New York’s Governors Island, bought by the city and state for $1, needs about $1 billion in improvements and repairs before its development potential can be realized, government officials said yesterday.

The 172-acre island in New York Harbor, most recently a U.S. Coast Guard base, needs about $290 million in renovations to infrastructure such as water, sewer and gas lines, plus $60 million in building repairs, just to arrest deterioration, say officials of the Governors Island Preservation and Education Corporation, the city-state agency deciding its future. Another $650 million will be needed to make its buildings useable, they say.

The historic island, whose fort and guns protected the city from British attack during the Revolutionary War and the War of 1812, was purchased from the American government in January 2003 and is seen by officials as an ideal spot for hotels, schools, college programs, and cultural and research institutions.

“Governors Island is an extraordinary gem,” Deputy Mayor Daniel Doctoroff, who chairs the agency’s board, said yesterday.

“But when you actually begin to get beneath the hood, understanding the infrastructure costs, understanding that its greatest strength and greatest weakness is its position as an island, it’s not going to be easy. But we will come up with a great solution.”

Half of the $60 million for immediate repairs was promised by the city and state – $15 million apiece – when they purchased the island, Mr. Doctoroff said. He said he doesn’t expect either government will have trouble coming up with the remaining $30 million.

Some of the money is needed to fix the island’s only ferry slip capable of receiving vehicles, which is vital for maintaining its 1.5 million square feet of historic structures, Mr. Doctoroff said. The island can be reached only by boat.

Most of the structures – which include a set of three-story colonial buildings known as “the Arsenal” along the island’s northern edge, with views of lower Manhattan – received little or no maintenance since the Coast Guard ceased operations there in the mid-1990s, the agency’s senior vice president, Peter Fleischer, said.

Private developers will be expected to foot most or all of the $650 million cost to make the buildings usable as hotel rooms, dormitories, or classrooms, depending on the island’s ultimate plan, Mr. Doctoroff said.

“Our goal is to make the island financially self-sufficient,” he said.