History of the ICC Student Co-ops in Austin, Texas

Timeline (mostly ICC)

1936

The first student co-op in Austin forms, the all-male Campus Guild, on the University of Texas campus. Other co-ops form on campus soon after.

1939

ICC forms as a social organization linking the various co-ops, but doesn't own or operate any houses of its own.

1940

• Shangrila Co-op is located at the current site of the UT Alumni Center. (Lesa R. Walker)

• William Henry Raschke founded a co-op food store around 1940 or 1941 that served all the UC co-ops, fraternities, and sororities, until 1983. (Lesa R. Walker)

1941

The Campus Guild moves off campus to 2804 Whitis, constructing their new building largely with their own hands.

1949

Whitehall Co-op is founded, at 2500 Nueces. The wood frame house was built in 1896 by Captain John Harlan, who ran a steamboat on the Colorado River and helped Sam Houston's troops flee in the runaway scrape from Santa Anna's army. To this day Whitehall remains Texas' oldest co-op. (by Trish Callahan, excerpted from the Wheatsville Breeze, March/April 2004, p. 9; see 1973-74 for more)

1950s-60s

Off-campus co-ops continually form in rented houses and then die off. The landlord might raise the rent too much or sell the property, or there would be too much turnover at a house and nobody would keep operating it as a co-op.

Whitehall was operated as an off-campus UT Women's Co-op in the 50s & 60s, with strict curfews and policies about male visitors.

1958

Royal Cooperative forms, but at a different location than where it is now.

1967

• Royal resettles at 1805 Pearl.

• The original Theleme (2402 Seton) burns down.

1970

ICC incorporates (on Jan. 22) with the specific plan of buying property so that co-ops wouldn't keep dying off.

1971

ICC buys its first house, Holloway House, at 2510 Rio Grande, for $60,000, in August &emdash; $5k down payment, and two mortgages ($35k from the UT Ex-Students Association, and $25k from the seller. Today, seller-financing is rare.). Interest rate was 9%. The house was named after Sterling Holloway, an attorney who had helped ICC get started as a house-owning co-op organization. In Nov. 2004 Howard Lenett wrote to me:

"When Ernie Eden was here for the dedication he had an interesting story on how Holloway was also on the board of the UT Ex-Students Association and how he wrangled the first loan for the purchase of the house from the ex-students assoc. because the banks wanted to change a ridiculous interest rate and payment schedule. It was only because of Holloway's wheeling, dealing, and contacts that ICC could buy the house. That was a big reason to name the first house after him. Also, Ernie told stories on how the down payment and closing costs that were put into the orginal ICC houses were often borrowed from the houses themselves as loans since ICC wasn't able to go to other places to go for money. Since some of the houses had already existed and had savings that ICC borrowed from them to purchase the houses."

In 1977 Holloway House was renamed Prana House by its members. (See pics of Holloway.)

ICC gets its non-profit 501(c)(3) tax status.

1972

New Guild. The Campus Guild is condemned, and the Guilders make a deal with ICC: They deed the lot and the condemned building to ICC for $10k on Aug. 31, 1972, in exchange for ICC creating a co-op to replace the Campus Guild. (The sale is signed by Dick Kingsley who was secretary of the Campus Guild, and Ernie Eden.)

ICC then mortgages the property for $40k (note from Austin National Bank, cosigned by Sterling Holloway) and uses it as a down payment on The White House, formerly a private women’s dorm, in August 1972, buying it for $120,000. The is financed by two notes. The new co-op is called the New Guild.

Initial rent is $90/mo. for singles (though another source says it was $865 for doubles for the LT semester, which would be about $93/mo.; it said singles were about $25/mo. higher). There is prepared lunch as well as dinner six times a week. But there were also many more members, since more rooms were doubles.) A year later, on July 4, 1973, the Campus Guild burned down.

1973-74

ICC leases the It Doesn't Matter Co-op at 807 W. 25th St.

In 1974, ICC also purchases Lothlorien, an experiment with a small (7-person) co-op outside the University neighborhood for people who planned to stay around for many years. Many of the first people to live there are staff members, board members, or otherwise very active in ICC. Unfortunately, the original members leave one by one over the years and it is difficult to find replacements. In the summer of 1977 there are only three or four members living there, and ICC sells it in 1977 &emdash; the first ICC co-op to close its doors.

Unrelated to ICC, College Houses gets a DOE loan to build 21st Street Co-op and to acquire the buildings that would become the Ark (now Pearl Street Co-op) and Opsis. (Austin Chronicle, Aug. 4, 1989)

Also unrelated to ICC, in the early 70's members at the women-only Whitehall got a loan from the National Co-op Bank, bought their house, invited their boyfriends to move in (making it one of the first co-ed co-ops), and made it into the independent co-op it is today. (See 1949 for the source for this info.)

