What Happened and Where We Go from Here

Letter from the President

Many of you have questions about the chapter house sale, donations and the future of Delta Upsilon at San Diego State. Alumni president, Richard Jaramillo (RJ) answers those questions below in an FAQ format. At the end of the post, there is a section to make public comments and ask questions.

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1. We built the house only a few years ago, what were the reasons we chose to sell the house now?

Fraternity Membership: Overall campus enrollment in Fraternities is flat and on the decline. Having the largest house on campus (30-beds) when the average house has 15-18 puts all the pressure on recruiting. Our last 2 pledge classes have averaged 23 members and a total active chapter membership of 75. This past year, we averaged 24 beds, which put us short 6 rents uncollected. As this trend continues, the shortfall continues. We built a house too big to support.

Sophomore Success Program: The university is a business. The Sophomore Success program is all about setting a policy that says, all Freshman and Sophomores must live in campus housing. A fraternity house is not considered “on-campus” housing. To request an exception to this policy, there is a process with limited and marginal results. As most of us know, a majority of “active” members of a fraternity are usually Freshman and Sophomores which this policy hurts the availability for them to live in the house.

DU International, Dry House Policy: Our Board has been aware of DU International “Dry House” policy coming in 2020 for the entire year. This news comes to no surprise due to the nationwide trend of universities cracking down on fraternities in general. Alcohol related events such as member hazing, sexual assaults to women have grabbed the attention of all Chancellors. Chapter House Liability Insurance is skyrocketing. DU International is being proactive to counter these universities where we have chapters with this upcoming policy. This “SHIFT” in policy creates the change in how we do… DU.

With all three of these current and ongoing policies, I believe our Board of Directors did an outstanding job of navigating us through this year of events. The San Diego State Delta Upsilon Chapter will survive and thrive through these changes. We are in a better financial position to navigate through all of this. We have options to rent across the street from our current location and maintain a Chapter House that can afford to pay their bills and be “right sized” with these new policies.

2. What is the financial result from the house sale?

After paying off the bank’s first and Zac’s second trust deeds and associated transaction costs, our chapter has net proceeds of, $706,383.41 transfer to US Bank. In addition, we will receive $150,000 released over 8 months from our rent back agreement with DG’s. Finally, we will have $90,000 released by SunWest Bank held on reserve until note payoff. Our end result will be just north of $900,000.

3. Where will the DU house be after we vacate?

Our current plan is as follows. Now that the DU house has been sold, the current residents will remain until the end of the 2019/2020 school year (June). At that time, the residence will be turned over to the Delta Gammas who will then begin construction for their sorority needs. With respect to the future of the house, we are looking at several options to rent another building, starting in the 2020/2021 Academic Year and ensure future rental revenues are aligned with costs.

4. If I gave a financial donation to build the house, where are those funds today?

Your donation is safe and built-in to the equity that we have from the proceeds of the sale, which is derived after paying off the mortgages and transaction costs.

5. What are we going to do with the proceeds? Short term? Long term?

Our current plan is as follows. Now that the DU house has been sold, the current residents will remain until the end of the 2019/2020 school year (June). At that time, the residence will be turned over to the Delta Gammas. With respect to a future house we are looking at several options to rent another building, starting in the 2020/2021 Academic Year. We will ensure future rental revenues are aligned with operating costs. Due to capital gains tax; we have the next four years to look at purchasing a new house that is right sized to the economic realities that all fraternities face at SDSU.

6. How will the SD DU money be managed?

The Board will begin to post quarterly financials on our upcoming, updated website. This transparency with the financials is a priority to having all alumni members feel informed and up to date. Our Treasurer, Jim Swartout will create a task force seeking the advice from our Alumni on the best financial tools and strategy that safely secures our proceeds from the sale of the house.

Since there will be no more fundraising for a new house; our efforts will shift towards scholarship, leadership and Alumni programs.

