PHILADELPHIA (Reuters) - Philadelphia officials plan to challenge a lawsuit by the local Boy Scouts that seeks to stop the city evicting the group because of its no-gays policy.

The city, which has allowed the Cradle of Liberty scouts to use a city building rent-free for 80 years, has said the group must either scrap its policy or start paying “fair market rent” of $200,000 a year or leave by May 31.

City officials say the no-gays policy, which follows Boy Scouts’ national rules, violates its 1982 Fair Practices Ordinance, which prohibits discrimination against certain classes of people, including on the basis of sexual orientation.

“We are not going to subsidize the violation of our ordinance,” said city solicitor Shelley Smith. “It’s still our intention to take the legal action necessary to evict them.”

Lawyers for the Boy Scouts, in the suit filed on Friday, argued the group has a right to set its own rules without government interference because it is a private organization.

That was set down by the U.S. Supreme Court which ruled in 2000 that the Boy Scouts and its local organizations have a right of “expressive association” under the First Amendment, the suit said.

Filed in federal court, the suit also claims that other groups that exclude certain classes of people under the ordinance occupy city buildings at little or no rent but only the Boy Scouts have been subjected to eviction.

And the proposed fair market rent of $200,000 a year is more than double the most expensive office space based on square footage in Philadelphia, the suit says.

“Both the proposed eviction and the ‘fair market rent’ requirement is intended to punish Cradle of Liberty for its constitutionally protected membership policy,” the suit says.