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The person who owns the building can definitely sue the local government if they are illegal interfering with his full use and enjoyment of the property.
The person can also sue the person coercing the local authorities if the person intended to tortuously interfere with the building owner's enjoyment of property. Typically, the person would need to prove that person doing the coercing either made illegal threats against the local government or made false statements of fact, causing them to unjustifiably act on those actions.
The local government could sue the individual to recover their losses (although that may or may not be successful). For instance, if a person is wrongfully incarcerated based on the false testimony
of a witness and wins a wrongful imprisonment case, the state normally does not seek or would it be able to obtain indemnification from the individual, since it still went ahead with the prosecution, etc.
The same is true of third parties in relation to government entities generally. As the government entity is being held accountable for its own wrongful actions.
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