1970-75

Most of ICC's houses are acquired. Of the eight houses we had in 2002, ICC buys six them during this time! (The other two: Avalon was leased in 1994, and HoC was purchased in 1981, though it was bought as a replacement for Holloway/Prana House.) Holloway & New Guild were discussed above; we then absorb French House (then Ramshorn, becoming French House in 1977), Helios (then Theleme), Royal, Seneca, and Arrakis into the collective.

Note: After starting out strong, ICC didn't purchase any new long-term houses in over 25 years! (although we did buy some junky apartments that we later sold, more on that later)

1981

House of Commons. In 1977 Holloway is renamed Prana House (Austin Chronicle, Aug. 4, 1989) and is the crazy vegetarian hippie co-op, the HoC of its day. But Prana is old and small (16 members), so in 1981 ICC sells it to a sorority (via Thomas Bullard) and buys 2610 Rio Grande, establishing House of Commons as an even larger vegetarian hippie co-op. (We sell Prana for $180k, three times what we paid for it ten years earlier. Shortly thereafter, it burns down and is now a parking lot for the sorority.)

Though the building isn't up to code, ICC lets new members live there for free in the summer in exchange for their fixing it up to get it ready to open in the fall. The previous year it had been vacant, and before that it was the Crow's Nest, a ROTC house. (The walls are plastered with bullet holes when HoC'ers moved in.) The house is called New Prana briefly until one of the founding members of HoC, John Handy, came up with the House of Commons name, though the reason behind that choice is lost to history. Original members Cedar Stevens and Stuart Gourd started Austin Earth First! at HoC. Cedar, then known as Christi, and a freshman at the time, met Stuart when she walked in and saw him playing the piano naked. (The piano was disassembled and thrown away 20 years later, in 2003.) Cedar now runs Natural Magic, a pagan/wicca shop off North Loop, and Stuart is an administrative law judge. Forrest Jackson, who lived at HoC circa 1982-83, died from heart problems in early 2001.

1983

Bad Expansion. ICC is in great shape financially, with several houses almost paid off, but there is about 25 years of deferred maintenance on the houses. Then ICC (i.e., THE BOARD) buys three small apartment buildings for $1.2 million. They finance it with regular mortgage and borrow against New Guild, Seneca, & Royal, adding $400k of debt to those houses. The 90-95% occupancy isn't enough to break even and we lose $10-20k/year until 1985.

The apartments are:

• 2800 Rio Grande
• Nueces Square Apts. (NW corner of 22nd & Nueces)
• Holloway Apartments (around 25th & Seton)

One of the myths about the 80's disaster is that ICC simply expanded at the wrong time. The numbers prove this is untrue:

(1) The housing market didn't start to go down until 1986, but we started losing money on the apartments as soon as we bought them in 1983.

(2) We initially had 90-95% occupancy, which is not bad, but that wasn't enough to keep us from losing money. In other words, it was nearly impossible to make money on the buildings at the price we paid for them. We simply paid too much for them; we didn't get our money's worth. Our business plan scraped.

(3) The apartments were in poor condition. Some of them still are.

(4) We financed nearly the whole damn thing, with barely any cash down payment. That meant we started with $0 equity, with no cash value invested in the apartments in case we had to sell them (which we did).

(5) We financed by borrowing against existing houses, although those houses already had mortgages on them. That's risky enough, but the amount that we borrowed against three houses -- $400k in 1983 dollars -- borders on insanity.

Sum. 1985

We sell one apt. building for what we paid for it, but don't retire any of the extra debt added to the existing houses. (This is according to Brenda; the debt from the other houses financed the down payment.)

Fall 1985

Brenda Smith comes to work for ICC (and serves as GM for 14 years, until Fall 1999, and then through 2000 as a contract accountant).

1986-87

The Austin real estate market collapses, meaning that overbuilding had caused the housing supply to exceed demand. This means even more vacancies, and nobody would buy our other two apt. buildings. City-wide occupancy is 70%. Vacancies and depressed rent city-wide would continue for a few years.

1987

We finally sell our second apartment building for the exact amount of its debt (the remaining balance on the loan). That means we lose the down payment, which was paid by adding debt to our other houses.  We keep trying to sell the third complex, Holloway Apts. (not to be confused with Holloway House), at increasingly lower sale prices, but there are no takers.

