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Review of Loans and Grants Handed Out by NFC Under Dyster Finds Hardly Any Bang for the Buck

By Frank Parlato

Cafe Lola gets more than $100,000, closes down and, voila, the equipment winds up in the hands of two Dyster donors who now operate the place.
The Krow’s Nest is absent Krows, kids and taxpayer-funded equipment.
Exterior of the now defunct Yvonne’s Bakery.
Interior of Yvonne’s Bakery. Where did all the new equipment go?
Exterior of Zane’s By the Falls.
Interior of Zane’s By the Falls.
Giving away money is not only easy, it’s fun, Who wouldn’t like to sit up there all proud and amiable, condescendingly gracious, giving out money to campaign donors. It is so easy, when it ain’t your money.

The NFC Development Corp, the city's so-called not for profit lending arm, has made some $2 million in grants and loans during the Dyster administration.

A careful review of these show that a high percentage of these loans were obviously poorly investigated, and failed to create the jobs that were promised.

More significantly many of them went out of business failing to pay back any of the money borrowed.

Last week we reported that, for reasons of its own, the Dyster administration seems to want as little information about NFC Development disseminated as possible. We asked what could be the motivation?

This week we determined to find out.

We drove to the various locations where the businesses that received NFC loans and grants and were the beneficiaries of happy press releases saying how successful they would be.

This week we will focus on restaurants and cafes.

A tour of these properties showed that almost all of the NFC loans and grants made to these kind of establishments have gone sour.

Lets put it this way, if the NFC board were bankers, they'd be fired or in handcuffs now.

One after another food service business was shuttered, businesses that had stepped up before a beaming Mayor Dyster and his sycophant NFC board and told how, if they only got anywhere from $30,000 to 110,000 they would succeed and hire new employees.

One after another, these places took the money and closed, what happened to the money is anybody's guess.

For example, Cafe Lola.

According to information obtained from a FOIL filed with the city of Niagara Falls, Michael Kraus, a chef at Wegmans, got $110,000 -- a $55,000 loan and a $55,000 grant in 2009 in order to open up, buy new equipment for and set up a coffee shop at 507 Third Street called Cafe Lola.

After getting the money, Cafe Lola bought new equipment, did who knows what with the rest and soon went out of business. Three years later, the shameless NFC board approved, at their June 27, 2013 meeting, a quiet sale to Dyster supporters and campaign donors Shawn Weber and Dave Giusiana, the equipment that Cafe Lola purchased with a supposed $55,000 earmarked for it - the only asset remaining - for the low price of $2,000.

Then there was the Krow's Nest Family Fun Center, a game room and food for children's parties place, right behind the Dollar Store at 8735 Niagara Falls Blvd. It too had a feeble business plan, but that didn't stop the NFC from giving its owner Tom Krawsczk a $30,000 loan in 2009 plus a $10,000 grant to buy new equipment.

The public money was supposed to create one brand new job and retain six jobs of people already working there. It was all BS.

It created no new jobs, lost all six jobs and the place is closed and the space is for lease with an out of town realtor.

One thing is sure: the equipment vanished into thin air.

Then there is Zane's By the Falls.

Located at the site of the old Pete's Market House on Pine Ave, in 2011, Nicole Savage an unqualified restaurateur got a $10,000 grant from the NFC for equipment and operating expenses for a planned resturant there. She promised five new jobs. Which was just BS. It is now closed and no new jobs were created and the money could have been poured down a toilet with the exact same results. A peek inside makes one wonder where the equipment went.

The Royal Cafe, on Hyde park Blvd. is another seeming failure. Tracie Zortman sought and was approved for $40,000 from the NFC. She may have received other public money loans for facade improvement as well. The NFC staff recommended she should get a $10,000 grant and a $30,000 loan. As of today there is no Cafe there.

Then there was Yvonne's Bakery at 447 third St which lasted not even one year. Lakea Strong, the owner, got a 20,000 loan (unpaid) and a $10,000 grant. Yvonne promised she would keep the place open for at least three years or she promised that she would pay even the grant back, according to NFC minutes. She was to employ five part time employees and provide herself a job.

Of course it was BS. The job creation total is zero and $30,000 flushed down a Third Street toilet.

Last year, after she closed the Cafe, the equipment, which public dollars paid for, was auctioned off for pennies on the dollar and went into the hands of -surprise - a campaign donor of Paul Dyster (more on him next week).

The NFC was created, as their literature proudly boasts, to "foster business, industrial and employment retention, and development in Niagara Falls."

That too, the record shows is BS.

Strong, Savage, Kruas, Krawczyk and a host of others got public money without working to earn it, and without any true obligation to pay it back and this hinders business because the taxpayers footed the bill.

They joined Eddie Jay's, Shorty's Ultimate Sports Bar and Grill, Mary O's Soul Food, and a host of others who took NFC money and were soon shuttered.



Niagara Falls Reporter - Publisher Frank Parlato Jr. www.niagarafallsreporter.com

Jan 28, 2014