ALBUQUERQUE, N.M. — The Pit’s $600,000 question has been answered – at least half of it.
WisePies Pizza & Salad has forked over half of the first major payment it owes University of New Mexico for the naming rights to UNM’s basketball arena, which is now known as WisePies Arena aka The Pit.
WisePies’ owner Steve Chavez said he paid $300,000 this week and plans to pay the other $300,000 before the official Dec. 31 due date.
Athletics director Paul Krebs, whose department finished the last budget year $1.5 million in the red, confirmed receipt of the check.
Chavez, who owns WisePies’ corporate entity and a stake in three of the chain’s 10 franchised pizzerias, said Wednesday that he hoped the move would quell doubts swirling around the company’s ability to meet the terms of its $5 million naming agreement – signed in 2014 – doubts stirred by its history of tax trouble and limited growth the fledgling company.
The 10-year deal between WisePies and UNM started with two $100,000 payments but calls for eight $600,000 contributions starting this year.
“I wanted to assure the fans we are committed to making the payment,” Chavez said. “And I wanted to do it before the start of the season, so we can all enjoy the incredible season ahead of us without that distraction. Our intention is to fulfill our ongoing, future payments.”
In an interview with the Journal, Chavez said he is now the sole owner of WisePies Franchise Services, the brand’s corporate entity. He described a changed culture more aligned with the rest of his business portfolio, which includes 12 companies with more than 500 employees.
Chavez said that he previously had a 40 percent interest in WisePies and that businessman Mike Baird owned 60 percent. However, Chavez took sole control on Oct. 26 and bought Baird’s last remaining franchise, the WisePies at 4545 Alameda NE.
Baird, who Chavez said no longer has a role with the company, did not respond to Journal messages.
WisePies Franchise Services has been the subject of repeated tax liens from state and federal agencies, as had three of the franchise stores owned separately by Baird. Baird, in a past interview, has said the tax debt was partly due to underestimating how much it would cost to launch a franchising operation.
Chavez said he has covered all known tax debt and has systems and staff in place to ensure that WisePies keeps current going forward.
He said he brought in a four-person management team culled from individual WisePies restaurants and has begun regular meetings with franchisees as he plots a growth strategy.
“We’re running at light speed again,” he said.
WisePies announced earlier this year that it was selling a majority stake to an unnamed, out-of-state restaurant group, but that deal never materialized. Chavez said he let the purchase agreement expire Aug. 31, because the buyer used the tax troubles to lower the offer. Also, the buyer wanted to renegotiate the UNM deal.
Two other out-of-state groups have expressed interest in buying or partnering in the company, but Chavez said he would wait until next year to make decisions.
Until then, he is trying to propel the brand in other ways. He is to meet next week with a California food manufacturer interested in producing frozen WisePies pizzas for national distribution and has talked to other groups about opening WisePies in more than 15 airports and on college campuses.
WisePies will become the exclusive pizza vendor inside WisePies Arena aka The Pit through a new licensed location.
WisePies halted franchise sales for several months while negotiating with the failed buyer, but Chavez plans to hire a new vice president for franchise sales in early 2017 to start selling again. The company will also refresh its menu around the same time and resume its companywide community fundraising initiative.
The future also includes rehabilitating the company’s image. Chavez said the naming-rights deal was positive, because it raised the company’s national profile. But he said he was disappointed by the backlash that began after the UNM deal was signed, which intensified amid the tax turmoil.
“I wouldn’t say there’s a bad side to it, more like a disappointing side, disappointed that so many people have negative and often incorrect things to say about our company because they felt like we took away the name of the Pit. And actually we just renamed (the) University Arena,” he said, adding that he thinks the move turned some people off enough that they would never even try the WisePies product.
Chavez, known primarily for his building automation control business, said he has never taken a paycheck from WisePies but the company is now profitable and he has faith in its potential.
“It was easy enough to let it die; it was easy enough for WisePies to go away, but it’s a great concept. Mike’s vision and the concept was there, and I want to help move it to where we felt it should be,” he said.
Journal staff writer Geoff Grammer contributed to this report.