The City Quilter is a great shop to go to but the prices are just like in every other LQS. They have great selection of fabrics though.
I used to live not far away from the Garment District in NYC and I found lots of fabrics there for quilting. They are not sold as quilting fabrics, but they are there. I have not been there a while, but I am sure nothing much changed. If you are staying longer, I would suggest renting a car for a day and going to Intercourse, PA - about 4 hr drive from Manhattan. Now that place is quilters' Mecca.