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Cafe Metro Owner Loses $6M Tax Break Over Claims of Unpaid Wages

 Steven Tenedios (right) poses with celebrity chef Dona Arpaia at an event for his casual-eating restaurant chain Fresh&Co.
Steven Tenedios (right) poses with celebrity chef Dona Arpaia at an event for his casual-eating restaurant chain Fresh&Co.
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Twitter/TheNYCalliance

LONG ISLAND CITY — The owner of the Café Metro chain wants the city to dish out a $6 million tax break to him to build a food-preparation plant in Queens — but the hefty subsidy has been tabled after DNAinfo New York inquired about accusations that his company short-changed workers.

The city’s Industrial Development Agency was slated to vote next month on whether to approve a tax exemption for a subsidiary of ST Management, a company that owns and operates 25 restaurants under the names Café Metro, Flavors, Food Exchange and Fresh&Co.

But the IDA put the vote on ice after DNAinfo asked the agency about four lawsuits accusing ST Management and its founder and CEO, Steve Tenedios, of underpaying employees at the restaurants.

More than two dozen food preparers, servers, cleaners and delivery people at ST Management restaurants have claimed Tenedios and his company have stiffed them on regular pay and overtime.

Tenedios had submitted the application under the holding company 38th St. Bakery LLC, explaining to the IDA that he sought financial assistance in order to acquire, renovate and equip a two-story 20,900-square-foot commissary in Long Island City that would prepare food for all the restaurants.

In his application, Tenedios estimated the project would cost $11.9 million.

He asked for $6.2 million in building, land and sales tax exemptions from the IDA, which helps city companies grow and create jobs in hopes of spurring economic development. The project was expected to benefit the city, earning it $13.4 million in indirect and direct taxes.

The city’s Economic Development Corporation, which administers IDA, pulled the plug on the vote after DNAinfo’s inquiry, but had started vetting the ST Management’s application weeks ago. The EDC said that it tabled the tax break vote because Tenedios only mentioned one of the four lawsuits in his application.

“The decision has been made to not present the application submitted by 38th St. Bakery, LLC, at the June NYCIDA Board of Directors based on the applicant's failure to provide complete and accurate information about its corporate history,” the EDC said in a statement. “We hold all NYCIDA applicants to the highest standards and will work with the applicant as this process continues."

In 2010 more than a dozen Café Metro employees filed a class-action lawsuit against him and ST Management in Manhattan Federal Court, accusing their employer of violating the Fair Labor Standards Act.

They claimed they regularly worked more than 52 hours a week, earning $8 to $9, but were never paid. While ST Management never admitted wrongdoing, the lawsuit was settled for $31,000, which was split among 17 workers.

In June 2013, six former employees at the casual-dining chain Flavors also claimed in a Manhattan federal lawsuit that they did not receive proper minimum wage or overtime compensation despite working 50-plus hours.

The lawsuit was dismissed in April 2014 after a settlement was reached. The terms of the settlement were not revealed. The plaintiffs’ lawyers did not respond to request for comments.

In November 2013, a food preparer at Fresh&Co and Food Exchange claimed he worked an average of 50 hours per week, but was only paid for 40. The lawsuit was dismissed in March 2014 after the two sides reached a settlement. The terms of the settlement were not disclosed.

In March 2014, Jonathan Agramonte sued Café Metro, ST Management and Tenedios, claiming he was hired as a delivery man at a wage of $5.65 per hour. But Agramonte was rarely sent out on deliveries, where he would have earned tips, the lawsuits says.

Rather he was relegated to in-house duties like preparing salads, washing dishes or cleaning, according to the lawsuit. When he complained about not being paid minimum wage, his boss transferred him to a job as a dishwasher at another restaurant location, where management refused to put him on payroll and pay him at the end of the week.

The lawsuit was dismissed in June 2014 after a settlement was reached. The terms of the settlement were not revealed.

ST Management and Tenedios did not respond to requests for comment.