Tuesday, July 6, 2010

The Fluxhouse Cooperatives, Charles R. Simpson



In 1966 George Maciunas, an artist working in the dadaist tradition of anarchistic and irreverent art, became entranced with the idea of artist cooperatives as a vehicle for the emancipation of artists. Beyond residences and studios, Maciunas hoped to establish collective workshops, food-buying cooperatives, and theaters to link the strengths of various media together and bridges the gap between the artist community and the surrounding society. Maciunas concretized his utopian planning impulses with endless and minutely detailed projections of renovation costs and the advantages of wholesale purchases. He had the conviction, essential in a social catalyst, that legal prohibitions and entanglements could be overcomes, and that the first priority was to get on with the living experiment. Maciunas established himself as the president of Fluxhouse Cooperatives, Inc., in order to “perform all the organizational work” involved in “forming cooperatives, purchasing buildings, obtaining mortgages, obtaining legal and architectural services, conducting work as a general contractor for all renovation and [handling the] future management if so desired by the members.”

With preliminary buying agreements with several SoHo building owners and with speculatively based bust convincingly detailed renovation estimates, Maciunas approached Kaplan for backing. Kaplan had formed a joint venture financed by the J. M. Kaplan Fund and the National Foundation for the Arts. Not only did this provide a source of capital, but it enlisted new and important interest groups to back Kaplan’s experiments in artists’ housing. According to a foundation consultant, Henry Geldzahler, the joing venture with Kaplan was designed to break through the city’s M-1 zoning designation, which excluded residential occupancy in areas of light manufacturing. “The M-1 zone, now forbidden to artists-in-residence, embraces areas of downtown Manhattan where light manufacturing has declined and many buildings now stand empty,” said Geldzahler. The Foundation and the Kaplan Fund, with a contribution of $100,000 each, were looking for a test case where artists could challenge the M-1 restriction. Maciunas appeared at the opportune moment, and Kaplan agreed to fund his Fluxhouse program.

By the end of 1966 Maciunas had picked out the first of the SoHo buildings that he was to promote as artist cooperatives, 80-82 Wooster Street, and was taking deposits from buyers of floors and half-floors. In the summer of 1967, with $20,00 from the Kaplan Fund and the Foundation, Maciunas was able to make the cash down payment on this $105,000 building. As was to be the pattern with other SoHo cooperatives, the former owner assumed the mortgage for the balance owed. With $20,000 in grants, Maciunas was able to offer spaces for only $2,000 cash down per shareholder, using the money for renovations and charging initially only $205 per month maintenance for 3,300 square feet. By August 1967, 80 Wooster Street was fully subscribed and undergoing basic renovations, and Maciunas was lining up buyers for a second building, 16-18 Greene Street. This time he had $5,000 from Kaplan and the National Foundation to hold the building. But serious setbacks had occurred in the Fluxhouse program. The Federal Housing Administration, which Maciunas had counted on to take over the mortgages as buildings were established, in order to free the Kaplan seed money for new purchases, had refused to become involved, citing fire hazards in the area, referred to by a series of city fire commissioners as “Hell’s Hundred Acres.” In addition, the National Foundation for the Arts and the Kaplan Fund has embarked on a project of their own, the sponsorship of a conversion of the old Bell Telephone Laboratories in Greenwich Village into a huge artist housing complex, and had therefore lost interest in the Fluxhouse venture. With the withdrawal of the legitimating momentum of philanthropic and governmental sponsorship, Fluxhouse residents were acutely conscious that they were occupying buildings that had been illegally purchased and illegally renovated. Without philanthropic sponsorship, they had no leverage to get required zoning variances from the Board of Standards and Appeals or the occupancy permits form the Department of Buildings.

Maciunas, however, relied upon a different basis of legitimacy for the occupants, a pattern of building purchases and conversions that involved enough people to make the city hesitant to enforce its own residency codes. In September 1967 he advertised shares in three buildings at Grand and Wooster streets at prices ranging from $2,200 to $5,000, or roughly $1 a square foot. Within three days the buildings were 60 percent subscribed, and by December Maciunas had the $50,000 necessary for the down payment.

