F&H also is excited to announce the hiring of Kuo Diedrich, an architecture firm located in Atlanta, Georgia. After a competitive bid process, the F&H board of directors selected Kuo Diedrich to provide professional design services for its national housing program. The company’s conceptual designs for the future Indiana Gamma and Indiana Sigma homes are shown on this page.

As part of its core mission, F&H remains interested in any project that promotes quality housing for our undergraduate members. Visit www.saefandh.com for more details. Or contact Associate Executive Director Greg Somers at gsomers@sae.net or at (773) 590-1056 to learn more about the many available F&H housing programs and services.

Profile
Chester (Don) Donnally

Graduation Stats
Southern Methodist (Texas Delta) ’67

Education
BBA Economics, Southern Methodist; MBA Finance, Cox School of Business

Hometown
Dallas, TX

Family
Wife Carol Donnally; Adult Children Christina, Chet, Caroline and Jodi

Do you have any other family ties to Sigma Alpha Epsilon?
My son, Chet, is also an alumnus from the class of 2009 at Texas Delta. He was rush chairman and Eminent Deputy Archon and a member of Phi Beta Kappa honor society. He’s now a med student at (Brother) Paul Foster School of Medicine in El Paso.

Career Highlights
I’m proud of my involvement with filing a 13D with the SEC in 1990 that detailed open-market purchases for a percentage of Southwest Airlines. And I served on a transition team of Smith Barney for the integration and merger with Shearson/Lehman.

Fondest Fraternity Memory
I was fortunate to see the successful completion and fundraising of a $3.5-million, 46-bed chapter house for Texas Delta. In fact, I selected the site and architect, and I’m humbled the building was dedicated in my honor. Plus, we have some great events at the house for undergraduates, alumni and parents to stay involved. At the same time, I’ll always remember the “Burning the Mortgage” brunch of the old chapter house at 3105 Binkley Avenue during homecoming in 1981.

Fraternity Volunteerism
I’ve been the chapter adviser and house corporation president for Texas Delta from 1972 to today.

What has been your biggest challenge as a housing volunteer?
Each chapter in the Realm is a real business with cash flow. It is imperative to have increased membership and recruitment each year and to have a physical structure that can compete with apartment living as well as the new concepts in university-owned campus housing. If you do not get bigger, you will die. In addition, residency requirements for pledge classes and sophomores are essential to filling our house because they contribute to our yearly rental income.

Each issue, the SAE Financial & Housing Corporation presents a profile for the Cornerstone Award. This award recognizes outstanding commitment by an alumnus toward the preservation and promotion of fraternity housing. Sigma Alpha Epsilon thanks these individuals for their dedication and their volunteer efforts. If you would like to nominate an alumnus who should be considered for the Cornerstone Award, contact Associate Executive Director Gregory Somers at gsomers@sae.net.

Profile
Jay House

Graduation Stats
Texas Tech (Texas Alpha) ’94

Education
BBA Finance, MBA, Texas Tech

Hometown
Lubbock, TX

Family
Wife Page House; Children Jocelyn Clair and Harper Jayne

Do you have any other family ties to Sigma Alpha Epsilon?
My father, Jerry, is a charter member or Founding Father of our Texas Alpha chapter. He graduated in 1955, so I followed in his footsteps and joined the same chapter.

Career Highlights
I’ve worked as the licensed Texas real-estate broker and VP of Development for Malouf Interests, a Dallas-based real-estate-development firm for three years. I also serve as the Executive Vice President of Vista Bank in Lubbock.

Fondest Fraternity Memory
Probably the fondest memory I have of Sigma Alpha Epsilon that relates to housing is my experience with the hard work and dedication that Texas Alpha alums from all eras demonstrated during the fundraising to build the current lodge facility on a debt-free basis. I was also fortunate to be an active member during the building stage and remember chapter members participating actively in its construction.

Fraternity Volunteerism
I currently serve as the president of the Texas Alpha House Corporation.

Why is it important for others to support fraternity housing?
It’s very true at Texas Tech that much of the chapter’s identity and perception is tied to its house or lodge, so having well-maintained and safe facilities are important for that reason. Keeping facilities maintained and operating correctly isn’t typically a one-man job; it takes a well-dedicated team of alumni volunteers.

