[5] The museum is a private non-profit organization which receives government support as a member of New York City's Cultural Institutions Group.

The city donated a site on Fifth Avenue, and funds for construction of the museum building were raised by public subscription.

In 2000, the administration of mayor Rudy Giuliani told the museum that it could relocate to the historic Tweed Courthouse near City Hall in Lower Manhattan.

[9] El Museo del Barrio would then have moved across the street to occupy the current Museum of the City of New York building.

This decision was overturned by the incoming administration of Michael Bloomberg, which decided to use the Courthouse as the headquarters for the new New York City Department of Education, causing MCNY's then-director Robert R. McDonald to tender his resignation.

The groundbreaking for this extension, which included renovation of existing gallery space, as well as a new pavilion, took place on August 2, 2006,[10] and it was completed in February 2008 with a ribbon cutting later that same year.

It included objects ranging from Bill "Bojangles" Robinson's tap shoes to advertising materials from Avenue Q.

The exhibit explored the history of basketball in New York City, including players like Kareem Abdul-Jabbar and Bob Douglass.