This week, for the eighth time, the Niagara County Industrial Development Agency approved subsidies for a fast food restaurateur — and one who’s under investigation for wage theft, as Investigative Post has reported.
NCIDA’s apparent indifference to the purpose of industrial development assistance — temporary tax relief, and sometimes direct subsidies, in exchange for long-term growth in the local tax base — is a red flag. Its apparent lack of concern about possible wage theft, that is, cheating employees of their earnings in a notoriously low-paying industry — is appalling.
Fast food restaurants and other retail businesses generally are ineligible for IDA assistance under New York State law, but because Muhammad Shoaib is opening many of his stores in downtown Niagara Falls, the NCIDA board of directors has let him exploit a loophole that allows tax breaks and grants for retail establishments in “economically distressed” census tracts.
As a result, Investigative Post calculated, Shoaib’s businesses have obtained almost $780,000 in assistance from the Niagara County IDA over the past 2-1/2 years, offsetting Shoaib’s cost to launch a network of franchised pizza shops, burger joints and dessert / sweets stands.
NCIDA officials have defended the assistance as necessary to keeping tourists on the American side of Niagara Falls, and praise Shoaib for creating jobs in a downtown that lacks them.
Staff members and directors are aware, however — or they should be aware — that the state Department of Labor has launched an investigation since Investigative Post reported the claims of numerous employees of Shoaib’s businesses who said their employer withheld tip money, refused to pay overtime and, in some instances, failed to pay the state minimum wage.
Back in March, NCIDA board chair Mark Onesi told Investigative Post, in response to its questions about the wage theft claims, that the claims are “not our business. We’re not investigators. (Employees) are not being stolen from unless somebody says, an authority, that they’re being stolen from.”
And so, this past Wednesday, without discussion and by unanimous vote, Onesi and the other directors agreed to cut a check for $48,750 to Shoaib, a grant from the Cataract Tourism Fund, in support of his opening a Church’s Chicken outlet inside the Hyatt Hotel.
Investigative Post has observed that, prior to 2023 when he first approached the Niagara County IDA, Shoaib opened 11 Papa Johns, Church’s Chicken and other food establishments in Western New York and Ontario without public assistance. That begs a question: Why didn’t Shoaib do the same in Niagara Falls, New York?
Then again: why would he, given NCIDA’s eagerness to demonstrate support for “economic development” at any cost?
And another question: Since it is known that Shoaib’s businesses are under investigation by the state labor department, why did the NCIDA board not hold off doling out “free money” to him pending the outcome of the investigation?
An accusation is not proof, ever, of course. But the charge of “wage theft” is serious, and it should be taken very seriously by the local economic development agency that likes to trot out “jobs created” numbers as a measure of its success. Whatever benefit exists in low-wage, often part-time employment is wiped out if the workers aren’t getting paid on time, in full, the wages that they earned.
Public decision-makers who wish to demonstrate they’re “doing something” without thinking it through are not doing the public any favors. Regardless of the outcome of the Department of Labor’s investigation of Shoaib’s employment practices, the Niagara County IDA should recommit itself to the true purpose of industrial development assistance: temporary tax relief, and sometimes direct subsidies, in exchange for long-term growth in the local tax base, as evidenced by increased taxable property value and the multiplier effects of a successful industrial enterprise and its good paying jobs.