San Diego may lease land to Scouts despite ban on gays, atheists

San Diego may lease public property to the Boy Scouts of America at a steeply discounted rate even though the group bans gays and atheists, a federal appeals court ruled Thursday.

A three-judge panel of the U.S. 9th Circuit Court of Appeals, overturning a lower court decision, said San Diego was not engaging in discrimination by leasing valuable property to the youth organization in exchange for the group’s commitment to improve and manage the land.

The ruling stemmed from a lawsuit filed by two couples, one lesbian, the other agnostic, who said that the city was subsidizing a group with discriminatory policies.

Drew Woodmansee, an attorney for the couples, said his clients were reviewing all options, including an appeal to a larger panel of the 9th Circuit.

“The Boy Scouts discriminate against people who don’t believe in God and who are gay and lesbian,” Woodmansee said. “The city in effect subsidizes that form of discrimination, and we believe it needs to stop.”

But the 9th Circuit said the lease was not intended to advance religious interests. “There is abundant evidence that its purpose was to provide facilities and services for youth activities,” the court said.

The 9th Circuit panel, which included two Democratic appointees and one Republican, said the leases for Camp Balboa and the Youth Aquatic Center did not pose a financial hardship to the city.

“Although they produce little to no revenue, these leases save the City money by placing the costs of maintenance and improvement upon the lessee organizations,” Judge William C. Canby Jr., who was appointed by President Carter, wrote for the unanimous panel. “The City spends nothing on the properties.”

One of the 25-year leases was for 18 acres at Balboa Park on a site that includes campgrounds, a swimming pool, an amphitheater, restrooms and showers, a picnic area and a ham radio room.

In addition to the annual $1 in rent, the lease required the Scouts to pay an annual $2,500 administration fee, bear responsibility for maintenance and administration and spend $1.7 million over seven years for capital improvements.

The other lease, for waterfront property on Fiesta Island in Mission Bay Park, required no rent but charged the Scouts with building a $1.5-million aquatic center. The center rents boats at inexpensive rates, the court said.

“Other nonprofit groups receive similar terms,” the court said.

John Eastman, a constitutional law professor at Chapman University School of Law, called the ruling “clearly the right decision.”

The ruling means that the Scouts’ “ability as an institution to have certain views doesn’t make them a pariah in the public square,” said Eastman, who wrote a friend-of-the-court brief siding with the Scouts.

“The Boy Scouts ought to be getting a medal for the public service they are providing rather than being on the receiving end of lawsuits,” the professor said.

The litigation over the leases has lasted about 10 years. The city of San Diego settled with the plaintiffs in 2004, paying their attorneys fees and court costs. The city did not evict the Scouts but agreed to abide by the court’s ultimate decision in the case and not to join the Scouts in their appeal.

maura.dolan@latimes.com