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The City of Buffalo took a legal step Wednesday toward recovering nearly $350,000 that it says it is owed from the operator of the Erie Basin Marina and Hatch restaurant.

“The City of Buffalo has notified Brand-On Services Inc. and its attorney that it is in breach of its contract with the city for the operation of the Erie Basin Marina,” Comptroller Mark J.F. Schroeder said in a statement. “The contract between the city and Brand-On has therefore been terminated, and the city has begun the arbitration process.”

The action, executed late Wednesday afternoon, formalizes the city’s demand for payment. An invoice for $343,245 sent by the comptroller to Brand-On was due Nov. 15, and the money was not paid, according to Schroeder’s office.

The arbitration process is provided for under the contract between the city and Brand-On when dispute over payment arises and precedes any lawsuit the city would file in pursuit of the funds.

A lawyer for Brand-On, Mark S. Carney, did not immediately return a telephone message left late Wednesday. Carney has described the audit’s findings as a dispute between a landlord and a tenant, and has said much of the work that the company did at the marina, and deducted from its rent payment, was at the direction of City Hall officials.

Carney also maintains that Brand-On’s payment to the city of 10 cents per gallon of fuel sold at the marina, instead of 10 percent, as stipulated in the contract, was done with the knowledge of City Hall officials.

Schroeder, the Common Council and city Law Department have said that the contract can only be amended by an act of the Council, and that the deducted rent in question was never formally approved.

The company has conceded that it owes the city $27,412, while Schroeder’s audit of operations from 2008 to 2012 found that $343,245 is owed.

The Council urged Brand-On and city officials to come to an agreement about what is owed. Informal discussions have not led to any results.

Brand-On is owned and operated by the Wolasz family and has had a contract to manage the marina and Hatch since 2001. The company appeared before a Council committee Oct. 22, and brought more than a dozen marina users as a show of support for its management.

In light of the comptroller’s audit, the city is seeking a new operator for the marina. The city is drafting requests for proposals for potential operators so that a new management team will be in place for the 2014 season, and is considering hiring separate vendors to operate the marina and restaurant.

email: jterreri@buffnews.com