Mayor Nutter said yesterday that he found it "astounding" that the Philadelphia Boy Scouts chapter would "have the audacity" to sue the city.

The local chapter sued the city in federal court late Friday to prevent being evicted from its city-owned headquarters or being charged $200,000 a year in rent.

The local Boy Scouts chapter - known as the Cradle of Liberty Council, Inc. - pays the city $1 annually to lease a city-owned 1928 Beaux Arts building at 22nd and Winter streets, near the Parkway.

Hizzoner says that the city can no longer afford to subsidize the rent of a group that discriminates.

The Boy Scouts of America Inc. bars anyone who is openly gay from being a member.

The city has given the local chapter until Saturday to revise its policy or pay $200,000 annual rent.

"Clearly, the laws of Philadelphia do not provide for discrimination," Nutter said. "We're upholding the law. This is not a commentary on the Boy Scouts and their policies."

A spokesman for the Philadelphia Boy Scouts chapter said that it would likely have to scale back programming if it is forced to pay rent.

"It's not feasible for us to pay $200,000," said Jeff Jubelirer, noting that the local chapter runs a "career-mentoring program" for Philadelphia schoolchildren and also operates a summer camp.

The U.S. Supreme Court ruled in 2000 that since the Boy Scouts is a private group, it has a First Amendment right to associate with whomever it wants and government cannot interfere with that right.

The suit says that because the city opposed such rights, it decided to "punish" the local chapter by demanding that it repudiate the national membership policy.

City Solicitor Shelley Smith said that the local chapter is free to associate with whomever it wants, adding, "but that doesn't mean they're entitled to use city property for free in the exercise of that right."

The suit, which seeks unspecified damages, also accuses the city of censorship by "singling out" the local Boy Scouts but maintaining free or modest leases with other groups that limit membership, including Roman Catholic and Baptist church groups.

Smith said that the city is unaware of other such leases, but, if proven otherwise, the city would take similar action.

The dispute between the city and the local Boy Scouts has been festering since June 2003, when then-Mayor Street asked city lawyers to examine the arrangement between the city and the local chapter regarding use of its headquarters.

The Law Department concluded that the Boy Scouts' membership policies violated the city's 1982 Fair Practices ordinance, which bans discrimination based on sexual orientation and other grounds.

The local group subsequently adopted a nondiscrimination statement in January 2004 in which it opposed "any form of unlawful discrimination."

After that, the city agreed that it wouldn't try to evict the local chapter from its headquarters, the suit said.

Then, in 2005, the city asked the local chapter to "clarify" unlawful discrimination, the suit said. The city wanted to know whether that included discrimination based on sexual orientation, the suit said.

The suit said that a year-and-a- half later, in July 2006, the city solicitor wrote to Cradle of Liberty and said that it either had to abandon the anti-gay-membership policy or, alternatively, pay the city "fair-market rent."

Smith said that a 2007 appraisal of the property put the fair-market rental value at $200,000.

The suit said that the local chapter has spent $60,000 a year to maintain the building and another $1.5 million in renovations in 1994. *

Staff writer Catherine Lucey contributed to this report.