As noted in the NY Post story on this:
"If the sponsors were looking for property anywhere at a distance that would be such that it would accommodate a better feeling among the people who are frustrated, I would look into trying to provide them with the state property they would need," Paterson told reporters.Read more: http://www.nypost.com/p/news/local/g...#ixzz0xQO23Fk4
New York Gov. David Paterson
Paterson spokesman Morgan Hook later acknowledged the state must competitively sell state land by bidding, and couldn't simply "provide" it to a religious group.
He added that the state was not actively looking for a parcel to house the mosque and would not do so unless both sides in the controversy agreed."