What has been your biggest challenge as a housing volunteer?
Finances are always challenging. Texas Alpha is fortunate not to have a mortgage. But taxes and insurance represent significant line items in the budget, and the maintenance demands that come with a fraternity lodge have proven to be to be considerable.

The Financial & Housing Corporation, in its mission to promote housing excellence and awareness, wants to make sure all of our properties provide a safe living environment. Yet many of our chapter houses’ infrastructures are dated – products of construction before the advent of certain technology. Having 80 men live in your house can be a great fraternal experience, but that many men under one roof can be a matter of life or death in an emergency. There’s no better time for our house corporations and property owners to take action in pursuit of life-saving upgrades. These types of upgrades pay for themselves, as you will see illustrated below. Plus, your insurance premium will decrease. A dollar amount cannot be placed on the items or lives that have been lost in a fraternity-house fire, and the process of overcoming such a tragedy have lasting effects. If your chapter house needs upgrades to its life-safety infrastructure, the following information outlines some important information you need to know.

Our Life-Safety Loan Program

SAE Financial & Housing Corporation will lend money towards the following life-safety programs:

• Hardwire (electrical-driven) fire, smoke and/or carbon-monoxide alert systems that are properly permitted and approved by the relevant local authorities and that are monitored centrally
• Fire-sprinkler or fire-suppression system that is permitted and approved by the relevant local authorities
• Installation of new exit and emergency backup lighting in accordance with and as required by code
• Fire-rated doors and other life-safety equipment

Terms

• Amount: maximum of $50,000 but will consider higher loan amounts
• Interest Rate: 6.25%
• Payments: up to a max of 180 months (15 years)
• Loan Origination Fee: none
• Closing Cost: paid by borrower
• Collateral: mortgage and/or personal guarantee
• Pre-Payment Penalty: none

Eligibility

Our life-safety loans are available to established Sigma Alpha Epsilon house corporations that have been in existence for at least 12 months and have a legitimate and reasonable contractual responsibility for the repair and maintenance of their chapter house. The corporation must be in good standing with the state in which it is incorporated, and the corporation should exist for the benefit of an active chapter. The borrower must own the real estate that will be improved with the loan proceeds or have an adequate leasehold interest with a term at least equivalent to the term of the proposed loan. In addition, the borrower must have an organized governing board committed to the perpetual and effective management of the corporation and agrees to follow SAE Financial & Housing Corporation’s suggested property-management practices. Furthermore, the borrower must complete and submit the standard application for the loan, clearly describing the need and cost of the desired solution. The loan will require financial information about the borrower and the chapter that helps demonstrate their ability to afford the loan with reasonable projections of income and expenses, including adequate allowances for contingencies and reserves.

The Bottom Line

How can upgrading the chapter house with a sprinkler system pay for itself over 15 years? Consider this example. A 12,000-squarefoot chapter house with average construction pays roughly $10,000 a year for full-replacement cost insurance. The cost of a sprinkler system for this size of house is roughly $36,000 or $3.00 a square foot. That means you can expect an estimated 35-percent reduction in the premium. If the insurance rates increase at an inflationary rate of 3 percent per year, the savings over 15 years with a sprinkler system will be $65,096. Compare that to the cost of a sprinkler-system loan from F&H, which is $55,561 over 15 years. You’ll save $9,536.

For additional information, contact Associate Executive Director Gregory Somers at gsomers@sae.net or at (773) 590-1056.

Are you up to the challenge? The SAE Financial & Housing Corporation is announcing its inaugural Spring Renovation Contest. F&H is looking for six big winners who have what it takes to make an impression.

During April 2010, any undergraduate chapter that submits an entry describing a completed renovation project is eligible to win one of five 42″ plasma TVs, and one chapter will win the grand prize of a 50″ plasma TV for the best overall project.

You can enter in any category:

• Interior Project
• Exterior Project
• Chapter Room
• “Green” Project
• And, for all the chapters without housing, any project performed to improve either the campus or community as it relates to housing, such as Habitat for Humanity, the university president’s house, a campus residence hall, or other project is eligible

Get your hard hats on and start planning today. Projects must commence after March 15, 2010, and be completed before April 30, 2010. All submissions must be received by Friday, April 30, 2010. Descriptions must include a detailed project plan, before-and-after photos and a statement of purpose on why this project makes a difference. More details and contest rules will be publicized in January. Winners will be announced at the 75th John O. Moseley Leadership School in August of 2010. For more information, contact Coordinator of Housing Development and Support Mike Fouts at mfouts@sae.net.

