ASU Bargaining in Bad Faith

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