I've deliberately ignored the saga of the plans for a mosque near what the media insists on calling "Ground Zero" (as if it is the only such place) to the extent reasonably possible. This isn't to say I'm completely ignorant of it; I've simply tried to avoid what I assumed would be the incessant and relatively mindless chattering of politicians, pundits and preachers on the subject. Now that it appears it will take place, for the time being in any case, I feel an inclination to comment on the matter, so bear with me (or don't, if you like).
Since Congress in its wisdom adopted the strangely named Religious Land Use and Incarcerated Persons Act (RLUIPA), local governments which prohibit the use of land for religious purposes may find themselves experiencing the delights of litigation in the federal court. Local governments are precluded from doing so except when they can establish good cause which must, of course, have nothing to do with the contemplated religious use. The law has very real, and sharp, teeth. Successful litigants may be awarded costs and attorneys fees, and even punitive damages in some cases, in addition to a court order that the planned use be allowed.
It's not very surprising, then, that permission was granted. It would be difficult in this case to establish that a refusal to grant permission had nothing to do with the religious nature (the Islamic nature) of the contemplated use, and litigation would likely have resulted on a refusal. It may still result now, though I'm not sure what the basis for any action would be.
There seems to be no basis in the law on which objection to the use can be made. Are there other bases?
This can't legitimately be said to be the equivalent of establishing the headquarters of a neo-Nazi party next to Auschwitz, I think. Those who carried out the 9/11 attacks are evidently not representative of Islam. Still, it's hard not to think that those who intend to build this mosque suffer, at the least, from an insensitivity which is monumental. It's also difficult to believe that those who intend to build the mosque were unaware of the fact that the community would find it very objectionable.
Why, then, decide to place the mosque in this location? Unless it's the case that it simply could not be placed anywhere else (and I don't know this has been established), one must wonder regarding the intent involved. It's likely that the mosque will be a site of protest and controversy (and possibly even violence) for quite some time to come; this would be the expectation of any reasonable person, I think. Why would those involved in this development invite such a result, if they had any alternative? These are questions which inevitably come to mind, and it would not be surprising in these emotionally charged circumstances that some of those who consider these questions infer that some disagreeable intent is involved, and act accordingly.
I don't particularly like RLUIPA, as I think it creates a de facto preference for religious land use (de jure too, I suppose) and I don't think the state should be involved in favoring religious use in this manner, regardless of the nature of the religion involved. I don't think it is "wrong" (immoral) that a mosque be built in this case, but I think a case can be made that it is unwise and even offensive, and that unfortunate results may be anticipated. It therefore seems to make no sense to build a mosque at this location.