There are many lessons to be learned from this, the amazing saga of the Thing (called sometimes a mosque, or an Islamic culture center with place of prayer, or something that's not a mosque) that's near--but not on--the Place (called sometimes Ground Zero, or the site on which the World Trade Center once stood, or the grave site). One of them is that the application of intelligence rather than emotion results in certain conclusions which are useful in creating some perspective, and would have probably prevented the very unfortunate circumstances which now obtain. If we remove the emotion, histrionics and posturing, I think we must conclude the following:
The law clearly allows the use. That should be all the state has to say about the matter. The law has nothing to do, and should have nothing to do, with encouraging the use or discouraging the use. There is no legal issue. First Amendment rights or other legal rights will not be violated regardless of whether the Thing is built near the Place. First Amendment rights in any case can only be violated by the state. So, those like Dr. Laura and others who claim their First Amendment rights are being violated whenever people get angry at them for saying something are, very simply, wrong. Those who try to characterize this mess as being about the "freedom of religion" are either ignorant or disingenuous. Those who claim that the Thing must be built near the Place because that's what the Constitution is all about are at best very misinformed.
Commentary by functionaries of the state (including politicians of all sorts) should be limited accordingly. Their concern should only be with the law. They should limit comment to what the state can or cannot do, legally. They may also, of course, urge a change in the law. But that's all they should do.
There is no legal prohibition against people, even lots of people, disagreeing with a proposed real estate development of any kind. or doing so loudly, insistently, and even stupidly. They may lobby their representatives to change the law if they desire. The mere fact that they do so does not mean that they are bigots. Whether they are bigots may be determined by what they say and how they act, but it doesn't follow they are bigots merely because they say the development is inappropriate or do something to stop it, within the law. Those who claim that anyone who opposes the development is a bigot are wrong, and being provocative.
Those Muslims who hate the United States and wish it harm will not be convinced or influenced not to hate the United States or not to do it harm if the Thing is built near the Place. They hate the United States and wish it harm for reasons unrelated to the Thing.
Those who believe all Muslims hate the United States and wish it harm have no reasonable basis on which to do so.
There is no reasonable basis on which to assert that the Thing is being funded by terrorists, nor is there any reason at this time to even wonder whether it is being funded by terrorists. The developer has no obligation to provide information regarding funding for the project to anyone.
The controversy which has resulted could have been anticipated. The developer must have known that the process of obtaining approval from the local authorities would make the project public, and that protests would be made. For good or ill, this happens quite frequently with real estate developments of many kinds, not merely religious ones. It happens when commercial developments believed to contain obnoxious uses are involved, when low-income housing is involved, when community based residential facilities are involved, when wind towers are involved. Perhaps the developer thought there would be no problem; if so, the developer is paying for that rather foolish conclusion now. If it was not anticipated, it should be clear to everyone, now, including the developer, that if the Thing is built near the Place there could be trouble, even though there should not be trouble.
The developer has a decision to make. The developer must decide whether to continue with the building of the Thing near the Place, or elsewhere. The developer is probably best advised not to listen to anyone on either side of the controversy. The developer has no obligation to please either side. The developer should consider what is in the best interests of the project. That will depend on the goal of the project. If the goal of the project is to build a fine Islamic Cultural Center with or without a mosque, that is not necessarily dependent on it being located near the Place. It may be the most sensible location depending on the economics of the situation--that's something I don't know and have not seen addressed. If that's the case, the developer must weigh the benefits against the risks in this complicated situation. If it's not, the developer must still weigh the benefits against the risks and determine whether to take the project somewhere else.
It's the developer's decision to make.