Guggenheim goes downtown.

The city is planning to give the Solomon R. Guggenheim Museum $67.8 million to build a new 40-story facility on a waterfront parcel in lower Manhattan, a project city officials are hoping will provide an economic boost to downtown, Mayor Rudolph Giuliani announced.

"We are without doubt the cultural capital of the world and this new project will strengthen our claim to that title," Giuliani said. "It will give a boost to our cultural life, and also to lower Manhattan -- the historic heart of New York City."

Of the money the city has pledged, $35 million would be for Piers 9, 13, and 14 on the East River just south of the South Street Seaport, which would be provided through the city's Economic Development Corporation. The city would also provide $32.8 million in capital funding over five years. The level of city support is consistent with support provided to other landmark cultural institutions, such as the Museum of Modern Art.

"This is one of the most exciting moments in the Guggenheim's 63-year history," said Thomas Krens, director of the Solomon R. Guggenheim Foundation.

Museum and city officials announced plans for the $678 million project during a Nov. 28 ceremony at the museum's Upper East Side headquarters. The museum was selected from among bids received by the city after a request for proposals was sent out seeking development plans for the waterfront site.

While officials touted the economic benefits a project of this magnitude would have in the city, they also acknowledged that the project would require a significant amount of private fundraising, not to mention potential hurdles posed by neighborhood groups and government regulations.

The city is projecting that the museum would create at least 2,550 new jobs and attract between two to three million visitors a year. It would generate $280 million in economic activity and $14 million in city tax revenues.

As it is currently envisioned the museum building would occupy approximately 570,000 square feet, with 279,000 square feet of public park and outdoor sculpture areas. The museum will have more than 200,000 square feet for exhibitions, with 75,000 square feet for the postwar permanent collection and another 60,000 square feet for architecture, design, and multimedia art. In addition, the museum will house a 23,000-square-foot Center for Arts Education and a 1,200-seat theater and a 400-seat theater that will be available for community and business functions, according to the museum.

The new museum would house artworks created after the end of World War II on three levels of exhibition space with about 225,000 square feet of space, and 80,000 square feet of space for the permanent collection and the rest of the temporary shows. The Upper East Side site would feature early Modernist works.

The project would be near the South Street Seaport Museum, the Museum of Jewish Heritage, the Ellis Island ferries, and a proposed skyscraper museum and would create a "Museum Mile" similar to the one near Central Park on the Upper East Side.

"Throughout its history, the Guggenheim has stood as a groundbreaking institution geared as much toward the promise of the future as the preservation of the past," said Peter Lewis, chairman of the museum foundation.

The museum is expecting to begin its capital campaign next spring, but will begin the approximately two-year design and development phase immediately, Krens said.

"Once this process is complete, we anticipate the construction will be carried out in three to four years," Krens said.

State and federal environmental reviews must be completed before the state Department of Environmental Conservation and the United States Army Corps of Engineers can issue permits. The city and the museum must finalize lease terms for the land and the city Council must approve the proposed city money for the project. A series of city land-use and zoning permits related to waterfront access and to the bulk of the building are required. Community Board 1, the Manhattan Borough Board, the Planning Commission, and the city Council must vote on the plans, a process that will likely stretch into the administration of the next mayor who will be elected in November 2001.

The Guggenheim has selected Los Angeles architect Frank Gehry to design the new museum, which would be built on connecting platforms resting on piers at water level. To preserve the openness of the platform and create a sense of space, light, and views from South Street to the East River, the majority of the structure would be raised above the platforms and have large light and air wells.

"This design creates both a view corridor of the waterfront below the level of the FDR Drive, as well as a public waterfront promenade, sculpture garden, fountain, and an expansive public park on the platform, with access to the water for ferry service and possible other boating activities," according to a museum description of the project.

The structure would be built of titanium, glass and stone, and rise to a maximum height of 40 to 45 stories. It would be twice as large as the Guggenheim complex in Bilbao, Spain that Gehry designed and 10 times the size of the Upper East Side headquarters designed by renowned architect Frank Lloyd Wright.

Museum officials selected Gehry because of the past relationship it has had with the architect and because of the critical acclaim he has received for past works. Gehry has won numerous awards bestowed in the architectural profession, including the Pritzker Prize, the Praemium Imperiale Award, the AIA Gold Medal, and the National Medal of the Arts. Among recent commissions in the United States are the Millennium Park Music Pavilion in Chicago, an addition to the Corcoran Gallery of Art in Washington, D.C., and the Walt Disney Concert Hall in Los Angeles. The new museum would be Gehry's first project in New York City.

"Hallmarks of Frank Gehry's work include a particular concern that people exist comfortably within the spaces he creates, and an insistence that his buildings address the context and culture of their sites," according to a museum description of the project.

"This aspect of Gehry's work makes him a particularly appropriate choice for a large-scale structure located on the waterfront of lower Manhattan, where the context of the surrounding skyscrapers, the constraints of the river site, and the needs of the community create a unique and challenging environment.

No formal opposition has yet been formed to protest the project, but initial reactions from some community leaders suggest that some opposition may be inevitable. Madelyn Wils, chairwoman of Community Board 1 has said the board has not taken a formal stance on the issue but has said the project seems to be too big for the site.