This is an update to this post.
Via LaDonna Sanders of the Alexandria NAACP:
NAACP received a verbal statement from Human Rights Office at approximately 3:00 PM yesterday, and a written statement later in the evening, determining the Halloween display while arguably done in poor taste, it did not represent hate speech under the law. Since the display is on private property, police department could not force the homeowner to remove the display. However the homeowner had removed portions of the display.