Thursday, August 6, 2020

Case Study: Phi Delta Theta, University of Michigan

Tom Buck, often called JT within the Greek community, has been the University of Michigan’s Phi Delta Theta chapter’s house corporation president for over two decades. In 2018, he faced the suspension of his chapter, a situation that has now become a common hurdle for house corporations. Facing the loss of rental income from the chapter for four years, JT and his alumni board needed help to avoid taking on additional debt and preventing the potential loss of the property.

In early 2018, two separate incidences in the same academic year resulted in the realization the chapter would not have a presence in the house that fall. Fortunately, Alpha Fraternity Management already represented another chapter that needed temporary housing while its chapter house was under construction. This was JT’s renewed introduction to Alpha Fraternity Management, who continued to manage the operations of the group that rented the Phi Delt house.

“This arrangement provided us with a great opportunity to watch Alpha’s work at arms-length,” JT explained. “They did a fine job of managing the group and I could see the respect their alumni leaders had for Alpha and what they brought to the table.”

In June of 2019, Alpha Fraternity Management was retained to manage the house under its Graduate House model, part of AFM’s ‘Save our Chapter House’ program. AFM instituted a plan to restore an income stream through rentals to individual students, manage the property as alcohol-free housing, and provide business management and resident services. Alpha got right to work to find tenants for the fall, ultimately leasing every room and all parking spaces, even with a late start. The plan was a success and the property was restored to positive cash flow.

“Alpha has been responsive and has helped us keep our house in good shape even when we haven’t been in it,” JT continues. “They’ve done a pretty darn good job and their ability to help us secure tenants and preserve our cash flow has validated our decision to use them and earned them the chance to manage the house when our own chapter returns in the fall of 2021.”

The Phi Delts appreciate the “hands-on” approach Alpha takes when managing tenants. Good systems and processes, plus monthly calls between the house corporation and the Alpha team keep the house in good shape and everyone informed. “Allan has a real presence in Greek life,” says JT. “I know he’s trying to make a difference on our campus, just as we are.”

“It takes an enormous amount of time to manage a fraternity house,” JT concludes. “Having Alpha in place gives me a lot of time back that I can use in other ways.”

Snapshot of Remedies
Implemented ‘Save Our Chapter House’ program 
Evaluated options that preserved the property’s zoning status
Provided solutions to restore the chapter’s revenue stream
Leased 100% of rooms and parking spaces within 90 days
Achieved positive cash flow in the first year of the partnership
Located a group tenant for rental the following year, increasing profits