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Since the Arbor now randomly overlooks a bridge, that provides with another visual aid as to trying to figure out where SST's exact location might be.
Looking around on the web, the only NYC bridge I've found that the one depicted in the new background remotely resembles is the Bronx/Whitestone Bridge: the architecture is pretty much identical, the color is just radically different, with the Whitestone Bridge being, well, white, and the bridge in the backdrop being reddish/orangle like the Golden Gate.
This question is essentially a condensed version of the eternally unanswerable "Where's Springfield?" question, only confined to one city instead of the entire US.
As someone who lives in NYC, let me weigh in. My knowledge of my hometown is not impeccable by any stretch, but it's adequate enough for this.
Sesame Street, it has always been clear to me, is somewhere in Manhattan. It's not any of the other four boroughs. There have been various things indicating that over the years.
Once you try to get more specific than that, that's when you run into problems, due to all the contradictions that can never be reconciled.
"I've deduced that 123 faces both the Empire State Building and the Plaza Hotel - the backdrop showed Empire State in the far distance to the left of the view from the rooftop, while the Plaza seemed a bit closer to 123 to the right."
Well, let's try to break that down.
The Empire State Building is on 5th Avenue and 33rd Street. The Plaza Hotel is also on 5th Avenue, but all the way up on 59th Street, 26 long blocks to the north. For 123 to be able to face both of these would probably be impossible. It's a very long stretch, and you wouldn't be able to see both of them unless you were really high up. If you were, though----if 123 Sesame Street were a 40-story building----and to get the left-right arrangement you describe in that shot, that would place our familiar corner somewhere in Clinton, the Theater District, or western-most Midtown.
But there's no particular reason to think that our familiar block of Sesame Street is all that close to the Empire State Building or the Plaza, and in fact that wouldn't be realistic at all. The closer you get to 5th Avenue, the more super touristy it is, packed to the gills with traffic, businesses and tourist traps. The further east or west from 5th Avenue you go, it's quieter.
From the west to east coast, that section of the island contains Clinton, the Theater District, Midtown, Turtle Bay/Murray Hill, Sutton, Beekman and Tudor. Our familiar corner is clearly in a quieter area, where the buildings are purely residential and not nearly as high. As far as I know, the more quiet, residential areas in that stretch are mostly on the east side---the Tudor/Murray Hill/Beekman area---- not the west, which would be wrong for that view you describe.
There have been many vague suggestions, it seems to me, that the characters live fairly close to Central Park. I know that's not official, and the park that used to be Around the Corner did not seem to be Central Park, but enough other hints have existed that I'm gonna go with that as a factor---though I could understand someone contesting that.
But here's one of the most important, and problematic, factors----Sesame Street is CURVED. Or at least, our familiar block is. And that right there is huge. Because from Midtown on up until you get to some of the northern-most neighborhoods---and I'm not even quite sure about those, there are virtually no curved streets at all. There are a few diagonal ones, but even those are scarce. From Midtown on up, Manhattan is largely a giant grid. This wouldn't have mattered in the first season when the street was shown as being straight, but from 1970 onwards, it's been proudly curved.
The grid falls apart somewhere in the 10s as you go south, and the streets in some southern sections of the island, like Greenwich Village, TriBeCa, etc., can be as jumbled and confusing as any other city at that point, with some streets being --yes--curved. But by then, you're a long, long way from Central Park.
If I remember correctly, someone once said that Sesame Street was originally modeled after some neighborhoods in the Upper West Side. Now, the Upper West Side is right up against Central Park, so it also has that in its favor, and it ALSO contains an 86th Street subway station which, if you recall, the characters get off of during Christmas Eve on Sesame Street. There are actually three different 86th Street stops on different lines, one for the 1 train, another for the B and C located a few blocks to the east, and another clear across the island ---in the Upper EAST Side---for the 4, 5 and 6. If Sesame Street were in the Upper West Side, that would have been a 1, B or C train the characters had been riding.
Sesame Street's OWN subway station on the corner is another wrench in the works. It shows that four trains stop there: the 1, the 2, the A, and the B. The creators obviously did that as a deliberate joke, because in real life there does not exist any station where all four of those lines stop. The only thing that comes closest is the 59th Street/Columbus Circle stop, as all four lines pass through it, but only the 1 actually stops there. Besides, the area doesn't look anything like the Sesame neighborhood anyway, although it IS located mere steps from the southern edge of Central Park. (It's also, as an added note, the spot where the Stay Puft Marshmallow Man first emerged in Ghostbusters. )
And then of course, you have the dodgiest factor of all----the continuously morphing surroundings. As has been pointed out in several threads, you used to be able to look "down the street", i.e. at the painted backdrop that once was set up beyond the stoop to evoke the setting of looking down a long, straight city street. As we know, what used to be a street has, for the past 17 years or so, bizarrely been blocked off by the side of another building, which if taken literally had to be constructed in the middle of what was once a roadway. Effectively this turned Sesame Street into Sesame Courtyard, or made it a dead-end street. And heck---between those two eras, the buildings formerly seen running perpendicular to that long street vanished in 1993 when the park suddenly appeared in that spot.
(The plausible suggestion is that "Sesame Street" is really just a small, separately addressed section of a much longer street, as several of those exist in the city. But this still wouldn't explain the complete overhaul of the area and blocking off of the road, though, to say nothing of what could have become of the buildings that used to be Around the Corner. Though it's possible that that park is still there, just blocked from our view now by that new building.)
And NOW, of course, with this radical and out-of-nowhere new redesign that has the street near a large bridge, things get thornier than they've ever been before.
There ARE no bridges like that on the west coast of the island, except for the George Washington Bridge, and that's all the way up near 181st Street, well past what's considered the Upper West Side. And there are no neighborhoods in its immediate shadow like that----there are long roadways that slowly lead up to the bridge, and those are located over Riverside Drive, not any neighborhoods. Besides, the GW is blue-gray, not red. Plus, there's never been anything before to suggest that our familiar neighborhood is up against either coast of the island.
You know what I've always liked to imagine? The actual reason for the eternal question "Can you tell me how to get to Sesame Street?" is because it is under some kind of odd Twilight Zone-esque curse that makes it actually keep changing where it is. The immediately surrounding landscape usually moves along with it, but that also magically rearranges itself every now and then, making the job of finding your way home to your apartment every day a unique challenge that most people would be unable to imagine.
The street was modeled after Harlem; Jon Stone even said they might as well have shot the show on location in Harlem because of how realistic the set was in terms of all of the run-down and lived-in details that was put into it. Considering, Sesame Street was a very elaborate set for a TV show (particularly a kid show on PBS) at the time.
I just signed an online petition (not to support the cause, just to throw in my own two-cents worth on a silly issue), but it kept forcing me to give a street address when I signed, so I put my address as 123 Sesame Street (seriously, I did); after my comment was published, it gave my location as Schenectady, NY, lol.
Before that, SS was filmed at the Reeves Teletape Studios in Manhattan; being unable to find any traces of Teletape on Google Maps, I did manage to come across this particular article which may help to shed some light on SS's general vicinity: