A Lake Street bar that police blame for neighborhood crime is suing the city of Minneapolis for engaging in what it says is a malicious and racially motivated scheme to close its doors.

Champions Sports Bar & Grill, 105 W. Lake St., filed a federal lawsuit Thursday morning detailing months of wrangling with police and city officials over the bar's liquor license. Many of the accusations, which include claims of defamation and retaliation, stem from an undercover drug sting that police announced in March.

The business claims the city has attempted to use the drug arrests, as well as a city requirement that bars sell a substantial amount of food, to impose conditions that would force them out of business.

"I've worked hard all my life, employ over 30 people, and play by the rules," Champions owner Rick Nelson said in a statement. "I don't know why they've targeted me like this."

In a threat to revoke the liquor license in October, city staff documented a number of troubles. They included the arrests from the drug sting, an assault and robbery in the Champions parking lot, a "disturbance" involving a large number of people that resulted in injuries, and a parking lot shooting that sent two bullets through a nearby apartment window.

"When you look at the list of complaints of criminal activity at this establishment, it is clear that the city is right to take enforcement action," said City Attorney Susan Segal. "There is a documented history of criminal and nuisance activity at this business."

The bar says that the city is discriminating against it because the clientele is largely black. They relate their predicament to Gabby's Saloon, a now-closed bar that won a $201,000 settlement from the city in 2009 after filing a similar federal lawsuit.

Champions alleges that the drug sting, which included deals that occurred in the bar, was initiated by Inspector Matt Clark in retaliation for Nelson's complaints about crime at a nearby bus stop.

The suit says Clark told reporters that Champions was a "hub for trouble" and a "haven for crack cocaine dealing." Clark's statements "directly led to a reduction in the number of patrons who have visited Champions ever since," the complaint states.

The bar alleges that the city then tried to impose "severely restrictive" conditions on the bar after the arrests, later citing them for violating the city's "60/40" rule, which requires bars near residential properties to make 60 percent of their money from non-alcohol sales. Champions contended that its license was grandfathered out of this requirement, since it was approved in 1981.

The 60/40 citation was resolved, the suit says, but a threat to revoke the bar's license remains in place.

City officials note the bar has twice previously agreed to a liquor license suspension due to illicit drug activity, once for 14 consecutive days.

Eric Roper • 612-673-1732 Twitter: @StribRoper