Yes, reasonable zoning restrictions that happen to affect religious organizations are permissible under the first amendment. But those zoning restrictions must be neutral, and must not be specifically intended to restrict religious practice. In this case, (a) there are already numerous religious institutions within a 1-mile radius of the WTC site (as an aside, in that part of Manhattan, 1 mile is actually a significant distance that covers numerous neighborhoods), and (b) any such zoning restrictions have been proposed only after this religious organization announced plans to build (and, therefore, a court would likely say that the zoning restrictions are not neutral and are targeted at restricting religious practice).
I think one could identify a religion that has, as its ultimate goal, the subjugation of Christians, Jews, Hindus, Buddhists under a political order known as Shariah law, a political organization and the functional equivalent of the KKK or the Aryan Nation. Islam is nothing less than Religion and Politics mixed to the point where there is no separation and the difference between Nazism and Islam is that at least Nazis were more tolerant.
I would tend to think that as an Originalist (rather than a strict constructionist) the founders would not have considered Islam a religion as much as they would consider it a political ideology. Religions traditionally existed to promote charity and respect for life and the movement towards the betterment of mankind. Islam exists soley for the purpose of subjugating men, destroying all other religions and setting up a system of government which would encourage the violent overthrow of the US Government and the destruction by force of the Constitution. In that sense Islam is not a religion.
As a strong defender of our Constitutionally-limited government and religious freedom, I believe that it is abhorrent and antithetical to the Constitutional principles upon which this country was founded to suggest that the government (federal, state, or local) has the authority to decide what is, and is not, a religion.
Again, I agree completely that this mosque ought not to be built. However, I strongly believe that granting the government the power to decide that a certain religion may not build a house of worship in a particular place is incompatible with the Constitution.
The founders had no problems with state and local governments deciding which religions they would favor and which they would not. The 14th Amendment was not an originalist concept. Indeed, it was in many ways antithetical to the founders principles.
I don't think the founders would have had any objection to the prohibition of the building of a giant mosque next to a place where members of that religion killed 4000 residents of that city.
The fact of the matter is that this mosque will create a nuisance. Loyal Americans and New Yorkers may have the uncontrollable urge to burn the damned building to the ground. And that could damage adjoining properties. And that would be bad. We wouldn't want to damage adjoining properties.