The money went toward changing the plans to allow the old church to remain. Otherwise it was to be razed.
That part wasn't clear in the article, just that money went to the design plans for the new church. If that is the case, and the state wants to make the old church a landmark, I'd see nothing wrong with it.
That would be sinful?
Not to me, in fact it's little different than colleges that have used taxpayer money to put in foot baths and other amenities that cater to Muslims.