There's a logical disconnect in the city's argument.
The boy scouts can't accept homosexuals into their organization because of religious constraints. The city has legal grounds for revoking the original grant of the use of the land based on the organization's religious affiliation.
But if the boy scouts organization accepts homosexuals as the city insists, that doesn't change the fact that the organization is still religiously affiliated. Homosexual employees and staff would be considered secular participants.
What this means is that even if the organization accepts gays, the basis for the city's argument against the grant in perpetuity would still be valid. In effect, the organization would give in to the city, only to remain under the city's thumb, and the city could continue to press for the revocation regardless of the organization's compliance with their demands.
The boy scouts organization should stand firm, and let the courts slog it out. If they lose, move. If they win, they should perhaps work to purchase the land from the city. There is probably a rule in the city books somewhere where a long term tenant has the right to convert a lease and buy the property at fair market value. A lot of cities have rules like this, atrocious as the rule may be.