More than three years after the troublesome Moonlight Magic bar was shut down for good, the vacant building in Frogtown continues to cause legal problems for the city of St. Paul.

The city says the 124-year-old commercial building at 601 Western Av. is hazardous and needs to be demolished. But a Minneapolis couple who bought the building in 2012 say the city is blocking their effort to open a wedding venue in the building because it does not want a Somali business in the neighborhood.

The couple, Ameena Samatar and Alex Jerome, say they did everything the city asked of them, including providing proof of financial ability, submitting work plans and repair bids, but the city still voted to demolish the building in December 2012. Then the couple stopped the action by filing a lawsuit.

On Wednesday, the Minnesota Court of Appeals will hear their case to determine if the city can move forward with the demolition. On Jan. 9, the couple filed a separate lawsuit in federal court, claiming discrimination.

“They don’t want the Somali community to be in the building,” Samatar said.

City officials declined to comment on the allegations. But Assistant City Attorney Virginia Palmer said in court documents that the couple’s discrimination claims are “absurd.” Palmer wrote that the city tried to work with Samatar and Jerome for four months, but the couple did not present an acceptable plan to repair the building and correct all deficiencies and did not show they had access to adequate funding.

The two-story brick building, which was built in 1890 and sits across the street from a school, has historically been trouble for the city. Liquor violations, shootings and a beating death outside the Moonlight Magic bar prompted the city to revoke its liquor license in 2010. Jerome and Samatar paid a bank $49,000 for the property in July 2012. Jerome said he was aware that the building had been categorized as a public nuisance, but because he had experience with buying vacant properties, he believed getting the building to code would be relatively simple. They envisioned a wedding hall on the top floor, and the first floor would be an ethnic grocery store or dollar store.

“We work hard as new Americans, and we are not fools. This is our third property,” said Jerome, who owns residential properties in Brooklyn Park and Minneapolis. “We understand this, and I knew exactly what I was getting into.”

The city held a legislative hearing on what to do about the vacant building in August 2012. The city claims in court documents that it did not know Samatar owned the building until she appeared at the hearing.

According to the couple’s lawsuit, the hearing officer, Marcia Moermond, said “this is a joke” when she realized the new owner was Samatar, who was dressed in a Muslim hijab. But the city says in a court filing that Moermond was referring to the fact that Samatar lived in Minneapolis and made a “dismissive comment about Minneapolis, which she then said was a joke.”

The couple said the city made it impossible for them to restore the building because it kept adding to the list of required repairs and changes. In its court filings, the city acknowledges that its estimate of the repairs rose, but only after code inspectors found more problems in the building.

Samatar said they were able to show about $197,800 in available funds, but they were deemed inadequate because some of the funds came from Samatar’s sister.

Samatar said she and her husband decided to fight the city on the demolition because they feel the city is “trashing our money.”

When asked how much the case is costing the city, City Attorney Sara Grewing said: “We are handling this appeal entirely in house, so there are no additional costs to the taxpayers beyond the printing of the brief, which would be a few hundred dollars at most.”