ASU appears to be bargaining in Bad Faith - Urgent Help Needed!! Fri, 26 Jul 2002

Greetings Brothers (ASU Alum's and other Sigma Chi Brothers in the Greater Phoenix Area),

If any Brother has pull with the University we are in dire need of assistance. ASU now appears to be bargaining in extreme bad faith with the Fraternities on Alpha Drive and we are all in danger of having our houses condemned and being kicked off the row!

Background ASU provided land for the construction of Alpha Drive and backed the issuance of bonds for the building of the Houses, construction of the street (Alpha Drive) and the construction of the parking behind the houses and across 6th street. Since 1962 the fraternities have been paying down the bonds (which were retired last year) and the additional fees for redoing the electrical grid for that area (retired earlier this year).

The leases allowed for a purchase option (expires September 1, 2002), which ASU has fought tooth and nail to stop the houses from exercising. They made a tactical mistake a few years ago when they told the Houses that we would have to retrofit fire sprinklers to the structures and pay for it even though we were the tenants. While the houses were negotiating with ASU on this point one of the houses went ahead and did it and then filed suit against ASU to recover the funds. When ASU saw that they were going to lose the suit (which would have meant setting precedent for the other Houses) they offered to settle with that house whereby in exchange for the house dropping the suit and not requesting fees that ASU would deed them the land if they retired their bond. They did so and became the first house to go "private". ASU's mistake was that now they had now checker-boarded the property.

Since that happened two of the other houses on the row exercised their options (the last one did so in February 2002 after a prolonged fight with the University ending with placing their money in escrow and having to threaten to sue to get ASU to perform according to the terms of the purchase option). The remaining six houses have been working in concert to get ASU to finalize the remaining issues before we purchase. Those issues have dealt with zoning, parking, the street and other issues. The attorney that we hired has been working diligently with the ASU General Counsel to reach agreement on the documentation (we are very close to terms with them). Plus the Houses hired Grady Gammage to work with the City of Tempe to work out a zoning classification to accommodate our use. All of these efforts had been moving forward until the new Michael Crow Administration came into power.

In the last two weeks the remaining six houses notified ASU per the terms of the purchase option of our intent to exercise. We had even notified ASU back in June that they would be getting this notice from all the houses the first part of July once our appraisal was completed. ASU is now telling us that they will not be able to talk to use again on this matter until the end of August and they have even changed the negotiating person that we are to deal with to a person that "Although not yet verified, he is reported to have stated to the Board of Regents and others that he does not believe the fraternities should exist on Alpha Drive." Additionally the head of the Alpha Drive Association stated the following in an email to the Representatives of the Houses with the following statement "Condemnation. I don't want to put my reasons in writing, but I am now 100% convinced that ASU is looking at the possibility of condemning us immediately. With that belief, I absolutely believe that we need to press ASU very hard to get these sales closed ASAP."

The House Corp for our house at ASU just spent $20,000.00 from the Reserve Funds held for us by the University, with the Universities approval, in the last three weeks putting a desperately needed new roof on the house in preparation for the coming fall semester because we could not wait for the final purchase and the remodeling to follow. If ASU, as The Alpha Drive Association President now believes, is seeking to declare Eminent Domain and condemn the properties this is very distressing that they would allow us to draw down and expend $20,000 in July to then turn around the next month and condemn the property.

So Brothers, if you have pull with the University please let your fingers do the walking and contact those with the ability to get those process set back on track.

The person now leading the negotiations for ASU is named Mernoy and his number is (480) 965-3201.

Of course please feel free to contact me at home 480-610-8232 or via email if you have any questions or comments

In hoc,


David Riddle

Chapter Advisor and House Corporation President for Epsilon Upsilon