You may recall that last fall more than 1,200 people wrote to all 44 city councilors and Mayor John Tory asking them to refuse to assign the sole-sourced lease from Tuggs Incorporated (Tuggs) to Cara Operations Limited (Cara).
To refresh your memory, the 2010 sole-sourced lease gave Tuggs exclusive rights to the restaurants and our eastern beaches parklands. It included the concessions at Kew Gardens and D.D. Somerville pool, and exclusive rights to the sale of novelties, food and drinks at four parks: Woodbine Beach, Ashbridges Bay, and Beaches and Kew Gardens Parks until 2028.
In 2016, Tuggs requested city council grant approval for an assignment of the lease to Cara. This means Cara could step into the shoes of Tuggs and be the tenant. But even though two private corporations were profiting from a public asset, taxpayers had no say in the matter.
That is why a group of us formed “Free The Beaches”. We wanted Toronto city council to say no to the assignment as bargaining leverage to get Tuggs to the negotiating table. We wanted – and still want – our parklands returned to the community.
Tuggs had not obtained the required prior written consent for the assignment as required by the lease when Carter’s Landing opened its door on July 1, 2016. Tuggs, according to media reports, had also not obtained the required written consent for the current renovations. A sheriff’s search – undertaken and paid for by Free the Beaches – showed that Tuggs was in arrears of taxes of approximately $150,000 – a violation of the lease. Surely the city had the leverage not to grant the assignment and instead, revisit the lease.
We did not feel that Ward 32 councillor Mary-Margaret McMahon best represented us at council, so we turned our attention to the rest of the councillors and the mayor. In all, over 53,000 emails were sent out, over 6,000 flyers delivered door to door and ad space taken out – all donated by private residents in the Beach. The letters to councillors and Mayor Tory outlined the hardships residents and groups faced in order to use our parklands. These letters detailed farmers’ markets, Christmas markets, and some charitable events and music festivals that could not come to terms with Tuggs and had to move elsewhere or be abandoned.
As in 2010, the debate at city council went in camera (behind closed doors). On Oct. 5, 2016, Toronto City Council voted to assign the lease from the current tenant Tuggs to Cara (21 yes votes to 14 yes votes – with 9 councillors absent). The city asked for nothing in return.
The city claimed it could be sued if the assignment was not passed which hardly seemed credible considering the alleged lease violations.
A motion by McMahon to buy back the parklands was passed instead, but as predicted and as was recently revealed in a city report, city staff hit a dead end.
The latest saga speaks once again to the perils of behind-the-scenes deals at public expense. We now know that Tuggs and Cara never came to terms with the assignment and are now in court. Tuggs has asked for a court order to evict Cara. Where does that leave our parklands now?
City staff argue that Cara is a “third party operator” of the restaurant. But that term is grey in the lease. If true, it means Tuggs can give the space to anyone as a “third-party operator”. Also, if Tuggs never assigned the lease to Cara, what did city council approve?
At the end of the day, the city, like the residents, is now frozen out as two private parties – Tuggs and Cara – fight it out in the courts, the trial set for next February. The one opportunity that residents had to reclaim our parklands was truly squandered at city council last October, nearly a year ago to the day.
Martin Gladstone is a lawyer in the Beach.