Frat forced to close its doors

When officials proudly displayed elaborate renovations to the interior of the Kappa Alpha house in 2001, no one knew that four years later the exterior would be boarded up due to those same renovations.

But that’s the problem that confronts the fraternity’s leaders today.

A lack of funding and a switch in banks resulted in foreclosure on their 110 W. Cameron Ave. house, in effect leaving members without a home and officials searching for a replacement.

“I’m hoping that we’ll be able to figure out a way to get another premise where the guys can meet and hold rush and continue to carry on,” said Van Webb, president of the chapter’s alumni association.

Despite losing the house, Kappa Alpha members are optimistic about the organization’s future.

Chad Habeeb, president of the fraternity, said the foreclosure doesn’t change anything except their location.

“It’s a sad situation,” he said. “We hate to lose the house, but we’ve got a positive outlook for this next year. … We’re going to stay as strong as ever.”

Habeeb stressed his confidence in the alumni association’s ability to find a new building.

J.B. Davis, treasurer of the alumni association, reasserted that notion.

“We’re going to rent another house as far as an interim until we decide what we need to do,” he said.

And even without a firm housing plan, Kappa Alpha’s status at UNC stands firm.

Jay Anhorn, director of Greek Affairs, said his office focuses more on integrity and adherence to rules and deals very little with finances.

“Finances has nothing to do with their status of good standing with the University,” he said.

Webb said the roots of the foreclosure, which became official late in the spring semester, can be traced back to 2000.

RBC Centura provided funds to kick off the project, but the building dedication occurred just weeks after the Sept. 11 terrorist attacks, causing difficulty in fund raising.

“The climate for raising additional money was not conducive to raising the money that we needed to raise to pay down the debt,” Davis said.

Webb estimated that they owed about 1.2 million to the bank, but a 9 percent interest-only rate made it difficult to gain headway.

“It wasn’t the fact that we weren’t paying the bills,” he said.

But the final blow came in September when RBC Centura sold the bank note to the Massachusetts-based Capital Crossing Bank.

“On Oct. 1 we get a welcoming letter from Capital Crossing,” Webb said, “And 15 days later we got a foreclosure notice — end of story.”

The bank wanted $1.4 million to sell property back to Kappa Alpha, he said.

Although the fraternity bolstered fund-raising efforts and made several counteroffers, the bank moved forward with foreclosure, Webb said.

“The bank backed us into a corner and we didn’t have the funds to dig ourselves out.”

Contact the University Editor at udesk@unc.edu.