The question that changed AU history:
‘Would you consider selling it back to us?’
It was a good sign that USC President Max Nikias agreed to meet with AU Sigs Kerry McCluggage (1976) and Jon Muller (1984) in 2015. Topic: Buying back the Alpha Upsilon chapter house and property from the university.
“Would you consider selling it back to us?” McCluggage asked.
When President Nikias said yes, the deal progressed very fast.
Without much argument or discussion, they had just struck a tentative agreement with the university to buy back the Sigma Chi house on 28th Street.
“We were a little surprised and quite pleased with the university’s willingness to work with us,” says McCluggage now. Muller says the term of the Alpha Upsilon lease with the university was about to end and there was interest in not extending it yet again – buying it back was the preferred path.
Buying back the chapter house allowed us
more control of our own destiny.
Dan Vogelzang, Trojan Sig House Corporation President
USC President Max Nikias, 2010-2018
Jon Muller, Trojan Sig House Corporation Development Committee Chairman
Kerry McCluggage, Trojan Sig Foundation President
It would not be inexpensive – a complex deal costing about $3.8M backed by 45 AU alums who collectively contributed nearly $1.4M as equity. But as described by Dan Vogelzang (1978), the third Sig alum working the deal, buying the house back allowed us to “control our destiny.” “The financing was a bit complicated, with a large bank in first position (run by a CEO who was a USC Trustee at the time) and the housing capital arm of Sigma Chi International providing a smaller 2nd Trust Deed, personally guaranteed by the Trojan Housing Corp board members.”
When McCluggage suggested an appraisal would be the next step to determine the price, the President had a surprising answer. “Well, as a matter of fact, we already have one,” said Nikias.
So, the terms were set. The historic deal was largely done to buy back the largest parcel on The Row at a fair market price.
“It all lined up,” says Vogelzang. “It was strategic and purposeful.”
In the 2000’s, the university was willing to get out of the fraternity landlord business. And it was important for Alpha Upsilon to have greater control over its future by owning its land. When the deal closed on July 9, 2015, Vogelzang says “our chapter house became ours again after nearly 55 years”.
In about 1960, the chapter house went into university ownership when AU alums agreed to accept an irresistible offer from the university: If we take ownership of your land, we’ll provide you very favorable terms for a new chapter house.
While it allowed for the construction of the current chapter house, over time the deal soured.
USC soured on being a landlord and Sigs soured on leasing from the university.
That all changed with the 2015 buyback deal.
The 2015 buy back, ironically, was critical in allowing the 2022 disaffiliation of Sigma Chi from USC. By owning the chapter house there literally were no chains or ties to USC holding Alpha Upsilon back from spearheading the creation of the University Park Interfraternity Council along with 14 other fraternities, to disaffiliate. This move alone truly emphasizes the ability to “control our own destiny.”
THE GREATEST ALPHA UPSILON STORY NEVER TOLD:
How the Sigs got moved out of
'the most luxuriant fraternity house
and never got it back.