Feds tell NYC to remove Times Square's giant neon signs

New York City officials are balking at federal demands that the city remove Times Square's iconic neon signs.

The oversized billboards are apparently in violation of a 2012 highway spending bill that placed a number of Manhattan streets under regulation of the 1965 Highway Beautification Act, which limits the sizes of signs along roadways, WCBS first reported.

"All these billboards, they no longer meet the Highway Beautification Act requirements, and so now we're going to have to go through kind of a complicated process with the state to yank them off because the feds are threatening to take away 10 percent of our money," New York City Department of Transportation commissioner Polly Trottenberg told Capital New York.

Failure to comply with the request will reportedly result in the withholding of about $90 million in federal highway funding.

Broadway and Seventh Avenue, which intersect to form the crossroads that is Times Square, were added to the National Highway System (NHS) when bill MAP-21 was signed into law three years ago, according to Capital New York.

This means the thoroughfares now fall under the Highway Beautification Act, which mandates that all signs within 660 feet of any NHS-designated highway cannot be more than 1,200 square feet.

Another DOT official told Fox News: "The signage will not be removed," adding that 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."

Taking down the signs would not only harm the tourism industry, it would hurt the building owners.

One Times Square, the mostly-vacant 25-story building where the Times Square ball drops on New Year's Eve, generates more than $23 million per year in advertising revenue, according to the Wall Street Journal. Billboards adorning the building advertise products from Anheuser-Busch, Dunkin Donuts, Sony, Toshiba and others.

About 50 million people pass through the "crossroads of the world" each year, according to Travel & Leisure magazine.

"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 WCBS. "We're not going to be taking down the billboards in Times Square."