Our Alumni Scholarship Chairman, Vaughn Jeffery will have a small fund (approved by the board) to work with and continue his activities and programs that are helping build better men. Our goal is to find a way to turn this program into a non-profit. If you have ideas, please reach out to Vaughn his email is: ctryroads@aol.com.

Our Social Chairman, Joe Duffel will have a small fund, (approved by the board) to start his social fundraising campaigns. I would like to see Joe recruit a NorCal, LA, and OC DU Alumni member who can help organize social events. With our upcoming website, we will have greater access to reach out and socialize. Joe’s overall goal will be to start a plan to have more than just our Founders Day tailgate event. If you have a suggestion to offer Joe, his email is: jdxd@hotmail.com.

7. What is the climate for fraternities today on campus at SDSU?

Not very good. Fraternity and sorority life have come under attack. Not just at SDSU but nationwide. There continues to be pressure on fraternities to completely ban alcohol. Here is what has happened this year. First, three fraternities, including Delta Upsilon were placed on interim suspension for alcohol-related incidents. (note: our house was not directly involved). On October 21, four more fraternities were put on interim suspension following alcohol, hazing, health violations.

On November 7th, all 14 fraternities were suspended in an alcohol-related incident at the FiJi house. While under suspension, the IFC and its organizations will not be recognized, and all activities will be suspended until a non-specified date. That student died. Subsequently, President Adela de la Torre called for the creation of two Presidential Task force groups in a November 12 campus wide email. The first one is on Student Activities and the second one for Alcohol and Substance Abuse. You can read all the news related to these events at this link.

8. What are the trends for fraternities and sororities in general?

Fraternities across the US are in decline in membership and popularity due to current, social trends and overall negative publicity. Headlines are not pointing to the philanthropic efforts, the higher GPA’s or the community service. The attention is being drawn to the date rape, underage drinking, and hazing.

As the tragedies, and public outrage mount, colleges and universities across the US are reconsidering the purpose of fraternities and sororities on campus. It’s only a matter of time where the restrictions put on fraternities will outweigh the feasibility to keep them on campus.

9. What is the current state of the DU house?

Like all fraternities on the SDSU campus; we are awaiting the “2-stage” investigation conducted by the university and San Diego Police. In the interim, there ae no activities allowed. No meetings, no initiation, no rush, no functions. We are not allowed to assemble and many of my attempts to reach out and communicate with members have been conducted by text, email and phone calls. Our kids are stressed and distracted right now. SDSU does not seem to be in any kind of rush to conclude this investigation and I believe it is tactic being used to financially attack the weaker fraternities that cannot afford to be in limbo and will disband and close shop.

When you think about it; we are currently just a group of 24 students renting a fraternity house from a sorority. We will weather the storm and DU will survive because we have a story to tell and a long history on campus.

10. Where will information be posted as updates?

We have Dave “Dino” Maiolo who will be updating our newsletter format, website on the Duck Talk blog and our Facebook page. If we have your correct email address, we will also send out an occasional email blast using Bomb-Bomb Video Text.

11. Who are the current Board members and their roles?

President, Richard “RJ” Jaramillo
Vice President, Vacant
Treasurer, Jim Swartout
Secretary, Kim Cox
Membership Director, Vince Ferraro
Facilities/Reunions, Bill Deering
Social Events, Joe Duffel
Scholarship, Vaughn Jeffery
Mentorship, John Little
Fundraising, Erik Stroman
Director, Sean Deichstetter
Director, Mike Manneh
Director, Ron Zappelli

Summary

Selling the house addressed the challenges that were beyond the control of the Board. We all desired for an outcome that would have preserved the chapter house ownership; however, given the circumstances of the current situation, I believe our Board of Directors did the best job possible of navigating us through this year of events. The San Diego State Delta Upsilon Chapter will survive and thrive through these changes. Thank you all for your continued support.

On behalf of the Board, I wish you and your families a safe Holiday and Happy New Year!

Richard “RJ” Jaramillo
President, DU Alumni