After clashing with city staff for years over its controversial Ashbridges Bay lease, Tuggs Inc. is now fighting restaurant giant Cara Operations Ltd., the Star has learned.

Amid claims and counter-claims in court documents is a demand from Tuggs that Cara immediately close Carters Landing, the popular restaurant Cara first opened in July 2016 — with Tuggs’s blessing — on a prime boardwalk spot owned by the city at 1681 Lake Shore Blvd. E.

But Tuggs cannot take action to evict Carters Landing pending a trial, set for next February, to settle the messy contract dispute, a judge ruled in June.

It’s the latest twist in a sole-sourced contract that has made headlines for more than a decade and helped trigger a city rule change to prevent a repeat.

The dispute has also frozen city attempts to negotiate with Tuggs to buy back lease rights to concession and novelty sales in four city parks, something demanded by Beach residents frustrated at having to get Tuggs’s permission, and in some cases pay the company, to hold community and charity events on public land.

For local city councillor, Mary-Margaret McMahon, the new legal fight is “disappointing.”

“At this point Beach residents are just keen to get back control of their parkland,” said the Ward 32 Beaches-East York representative.

George Foulidis and his company Tuggs won a contract in 1986 to build and operate the Boardwalk Cafe at Woodbine Beach Park and summer food concessions at a nearby pool and park.

In 2007, then-councillor Sandra Bussin convinced her council colleagues to approve a 20-year, sole-sourced extension. City staff advised against the Tuggs-initiated deal but some councillors argued it was necessary to keep a “mom and pop” operation on the site rather than a big fast-food chain.

City staff, unable to come to terms with Foulidis, brought the lease back to council which, in 2010, voted 15-12 to proceed with it. Tuggs got the main restaurant spot along with concessions at Kew Gardens and D.D. Somerville pool plus exclusive rights to the sale of novelties, food and drinks at four parks: Woodbine Beach; Ashbridges Bay; Kew Gardens; and Beaches.

Carters Landing opened July 1, 2016, alongside a new Foulidis-franchised Tim Hortons. The move angered some in the community because Tuggs had not yet got city permission to reassign the building part of its lease to Cara

Last fall council approved the reassignment. Cara was to sublease back to Tuggs the part of the building that holds Foulidis’s Tim Hortons and adjoining Athens Café.

Council also voted to start negotiations with Tuggs for the city to regain rights over activities in the four parks.

But court documents reveal the lease reassignment was never signed, the Tuggs-Cara relationship broke down and Tuggs is trying to evict Carters Landing.

None of the allegations has been tested in court, and both sides deny the other’s allegations. Foulidis has not responded to requests for comment. Cara said it could not comment on matters before the courts.

After Tuggs was unable to get city permission to reassign the lease within an agreed upon time frame, documents state, Tuggs and Cara signed an amended agreement to continue the relationship pending official approval.

But amid disagreement over several issues Tuggs “abruptly ended” negotiations on a final agreement and ordered Cara out, Cara says.

The restaurant chain says leaving would cost it the $825,000 it spent transforming a Foulidis seafood restaurant, which had replaced the Boardwalk Café, into Carters Landing and could cost 110 restaurant staff their jobs.

Disputes chronicled by both sides in the documents involve proceeds from sponsorships, parking and alcohol sales, the paying of rent — Tuggs suggests Cara failed to pay “in a timely manner or at all” – and who should be the recipient of rent payments given a court order related to Foulidis’s contentious divorce proceedings.

“Cara has been acting in good faith and was ready, willing and able to close the transaction,” Cara states.

Tuggs filed a counterclaim, urging the court to allow it to give Cara 10 days’ notice to vacate the site.

Cara’s “last-minute attempt to appropriate certain rights which it has not bargained for,” Tuggs says, and attempts to “fetter” Tugg’s bargaining position with the city for the parks rights, “patently demonstrated that there was no meeting of the minds and therefore no agreement on the fundamental terms,” of the lease reassignment, Tuggs alleges.

An update from city staff for next week’s meeting of the government management committee says staff tried to talk to Foulidis, on “a number of occasions,” about negotiating a return to city of food, beverage and sponsorship rights for the four parks.

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“Following these conversations, staff have determined that there is no feasibility of negotiating terms acceptable to the city and that further discussions are not warranted,” the update concludes.

McMahon says her residents would balk at any deal giving Tuggs a portion of proceeds from community events until the company’s lease with the city expires in 2027.

“We had hoped for a quick and easy agreement and some kind of payment (to Tuggs) and it’s disappointing but not surprising that hasn’t happened,” she said. “I’ll continue to work with the community to try to hold events in a less cost-prohibitive, easier way.”