IDA supports more junkfood

Opinion: Investigative Post has been consistently reporting on the business ventures of Muhammad Shoaib, an entrepreneur who develops junk food franchises and creates part-time, low-wage jobs with the assistance of government subsidies. The Post published another in the series on Wednesday.

Shoaib’s process parallels the book “Under the Banner of Heaven” by John Krakauer where he profiles the Fundamentalist Church of Jesus Christ of the Latter Day Saints who call having more babies to get more government aid “bleeding the beast.”

The Fundamentalist church is a splinter sect that practices polygamy and takes child brides.

Meanwhile, the Local Waterfront Development Program, a state initiative spending tax dollars to study the mostly state-owned Niagara Falls Waterfront and replicating numerous past efforts, doesn’t appear to include any element of food entrepreneurship even though “restaurants” was one of the top things survey respondents requested.

Just an opinion, but Papa John’s, Cinnabon and Moe’s are not what survey respondents are seeking, the corn-syrup, dye, chemical and sugar laden “foods” are the sort of things Robert F. Kennedy Jr. rails against.

Residents are looking for Power City Eatery, DiCammillo’s, Misty Guild, Starry Night, The Marketside, Angie’s Kitchen, Mami House and Misty Guild – real restaurants serving scratch-made food not chain restaurant garbage that contributes to the obesity epidemic.

You can read Shoemacher’s work from Investigative Post at the Express today.

By J. Dale Shoemacher

Investigative Post

The Niagara County Industrial Development Agency on Wednesday unanimously approved nearly $247,000 in tax breaks to a fast food operator being investigated on allegations of wage theft and other labor law violations.

The IDA board did not discuss the allegations before granting the subsidy to Muhammad Shoaib, whose other fast food operations previously have received subsidies totaling close to a half million dollars.

The latest round of assistance for Shoaib’s businesses comes as the state labor department probes allegations of wage theft made by several of his former employees. At least two have submitted complaints to the labor department that Shoaib failed to pay overtime or withheld tips. Other current and former workers said they planned to file similar complaints.

In recent weeks, Investigative Post has reported on allegations from nearly a dozen current and former employees that Shoaib failed to pay overtime rates when they worked more than 40 hours in a week and withheld tips from employees that were left via credit cards.

Shoaib’s latest project, a renovation of a two-story retail building located at the corner of Rainbow Boulevard and Old Falls Street, will replace a haunted house tourist attraction with a food court featuring a Carvel Ice Cream, a Cinnabon and an Auntie Anne’s Pretzel Place, along with a Mediterranean restaurant.

Shoaib purchased the property at 222 Rainbow Blvd. in 2023 for $1 million according to property records. He lists renovation costs at $1.55 million.

With the property tax break approved Wednesday, Shoaib will make $117,000 in payments to local schools and governments and save $143,000 over the course of five years. The IDA also approved $84,000 in sales tax breaks.

That equates to about $83,000 in lost revenue for Niagara Falls over the five year abatement period. The city school district will lose out on about $40,000 over that time and the county around $20,000.

The IDA, meanwhile, is set to earn $26,500 in fees from Shoaib, its commission for approving the tax breaks.

Mark Onesi, chairman of the IDA, defended Shoaib in an interview after Wednesday’s meeting. He said the agency was not concerned with the labor department’s investigation and praised Shoaib for bringing jobs to Niagara Falls.

“That’s the labor department’s issue, not mine,” he said. ‘We’re looking at an individual that is doing things for this city. They are bringing jobs. They might not be a lot of jobs but they’re jobs, and they’re businesses that people need, tourists need. He’s doing good things for the city.”

“We have no reason to investigate,” he continued. “That’s not our job, we’re not investigators. If it comes out, then that may be a different thing.”

Other board members said they may revisit Shoaib’s tax breaks if the labor department finds he violated the law.

“He should not [receive the subsidies] if the wage theft accusations are true,” board member Ryan Mahoney said Tuesday, prior to the vote.

Mahoney voted to approve the tax incentives Wednesday.

Board member William Ross also said he had some concerns but also voted in favor of the assistance.

“I can see where there are still some concerns,” Ross said. “If it goes further and if anything comes up, [IDA attorney Mark Gabriele] will put us on the right path.”

State Sen. Sean Ryan, chairman of the state senate’s Committee on Commerce, Economic Development, and Small Business, criticized the IDA awarding Shoaib tax breaks.

“It’s troubling that they would give a subsidy while there’s an active investigation going on for wage theft,” he said. “One thing for sure is that it’s a bad use of tax subsidies to subsidize national food chains to come into your economy.”

It’s the third time in two years the Niagara County IDA voted to subsidize the opening of Shoaib’s fast food restaurants in Niagara Falls.

The board in February 2023 approved $172,000 in tax breaks and two grants worth $261,750 for a Moe’s Southwest Grill and A&W Restaurant that Shoaib opened later that year. Employees of those two restaurants have said they were cheated out of wages and/or tips.

Those ventures were also supported by $50,000 worth of previously unreported grants from the Niagara Falls NFC Development Corp., according to records obtained by Investigative Post.

In total, city and county agencies have now subsidized Shoaib’s fast food ventures to the tune of $730,000.

Shoaib owns some 20 fast food restaurants in New York and Ontario — including the Moe’s, the A&W, several Papa Johns and Church’s Texas Chicken franchises, and a Crumbl Cookies.

The $50,000 in city grants came from Niagara Falls’ share of the federal American Rescue Plan, intended to help cities and counties rebound from COVID-19.

Photos posted on the city’s Facebook page show a smiling Shoaib receiving a physical check from Mayor Robert Restaino.