There was the faded mural on the fence between Hooper's Store and 123 that had a palm tree. And in the very first season, there was a painting on the side of Hooper's Store that had some smaller trees under a big sun.
I think the motifs give a good flavor of what existed at the time in urban neighborhoods with Blacks and Hispanics of Caribbean descent. People from those areas do tend to paint murals depicting island scenes , to remind them of back home, and to give a little color to a sometimes drab urban landscape.
Even though it's subtle, it's nice to see Sesame Street was adorned with these murals too.
As far as real trees go, for a while they did have a tree planted along the sidewalk (in a square block of earth instead of the concrete) along with the mailbox, fire hydrant, and litter basket. But I don't ever remember seeing any actual palm trees. The mural on the fence was the closest they had.