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UNM asks WisePies to relinquish Pit naming rights

Copyright © 2017 Albuquerque Journal

WisePies is stepping aside so UNM can get more dough.

The Albuquerque pizzeria chain’s naming rights deal for the University of New Mexico’s basketball arena, aka the Pit, is headed toward early termination — apparently at the school’s behest.

WisePies agreed to walk away from its 10-year, $5 million sponsorship to make way for another donor, UNM announced Thursday.

The university has not revealed a new naming rights contract, but has described a pending agreement that would encompass multiple facilities and should be announced soon. Officials are not naming the donor or the amount, and the agreement still requires the Board of Regents’ approval.

UNM athletic director Paul Krebs told the Journal that UNM approached WisePies owner Steve Chavez about making a change.

“As part of our agreement , we talked about WisePies stepping aside if a better opportunity arose and Steve was at the forefront of those discussions,” Krebs said by email. “In the current negotiations, it was asked if WisePies Arena would be in play, and per our agreement we asked Steve.”

WisePies had a chance to counter the unnamed donor’s offer and decided against it, though the company “was prepared to fulfill the terms” of the original agreement, the company said in a written response to Journal questions.

The company also indicated WisePies had reached the goals it had set for the partnership and expressed no regrets.

“WisePies launched a national brand through a prominent sponsorship,” spokesman Tom Garrity wrote.

The plan for the pizza chain to step aside will cut short the original WisePies deal by 7½ years and $4.2 million, terminating a high-profile and oft-questioned arrangement forged in 2014 — one clouded by the company’s repeated tax troubles.

WisePies Franchise Services agreed to give $5 million to UNM’s athletic department over a 10-year period in exchange for renaming the school’s famed basketball venue WisePies Arena aka the Pit. The terms obligated WisePies to pay in annual installments that started at $100,000 but jumped to $600,000 last year.

Payments made to date total $800,000. The UNM Foundation, which represented UNM in the deal, athletic department officials and a WisePies spokeswoman have each told the Journal WisePies “is current” on its payments, which come due Dec. 31 each year.

Krebs said Chavez has agreed to relinquish the naming rights on July 1 — six months after its last major payment and six months ahead of the next due date. Chavez has not asked for any kind of refund, Krebs added.

The Pit will still sell WisePies food.

“We have enjoyed our partnership with UNM Athletics, and would expect it to continue in a different capacity in the future,” Chavez is quoted as saying in UNM’s Thursday news release. “Being associated with a building that is considered the crown jewel of New Mexico has been great for both ourselves and UNM.”

The new donor agreement will cover the cost of new signage, the installation of which will be “as congruent as possible” with the WisePies’ signage removal, Krebs said.

Krebs, who declined to be interviewed but answered Journal questions by email, praised Chavez when asked if he had any regrets about the WisePies deal or had been surprised by reaction to it.

“We should celebrate those who are wanting to help our department and student-athletes, particularly local businesses. Steve showed that it can happen in New Mexico and that naming rights can be a major part of funding for facility projects and for the budget. If there is a regret, it would be the criticisms by fans and the media of Steve Chavez and WisePies, who really stepped up and paved the way for us in terms of facility naming rights,” Krebs wrote.

The WisePies deal generated strong reaction in the community from the start.

Some praised UNM for finding a local donor. But others objected to putting a corporate name on the beloved Pit, especially one still relatively unknown in its hometown. At the time of the signing, WisePies had just three pizzerias around the Duke City. None were more than a year old.

The company has nine locations in New Mexico and one in Arizona.

The terms also raised questions.

“Who negotiated this contract anyway? There is minimal up front payment and no real money until December 2016 . This is so cheesy!” one reader wrote in the Journal’s Sports SpeakUp section.

Even internally at UNM the original deal was questioned. According to the original draft of the contract, which initially called for 10 payments of $500,000 per year instead of the later deal of $100,000 for two years then $600,000 for the final eight, a UNM Foundation employee added a note asking Krebs if they were confident in the new payment schedule.

“Paul, this means that the name can be put up this December with only $100,000 in hand,” Sandy Liggett’s note states. “What if the naming rights were activated December 31, 2015 after the second paratial (sic) payment is in hand?”

The original “gift agreement” drafts were with Chavez as opposed to WisePies and had a clause that allowed UNM to end the agreement at any time if a more lucrative naming rights deal came along. That was removed from the final signed contract that was released Dec. 1, 2014, the day the deal was made public.

Public scrutiny only mounted from there.

Just weeks after the deal’s announcement, the Journal reported the state had filed a tax lien against the company in November 2014 . It was paid and released within a month.

But the tax issues proved a recurring theme, with the state at one point trying to shut WisePies down over unpaid bills.

In a May 2016 story, the Journal reported that the company had three outstanding liens and cofounder Mike Baird, who at the time was the majority owner,  had a combined 11 liens totaling $168,291 on his individual franchised WisePies restaurants.

Chavez, a prolific businessman with several other companies, has since taken over the WisePies corporate entity and says it is current on its taxes.

“WisePies is focusing on the future and since 2016, historical issues have been just that … history,” Garrity told the Journal Thursday.

Shortly after taking over the company last fall, Chavez said  he wanted to change the culture of the company. He made half of the company’s first $600,000 payment to UNM — which wasn’t due until Dec. 31, 2016 — two months early to demonstrate his commitment and quiet doubters.

WisePies and Krebs said WisePies paid the remaining $300,000 by year’s end.

But the UNM Foundation’s denial of a freelance journalist’s request for proof of the payment sparked a lawsuit against the foundation and board of regents. Daniel Libit filed the suit last month, citing  alleged violations of New Mexico’s public records laws. The foundation has argued it is not a public entity.

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