What is the housing project?
The University of Akron has been working with TKE to have a long term housing solution. We will own the house at 464 Carroll St. (Former House) with a long term lease on land owned by the university. The University Board has approved a 40 year lease for $1.00 per year with two five year extension options. We will utilize the existing structure to remodel into a completely new house that Beta Rho will own.
Why not buy the land and build a new house?
We hired an architect and evaluated using the existing structure versus tearing it down and building a new house. The basic structure of this house is extremely well made. When looking at the costs – remodeling this base structure is about 50% less costly than building a completely new house up to code. It is also less costly than purchasing the land and paying to remove the current structure.
If the University owns the land will they control TKE and establish more rules?
We have reviewed this thoroughly with the University and there is no difference in the rules the chapter must adhere to if we owned the land vs. a long term lease.
How did we end up in this situation? What really happened?
This is a brief answer to a long story: During the last fundraiser to remodel 116 Fir Hill, $260,000 was acquired in pledges prior to the 2009 market collapse. As part of the process, TKE secured a $250k note to move forward, with the pledges used as security. Because of the market collapse, only 50% of the pledges were collected, putting the chapter in a difficult financial situation at the same time the active number declined. Eventually cash flow turned negative and the house could not meet the note payments. During this time banks in general became increasingly difficult to work with and our bank began action for foreclosure and a sheriff sale. The good news is with discussions with the University, the house was purchased from us for a fair market value, enabling us to avoid foreclosure. We were able to pay the note and retain $75k in escrow for the new house.
If I give money, how will I be sure it will be managed properly and put towards the new house?
We have a completely new Board of Control in place with seasoned professionals in all areas of business including law, accounting, finance and construction. Lon and Dan have agreed to chair the capital campaign and oversee all aspects of fundraising to ensure all monies go to the house and specific designations.