I think the actions were foolish, but you're correct, there's no legal question about the Menorah display.
Unfortunately, the ACLU will sue.
They will have no legal standing, but Sea-Tac would rather not litigate. Since the ACLU gets money everytime they win one of these "civil rights" cases, they have little to lose.
Moreover, fighting these sorts of lawsuits brings in donation dollars for them.
Sea-Tac isn't afraid of losing the lawsuit, no matter what happens, they lose.