Cops have blocked off a four-block radius around the building with police tape and SWAT teams. Twitter reports say that it appears to involve an armed gunman, in an apartment near but not in the Flatiron building itself, reportedly at 12 East 22nd Street. (There were initial reports that the gunman was in the Argo Tea Cafe, inside the Flatiron building itself.)
Update: No shots appear to have been fired, and WNYC reports that police have now led a man away from the scene in handcuffs, reportedly to Bellevue. He is apparently a septuagenarian resident of the building who "menaced" contractors doing work on the apartment so much that they called the cops; he then barricaded himself in the building and the hostage situation ensued.