Court documents outline restaurant lease fight
Owner of boardwalk eatery property claims to have large debts in divorce papers
The owner of Tuggs Inc. wants the city to reassign part of his controversial sole-sourced lease to Cara restaurants to help him get out from under debt, according to his divorce papers.
A judge lifted a publication ban on some divorce documents Friday, five days before Toronto city council is to debate George Foulidis’s request to let Cara Operations Ltd. take control of the prime boardwalk spot.
None of the claims in the documents have been tested in court.
In a June 9 affadavit, Fouldis’s estranged wife, Lynne, alleges he is a “savvy entrepreneur with a vast and complex corporate group of operating businesses,” and has more money than he is admitting — something he denies.
Foulidis’s July 14 affadavit states his Boardwalk Café at Ashbridge’s Bay had good and bad years, but he was able to buy real estate, including some commercial buildings, with financial help from relatives.
After city council in 2010 agreed to a 20-year extension of his untendered lease, he spent $5 million renovating the building to host Paralia, a new seafood restaurant that opened in July 2013. But his “crown jewel” became a “money pit” and closed last December.
“To keep the business afloat I had to borrow money from friends and relative and private lenders,” his affadvit states, listing more than $2.8 million in debts, including loans from several individuals and a $500,000 line of credit on the family of five’s $1.2-million home.
He lists his only income in 2015 as being $38,740 from a Tim Hortons in Toronto East General Hospital that he co-owns. This year he opened, with a family member, another Tim’s at the Ashbridge’s Bay spot.
Stress from the debts “and my family law issues, has made it necessary for me in the last six months to negotiate a part assignment of the city lease to Cara as a way to come out from under this debt,” George Foulidis wrote, noting he is so confident the city will agree that Cara opened Carters Landing restaurant in Paralia’s old spot on July 1.
He says he is unable to borrow any more but expects his income to im- prove in 2016, “and that will absolutely be the case if I am able to complete the Cara deal which seems imminent.”
Foulidis wants the court to deny his wife’s request to hire a receiver because the cost “would have significant negative impact to the ongoing negotiations with Cara which, if unsuccessful, will be ruinous.”
In her affidavit, Lynne Foulidis says “the lack of funding by George has left me destitute,” and her only asset is the home, which her husband borrowed against to finance his share of the hospital Tim Hortons.
She suggests, from parking on city land in front of the restaurant alone, he got “thousands of dollars of cash each week for George’s sole use and enjoyment.” George Foulidis denied that, saying parking revenues are seasonal and properly accounted for.
In an interview after a lawyer for Postmedia convinced Justice Alison Harvison Young to lift a sealing order and publication ban on the affidavits granted by another judge in August, Foulidis downplayed any link between his financial issues and desire to reassign part of the Ashbridge’s Bay lease.
He also suggested the city “not really living up to terms of that agreement” was a factor in Paralia’s failure.
In an interview lawyer Tanya Road cited Foulidis’s costs from a failed libel suit against former mayor Rob Ford — his own $300,000 legal fees plus $200,000 of Ford’s fees — as a burden, but said her client “is not on the brink of receivership or bankruptcy or anything.”
Foulidis first got the prime beachand-boardwalk location in the 1980s. City council voted in 2007, despite a city staff recommendation to issue a tender, to give Tuggs a 20-year extension. Some councillors said they wanted the “mom and pop operation” because a fast-food chain might win an open competition.