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I doubt that insurance has much to do with it. For a skyscraper insurance for an observation deck would be a drop in the bucket.
Many US cities, even if they have skyscrapers, don't have any observation decks at all were someone could get a view of the city, if they don't work in an office. I have found that probably most of those cities had at least one observation deck until the 1960s, and in most cases there is no record of when they closed.
Here is my theory why. When a new building opens up there are probably a lot of people who are curious about it. Many people might even pay to visit the observation deck to see what the view looks like. But would anybody do it a second time? Maybe one person would, but I think for the vast majority of people it would be a one time thing. Been there, done that, don't need to do it again. Which means that unless the building has major tourism appeal, such as the Empire State Building or something, visitation to the observation deck is going to start dropping from the day it opens, and keep dropping until nobody is interested anymore.
I don't know if anybody else remembers it, but until the 1970s most airports had plane viewing rooms, where you would put 25 - 50 cents in a turnstile to get in. There you could sit in nice comfortable theater style seating and watch the airplanes taxiing and taking off. I loved those places, because it was a comfortable place to wait an hour or two for my flight, and watching the airplanes made the time go faster. It was way better than sitting with the crowds at the gate. But I think I was one of the few. Because I never saw more than a handful of people in those places. The turnstiles were probably collecting about $5 and hour, and for what? It was taking up primespace in the airports. Eventually that disappeared because it was just not economically feasible to maintain those spaces for so little money. I suspect the same thing happened to the observation decks in skyscrapers.
I do know the Chanin Building observation deck was still open in 1961 and at the time, the admission fee was 25 cents and hours were 9 am to 6 pm every day.
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