Facing poor occupancy, ICC leases Seneca to a fraternity. It becomes a co-op again in 1989. (Austin Chronicle, Aug. 4, 1989)

1988

Low occupancy means that we're not bringing in enough money to pay the mortgages. We run out of cash, make a bankruptcy plan, and stopp paying the mortgage for three months. The bank might have foreclosed right away, except they were busy foreclosing on everyone else who was in a similar situation.

NASCO forms NASCO Properties in July specifically to buy House of Commons from us in order to bail us out. The cash we get from the sale allows us to catch up on our mortgage payments. NASCO Properties leases House of Commons back to us with a 99-year lease (at the ridiculously low rental rate of $1800/mo.), so we're still able to operate HoC as HoC. But we still can't sell Holloway Apts., and continue to lose several thousand dollars a month.

1989

SPRING: About to run out of cash again, stop paying the mortgage again. The bank starts the foreclosure process. Brenda says she went to the bank and literally bawled openly before the loan officer, who decided to delay the foreclosure.

We finally sell Holloway Apts. in October, for $100k less than its debt and $185k less than we paid for it. We are happy to lose money on it because we'd lose even more by keeping it and having mortgage payments we couldn't afford! We refinance all remaining houses at 7% interest-only payments for 2 years. This kind of loan means that we can't pay off our debt our build equity, but it's the only kind of loan we can get.

French House briefly changes its name to Emerald City. (Austin Chronicle, Aug. 4, 1989)

1990

We start catching up on deferred maintenance, at a rate of about 2-3 years per year.

1992

Room rates go up by $85/mo. (in '92 dollars) to pay for electrical rewiring of the houses and other improvements. $500,000 is spent in the early 90's to bring all of the houses to basic levels of safety and sanitation. (Howard Lenett, 2003)

We refinance our mortgage for 5 years, still interest-only.

1994

We lease Avalon from a local owner.

Oct. 1995

We refinance all houses with a normal 15-year mortgage, $670k debt, 10.388% interest. Our first permanent financing in years, whew! The houses are set to be paid off in 2010, but we'll wind up refinancing in Summer 2001.

1997

We borrow $300k from the National Co-op Bank (NCB) to renovate Seneca in the summer ($150k) and House of Commons the following summer ($150k). The loan is 10.5% interest, interest-only payments from Summer 97 through 9-30-99 ($15k/yr), then $67,608/yr. from 10-99 to 8-05. (We'll wind up combining this loan with our mortgage loan in 2001.)

Seneca catches fire mysteriously in early fall right after the Senecans move in. The cause is unknown, but many suspect that the remodelers improperly wired the attic. Seneca is salvageable but much staff time is taken up by dealing with the insurance company.

1998

A staff member almost persuades the board to close the HoC pool, purportedly because it's too big an expense. HoC members fight back with facts and numbers, there's a member referendum about the issue, and the pool is saved.

HoC is remodeled over the summer. Besides $150k loan, we spent another ~$80k from income. The house re-opens almost a month late because of problems with the architect and the city, coupled with poor management by staff. This left HoC'ers with fall contracts in a bind, who had to find temporary housing elsewhere, often in commons areas of other houses or in other co-opers' rooms. To add insult to injury, a lot of the work wasn't done properly or wasn't done at all. Lost $20k in lost rent from opening late.

1999

ICC hires lobbyists to get the TX Legislature to exempt student housing co-ops from property taxes. This saves us $45k/year in 1999 dollars, or about 5% of the budget.

HoC member Michael Bluejay delivers financial training to the board, the first time in untold years that training is provided by a member instead of staff. He discovers & corrects several errors that were part of previous trainings and therefore ICC folklore. Correct info includes:

• ICC's first house was Holloway, not New Guild.

• The Campus Guild burned down in 1973, not 1971.

• ICC didn't use the insurance money from the Campus Guild fire to buy New Guild, and could not have, since we bought New Guild before the Campus Guild burned.

• Prana was not purchased as Prana in 1972-74, it was purchased as Holloway in 1970 and later renamed Prana.

• Arrakis was purchased in 1975, not 1980.

These facts can be verified by examining the source documents (e.g., official settlement statements) in the ICC office.

After 14 years as ICC’s GM, Brenda becomes an outsourced contract accountant for ICC, and the board hires a new GM, Shelley Earley.

Around this time (I don't know the exact year) UT forced the women's co-ops to move off-campus. This was actually a multi-year process, with X number of co-ops closing each year. The women's co-ops bought a building off-campus but by 2003 it had failed and they merged with College Houses.

