Attorney Sam Diehl, flanked by architect Dean Dovolis, left, and attorney Matthew Duffy, speaks about a lawsuit against two City Council members and the city of Lino Lakes over violations of civil and constitutional rights, alledging that some council members were motivated by discriminatory views against Muslims, outside the Federal Courthouse in Minneapolis, Minn., on Tuesday. (Renée Jones Schneider/The Minnesota Star Tribune)

The developers behind a fiercely-debated “Muslim-friendly” housing development in Lino Lakes sued the city and two of its council members on Tuesday in federal court, alleging that anti-Muslim discrimination was behind the decision to enact a moratorium that delayed the project.

The suit was filed by developers Faraaz Yussuf and Jameel Ahmed, along with their company Zikar Holdings LLC. It names the city and Council Members Michael Ruhland and Christopher Lyden as defendants. Speaking to reporters outside of U.S. District Court in Minneapolis, attorney Sam Diehl said his clients were treated unfairly because the proposal contained a mosque, and said he believes there would not have been opposition if the project was centered around a different place of worship such as a church.

“My clients have received blatantly discriminatory treatment and there’s been a pattern of unlawful behavior by the City Council and the city of Lino Lakes,” Diehl said.

In an email, spokeswoman Meg Sawyer said the city declined to comment. Ruhland and Lyden did not respond to email and phone requests for comment.

“The matter has been referred to legal counsel and the City has no comment at this time,” Sawyer said.

The project in question, “Madinah Lakes,” would bring an estimated 1,200 to 1,300 new homeowners and renters on the site of an old sod farm in Lino Lakes, and was hotly debated since it was introduced this spring. It would also contain a mosque.

Hundreds of opponents and supporters for the project showed up at a series of public meetings, with opponents saying they had legitimate concerns about the project’s impacts on local infrastructure and water use. Supporters of the project, including many Muslim community members, alleged that the opposition was rooted in Islamophobia. In June, the council voted 4-1 to enact a one-year moratorium on residential building in the northwest quadrant of the city, stalling the project. It does not prevent building the project’s mosque or shopping components.

In the lawsuit, the plaintiffs say Ruhland, Lyden, and others with the city, were “personally motivated by discriminatory animus against Muslims.” It alleges that the city treated this proposal differently and unfairly based on the religion as protected in the Constitution. Part of the suit additionally alleges that Ruhland proposed the moratorium “in response to negative, anti-Muslim opinions” the council heard from Lino Lakes residents.

Diehl said the charges include constitutional rights violations, including alleged violations of the First and Fourteenth amendments, and alleged violations of the Fair Housing Act by not allowing housing to someone based on religion.

Ahmed and Yussuf, whose official name is Faraaz Mohammed, did not attend the Tuesday news conference. Before the moratorium passed in August, Yussuf said he went with a different last name following a theft-by-swindle conviction he received in 2013. Members of the public have raised concerns at meetings about Yussuf’s past legal troubles, and about the lack of past projects completed by Zikar Holdings, which was created in late 2023. Diehl objected to the concerns and said Lino Lakes and other cities are required to treat each project by its merit and not the applicant’s background.

The lawsuit comes a day after the City Council voted to censure Lyden through a resolution for his email response applauding an anti-Muslim email he received regarding a story about the Madinah Lakes project.