Peace, Love, and Paying Bills

After paying ever-rising rents in and around New York City for 20 years, I started hearing a voice. “Go north, middle-aged man,” it whispered. The American dream of homeownership was calling.

A writer friend had told me about the Peekskill Art Lofts co-op, less than an hour’s ride from Grand Central. When I’m not playing the jump blues on guitars, I write fiction, poetry, and nonfiction, and the idea of living among other artists was intriguing. We spoke a common language. What could go wrong?

The application process was complex and lengthy, and, because there are only 28 lofts, the openings are rare. Shareholders must qualify financially and also prove they’re working artists by providing résumés, published books or articles, letters of recommendation from established artists, and a whole lot of tax returns.

I passed the acid test and moved into a two-bedroom in the Peekskill Art Lofts in 2009. After living there a couple of years, I felt more settled in and started asking questions. What was the interest rate on the co-op’s underlying mortgage? Was there any discussion about refinancing to take advantage of rock-bottom interest rates? The board president patted me on the head and told me the finances were too complicated for me to understand. That was when I decided to get involved.

After my election to the five-member board, I soon learned that the unfavorable mortgage – with an interest rate of almost 7.5 percent – was just one of many problems facing the co-op. Two shareholders were in serious financial crisis. Both were getting on in years, both lived without a family support system, and both had nowhere to turn. This situation existed, I realized, because previous boards had been reluctant to enforce the rules and regulations. The creative vibe that had drawn us to an art co-op was hampering our ability to run our cooperative corporation like a business.

“We’re all artists,” as one former board member put it. “We’re in this together, and we have to help each other out.” But some of our fellow artists were constantly in arrears. If they caught up, they’d quickly lapse again. The bylaws made clear what the board was supposed to do. After a second missed maintenance payment, management issues a letter. After a third missed payment, the shareholder gets a letter to cure from the co-op attorney. The previous boards simply hadn’t enforced the bylaws. Shareholders who wanted rules to be followed had made complaints, which went nowhere. Our new board agreed unanimously to begin enforcing the rules. Some of the old guard were unhappy with this decision. They wanted us to let shareholders slide and not evict one of our own.

After some gut-wrenching discussion, the board agreed that drastic action was needed. Through our attorney, we asked the two artists who couldn’t pay their maintenance to surrender their shares and vacate. In this way, they would receive the balance after their arrears were settled. None of this felt good. As artists, we’re familiar with struggle. As new board members, though, we signed documents promising to carry out our fiduciary responsibility to the corporation. As one shareholder said to me, “When I moved here, I agreed to pay my share of the bills, not anyone else’s.”

One of the delinquent shareholders saw that surrendering her shares was in her best interest after social services secured subsidized housing for her based on existing health conditions. The other shareholder dug in. She ceased communication with management, the board, and the co-op’s attorney. She didn’t pay maintenance for 10 months, and we finally had to evict her. Eviction proceedings and apartment renovations are expensive, and all shareholders lose out when forced to absorb these costs. It was traumatic all the way around.

As artists we can find peace and love within our art, but as board members we have a responsibility to enforce the bylaws for the greater good of all. A co-op full of artists is still a corporation with bills to pay. Creatives who are also shareholders can’t afford to forget that.