Today’s news:

City says Caffé on Green owes $120K

The city Parks Department said it will end its contract with the operator of Bayside's Caffé on the Green after a city audit found the gardenside restaurant had recordkeeping so shoddy that officials had trouble figuring out how much money was owed to the city.

But the tony restaurant, which has hosted many political events and fund-raisers for the borough, is contesting the audit.

The establishment's operator, Joseph Franco, was identified by an FBI agent as a Gambino crime family member during a 1998 labor tribunal. But Franco's attorney, Sid Davidoff, denied Franco has mob ties.

Caffé on the Green is a public concession that requires a license from Parks to operate. It received its license in 1992.

An audit by city Comptroller William Thompson's office found Caffé on the Green had "deficiencies so severe that the comptroller could not determine whether all gross receipts have been actually reported to the city," according to a statement released Thursday.

"My auditors uncovered significant lapses in how revenue generated from the restaurant and banquet operations was documented, making it virtually impossible to determine how much money was legitimately owed to the city," Thompson said.

A Caffé on the Green employee said Franco was referring comment to his lawyers.

Thompson's office determined that Merissa Restaurant Corp., Caffé on the Green's management company, did not account for $900,182 in income, which would have netted the city more than $120,000 in revenues.

But Howard Weiss, an attorney representing Merissa, said that the $900,000 figure is mostly from tips, which the company understood not to be included in gross revenues under previous comptrollers.

"What is really unfair is the notion that every past comptroller has never treated gratuities as gross revenues," Weiss said. "Merissa has never before had an issue in terms of reporting income and paying over license fees to the Parks Department."

The revelation prompted the Parks Department, which owns the Bayside mansion housing Caffé on the Green and controls its contract, to cut ties with the establishment.

"We cooperated fully with the comptroller on this audit and we will soon be issuing [requests for proposals] to seek a new concessionaire who will take over once the contract is up in February 2009," the agency said in a statement.

City Councilman Tony Avella (D-Bayside), whose district covers Caffé on the Green, said "the concession should be paying everything that the city is due. If Mr. Franco thinks he's being treated unfairly, he should present his facts."

The mansion was once the home of silent film star Rudolph Valentino.

Thompson's audit found that Merissa does not report all transactions into its point-of-sales system and that it could not give his office a la carte party contracts for small parties in the restaurant because the company throws out such contracts a week after the events are held.

Weiss claimed a la carte contracts were recorded in the point-of-sales system. He also said the catering hall's banquet manager kept a ledger that the company never knew existed.

Reach reporter Howard Koplowitz by e-mail at hkoplowitz@timesledger.com or by phone at 718-229-0300, Ext. 173.

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