If the lease has expired, yes the can. I didn't see that it was in the article however.
Judging from the story there was no lease, just a unwritten agreement that the city would rent the Scouts the land for a buck. Well, as any lawyer will tell you unwritten agreements are not worth the paper they're printed on. So now both parties are over a barrel. As the story points out, the city cannot legally continue renting to an organization that discriminates. And the Boy Scouts have no plans to changing their membership and leadership standards simply to satisfy the Commonwealth of Pennsylvania. So either the Scouts pay fair market value or they move. There doesn't seem to be any legal alternative as the law is currently written.