The Joe Clarke Scholarship:
Inspiration to Be the One for the Future

At the 153rd Anniversary Convention in New Orleans, the SAE Financial & Housing Corporation gave a grant to the Sigma Alpha Epsilon Fraternity equal to the initiation fees for ten deserving brothers. The grant was awarded in honor of Joe Clarke, who paid the initiation fee for our past Eminent Supreme Archon, M. Todd Buchanan.

Buchanan was unsure whether he could afford to join Sigma Alpha Epsilon as an undergraduate, and that night when he returned home, an envelope was under his door, with a check made out to Sigma Alpha Epsilon in the full amount of his pledge and initiation fees. It was through that act of kindness that Buchanan went on to be a twotime Eminent Archon of the chapter and work his way up to eventually being our Eminent Supreme Archon. F&H is proud to announce the following ten brothers as the recipients of the 2009 grant.

• Alaska, Alaska Alpha

  Karl R. Wing

  Cal State-Northridge, California Nu

  Nathan L. Archuleta

  Cal State-San Marcos, California Alpha-Gamma

  Travis D. Wilson

• Cumberland, Tennessee Lambda

  Justin T. Virtue

  Duquesne, Pennsylvania Xi

  Devin A. Koehring

  Eastern Illinois, Illinois Delta

  Gregory S. King

• Louisiana, Louisiana Alpha

  Travis M. Meaux

  IUPUI, Indiana Iota-Pi

  Alexander J. Bova

  North Georgia, Georgia Delta

  Joseph J. Slattery

• Randolph-Macon, Virginia Alpha

  Philip E. Andrews

]]> http://saerecord.net/2010/01/financial-housing-win-a-50-tv-or-scholarships/feed/ 0 http://saerecord.net/2009/08/so-you-think-you-know-about-fh/ http://saerecord.net/2009/08/so-you-think-you-know-about-fh/#comments Tue, 18 Aug 2009 15:42:10 +0000 Editor http://saerecord.net/?p=471 With the convention this summer in New Orleans, there have been quite a few questions about the SAE Financial & Housing Corporation. F&H serves as an entity under the Sigma Alpha Epsilon umbrella — just like the Fraternity or the Sigma Alpha Epsilon Foundation — that generally provides support and assistance with chapter housing. Read on for more frequently-asked questions about the F&H Corporation.

Where can I get a copy of the F&H financial report?

The current financial report for the SAE Financial & Housing Corporation can be obtained by requesting them from Gregory Somers, the Associate Executive Director for F&H, at gsomers@sae.net.

Who visits to the properties to make the houses are properly supervised? How are those visits funded?

Each property has a house director — in many cases, a house mother — who watches the individual property. In addition, Gregory Somers, the Associate Executive Director for F&H, visits each property on an as-needed basis. Somers’ expenses are paid through each chapter’s housing corporation. Expenses for house directors are paid through an entity called Greek Housing Management, LLC, which is funded through a management agreement between each housing corporation and each chapter, which functions as a tenant.

What properties does F&H own?

There are currently five housing corporations owned by F&H. Each corporation is set up as a limited-liability corporation, or LLC, which protects F&H from liability and helps with IRS and tax concerns.

• MIGA Housing, LLC, owns the title to 342 North Harrison, East Lansing, Michigan, for the house at Michigan Gamma at Michigan State.
• NHBE Housing, LLC, owns the title to 28 Madbury Road, Durham, New Hampshire, for the house at New Hampshire Beta at New Hampshire.
• WABE Housing, LLC, owns the title to 865 NE B Street, Pullman, Washington, for the house at Washington Beta at Washington State.
• OHGA Housing, LLC, owns the title to 57 East State Street, Athens, Ohio, for the house at Ohio Gamma at Ohio.
• ILBE Housing, LLC, owns the title to 211 East Daniel, Champaign, Illinois, for the house at Illinois Beta at Illinois.
• MIDE Housing, LLC, owns the title to 3315 West Michigan Ave., Kalamazoo, Michigan, for the house at Michigan Delta at Western Michigan.