2000

There are conflicts between staff and Brenda which the board is unable to resolve. ICC faces the possibility of 100% staff turnover: The board considered plans to let Brenda go, some other staff decided to leave, and the rest of the staff threatened to leave, although staff conflicts were not a factor in at least some of the departures. When the smoke clears, the board agrees to pay $28,000 to buy Brenda out of her contract (i.e., paying her to leave!), Shelley agrees to stay as GM, and by summer we hire: former Royal member Tyra Robertson as our Membership Director, Ann Raber as our Administrative Assistant, Suellen Mittleman as our Accountant, and HoC member Billy Thogersen as our Maintenance Manager.

Brenda's buyout is controversial: some members considered her to be greedy for insisting that she receive the buyout if she left, and in fact we did wind up paying her a chunk of change just to leave and do nothing, but on the other hand, keeping her might have meant losing even more staff, while limiting the whole organization's effectiveness as conflicts continued. It wasn't a black & white issue and there was no clear, correct answer. The main lesson we learned was, do not use contracts for your staff. Having a contract makes it difficult to release staff before the contract period ends.

The 99/00 CO (Cody Koeninger, from HoC) discovers that ICC hasn't put new-member fees into a Development Fund for many years, in violation of the bylaws (Art. XI, Sec. 4). The board resurrects the Development Fund as per the bylaws.

Continuing a fine co-op tradition, Arrakis suffered a fatal fire in December. A member left a faulty toaster on then left the building during the winter break. Amazingly, the board does not have to raise rent more than normal for the next year to compensate.

Spring 2000

The board creates a 5-year plan for savings and expansion. We have to deal with the loss of Arrakis and the potential loss of Avalon since the landlord might decide to stop renting to us some day.

ICC incorporates air conditioning costs into rent rates. Now members get a discount off their rent if they don't use AC, rather than paying an AC charge if they do.

Under the 00/01 CO's leadership (Jaime Bruner, from HoC), the board updates the Bylaws for the first time in ten years. Most changes were minor and served simply to clean things up.

2000-01

In 2000-01, we hire new staff with strong ties to ICC. Billy Thogersen of HoC becomes Facilities Manager, Tyra Robertson (formerly of Royal) becomes Membership Director, and Howard Lenett becomes General Manager, with his office at New Guild being the room he'd lived in as a freshman in 1973!

Spring 2001

NASCO Properties raises the rent we pay to them for House of Commons for the first time since we sold them the property in 1988. The rent goes up $54 to $1854/mo.

The board and members change the bylaws and effect the first major change in board & committee structure in years. The CO job is split into two positions, the Membership & Education Officer positions become two Membercationater positions, the Membercationaters and the Maintenance Officer are no longer board members (so they can actually spend some time organizing instead of being stuck in meetings all the time), and houses can choose to have an ICC officer from their house also act as board rep.

Fall 2001

Major Refinancing. We refinance our mortgage + our NCB renovation loan:
(1) To free up cash in the short term to ease the loss of Arrakis,
(2) To free up cash in the short term so we can pursue more expansion,
(3) To take advantage of very low interest rates,
(4) To release some of our houses from collateral requirements.

We combine the ~$224k left on our NCB renovation loan with the ~$523k left on our mortgage and refinance the ~$737 together at 7.75% for 15 years. This reduces our yearly debt payments from ~$160k to ~$85k, saving us ~$75k/year. Only Royal and French are still collateralized, meaning that we own Arrakis, Helios, New Guild, and Seneca free and clear.

The downside is that there's a 5-year balloon on the note, meaning we can't pay this loan off over 15 years. In 5 years we'll have to either pay off the entire loan balance (which we won't be able to afford) or refinance again.

Spring 2002

For the first time in many years (perhaps ever), the board freezes rent rates for the next budget year (02-03), in hopes of improving occupancy after a disastrous Spring (with occupancy in the 80% range).

Increased Staff Expenses. The board increases expenses by changing the 30-hr/wk receptionist position to a 40-hr/wk Office Manager position.

Unified Savings Policy. Existing policies for the Capital Reserves and Development Fund are combined, along with a proposed policy for a Capital Reserves Fund, into a unified Savings Policy.

House Accounts. House accounts changed from "Discretionary & Bonus" to the easier-to-understand "Checking & Savings".

Arrakis Reconstruction. The board finally commits to rebuilding Arrakis after its fire in Dec. 2000. Reconstruction loan is $617k, 20 years, 5-year balloon. We expect to open for new members by Summer or Fall 2003. Construction and permitting delays mean that it doesn't actually open until Jan. 2004.

