The end of LCAP

[GammaZeta]

"The good news is that when people do something inappropriate with someone else's money and there is a paper trail, it is not too hard to knock them into shape fast. You just need to know where to get the right baseball bat."

Only problem is, NOTHING WILL EVER BE DONE.

Will HQ take any acton? Never. They are just as at fault. They ALLOWED incompetence to run LCAP. They hired the people. They allowed it to go on for years.

There never was a business model.

Like I said before, they should have hired an outside, accountable property management firm to run the properties. Ownership would still be in LXA's name.

But this isn't the best part of it!!!!

In a few years, we will be in the SAME exact situation. More buddies will be hired, actions will be unaccounted for, no one will question, and those that do will be put into a witch hunt.

This happens all the time. I'm beginning to think the people at LCAP/HQ care LESS about the general fraternity as time goes on and MORE in lining their own pockets and making jobs for themselves and buddies.

I have a solution thought that I will be posting shortly.

[lenoxxx]

I like what our new poster from Beta is saying.

I think that in retrospect LCAP, never listened

and now is still not listening to anyone, and if you listen to the kid from Michigan State- they are using the fraternities laws to hide behind.

Lame

[EE-BO]

Originally Posted by lenoxxx

I think that in retrospect LCAP, never listened

I think non-profits naturally chase off a lot of potential business leaders because so often it is about personalities and politics to an extent that can bring financial ruin or short term disaster.

In all the things I do in life, dealing with centralized non-profit organizations is the most frustrating. There is just too much of a personal stake going on there most of the time. And I have run into plenty of people- in Beta and elsewhere- who would rather see the whole thing fall apart than admit their personal vision is flawed or needs to be part of a comprehensive team effort.

When I came onto the housing corp for my chapter, one of the first Board members we got rid of was someone who flatly stated that if his specific vision did not come to light then it would be better for our 120+ year old chapter with a clean continued existence to fold and be recolonized under the direction of what he wanted (which was not even totally in line with our national's current policies on colonization.)

[lenoxxx]

EE-BO;

Just to give you a clear cut example, which re-inforces what you said.

With our LCAp Property at Shippensburg, we asked several times to get leases for the house in Jul/August to have them for when school starts- most leasing is done by the end of october for dorms, and off campus. In addition, everyone does 1 year leases so kids can live in houses for 12 months- exception being dorms, and our house was off campus.


We were given leases by christmas at the earlies, and told it ws impossible to get them when we needed it (thus hurting our ability to help them make money) and they went with semester/summer/ semester leases. this actually hurt renitng and cost revenue by making a rent that was way too high for the market on a monthly basis. And kids abused it every summer by just living there and not paying. We had two alumni suggest going to a 12 month lease for everyone with less per month, but more months. Kids at SU were ok paying 325/ mo for 12 months, but not 420 for 7 months (and you would never get someone to sign a summer only lease). Sort of like the car payment idea of "what can you pay per month" do determine what kind of car you buy. Illogical, but it was how things were.

This was presented as a way to make more renters interested and raise revenue- we were told- it was too hard to change the way LCAp did business. And it was flatly refused- they floundered and we had alumni quitting in disgust. This would have had less paperwork (and it would have taken about 15 minutes to change the contract verbiage to have one contract, not 3) and built more profit and revenue.

There was no excuse for this but ego and hubris In my humble opinion

[EE-BO]

Originally Posted by GammaZeta

Only problem is, NOTHING WILL EVER BE DONE.

Will HQ take any acton? Never. They are just as at fault. They ALLOWED incompetence to run LCAP. They hired the people. They allowed it to go on for years.

There never was a business model.

Like I said before, they should have hired an outside, accountable property management firm to run the properties. Ownership would still be in LXA's name.

But this isn't the best part of it!!!!

In a few years, we will be in the SAME exact situation. More buddies will be hired, actions will be unaccounted for, no one will question, and those that do will be put into a witch hunt.

All very solid points that I think can be applied to many fraternities today as national office structures and fundraising models are fundamentally shifted.

I think in many cases the shifts are intelligent approaches to a changing world. The difficulty is that leadership are often reluctant to be transparent about what they are doing because they know there will be criticism. But at the end of the day, there will always be critics- and so when you are not forward with your plans you just alienate even more people who are more upset about being left in the dark than about the long term game plan and how it can be practically executed.