Maciunas moved from block to block throughout SoHo, tracking down owners who were closing their businesses and anxious to sell their buildings. His method was to hold buildings with deposits, then to line up shareholders to provide the down payments. Maciunas balanced his increasingly complex financial arrangements with a continuous flow of new cash deposits. By June of 9168 he had sponsored cooperatives on Prince Street, Broome Street, and along West Broadway, a total of eleven cooperative units involving seventeen buildings.

The city’s planning policies indirectly aided Maciunas. By casting the depressing shadow of the Lower Manhattan Expressway over the area for so long, the city planners had driven down the building values and undermined the real-estate market. As early as 1963, local real-estate interests whose properties had been rendered unacceptable as loan collateral had filed suit in fruitless effort to force the city to either buy their buildings or abandon the expressway. Maciunas was operating in a buyer’s market, purchasing in an area many feared would become an industrial slum. Shael Shapiro, an architect-resident in one of the first Maciunas buildings, and later a consultant for many cooperatives and an active civic leader, agreed that the city had inadvertently aided Maciunas. “The Lower Manhattan Expressway made this [Fluxhouse project] possible. It depressed values throughout this area. The day after Lindsay announced the end of the expressway, real estate along Broome Street went up 50 percent.”

The Emergence of Vested Housing Interests

The cooperatives, which Maciunas envisioned as a numbered series of affiliated “Fluxhouses,” quickly became autonomous and resident controlled. The shareholders had become restive under Maciunas’s single-handed directorship, and they felt fully competent to take over building management themselves. All residents were artists under the broad definition (which included writers and composers along with visual artists, “events” artists, architects, and in one case, a flower arranger), but many, especially the writers, college art teachers, and architects, were experienced with legal and financial matters and were comfortable dealing with the city bureaucracies. These co-opers were not bohemians desirous of protection from the harsher realities of their situation.

The cooperative food-buying schemes were the first to collapse “I can remember sitting in my loft surrounded by dozens of loaves of Russian black bread,” said an early resident. “George thought this kind of buying would save us all money, and he just went out and bought what he liked. We ate it for weeks.” Another time it was oranges, and then toilet paper. Cooperative buying soon ended.

Residents faced the chronic problem of undercapitalization stemming from the fact that Maciunas’s coast estimates were always too low, and because the shares had been sold at prices that attracted artists with very little money. Residents repeatedly found themselves having to pay special assessments for unforeseen plumbing costs or to make up a low fuel bill estimate. For a time, this condition was not attributed to deception on Maciunas’s part, but rather to his alleged warmhearted incompetence. “We were all smart enough to know that George was totally unrealistic in his expense estimates,” said one resident, “and we allowed for it.” But as the levies continued, many found they were financially overcommitted. Their access to capital, largely through modest loans form their middle-class families, had been exhausted, and more assessments were due. Individual buildings had to resort to independent action to save themselves from default. In some cases only the exceptional connections of one or two residents saved their buildings from bankruptcy. One resident, a painter and his building’s first president explained,

I have a Harvard education, and so I have connections that way. We brought this building with a mortgage almost due [one of three], and it was immediately called. We were really about to lose the building. I had been to every bank in the city and had been laughed at. You couldn’t get a mortgage on anything. At nine in the morning of the day the mortgage was due, I had the idea of calling the father of a girl I used to date at Radcliffe. By one P.M. I had the money.

I knew he was in real estate, but it also turned out he was a chairman of the board of the [N] Bank. Uncle Jim, we used to call him. He simply directed the head of the branch bank to make the new mortgage. He said that had it not been for him, we would not have been able to get an appointment with the secretary to the branch manager, with the kind of building we had…. [B] was another dear friend. I just happened to be mentioning the building’s situation one day, and she offered five thousand dollars. She said it was probably made by exploiting someone anyway, and she had no doubt clipped a coupon to get it. But she offered it interest free to us for five years.

Residents solved their financial problems as a unit, giving some members grace periods on debts, taking loans from others, and using the borrowing ability of a select few. But they could not assume responsibility for the financial problems of cooperatives other than their own.

