Just to close the loop on this one, I flew this photo by my two dependable sleuths, Chung Wong and Bob Egan, and they nailed it in short order. My original hunch was that the location was somewhere around Union Square. I, of course, was wrong.
Citing the fact that Andy's Silver Factory was, at one point, based at 231 East 47th Street, Chung surmised that it would have been someplace in that Murray Hill area of midtown.
Chung: the corner building at 2nd ave and 46th St looks like a match, near Silver Factory.
Chung: Background is a match (below)
Bob Egan: I looked for an aerial but the plaza was in shadow. On another subject, I once figured that the Douglas's in Green Acres lived right above this plaza. When, in the opening credits, Eva Gabor sings "I Love the country but, give me Park Avenue" she's on her balcony above here and in the far distance are the buildings next to Central Park. She'd have fit in at a Factory party.
So, there's our answer! Basically, the Warhol gang are posing in Dag Hammarskjold Plaza. I had a crappy part-time job doing customer service for shoddy mail-order operation in that neighborhood back in the late 80s, and trust me -- there wasn't anything fabulous or rock'n'roll about it, but hey, times change, I guess.
The wall depicted behind them in the original photo is gone, replaced by a glass and steel tower. Behind that used to be a Chinese restaurant that is now a middle-eastern joint called Ali Baba. Of the folks in the original picture, I can only really name Warhol and Gerard Malanga, who used to crack the whip for The Exploding Plastic Inevitable Show featuring the Velvet Underground. Gerard is about 74 today. Warhol, meanwhile, passed away in 1987 and, to my knowledge, remains dead.