New Guild Mini-Renovation. With occupancy at the New Guild at only around 20% for the Fall, the board decides to close the Guild for the summer for a mini-renovation to make emergency improvements to make it more attractive to potential members. This angers many Guilders who are displaced for the summer, some of whom graffiti the office door and deface the ICC sign.

HoC Rent. NASCO Properties raises the rent we pay to them for House of Commons for the first time since we sold them the property in 1988. The rent goes up $75 to $1875/mo.

Compensation for Coordinators. After years of non-interest among the membership in running for ICC-wide officer positions (now called coordinators), the board decides to compensate officers by letting them live in ICC free in the following summer, one free month for every semester they serve as an officer.

2002-03

Summer 2002 Staff Reorganization: Old way: Tyra Robertson as Membership Coordinator, Danita Lee as Office Manager. New way: Shebah Washington as Member Services Admin., Danita as Housing Admin. Saves $10k/year.

Under 2002-03 leadership occupancy is good, members become much more active, and ICC improves financially.

The board buys the first new house (1910 Rio Grande) since the purchase of Arrakis in 1975. We refinance our existing $700k loan with $500k for 1910, making our debt $1.2M. Add the $600k from the Arrakis rebuild loan and our total debt is close to $2M. Yikes. We can afford it w/good occupancy, but that's a big, scary amount of debt. Good news: Interest rates are phenomenally low. (We get 6.5%.) Bad news: Because interest rates are so low, bank insists on a 5-year balloon. (They'll expect us to pay off the entire balance in 5 years, which we can't do, so we'll have to refinance again.)

Officers are now called Coordinators, staffmembers are now called Administrators.

Members back a board plan to make all room rates the same (no more small, medium, & large).

The board eliminates all occupancy bonuses, leaving no way for houses to grow their Savings accounts, besides saving a portion of their food money, although ICC hasn't raised the food allotment in years.

2003

When UT forced the Women's Co-ops off of campus the women's co-ops bought a building (Halstead, next to Arrakis on Pearl Street) and went forth with a new name, Student Heritage Houses Inc. But limited financial resources and poor occupancy hurt them, and in 2003 SHHI sold Halstead to College Houses. Though the building remains a women-only co-op, the transfer ends decades of the women's co-ops existing as an independent entity.

2004

Arrakis re-opens on Jan. 30, after having been rebuilt following the Dec. 2000 fire. (more on the cost of rebuilding Arrakis...)

Sandia Co-op dies as the rented building it's in at 602 Elmwood is sold by the owner. This is the exact kind of thing that ICC prevents by owning its own property. (May)

Academic-year contracts. To address problems of poor Spring occupancy and high turnover, the board requires nine-month contracts (i.e., no more "Fall-only" contracts). Several members petition to overturn the decision, but the members vote overwhelmingly to keep the nine-month contracts—possibly in part because the board says that room rates will go up substantially if the proposal doesn't pass. (more...)

New Guild goes non-smoking. After many years as being the only house to allow smoking in commons areas (much to the dismay of the board which felt that that made it harder to get new members to move into the Guild), Guild members decided by themselves to go non-smoking. Smoking is still allowed in the TV room but only with the door closed.

• Big Loan: $1.17M, 20-year amortization, 6.5% for five years, annual payments of ~$106k, and a balloon in five years.
• Arrakis Rebuild Loan: $616k principal, 20-year amortization, variable interest rate starting at 7% (1.5% over prime at closing, fixed for 3 years, with a cap of 8%, and then fixed for another 3 years, but the balloon will be due first at 5 years), initial annual payments of ~$58,146, 5-year balloon

New way: $1.8M principal, 15 years, 6.35%, no balloon. Yeah!

• ICC gets a $243k loan (15-year) and a $275k loan (3-year balloon) from the bank.
• We use the $243k to buy back HoC from NP, and we loan NP the other $275k.
• NP uses that $275k to buy Sasona, an independent co-op in Austin, to save it from being foreclosed on. ICC's loan to NP is secured by a lien on Sasona.
• When NP owned HoC, NP had loans from ICC-Ann Arbor and from Madison Community Co-ops secured by HoC. After this new deal went through NP paid off Madison, and got ICC-AA to secure their loan through a second lien on Sasona instead of on HoC.

As the ICC chief of staff summed up this deal, "Everyone gets more equity and co-ops help co-ops."

Around the 60s/70s the buildinrg was known as Stag, then Halycon circa the 80's, then Prentiss circa the 90's. ICC bought it in 2003 and its new members decided to call it "1910", after its address (1910 Rio Grande).

2007

Per policy, the board must re-evaluate the Cash Reserves policy this year and every 5 years thereafter.