At first, however, George Maciunas handled the deposits and bank transactions of the cooperatives on a different basis. One cooperative in the formational stage found that he had lent $26,000 in members’ deposits to four other cooperatives also being established, all without the depositors’ knowledge. Maciunas was unable to calm the irate shareholders with this explanation of his accounting methods, published in his Fluxhouse Newsletter.

The reason for such disposition of monies is my principle of collectivism- running the cooperatives not necessarily in a legalistically correct way, but in a way to benefit the collective good. When a particular cooperative is in danger of losing a building to foreclosure of lien, every effort-0all the funds, go to the rescue. This has worked well without detriment to anybody. Not one of the 4 closings we had so far was delayed by this principle of a “collective chest.” It would not have delayed the closing of 465 West Broadway either had it not been for the interference of the “shadow kitchen.”

The “shadow kitchen” consisted of shareholders who did not trust Maciunas and who were eager to take over their building affairs. They believed that his financial control and manipulation of deposit accounts enabled him to speculate at their expense. The president of one early Maciunas cooperative pointed out,

George sold the garage on the ground floor of our building for a ridiculously low price to a friend of his. It’s now a theater, and a very valuable space. We saw collusion, with his friend working behind the scenes in partnership with George. When we protested, this guy rented the space to a company that parked garbage trucks there, just to spite us. Maciunas was dishonest from the very beginning.

Cooperatives found, contrary to Maciunas’s reassurances, that they could not get their deposit money back from other co-ops when their own closing date for purchase arrived. One cooperative reported having to pay an interest rate of 25 percent a month to borrow two thousand dollars from another Fluxhouse in order to forestall the foreclosure of their mortgage. In another instance, a cooperative found itself sued by the bank which handled its deposits because of Maciunas’s policy of shifting money from account to account. Individual cooperatives quickly discovered that if they were to survive, they had to fend for themselves in financial matter. Maciunas was hurt by this turn toward economic self-interest on the part of the cooperatives and by the criticism of his leadership which he felt had inspired it. In a letter in which he relinquished all managerial connections with two Fluxhouse units, Maciunas explained the dispute from his side.

I did not mind doing all this [managerial work] free of charge if it was going to advance the selfless spirit of collectivism. Unfortunately, it did nothing of the sort. As soon as opportunity presented itself, the collective spirit fell apart- members selfishly promoting their own interests at the expense of the cooperative and separate cooperatives promoting their interests at the expense of the entire collective. More specifically,… the Grand St. directors saw no reason why their temporarily excessive funds should have been used to save Wooster St. from disaster and Wooster Street’s treasurer saw no reason to reciprocate this good will by returning this borrowed money or part to save Grand Street from disaster. Members showed their distrust in me, or envying better spaces of other members, actually entered those spaces to remeasure and recalculate the spaces as to increase other’s and decrease their own monthly rents. Etc., etc., ad nauseam… Furthermore, since several members expressed dissatisfaction with my methods of management and accounting, a few even suspecting me of making a fortune (!), I decided to stop wasting my selfless interest which is unappreciated anyway and become just as selfish as everybody else.

THUS: … I will stop giving free time and advice on all matters relating to architecture, electrical engineering, management, accounting, carpentry, building code, contractors, supplies, etc…. I will charge… for my past work in management, general contracting and accounting at the low rate of $40 per week…. Any further time spent by me on any of the above matters will be charged to you at the rate of $10 per hours (which is the rate I received at the time I quit my job).

Maciunas continued to sponsor cooperatives, but only as individual ventures and for a fixed fee The Fluxhouse phase in SoHo was over by late 1968. In the absence of any overall financial resources, the problem of survival had individuated each cooperative. Financial anxiety and the recourse to purely personal resources available to the individual; shareholders made self-management for each cooperative a necessity. A secularizing monetary fear had washed away any illusions about the bonds of a gemeinschaft between cooperative. Nevertheless, it soon was to become apparent that the larger problem of resolving the artists’ illegal residential status would require an area-wide organizational approach. The territorial district itself evolved as the basis for a functionally important form of community in the next phase of development.

Charles R. Simpson, “The Achievement of Territorial Community” in SoHo: The Artist in the City (Chicago: The University of Chicago Press, 1981) pp. 153-188.

Above copied from: http://www.liino.com/?page_id=857

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