The Financial & Housing Corporation is the parent organization of all LLCs listed above.

How much was paid for each property?

F&H does not purchase any properties. All are donated outright or donated in lieu of foreclosure. F&H then pays any remaining third-party mortgage or existing debts.

Michigan Gamma was gifted to F&H, subject to the existing mortgage on the property. The appraised value of the house is currently $1.05 million. F&H paid an estimated $180,000.

Washington Beta was closed, leaving F&H with a first-mortgage position. With no income, the house corporation was unable to make payments and, rather than foreclosing on the property, the house corporation gifted it to F&H. Appraised value, prior to planned improvements, is $1.1 million. F&H paid an estimated $325,000.

Illinois Beta was closed with a first mortgage in default, leaving F&H with a second mortgage on the property. Rather than losing its equity, the house corporation gifted the property to F&H, which paid the first mortgage. In 2005, appraised value was $1 million. F&H paid an estimated $800,000.

Ohio Gamma was closed and the first mortgage was in default with foreclosure sale pending. Alumni approached F&H about a gifting the house to the entity. F&H paid the $325,000 mortgage along with some past-due utilities and tax payments. While there is no current appraisal, F&H has a valid offer to purchase the house for $900,000.

New Hampshire Beta had been closed, and the house condemned by the town of Durham, with a first mortgage in default and a foreclosure sale scheduled. To save the house, the house corporation gifted the property to F&H. The appraised value is $1.25 million. F&H paid an estimated $425,000.

Michigan Delta gifted its existing property, located at 919 Short Road with a taxable value of more than $300,000, to MIDE Housing, LLC. MIDE Housing, LLC, then purchased the old Delta Gamma Fraternity house at 3315 West Michigan Avenue for $290,000. MIDE Housing, LLC, will sell the Short Road property to help pay the acquisition cost for the other house.

How does F&H ensure it gets its money back?

The board of directors built an ownership program that included model leases, house directors, an online billing system, financial oversight and a house-manager training system. With such measures in place, F&H can ensure that each house is filled to capacity and that each house corporation remains solvent. Additionally, F&H has consulted with other Greek organizations on how they have successfully and profitably operated large housing portfolios.

What is the capacity of each house?

Michigan Gamma holds 32 members. Washington Beta, 52. Illinois Beta, 50. Ohio Gamma, 45. And New Hampshire Beta, 32. These capacity numbers are for full occupancy and include a house director.

Are the houses at capacity?

For the 2009-2010 school year, Michigan Gamma, Washington Beta and New Hampshire Beta expect to have full occupancy. Illinois Beta is currently rented to the Acacia Fraternity, as the colony at Illinois is not large enough to fill the house. Ohio Gamma is currently being renovated and will be ready for new tenants after improvements are completed. A Fraternity colony is planned for the campus that will eventually move into the house.

What properties is F&H leasing?

As mentioned above, Illinois Beta and Ohio Gamma are rented to third parties, but all others are used by Sigma Alpha Epsilon chapters.

]]> http://saerecord.net/2009/08/so-you-think-you-know-about-fh/feed/ 0 http://saerecord.net/2009/04/how-much-is-one-undergraduate-life-worth/ http://saerecord.net/2009/04/how-much-is-one-undergraduate-life-worth/#comments Tue, 21 Apr 2009 21:56:00 +0000 Editor http://saerecord.net/?p=74 by Gregory P. Somers, Associate Executive Director

Our undergraduate members deserve nothing but the best, from programming to brotherhood. Chapter houses are the same, and the Sigma Alpha Epsilon Financial & Housing Corporation can help you protect lives — and save money while doing it.

Does your house have a fire-sprinkler system installed? To provide coverage, fraternity insurers generally consider a hard-wired smoke-and-heat detector system mandatory. Either could save members’ lives in the event of a disaster, but they could also reduce your F&H loan-interest rate to as low as 5 percent. For houses that include sprinkler systems, property-insurance costs could be reduced by up to 50 percent. And with those savings, the systems could pay for themselves in as little as 10 or 15 years — not to mention providing surveillance while protecting life and property.

