LIVINGSTON — A dispute over the resurrection of a defunct Main Street bar is shaping up to be a legal showdown — and possibly a mayoral showdown in November.

Earlier this month, a lawsuit was filed in Merced County Superior Court on behalf of local businessman Mike Sperry Jr. claiming that the Livingston City Council improperly revoked a conditional-use permit for the site after it was originally approved by the city's Planning Commission.

Sperry, who's behind the effort to bring back a drinking establishment at 444 Main St., owns the 3rd Street Armory Co. gun shop in Livingston.

In January, the Livingston Planning Commission approved a conditional-use permit for the site that would have allowed the establishment to sell alcohol by the glass.

The permit was appealed by Mayor Rodrigo Espinoza. The mayor had been in favor of the plan to allow a bar to move back into the vacant building but has said residents' concerns made him rethink his stance. The permit later was revoked by the council.

Sperry said he thinks the city isn't small-business friendly, and because of it, he pulled papers Thursday to run for mayor, noting that Espinoza "burned him" with the appeal.

Last month, Sperry and his attorney, Mike Warda, filed a claim against the city seeking $300,000 in damages for lost business. That claim was rejected by the City Council.

The lawsuit claims that Espinoza's appeal was illegitimate in part because it wasn't filed in a proper or timely fashion. The lawsuit claims that a mayor or council member doesn't have the authority to file an appeal.

Furthermore, the lawsuit alleges that Espinoza didn't pay the proper fee for the appeal. His appeal fee was instead returned to him, according to the complaint.

Espinoza said the appeal he filed was submitted correctly to the city. He noted that he has proof that he paid for the paperwork, but declined to get into anymore details about the issue since it involves pending litigation.

While the claim against the city had sought damages, Warda said he and his client aren't going after money with the lawsuit.

"We would drop the lawsuit today if they said 'you can have your conditional-use permit,' " he said. "We're not asking them for a dollar. We just want them to do the right thing."

If the lawsuit does turn into a full-blown legal battle, it would create attorney fees for the city.

"I'm more interested in really trying to resolve this with the city, because I don't think anybody should be spending the money on this," Warda said. "I'm not sure why this thing went sideways originally -- Mike Sperry enjoyed the support of the mayor."

Several concerns, including parking issues and problems that arose from the previous such business, have been raised by the city and the public, but Warda insisted that he doesn't know what the real issue is behind the city's unwillingness to allow a bar at 444 Main St.

"There's probably no industry that's more regulated than alcohol," Warda said, noting that most successful downtown revivals include bars and restaurants. "So do I know what's driving it? No, I have no idea. There's a store that sells beer downtown right next door, they're not trying to shut that down."

On Espinoza's appeal, he called the Planning Commission's approval "an interesting decision."

"As mayor, you'd think that he would identify the basis of his appeal," Warda said. "The entire basis of his appeal is 'I find this matter interesting.' "

Sperry said he thinks the council simply doesn't want a drinking establishment at the location, adding that he's trying to get a chance to open one through the lawsuit.

"Basically, I'm not in it for the money," he said. "I'm trying to force the city to give me an opportunity to run a legitimate business."

Reporter Mike North can be reached at (209) 385-2453 or mnorth@mercedsunstar.com.