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.

George 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. Earlier 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 improve 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 that, 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 beach-and-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.

When it came to light in 2010 that Tuggs had not signed the extension because Foulidis was trying to negotiate a better deal, council debated putting the contract out to tender but ultimately agreed to new terms that included annual rent of $200,000, Tuggs spending $2 million on renovations and the city getting a reduced cut from beach events and activities that Tuggs controls.

The lease also lets Tuggs run a beachside snack bar and includes exclusive rights to sell food at Donald D. Summerville Pool and in Kew Gardens. The proposal going to council next week would leave that part of the lease in Foulidis’s hands.

Cara wants to take over the lease for the premises where there is now Athens Café, Tim Hortons and Carters Landing, plus a Pizza Pizza window, and sublease the café and Tim Hortons spot back to Foulidis.

“Our hope, always our intention is we want to be a direct tenant to the city,” Steve Pelton, chief executive of The Landing Group that Cara bought in 2014, said in an interview earlier this week. “We want to have a great working relationship with the city; it’s basically between the Landing Group and the city and no one else involved.”

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A TIMELINE

June 1989: Beach residents at a public meeting argue Foulidis’s Boardwalk Bistro should not get a liquor licence. Foulidis argues that, although his original lease said he would not serve alcohol, “99 per cent” of his patrons want beer or wine with meals. He gets the licence.

February 2007: City council votes 21-14, over the advice of staff, in favour of a 20-year lease extension. “In this case we have somebody with a proven track record,” then-local councillor Sandra Bussin said. “I think they are a good fit with the neighbourhood.”

June 2009: A Star investigation identifies soft-serve ice cream from the Foulidis family’s Kew Gardens snack bar as the most bacteria-laden of samples bought around the city. Danny Foulidis orders the machine shut down and cleaned.

June 2010: City council votes not to reopen the lease agreement with Foulidis’s Tuggs Inc. even though the 2007 lease extension was not signed while Foulidis sought better terms. The Foulidis family argues it deserves the extension because of the money it spent on the site.

September 2010: Then-councillor Rob Ford raises a stink about the sole-sourced lease. However, he misses an audit committee meeting where a motion asking for an audit fails to pass. Foulidis later files a $6-million libel suit against Ford.

October 2010: The controversial sole-sourced Tuggs lease becomes a Ward 32 campaign issue in the 2010 municipal election. Sandra Bussin, who supported the deal in 2007, is defeated by Mary-Margaret McMahon.

December 2012: A judge clears then-mayor Rob Ford of libeling Foulidis. The restaurateur didn’t prove Ford’s talk of “corruption and skullduggery,” in an interview with the Toronto Sun, was aimed at him.

December 2013: Foulidis opens a new restaurant, Paralia, at the leased site, replacing the Boardwalk Pub. The taverna is later replaced by seafood restaurant Paralia, and then Carters Landing.

December 2015: Paralia closes, with a sign saying it will re-open after renovations.

April 2016: Foulidis opens a Tim Hortons on the site. Some say it’s not the kind of “mom and pop” operation city council wanted to protect, but the city says he is a franchisee and it’s allowed by the lease.

July 1, 2016: Carters Landing restaurant, part of the huge Cara company, opens in Paralia’s spot. The local councillor calls the opening, before any approvals from city hall, a “slap in the face” for local residents.

October

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