perhaps, but in the world of public art, there is a bureaucratic mandate to make sure the work is pedestrian enough not to upset the actual pedestrians. “We don’t want accidents,” Whitney Barrett, the project coordinator for the Alliance which oversees the project, said with a laugh.

“I don’t know what it is, but people who are creative inject an area with life force. But it’s almost impossible to put your finger on what that force is,” Barrett added. Barrett said the Alliance collaborates with one of the city’s lesser known arts organizations, the Department of Transportation, whose exclusive goal is to ensure the work is safe.

“They use as a real low common denominator as a standard. If something might be yank-able or is so distracting it might cause an accident, like text, it’s not going to happen. And there can’t be any diva artists,’ Barrett continued. “These works might be destroyed. Artists know that this work is going to be moved around by construction workers and that it’s going to be deteriorating in the wind, snow, sun and ice.”

The prohibition against divas is a little ironic considering the Hayes’ projects proximity to the Nevelson sculptures. Nevelson was a notoriously glamorous, card-carrying diva. She went around her beloved city in dramatically long false eye lashes and furs, making sculpture from found objets, a.k.a. street trash, and helped to invent stuff like Abstract Expressionism.

Nevelson also participated in the WPA projects of the 1930s, the federally funded New Deal-era revitalization effort that resulted in the creation of some of the most important public art of the 20th Century. Nevelson worked, for example, with Diego Rivera on murals he was commissioned to create throughout the country for the WPA. Like the artists commissioned today by the Alliance, WPA artists worked to brighten public spaces.

Whatever the rationale for choosing their work, the commissions are taken seriously by artists like Nina Bovasso, who created Botanizing the Asphalt along 400 feet of bike path inHudson River Park; Caitlin Hurd, who created Flying Herd on a construction wall at Washington and Rector Streets; and Ellen Berkenbilt, who created the Poster Project at 50 Trinity. All these artists say they have tried to infuse their work with meaning while understanding the limitations of operating in the public sphere. “I think something like this in a public-street-unexpected environment is great, as it breaks up the monotony and maybe creates a situation where folks will do a double take when they see this in their daily routine. New York is full of surprises,” Bovasso said.

Barrett said the Alliance received $1.5 million from the Lower Manhattan Cultural Commission to work on the art projects, and to coordinate the various projects underway, stalled or not. Among its jobs, the Alliance must ensure the overall aesthetics of the downtown area, monitor the pedestrian and traffic flow, and keep track of construction sites. She said a common problem is complaints from businesses that are hidden from cusomters by scaffolding and construction site fences.

Not everyone thinks public art at construction sites is a good idea. The New York Post called the art work itself a blight, saying it was a reminder of the period in the 1970s when the city was covered in graffiti.

In a September editorial titled, Begging for Urban Decay, the Post wrote: “Now, given all the billions spent on various downtown projects -- both before 9/11 and since -- the cost of these undertakings amounts to chump change. But spending even a dime to tart up jersey barriers and chain link fences is wasteful.”

Barrett deflects the criticism. “Even if it changes one neuron in the brain of a passerby, it’s worth it. Now there is something there that people can look at and think about it, something vibrant and colorful that generally makes people feel good. “Something to think about other than the void.”