Growth Over All

April 16, 2015 10:49 AM

Journalist Felix Salmon brings us up to speed on the increasingly strange and complicated saga of The Cooper Union School For The Advancement Of Science And Art, one of the last historically free schools in the US for Art, Architecture and Engineering, which may be brought down by shameless trustees, incompetent management, the State Attorney General, or pure greed. (Cooper Union charging tuition previously. Cooper Union students occupying the president's office previously)
posted by The Whelk (21 comments total)

An article by Salmon from a couple days ago on Cooper Union"

Even by the ultra-dysfunctional standards of Cooper Union, however, the current situation there is surely at an all-time low. And there’s really no indication whatsoever that this wonderful and storied institution is going to be able to rebound from its current crisis.
posted by GuyZero at 10:58 AM on April 16, 2015

That first article is from 2013, right?
posted by smackfu at 11:00 AM on April 16, 2015

I made a mistake and GuyZero's link should've been first, one second
posted by The Whelk at 11:01 AM on April 16, 2015

Mod note: Swapped in the correct link.
posted by LobsterMitten (staff) at 11:06 AM on April 16, 2015

While I'm generally not for a libertarian survival of fittest approach i have to ask. If Cooper Union has a ultra-dysfunctional standard why does it had the privilege to continue to exist?
posted by Agent_X_ at 11:24 AM on April 16, 2015

You mean, why should a handful of maroons bring down an institution that educates people for free?
posted by zippy at 11:26 AM on April 16, 2015 [10 favorites]

In high school, in the 90s, I had a teacher who went to Cooper Union and spoke of it in a somewhat revered tone as a place of incredible intelligence, commitment, and output.

It's a shame that it was clusterfucked by assholes. Because it sounds like it can't get unfucked.
posted by entropone at 11:27 AM on April 16, 2015 [1 favorite]

Throw all of them out. They created an utterly foreseeable disaster and then acted horribly in pursuit of fixes.

A pattern I keep seeing over and over again, and Cooper Union is no exception, is non-profit orgs building massive shiny new buildings and then going near bankrupt (or actually bankrupt) when they discover how much it actually costs to maintain them and fill said spaces with quality programming––you know, the purpose of the organization in the first place. A thriving organization hires up the most expensive fundraising consultants it can buy, sells the naming rights to everything in sight, extracts big pledges from every wealthy donor in the community, hires a big name architect, and is soon shocked to find that there's nobody left to donate to the "John Smith Pay The Electric Bill Fund" or the "Michael Scott Endowment For Custodial Services." But people like building shiny new buildings and they don't like donating to pay operating expenses, so it keeps happening.
posted by zachlipton at 11:30 AM on April 16, 2015 [15 favorites]

As the chancellor of Berkeley, Chang-Lin Tien, once said, "everybody wants his name on a new gym, and nobody wants his name on the PG&E bill."
posted by Harvey Kilobit at 11:41 AM on April 16, 2015 [11 favorites]

"everybody wants his name on a new gym, and nobody wants his name on the PG&E bill."

So why don't they start naming facilities after people who donate towards operating expenses?
posted by bardophile at 11:53 AM on April 16, 2015 [3 favorites]

There is also somewhat of a nasty rumor going around that the new facilities where not ....built in good faith.
posted by The Whelk at 11:59 AM on April 16, 2015 [3 favorites]

What do you mean, The Whelk?
posted by indubitable at 12:10 PM on April 16, 2015

That the building may have been proposed to throw business to contractors, not improve the school's capacity.
posted by The Whelk at 12:12 PM on April 16, 2015 [4 favorites]

That the building may have been proposed to throw business to contractors, not improve the school's capacity.

This is highly probable; only the competing hypothesis that it was done to generate loan fees and interest payments -- made more credible by bad rates and absurd prepayment penalties -- keeps it from being a virtual certainty.

(and it's nice to finally have a comment that doesn't sound like one of the crew of the good ship Lollipop on long-delayed shore leave.)
posted by jamjam at 12:25 PM on April 16, 2015 [3 favorites]

If I understand correctly, the school actually lost 33% of space with the new building.

But hey Ugly Betty got to film on the staircase.
posted by The Whelk at 1:00 PM on April 16, 2015 [1 favorite]

I have a model I apply to boards and administrators when their actions seem contrary to the interests of the institution or organization they run, and it's this. Board members and CEOs get where they are by trading and gaining influence, much of this in the form of favors.

You can have someone who is not good at anything but trading and gaining influence win the system and become a board member. Maybe they were born connected. Maybe they spent their entire life working on connections. Maybe they bought connections. Maybe they're just really likable and fun to have around, but incompetent.

So, you get a majority of these people on any board, and they use their position as they've used every other position, not necessarily for direct financial gain, but to accumulate more power, more glory, more whatever.

Or alternately, they got where they are by making a series of gambles with other people's money and coming up correct through sheer luck. Over their career, n-1 coin tosses came up right, so they're a winner. Then they fail on the nth coin toss, and it's their last.

Whatever the case: this board seems by all accounts except its own to have monumentally fucked up, and I want to say 'you know, not only are they personally liable for their fuckups, but because this was so INSANE, the loan should be undone.'

Because fuck, if we can bail out the investment banks, we should be able to bail out an institution that actually does good.
posted by zippy at 1:58 PM on April 16, 2015 [5 favorites]

And I mean, I know the board was faced with rising costs and a reduced endowment, but they had a guaranteed income stream that would cover all their expenses with a surplus. And then they borrowed 30 million more than they needed for the building and invested it in hedge funds. A guaranteed cost of 5.875% (the loan) plus 2% (hedge fund overhead) meant they had to do better than almost 8% on their investment just to break even.

I don't even.
posted by zippy at 2:26 PM on April 16, 2015 [4 favorites]

I know they didn't directly invest the loan money into the market, but by using the loan instead of the endowment to pay operating expenses, and then putting the endowment money into hedge funds, that was the equivalent of putting the loan money into risky investments.

I'm going to breathe deeply now. I'll be fine.
posted by zippy at 2:30 PM on April 16, 2015 [1 favorite]

Metafilter: the crew of the good ship Lollipop on long-delayed shore leave
posted by just another scurvy brother at 3:40 PM on April 16, 2015

Misplace $100 from the till while working retail and you might face criminal charges.

Squander $10 000 as a middle manager and you might get fired.

Deliberately misdirect 100 million dollars and you get 18 months of continued employment or a golden parachute.
posted by justsomebodythatyouusedtoknow at 4:34 PM on April 16, 2015 [3 favorites]

Well it's an issue of who's watching the watchers - if the university board appoints a kleptocrat as president and then continues to support him, welp, then that's that.
posted by GuyZero at 4:53 PM on April 16, 2015