Mr. Diller, the chairman of IAC/InterActive Corporation, had enlisted Hollywood friends to create an ambitious program that he and his wife, the fashion designer Diane von Furstenberg, would underwrite.
But the cost ballooned to more than $250 million today from $35 million six years ago because of the complexity of the design and the delays caused by legal wrangling over the pier’s placement in a protected estuary, among other issues.
“Because of the huge escalating costs and the fact it would have been a continuing controversy over the next three years I decided it was no longer viable for us to proceed,” Mr. Diller said in an interview, appearing visibly distressed about dropping a project he had taken to heart.
Mr. Diller’s reversal caught everyone by surprise. Richard Emery, a lawyer for the opponents, said he was “shocked” by Mr. Diller’s decision, “because I thought we were close to a solution.” But he was also elated.
“It’s a great decision,” Mr. Emery said. “It shows great respect for the estuary. It preserves the estuary as the legislature intended. I believe he came to believe he was being manipulated by the trust as much as the public was.”
But that was not the sentiment of the pier’s supporters, who included the local community board, Gov. Andrew M. Cuomo, Mayor Bill de Blasio and Senator Chuck Schumer.
Madelyn Wils, president of the Hudson River Park Trust, said in a statement that she was “deeply saddened” by Mr. Diller’s decision, “not simply because this would’ve been one of the world’s greatest piers, but because this was a project the community so resoundingly wanted, and that millions would one day enjoy.”
Senator Schumer had a sharper-edged response. “For such a small group of people to hold up a public and philanthropic project that would benefit so many is just awful,” Mr. Schumer said.
The opponents included the City Club of New York, which has few members and was almost dead just a few years ago. It was revived by a group of activists to fight zoning changes under the Bloomberg administration.
The pier, envisioned by the British designer Thomas Heatherwick, would have been the capstone of Hudson River Park, a four-mile-long strip of green along the Hudson that was created in 1998 as a city-state partnership. The Hudson River Park Trust was created to oversee its development and operation.
Mr. Diller also enlisted the help of the producer…