The fire that destroyed the Municipal Building started before dawn thi

try to simplify the argument -

the second sentence states a condition -
Vicinity of a fire that large --> notice the fire.

the next sentence -
he went from his apartment to library --> he has to go past the Municipal building --> he was in the vicinity of the fire.

If we combine the above two sentences we get -
he went from his apartment to library --> he has to go past the Municipal building --> he was in the vicinity of the fire --> notice the fire.

the last part is the conclusion. Hence, Option C.
This is mentioned in the sentence - "Thomas must have seen it, whatever he now says to the contrary."

A - Incorrect.
Even though this statement is correct, note that we can combine this with the first statement to get a further conclusion. That conclusion would be the final/main conclusion of the argument.

B - Incorrect.
this statement, although correct, is not the main conclusion. Note that the paragraph says - "Thomas must have seen it, whatever he now says to the contrary."
"whatever" here indicates a contrast, so the author does not agree with Thomas. Hence, Thomas's claim cannot be the main conclusion.

D - Incorrect.
this is an assumption, not the main conclusion.
If he did not go directly to the library, but went somewhere else from his apartment and from that place went to the library, the argument falls apart. (He need not necessarily be in the vicinity of the fire then).

E - Incorrect.
same error as option A.