ALBANY, N.Y., April 21 (Reuters Legal) - New York's financial woes have forced the state's Court of Appeals to halt the $23-million renovation of a former Catholic school into luxury apartments for judges.

"The project looked reasonable in more comfortable times, but less so now," court spokesman Gary Spencer said on Tuesday. He said the indefinite suspension was never announced publicly, even though the decision was made in February.

The New York Post had assailed the 1898 gold-brick and white-stone building, known as Centennial Hall, for renovations it said featured seven judicial suites with stained-glass skylights, cherrywood furniture and marble tiles.

The seven judges currently stay in hotel rooms during the 66 days they spend in Albany each year at a total cost to the state of about $37,500 a year.

The state legislature approved the spending in 2007. But in the face of a $10 billion state budget gap, Governor Andrew Cuomo accused the courts of not sharing in the sacrifice of other agencies, school districts and the general public.

The state's fiscal year 2012 budget slashes the court system's budget by $170 million. Hundreds of layoffs are expected by June, and court officials have shortened court hours, called for smaller jury pools and cut back a range of programs, including mediation and the hiring of retired judges to preside over specialized cases.

Spencer said the renovations price tag was high because of the poor condition of the building, vacant more than 20 years. The county gave the property to the state in 2007 because no private developers wanted to take on the renovations.

DECAY, LEAKS

"The building was decaying," Spencer said. "The roof leaked, and there was a gut renovation."

The Law Reporting Bureau, a 34-employee agency that publishes and archives Court of Appeals and lower appellate court decisions, will move into new offices at the building on Monday. The court has been spending $240,000 a year leasing office space for the agency, which is the largest of its kind in the United States. Spencer said the "vast bulk" of the project's expense was dedicated to the bureau's new space.

Blair Horner, the legislative director for the New York Public Interest Research Group (NYPIRG) and a veteran good-government advocate in Albany, said that suspending the work on the apartments was a "smart move" given the economy and Cuomo's criticism of the court system's spending.

"In tight fiscal times, symbolic actions matter," Horner said. "Public agencies should be as tight-fisted with public dollars as they can possibly be."

But Judith Kaye, the Chief Judge on the Court of Appeals from 1993 to 2008 who helped get the Centennial Hall project off the ground, said the apartments would provide judges with greater security and easier access to the courthouse.

"To hear about the suspension of the apartments saddens me," said Kaye, who is now of counsel to the Manhattan law firm Skadden, Arps. "There was never an intention that this would be anything luxurious. It was supposed to be a place where you could leave a toothbrush and other personal effects, and there would be better security."

SECURITY A CONCERN

Kaye said as chief judge, she was met each morning by a court officer who would escort her from her hotel to the nearby courthouse.

"I once had a little apartment there, but at one point there was a security risk and I left," she added.

Horner said the security concerns were valid, but that government had a responsibility to make cost-effective choices.

"I don't think the public would be unsympathetic to the security considerations of the state's top judges," he said, "but if you have someone walking you across the street, and that additional cost doesn't tip the balance in favor of the suites, then you stick with it."

Despite the broad cuts to the court system, judges will still receive $10,000 stipends for expenses, which are separate from the hotel reimbursements. The state's 1,300 judges have not received raises since 1999, though state lawmakers last year created an independent panel that is expected to recommend raises next year. The move ended the long-held practice of tying judicial pay raises to those for legislators.

Spencer said there was no indication when construction on the apartments might resume.

(Reporting by Dan Wiessner; Editing by Howard Goller)