Sinn Féin’s Gerry Adams made the claim after President Micheal D Higgins laid a wreath at Arbour Hill in memory of the rebels.
Taoiseach Enda Kenny stopped short of calling the national monument a slum, but agreed it was “not edifying” to look at and he would not like to take visitors from abroad there.
Mr Adams called for the national monument at 14-17 Moore St in Dublin’s north inner city to be renovated as part of the creation of a wider “historical quarter” in time for the centenary of the uprising.
The Sinn Féin leader said it was wrong for a developer involved with Nama to have the ability to build a shopping mall adjacent to the site.
Mr Adams said Nama’s involvement in any such scheme could see the taxpayer pay for “vandalism of a national monument”.
Mr Kenny told TDs he hoped an amicable solution with the developer could be worked out for Moore St.
In 2007, 14-17 Moore Street was designated a national monument as it was the site many leading rebels of the 1916 rising surrendered from. Number 16 was their final headquarters.
The Taoiseach and most of the Cabinet, as well as opposition figures such as Fianna Fáil leader Micheál Martin and Mr Adams, attended the annual ceremony at Arbour Hill.
Mr Higgins was accompanied by a 21-strong motorcyclecade as his car arrived at the Church of the Sacred Heart at Arbour Hill.
Before Mass, Mr Higgins inspected a captain’s guard of honour drawn from the Second Infantry Battalion at Cathal Brugha Barracks, handed over by Capt David Fitzpatrick from the Fifth Infantry Battalion at McKee Barracks.
A minute’s silence followed the wreath laying and The Last Post was played by the Army Number One Band.