Tuggs Inc., which won a controversial city lease extension in part to keep chain restaurants out of a prime Beach location, is now hosting a chain eatery run by Canada’s biggest full-service restaurant operator.

Carters Landing — part of Cara Operations Ltd. which has more than 1,000 restaurants including Harvey’s, Swiss Chalet and Milestones — opened July 1 at Ashbridge’s Bay. Tuggs is subleasing the space to Cara.

The restaurant is next door to a Tim Hortons that opened last spring on the site of Tuggs’ former Boardwalk Pub.

City staff are looking at Carters Landing and whether Tuggs is complying with terms of the lease that prohibits the subleasing of property without city council approval. Last spring staff told the Star that Tim Hortons was allowed there because Tuggs owner George Foulidis is the franchisee and not subletting.

Foulidis says Carters Landing is abiding by the terms of the lease and that approval from the city has been requested.

Carters Landing is part of a seven-eatery “upscale casual” chain bought by Cara in 2014.

An “exasperated” Mary-Margaret McMahon, the local city councillor, called the latest chain opening, in space formerly occupied by Foulidis’s Paralia seafood restaurant, “a slap in the face” for her residents.

“The guy just seems to operate under his own rules and this has been the case since 2010,” when city council affirmed Foulidis’s 20-year lease extension on a prime waterfront spot overlooking busy Woodbine Beach, she said.

“Any restaurateur and chef would give their eye teeth for that site, which I would argue is the best in the city.”

McMahon said she wasn’t criticizing the new restaurant, which has a huge patio overlooking the beach, but its opening before city council has had a say.

In a statement, Foulidis said: “Carters Landing is operating business pursuant to the terms of the lease agreement between the City of Toronto and Tuggs. The parties have requested consent from the City pursuant to the terms of the lease to formalize a legal tenancy relationship with Carter’s Landing.”

City parks spokesman Matthew Cutler said that in May, Tuggs asked for “the city’s consent to a partial assignment of its agreement with the City to Cara.” The company was told the request would have to go to government management committee in September and then full city council in October.

Under the lease, Cutler added, consent to a sublease “may not be unreasonably or arbitrarily withheld.”

Asked for the city’s position given that Carters Landing has been operating since July, before the committee or council has even considered Tuggs’ request, Cutler would only say: “The matter is under review by the City.”

City council voted in 2007, despite a city staff recommendation to issue a tender, to give Tuggs a 20-year extension of a lease it had held since the 1980s.

“It's that sort of mom and pop kind of operation that's a good one and a successful one, and I think it's the right fit with the community and he should be given first chance,” Sandra Bussin, then the local councillor, told her colleagues. Councillor Giorgio Mammoliti agreed, adding: “There's probably some huge conglomerate ready to gobble them up.”

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 which Tuggs controls.

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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.

Cara did not return calls seeking comment for this article.

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