F&H is ready to assist house corporations with the specifications, purchasing, installation and financing of fire sprinklers, alarm systems and other life-safety equipment. Its board of directors recently authorized a new loan program that would allow house corporations to borrow money at an interest rate as low as 5 percent for up to 15 years. This is a great opportunity to retrofit your house or provide for those much-needed life-safety enhancements, including sprinkler systems, emergency lights, fire and smoke alarms, fire doors and more.

Current building code requires this equipment to be installed in every new fraternity house, and it is only a matter of time before every state, city or municipality mandates these rules be applied to existing structures. In addition, several states have already mandated sprinkler-system compliance for current houses. Other states and local fire departments will likely do the same, and every year the cost of installing the systems will increase.

The F&H board realizes that these emergency events can happen to anyone at any time. There are both positive and tragic examples. A recent fire at Washington State University was extinguished by the new fire-sprinkler system in minutes with no loss of life and minimal property damage. But there is a flipside: The recent fire at the University of Mississippi, where no fire-sprinkler system was present, caused the death of three Alpha Tau Omega members and resulted in a large liability suit.

According to the National Fire Protection Association’s statistics from 1990-2000, there was an annual average of 1,700 fires in on-campus dormitories, which includes fraternity and sorority housing. More than 50 fire deaths resulted. But then there’s the even more bleak downside: Half of the fires and 75 percent of the deaths occurred in fraternity and sorority housing with an average property loss of $580,000.

So what is being done to address these issues on college campuses? Undergraduates and alumni are often educated on saving lives from a variety of sources. Most colleges and local communities conduct yearly inspections of chapter houses. And an increasing number of communities are requiring the installation of life-safety equipment, most notably fire sprinklers.

The importance of fire sprinklers cannot be overstated. The National Institute of Standards and Technology has stated that fire sprinklers, when used in conjunction with smoke detectors, could reduce the deaths caused by fire by 82 percent. It is believed that had the Phi Gamma Delta house at the University of North Carolina had fire sprinklers in 1996, the five lives lost would have been saved. That fire rapidly changed fire codes in Greek housing. As a result of the deaths, the National Fire Sprinkler Association stated that it would be seeking increasingly stringent fire-code mandates from local communities in the form of fire-sprinkler retrofits. Together, we can all save lives.

If you are interested in taking advantage of this opportunity or would like a loan application, contact Financial & Housing Associate Executive Director Gregory Somers at (773) 590-1056 or at gsomers@sae.net.

]]> http://saerecord.net/2009/04/how-much-is-one-undergraduate-life-worth/feed/ 0 http://saerecord.net/2008/12/so-youre-looking-for-a-chapter-house/ http://saerecord.net/2008/12/so-youre-looking-for-a-chapter-house/#comments Mon, 29 Dec 2008 07:41:07 +0000 Editor http://saerecord.net/?p=256 A house is literally the thing that holds a chapter together. Members have a consistent meeting place, an area for meals and accommodations — in short, members have a way to come together. If your chapter doesn’t already have a house, though, getting one can seem an insurmountable task. How will it be funded? How big will it be? Who’s going to oversee the project? To get you started, stick with this checklist.

1) Define Your Objectives
What’s the reason for a chapter house? Before beginning the process of getting one, ask yourself and the chapter two questions: Is chapter housing a necessity on my campus? And is chapter housing a feasible option at this time? Once you determine the answers to those questions, there are some guidelines and specific courses of action to follow.

2) Save Money
Even without a house, there should be an assessment for a chapter housing fund. A small assessment of $50 per man, per term, can grow significantly over time. As a general rule, you should hold 20-30 percent of the project cost in cash before conducting a review of other financing options. If you have not begun to save money, stop at this step before moving on. While you can move through the other steps in this process, you may be wasting your time without cash.

3) Form a House Corporation
The house corporation, a not-for-profit corporation formed under state law, supervises the physical plant or chapter house. It is a legal entity that holds the title to all real property and through which all loans are negotiated. This group, through an annual meeting or through mailed ballots, elects a board of directors. The board usually includes a president, vice president, secretary, treasurer and three or more members-at-large. The chapter offices of Eminent Archon, Eminent Treasurer and alumni chairman also frequently hold one seat on the board, though they always serve as resources. The chapter president may serve as an ex-officio member of the board.

