HomeMy WebLinkAboutA8 t r Delta Tau Delta Fraternity
Gamma Pi of Delta Tau Delta, Inc.
February 06,2014
To: Jeff Benson,Planning and Zoning, City of Ames
From: Stephen E. Jones,President, Gamma Pi of Delta Tau Delta House Corporation
Re: Additional economic data to support parking variance request
1. I have attached a worksheet that includes the following budget data for Gamma Pi of DTD
operations: Operating budget data for academic years 2011-12, 2012-13, 2013-14 (current
year), proposed budget for 2014-15, and proposed budgets for three scenarios with the
proposed new facility beginning in academic year 2015-16.
2. The Gamma Pi House Corporation owns the facility and it is then leased to the undergraduate
chapter on an annual lease.
3. Included in the annual lease budget are expenses for P&I payments on existing mortgages,
facility depreciation expense, property taxes, property insurance, liability insurance, annual
maintenance budget, a capital fund charge, and service contracts. The service contract line
includes the salary,payroll taxes, and health insurance benefits for the full-time house-mother
and the cook, intemet service, and other payments to the State of Iowa (unemployment
insurance,etc.)
4. A basic principle we have used since 1998, is to keep our combined room and board cost for
the members living in the facility a little below the combined room and board in the ISU
residence halls. The data spreadsheet shows that we have been about 100-110% of ISU rates
for the room cost but when combined with our meal costs, we have been from 94% - 97% of
the ISU combined room and board. The ISU rates are updated each year as they change. The
room and meal rates are as listed on the ISU residence system website.
5. Our current active membership is 95, and usually fluctuates a little year to year based on
graduation rates and recruitment. DTD recruitment has been strong with 24-26 new members
pledged during the summer informal rush; the chapter usually adds another 3-4 new members
during the academic year. The chapter active membership was at 105 last year and will likely
be above 100 again by fall semester.
6. As noted in in the previous variance submittal, the capacity of the current building is 56 but
has been as high as 68 (1975 — 1990). The reason for the drop in capacity is due to
reconfiguration of rooms to provide space more competitive with the newer ISU residence
halls. Our annual lease to the undergraduate chapter is based on occupancy of 56 men. The
chapter pays for that occupancy even if it drops. The spring semester census in the facility can
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be less than full and this is usually due to students on study abroad or coop work internships.
This is a problem for all of the Greek system facilities and it does impact annual budgets.
7. The proposed capacity of the new facility will be 64-men. The total live-in capacity is actually
65 since we have always have maintained a full-time house-mother. There is an apartment in
the existing building as well as the proposed new building for the house-mother (House
Director!).
8. We have a full time cook who prepares 9-meals a week (lunch and dinner). The cook
commutes to our facility. We maintain a reserved parking stall in our current parking lot for
the House Director as well as the cook. This arrangement is the same for most all of the other
facilities in the Greek system.
9. The projected cost of the new facility is$4,725,000. A capital campaign feasibility study was
completed in 2012-13 and Gamma Pi plans to raise $2.9M from alumni to support the project.
For capital fundraising for Greek facilities, an important metric is what portion of the facility
is deemed educational use as this governs what % of the capital raised be considered tax
deductible contributions for a qualified educational purpose. A parking facility would not be
considered educational use and all of the direct additional expense for a new facility would be
considered non tax deductible.
10. A nominal estimate for a 65-stall two-level parking facility would be ± $15,000/space or a
total cost of$975,000. Our architect, RDG Planning and Design recently designed the new
parking facility for St. Thomas Aquinas Catholic Church, which is about 1-1/2 blocks from
the DTD property. That facility was approved by the City of Ames with respect to style and
aesthetics for the neighborhood area. The estimate for a similar facility scaled to our site and
required capacity is$1,250,000 plus a 15%contingency.
11. The attached document shows the impact of the new building project with and without a new
parking facility. The costs for the out-years beginning with the 2015-16 academic year are
compared with the current and expected ISU room and board costs since this is a main
competitive price point.
12. The economic costs in the attachment include the expenses for property taxes, property
insurance, maintenance, liability insurance, employee salaries and benefits, as well as
depreciation costs. The ISU residence hall system does not pay property taxes, ISU is self-
insured, and do not have liability insurance costs. We try to manage our annual cost for room
and board per student and still be competitive with the ISU residence hall system.
13. Since the $1,250,000 cost for the parking facility will result in an additional equal amount of
borrowing, the impact on the annual cost of room and board is clear — room cost increases
dramatically and we lose competitive advantage. This tends to decrease competitive
advantage for recruitment.
14. The other factor to be considered is the increase in property taxes. The property tax for the
new facility will be considerably higher than our current annual taxes of$15,866/year. Even
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after accessing the tax abatement options with the City of Ames, we expect a much higher
property tax over the longer term. Adding another$1,250,000 of assessed valuation for a new
parking facility increases the tax impacts.
15. Iowa State University announced on Tuesday, February 4, 2014, the construction of a new
700-student capacity residence hall immediately north of our property (Gable Lane) and just
east of the current Buchannan Hall. ISU is not subject to the local zoning requirements for
parking and there will not be 700 parking spaces in the current Buchannan Hall parking lot.
16. The economics of providing competitive living space in the Greek facilities is tied to
providing space and amenities that are available in the ISU residence halls as well as the off-
campus student apartments. Students want quality living and study space, access to internet,
and being close to campus is a big advantage. The attraction of the Greek area in the East
University Impacted Area OL district is the walking access to campus. The Greek
neighborhood area is 100% built-out and parcel sizes make it difficult and very expensive to
meet the current parking requirements.
17. Our position is that adding the additional expense of a new parking facility will place the
fraternity at a disadvantage when compared with the economics of our main competitors, the
ISU residence hall system and the off-campus student apartments.
18. The additional expense of a new parking facility will lead to another$1,250,000 in additional
debt obligation plus additional property taxes on the added value of that improvement.
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