I don't contribute that often, although I lurk daily. I am well versed with NPC expansion due to a previous but very recent volunteer roll.
Based on your description, it seems that the Director is not knowledgeable about NPC and that is fine. It can be confusing. What you were asked to do is more typical for a fraternity expansion via interest group so it isn't surprising that you were asked to do the same if that was the only recent reference point. 33girl is correct, you should have never been asked to select a group because it could set you up for disappointment. Pi Phi is a wonderful choice, as are all NPC member groups because extension is about fit. Additionally, there can be no Greek Council who can decide if your campus can proceed but that is another discussion for a different time. The proper authority remains with your student affairs folks.
The University has to be the one who says they want to open for extension and that is all about your University's student/co-curricular goals. This should really be a discussion with those who influence the student experience first. Some NPC marketing materials already showcase why our member groups contribute to the fulfillment of a University mission, increased engagement, etc.
In all honesty, I think your best bet may be to ask the NPC Office/Carole for recommendations that you can provide the Director as to how NPC expansion works with an interest group. However, NPC will not do the sell. Universities are all about the student so the "sell" needs to happen internally.
Your "should we recruit" question need to be answered by the University. Do they want you to demonstrate you have a critical mass of interest or would they rather not get anyone's hopes up.
If and when the campus opens, I believe any host institution needs to be sure they market themselves well to be attractive. Extension is expensive. Ground up Greek communities may be perceived as a great opportunity for some NPC groups and too great a risk for others. Each group has its own strategy for where they see their organization growing as well as the metrics they use for evaluating opportunities.
I do hope you have the opportunity to experience the extension process. I would say to keep an open mind. The other answers regarding offering an invitation to membership to interest group members is accurate. You won't know until you get to that step due to membership selection processes but hopefully that won't deter those interested.
Best of luck! Keep us posted
