"So there is a litmus test for potential buyers? Anyone that would keep the cross is automatically eliminated as a buyer?"
If you sell a piece so small that it has no other valid use, you are limiting your buyers to those who wish to keep it, and the City would be showing a bias. If you sell a bigger area that WOULD be of some use, the price would skyrocket.
Think giving it away was tried also.
Bush will fight for "freedom" in Iraq, but I don't expect him to fight for veterans right to have this cross in San Diego. Wouldn't be PC.