A board of directors should:

• Provide general advice and guidance to undergraduate officers in managing the property.
• Supervise long-term housing, authority for financial details related to housing and direction of planning for future housing needs – including management of the chapter’s reserve fund.
• Coordinate general alumni activities, communications and reunions to encourage alumni to continue their interest and support of the chapter and the Fraternity.
• Meet regularly to review the rent, finances, upkeep and insurance coverage while providing input to the by-laws of the chapter that relate to the house corporation, such as capacity, room charges and reserve-fund allowance.
• A chapter house must be operated as any other commercial property and, at its best, provides a home away from home for students to learn and develop leadership skills throughout their college years. Many chapter houses are currently suffering from deferred maintenance and a lack of savings for future repairs. By managing the property as a business venture, the property can be enjoyed for generations to come.

4) Identify Needs and Capabilities

Ask the following questions to have better-informed construction plans:

• What is the chapter’s five-year average membership?
• What is the campus’ five-year average attendance?
• What have been the chapter’s recruitment trends?
• What has been the campus’ recruitment trend?
• What is the average fraternity-house capacity on campus?
• What is the average fraternity-house occupancy rate?
• What is the typical fraternity housing type?
• What is the potential amount of annual income as compared to what members would spend on university housing?
• What is typically spent for comparable fraternity houses for ancillary items such as utilities, trash service, taxes and insurance?

5) Begin a Patient, Persistent Search for Suitable Property
There are four different properties to research: Vacant land in a prime location, existing buildings to be demolished, existing structures and existing structures with needed improvements. Each brings its own challenges and advantages. Spend time with this step to ensure the chapter doesn’t end up with substandard property.

6) Research Zoning Laws
Some cities and towns have specific zoning laws for Greek properties. Check with your local planning and zoning office to determine if the property in which you are interested is properly zoned. Before singing anything, be sure every agreement states that the zoning allows fraternity use. Avoid, if possible, conditional use permits that tie ownership and sometimes occupant behavior to the right to use the property as a fraternity house. You should seek the permanent right to use the house for a fraternity.

7) Identify Property and Make a Game Plan
After researching your options and making sure of zoning requirements, determine which property is ideal of your situation by placing heavy emphasis on location, occupancy and feasibility.

8) If Buying, Tie Up the Property
If the chapter and house corporation have decided to purchase property, it is recommended at this point to use the expertise of a real-estate professional. Look at the following options:

• A purchase agreement, or contract, with contingencies
• An option by itself, which is money paid to have the right to buy at a certain price by a certain time
• The right of first refusal, or money paid to have the right to match any other legitimate offer made within a certain time frame of offer being received
• A lease with option to buy, if you don’t have enough equity on hand, which would require:
• A pre-negotiated purchase price
• The cost of repairs to pre-existing conditions able to be applied to the purchase price
• A portion of lease payments applied to purchase price
• A ground lease, which is common on university property when the school doesn’t want to own the building, which would:
• Enable financing in the long term and, therefore, enable a loan
• Recognition of equity to provide value in your rights in the lease
• The option to lease to another acceptable entity or sell or assign your rights in the lease to an other acceptable entity, should the chapter close or face hard times

9) Financing

This is the final key step in working toward a chapter house. The board should look at various lending sources:

• A local lender that would usually make up the bulk of the loan
• Seller financing, if applicable, to see if the seller will supply any of the financing
• A possible mortgage loan from SAE Financial & Housing Corporation
• Qualification for a commercial loan, which have different interest rates than residential loans

For all loans, that 20-30 percent figure comes into play as a down payment. In order to qualify, the corporation must demonstrate cash flow, as evidenced by an income greater than expenses. The cash flow should account for a 10-20 percent expected vacancy rate, a 5-10 percent contingency for uncollected accounts and a 5-10 percent contingency in variable expenses. Additionally, most lenders will require some form of personal guarantee from alumni — and the Fraternity Service Center cannot provide this. The bottom line is simple: Establish a good track record and credit record. Lenders will want to know the chapter’s five-year average size — and remember that a new house will have little long-term effect on chapter size.

For more information about the process of getting a chapter house, contact Associate Executive Director of the SAE Financial & Housing Corporation Gregory Somers at gsomers@sae.net.

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