CLEARWATER, Fla. — In this small beachside community sits a 1.4-acre patch of dirt that has become a flash point in a fight between church and state.

The Church of Scientology offered $15 million to buy the vacant piece of land in the city's downtown from the Clearwater Marine Aquarium. The city of Clearwater offered $4.25 million. But somehow, the city in April still won the bidding war — and now the church is claiming bias played a role.

"I think that there was religious discrimination with respect to the church. That the city somehow made this into a Scientology issue, when it did not need to be," the Church of Scientology's attorney, Monique Yingling, told NBC News. "For some reason, the city wanted to keep that property out of the hands of the church."

City officials want the land for a larger downtown restoration plan and reportedly considered partnering with the church to redevelop downtown. The officials vigorously deny that they sought to undermine the sale in any way.

"It's such a silly argument — it's offensive," said Clearwater Mayor George Cretekos.

Land apart of the battle between the Church of Scientology and Clearwater officials.

Suspicion and mistrust between local government and the church dates back to the 1970s, when Scientology — then under the late founder L. Ron Hubbard — quietly bought an old 11-story hotel in downtown Clearwater and renovated it into its spiritual headquarters.

Known locally as the Flag Land Base, or "Flag," the building takes up an entire city block in Clearwater’s downtown district. Since then, the church has scooped up dozens of properties throughout the area as part of a sprawling complex of buildings and a patchwork of parcels.

Related: Scientology Takes Aim at ‘Going Clear’ Documentary

"When they redevelop a property it looks beautiful. They do a good job in that. They go out into our neighborhoods and provide some volunteer services, which is also very well-received," Cretekos said. "But they also do some things that concern people because they're not necessarily up front and open with you."

He said the church has a history of buying properties downtown using corporate names, leaving some residents and business owners worried about the church’s intention to expand, according to Cretekos

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Downtown Clearwater, Florida. NBC News

"The church has facilities all over the world. They seem to have a large presence in Clearwater, but Clearwater's a small town," Yingling said. "It has absolutely no interest in taking over the city. It has no interest in managing the downtown. It has no interest in putting retail in the downtown that it would run or manage."

Church leadership says the 1.4 acres of land was part of a $60 million expansion project that was to be built with the city as a partner. The church produced an animation showing how the land fit into a massive retail and entertainment complex. But now, without that land, the church says the deal is off.

"It's dead because it was part of a partnership and the city rejected the partnership," Yingling said.

Although the church said its dispute with the city is over and it is moving on, it has now turned its attention to the land's previous owner, the Clearwater Marine Aquarium.

The church recently filed an extensive critical report with county officials in April about the aquarium's tax-exempt status, questioning how the organization's staff spends its multimillion-dollar budget and arguing the aquarium is less a "tax-exempt rescue mission" and more a "for-profit entertainment center."

Aquarium officials are not worried.

"We're one of the top-rated nonprofits in the country, year after year after year," said David Yates, the Clearwater Marine Aquarium’s CEO. "We're just moving on with life and this can't distract us from the work we do."

As for the 1.4 acres of land, the mayor says the city now owns it, but adds that plans to develop it into green space or for commercial use or something entirely different are still a work in progress.