With something like LCAP there is an inherent additional difficulty since you are talking about housing. That is the one aspect of fraternity life that absolutely demands a businessman's approach, and to put it in the hands of people with a different mindset and skill set is dangerous.

As to your comments about professional management and getting into the same mess every few years- this is, I think, the sad story of every fraternity at the chapter, alumni and national level. Preserving and passing down historical knowledge to capable leadership is very difficult.

Add in real estate management and running a non-profit that engages in mortgage transactions, and an entity like LCAP has far less ability to financially absorb periods of mismanagement- plus the general implications of bad decisions can have an incredible impact. And note that mismanagement does not necessarily mean fraud or malice. More often mismanagement is the result of people getting in over their heads.

If a fraternity adopts a policy that proves unpopular or ineffective, they can just change it if the leadership realizes it will cost them membership.

But poor management of a housing entity that has engaged in legal transactions with banks or other third parties, and must manage significant non-cash assets under the scrutiny of the IRS and other legal bodies has far less breathing room to make mistakes. And to be fair to LCAP- given the massive changes in the housing market in recent years including property appreciation, scarcity of real estate in proximity to major universities and a whole new range of mortgage options which are much less stable than traditional mortgages; it is quite possible that these were well-intentioned people, perhaps even somewhat familiar with real estate, who got caught up in a mess.

The right answer is to get the numbers and find out what really happened. And yes, the witch hunt concern is a valid one. Quite frankly, if LCAP and LXA are not letting out financial information to alumni who have the status and education to be of assistance- you are going to have to find guys like that who are willing to risk being ostracized for doing a good deed for the benefit of the present and future of LXA.

If you want a financial expert to look at whatever public reports are available on LCAP- PM me and I can at least take a closer look. When I first came to this site I had just become an advisor to my chapter, and Tom Earp was a HUGE help to me- and has been all this time- giving me advice on how to do my work- and his advice has been key to my success. If I can help you guys out in some small way in return, I am happy to do it.

I think goal #1 is to find out what is really going on and then decide later the extent to which there were inappropriate or reckless actions later. Odds are this is just an honest effort that went bad because people did not know what they were doing. That does not make those guys bad brothers, but it still does not help the chapters who might get unfairly messed over in the short term.

[GammaZeta]

Can't blame the housing market for LCAP's problems. Property near a university/college are ususally always the most desirable, in demand property in any housing market. They also are able to withstand any major increases or decreases in the housing market.

[rgrater]

Has anyone who has received a offer from LCAP to repurchase their house had the item "write down of property value" in their purchase price calculation, and if so, did you get any explanation as to what this charge was? LCAP included a $316,041 line item for this in our price to repurchase our house, but I still cannot figure out what this charge was for . . .

[GammaZeta]

Also, I would recommend an immediate title search, specifically looking for mortgages.

For instance, on Gamma Zeta, LCAP immediately took out a mortgage on the property with the Lambda Chi Ed. Foundation for $175,000. Good luck trying to get another mortgage from a lending institute with another outstanding mortgage on the property.

Great job, LCAP. Screwing the alumni and undergrads out of their homes, making it impossible for them to ever get their houses back.

I hope you sleep well at night knowing your mismanagement has caused great pain and suffering to thousands of undergrad LXA's that don't know where they will be living next year.

Bravo.

*For clarification; I am referring to the PRE-collapse LCAP, NOT the current volunteers who were put in the difficult situation of trying to fix this mess without bankrupting the fraternity.

[Tom Earp]

EE-BO, thank you for your knowledgeable input.

Yes he and I talked quite a bit about this and the things and difference between our two great organizations.

He has a true grasp of the situation and fully understands what we as Housing that has come up with the LCAP fiasco.

I am sure most will agree that the inseption was a great idea, but the way it was run is what has created this major mess.

GammaZeta and I have discussed the Zeta situation several times and I have been in contact with a Brother from Shippensburg and another from Un. Mo. about their situations, and am agahst with the ineptitued that was dropped on them like huge bomb.

Now a major flag ship Un. (Mi) is up against a wall! Basically losing the houseing which in most instances means losing the Zeta.

When it comes to House Corporations ( I was a member for 12 years), this keeps IHQ out of it and it also shouild give the power of getting leases sign sealed and delivered, not IHQ (LCAP).

