Yup, that's what the Maui News reports. The threat apparently worked.

The county had earlier let a Jewish group put up a menorah. The ACLU argued (likely correctly, given existing Establishment Clause precedent) that a stand-alone menorah would be seen by reasonable observers as a religious symbol, while a menorah coupled with a Christmas tree — which the Court has (in my view, quite correctly) held to be a secular symbol — would be seen as a permissible secular celebration of the holiday season.

One can certainly criticize constitutional doctrine that calls for such decisionmaking (though if you want to criticize it, you might want to read the leading case, Allegheny County v. Greater Pittsburgh ACLU, first). But given this doctrine, the ACLU's position seems quite sound.

The rabbi, to his credit, doesn't object to the county's putting up the tree. "I think it's wonderful," he reportedly said. "It's just in the spirit of holiday festivities, and educating the community about different celebratory events."

Thanks to Allen Asch for the pointer.