I wonder if the NYPD got permision from the building's owner to paint it before they did so. After all, the "artist" had secured permission to paint there from the property owner.
He had permission from the business owner, who may or may not have been the property owner.
Either way, badly handled bit of business there. Residential complants about such things arn't generally handled by the police. It should be dealt with by zoning/building code type department. The fact that the police actually went out and repainted the wall themselves just smacks of illigal censorship.