Photo Licensing Questions

Great project and it is worth real money but Government Educational Facility typically means that they also don't have lots of money and are probably faced with budget cuts. Government facilities and museums are under tough times so no matter what price you tell them, it is highly likely that they will scream and moan. Keep in mind that all the directors and folks who work at these facilities are usually very well paid so my attitude is I too should be fairly paid. They seem to think that displaying images at a place like this is a fantastic thing for the photographer and thus the charge should be minimal. The facts are pretty clear. Credit does not put food on the table and credit really only means something in certain markets. At an museum or government office most of the traffic is folks walking by. They are not in a buying mode and it is doubtful that having a credit under an image in the museum will lead to bigger and or better projects.
On the other hand, the images do a awful lot for the facility or museum. A nice mural will enhance the look and people will notice. So the images will generally enrich the facility and add to the decor but it is doubtful that simply displaying them will add anything to the photographers bottom line.
So what is a fair price? Here lies the problem. A fair price for the photographer is generally going to be too high of a price for the museum or facility. So let's look at what the display should be first and then let's look at a discounted rate.
If I understand correctly the image is an existing image that will be used to create the mural. So if this is correct you need to determine a fair licensing fee for usage of the material.
A 17' x 8 foot display with 600,000 viewers  would license for an average of $2500 for one year and $6500 for 3 years and $8000 for 5 years and $10,000 for ten years. Keep in mind at that a ten year license would mean $1000.00 per year or $2.74 per day. With 600,000 viewers in one year this means each day there are 1643 people viewing the image at $2.74 or 1.6 cents per person.
I think that this is more than fair. That said I would be surprised if they have budgeted more than $2500 for the entire license. I personally like to set what I call a target price and a walk price. The walk price is the bottom amount that I will take. One cent less and it is no deal. The target is the amount I would like to get. This means that any price between the walk and the target is a good deal. The deal just keeps getting better as you get closer to the target. Psychologically this is very helpful for the photographer. In this case, I would personally set a target at 7K and a walk price at $4700. The critical figures are an estimate on how many folks will see the image in one year and if your work is simply being made into a mural or whether another artist is going to craft the glass mural based on your image. Both of these would efface the price.