A Plan is Born
During the Summer of 2005, there were vague rumors of what used to be Phi Kappa Sigma shuttering its doors and putting its property at 160 Madison Lane up for sale. I decided to make a few phone calls just to see what was really happening. Turns out that the ownership group which consisted of old Phi Kap alumni had come to the realization that it was not going to be re-chartered by its National and recognized by the University as a fraternity in good standing and finally decided to cease its presence in Charlottesville.
Over the years, SAE and Phi Kap have had a very close relationship based on the geographic make-up of our houses’ brotherhood and social interactions with each other. Fortunately, this relationship helped SAE in our subsequent negotiations to buy the house at 160 Madison Lane, as there were no shortages of potential buyers. We were quickly able to come to an agreement and put the property under contract.
Finding ourselves long two houses led to the examination of a number of scenarios that would have allowed SAE to retain its property at 1703 Grady Avenue, but at the end of the day it was determined that it would be best to sell our Grady Avenue house and reinvest the proceeds from that sale into our new house, which is in need of substantial renovation. Through the use of various University contacts, we were able to contact a handful of potential buyers for 1703 Grady. Ultimately, a bidding contest developed between a private party and the recently reorganized Phi Delt fraternity, the ultimate winning bidder, which had been renting a property on Gordon Avenue, roughly a block away.
The sale of the 1703 Grady Avenue house closed in May 2006 at the end of the school year. We re-opened our doors, flanked by the now familiar lions of 1703 Grady, in August 2006.
You may be wondering how we have accomplished so much with so little cash. Charlottesville, like so many areas, benefited from the boom in residential real estate prices and our current house had appreciated handsomely. Additionally, we were able to negotiate a very favorable price on the Phi Kap property largely due to the generosity of its current owners, the desire to keep the house in “friendly” hands and due to the condition of the house. We obtained bridge financing from SunTrust Bank that allowed us to start renovations and permit carry for loan interest until SAE sold its 1703 Grady facility in May 2006. We organized an educational foundation, which we rely upon for a portion of the renovation costs and will allow donors to make tax-deductible donation for this purpose. Our renovation efforts were overseen by the University-affiliated Historic Renovation Corporation (HRC), which was responsible for overseeing SAE’s renovation in the mid-1980’s and has managed the house on behalf of our house corporation since that time. Our renovation costs totaled roughly $350,000, which consisted primarily of putting the interior and exterior of 160 Madison Lane back together again.
At the end of the day, you may wonder why we undertook this exercise. We moved a half mile closer to the University, situated on the traditional fraternity and sorority confines of Madison Lane and own a property that is almost 50% larger than our current house. Another significant benefit is a substantial basement party room, which should reduce damage and wear and tear on the more traditional living area of the house.
We believe that we have taken the steps to fortify SAE’s future at the University of Virginia and look forward to sharing our progress with you over the coming years.