People observing toilet in New York city not unknown (9)
I believe the answer is:
onlookers
'people observing' is the definition.
(people looking on at something)
'toilet in new york city not unknown' is the wordplay.
I cannot quite see how this works, but
'toilet' could be 'loo' (loo can informally mean a toilet) and 'loo' is present in the answer.
'new' could be 'n' (common abbreviation eg NT for New Testament) and 'n' is present in the answer.
'not' could be 'o' (I've seen this in other clues) and 'o' is found in the answer.
This explanation may well be incorrect...
(Other definitions for onlookers that I've seen before include "They watch" , "Spectators" , "Bystanders, rubber-neckers" .)