On Wikipedia.

I believe the controversy was propagated, if not wholly invented, by bigoted busybodies who blame all Muslims for the acts of a small number of extremist terrorists, and think government ought to control where places of worship are built. My guess is a lot of them bitch about 'big government', but I don't know.

I think it's New York State's business. I think a lot of people who have stuck their noses in this come from places a lot less cosmopolitan than NYC, and expect New Yorkers to be as xenophobic and Muslim-hatin' as they are. I think a Muslim cultural center and mosque might, in the LONG run, turn out to be a good, healing thing.