In reading some posts, as I was told in a PM, we all have the same problem!

It is lip service given to Alumni, House Corp. and when meetings and ultimatums are given when we leave, then it is back to the same old, same old! Ignoring in the nth degree!

It is still a two street between the Alumni and Active Chapter and if one falls, both fall. But, when you throw in a third such as LCAP was, that is a totally different spin and really throws/threw every thing out of sync!

I have made some recommendations to IHQ so that Zetas could keep the property but I am afraid that the time in point has come to late.

So, my question is, who should bite the bullet on this?

The past members, current members, or possible future members?

[lenoxxx]

I was curious to see what happened to all of the people affected by this.

Any random updates?

[Sigma1844]

I heard that Michigan State (Gamma-Omicron Zeta) has reached an agreement with LCAP in which they will once again own their house.

We at Sigma are currently trying to strike a deal to take back the deed to 1601 Washtenaw Avenue even though the Fraternity owns our house and LCAP just manages it.

And I agree, the work being done by the current board has been expedient and well-communicated with the GHZ. Unfortunately their job is to liquidate the properties. The folks who should be taking the blame on this are long gone from LCAP. I won't name names publicly, but if you're an interested party you already know who screwed the pooch on this. Brother Mike Smith is doing a very efficient job cleaning up their messes.

[Forgotten Zeta]

personally, i'm glad that nobody had control over our house but our own chapter. we've been able to keep our house what it is because we decided to fix what was broken and hold ourselves accountable. do we really need a higher power to come in and fix our broken shit? fraternity has nothing to do with where we live, but how we live and how we treat our fellow brothers. the house is just a tool in this quest. i, however, have never been to any ihq meeting. i don't think i'll ever be invited.

[lambdachi1100]

From what I heard recently, Michigan State's chapter Gamma-Omicron has been put on the open real estate market as a final agreement by the alumni and LCAP was not successful.

[GammaZeta]

Amen Leno,

Too often our Administrative employees and the GHZ drink the punch and refuse to open their eyes to reality unless it is through rose colored glasses.

If you thought Government was bad in the way it operates with patronage, politics and financial spending, then you haven't seen Lambda Chi Alpha!

[lenoxxx]

Tried to post on the C&C article about Montana State....

Long story short for those that are asking-

LCAP was "Lambda Chi Alpha Properties"- started about 10 years ago to let a separate corporation affililiated with Lambda Chi Alpha own and manage LCA chapter houses. At one time they had about 15 houses under their banner. Due to gross mis management and incompetent employees, they ran their balance sheet into teh ground and then they decided -with no notice- to liquidate all properties in 2007 and go out of business destroying untold amounts of lost alumni equity in real estate entrusted to them by individual chapters.

On a LCA bulletin board this has been debated here

http://www.greekchat.com/gcforums/sh...ad.php?t=91715

...and also here extensively with links to news articles from East Lansing about the Michigan State Chapter's house being sold out from under them to a developer.

http://www.greekchat.com/gcforums/sh...d.php?t=111777

My chapter lost about 40-50 thousand dollars over this fiasco by trusting and investing with LCAP at Shippensburg University's now defunct chapter. It's a story that isnt being told except in news articles and online Bulletin Boards with folks that were affected by it talking.

On the "end of LCAP thread" I referenced, a former staff member talks about it, and then is banned from talking about it anymore, interesting stuff to read and check out. U Mass, Montana State, Shippensburg, and Michigan State all got hit hard, I cannot speak much for the other chapters, but it was a bad deal from the get go- poorly run and managed, and then ended with a total melt down that took chapters and historic houses out with it. The news articles out of East Lansing are appalling to read if you are a Brother of our Bond.

On a good note about 90% of the chapter memorabilia we had was saved from the LCAP fiasco, and subsequent destruction of our LCAP house by the undergrads which was again due to house mis-management by LCAP not securing the property and having no plan to sell it after putting it on the market and having no tenants. Of course the undergrads were awful as well, and it was what closed the chapter in 2008.

But unlike my brother at Dayton, we still have our stuff under lock and key- about two U-Hauls worth of it. Thank goodness for that silver lining. We'll be back, so check us out on www.phitauzeta.org and on facebook- you can link to our group from our website.

Long winded, but it's a real story about a real chapter's fall from grace, and you all asked for it!

zax
lenoxxx