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Wednesday, April 3, 2013

Campus Crest Remains A Major Hit On Wall Street, But The Firm Is A Dud With Its Unhappy Customers

Copper Beech Townhomes
A growing body of evidence suggests Campus Crest Communities is a poorly run company that turns out an inferior product. But that hasn't kept similar companies from cutting deals with it--or Wall Street investors from throwing dollars at it.

Do corporate big dogs see something in Campus Crest that everyday consumers can't see? Is the investment world unconcerned about the company's questionable ethics and shaky operations as long as the bottom line produces favorable numbers?

The answer to both questions appears to be yes. But perhaps its time investors put themselves in the shoes of employees and customers who have seen the real-world view that Campus Crest has successfully hidden from Wall Street.

Charlotte-based Campus Crest has developed student-housing complexes, under The Grove banner, near some 40 public universities around the country. The company is of special interest here at Legal Schnauzer for three primary reasons: (1) It has Grove sites operating or planned at four Alabama institutions (South Alabama, Troy, Jacksonville State, and Auburn); (2) CEO Ted Rollins played a central role in a Shelby County divorce case that caused his ex wife, Sherry Carroll Rollins, and their two daughters to wind up on food stamps; (3) Campus Crest's chief corporate law firm is Birmingham-based Bradley Arant.

We have reported, along with the mainstream press, on all sorts of operational problems at Campus Crest. Those include discrimination lawsuits at corporate headquarters; a balcony collapse that led to serious injuries in Denton, Texas; and mold, heating, and water problems at Orono, Maine.

For good measure, we have reported extensively on Ted Rollins' personal ethical lapses--including a conviction for assault on his 16-year-old stepson, an investigation for child sexual abuse of the same stepson, and perjury in his Alabama divorce case.

If the business community is concerned about any of this, it's hard to tell.

First came reports that Campus Crest had reached agreement to acquire Copper Beech Townhome Communities, which has been a major player in the student-housing sector for about 20 years. Lawyers from Bradley Arant helped orchestrate the transaction. Here is what made Copper Beech an attractive target for Campus Crest:

Copper Beech, which was founded in 1994, is the fifth largest student housing operator in the United States, with a portfolio of approximately 16,645 beds. For 20 years, it has been a vertically integrated developer, owner and operator of a unique, market-tested, branded town-home student housing product. The Copper Beech portfolio consists of 35 student housing properties, including two phase II development properties scheduled to open in fall 2013, plus one undeveloped land parcel in Charlotte, NC and Copper Beech's corporate office building in State College, PA. Copper Beech has utilized its vertically integrated platform to develop 30 of its 35 properties. As of February 13, 2013, the operating portfolio had an average occupancy of 98.5%, marking three consecutive years with occupancy levels in excess of 98%.

Then came news that Campus Crest had closed on a $300-million stock offering, designed primarily to fund investment in the Copper Beech portfolio. By our unofficial count, that brings Wall Street's total investment in Campus Crest to about $730 million.

All of this comes with a load of irony. Copper Beech is based in State College, Pennsylvania, and its founders and CEOs are John and Jeanette McWhirter. In 2010, the McWhirters were among the largest donors to Penn State University.

Why is that ironic? We will examine that question in a series of upcoming posts.

(To be continued)


Anonymous said...

Copper BEECH.....not BEACH.

Anonymous said...

Why is that ironic? Maybe because the stench of pedophile is all around Penn State and Campus Crest?

Anonymous said...

Fagus Sylvatica is the botanical name for the Copper Beech tree. The most famous copper beech trees are on the lawn of the home of Winslow Homer and in England in Kew Gardens. They are mentioned in one of the Sherlock Holmes mysteries as a source of light in the evening when the copper leaves give off their light and glow.
When all the young saplings and weak branches are pollarded and removed the main tree will grow upward to heights of 140 ft.
Broken young branches so that the main tree can reach its highest heights, Penn State, Jerry Sandusky, Joe Paterno, football; did the young "branches" have to be destroyed for the common good of the team, the school, and large endowments. What were the first owners of Copper Beech thinking when they named their company "Copper Beech"? Were the children of the poor sacrificed for the most important things at Penn State...football and egos? Did the McWhirter's dollars finance the use of young boys for Sandusky's needs? The Copper Beech tree shudders.

Anonymous said...

I have to say that the Copper Beech apartments are a far better product than the Grove of Campus Crest.
Maybe Campus Crest/Ted Rollins purchased this company to give their company a better name and clean up their image.

Anonymous said...

Ah, irony indeed. Ted Rollins is doing business at the home of Jerry Sandusky.

legalschnauzer said...

Anon at 7:16--

My mistake on the spelling. Thanks for being a good copy editor. I've fixed the error.

Anonymous said...

Are officials in State College asleep at the wheel? Given what has gone in their community for years, did they bother to check on Ted Rollins' background at all?

legalschnauzer said...

Anon at 9:27--

Thanks for background on the Copper Beech tree. Fascinating. I wondered about the derivation of an unusual name.

TLR said...

Wall Street seems to be a personal ATM for Rollins family. Wish I had one.

legalschnauzer said...


We all could use one, couldn't we?

Anonymous said...

This Just In: I just heard through the Rollins grapevine that Ted Rollins is purchasing a $23 million dollar Gulfstream V for himself . Those $300 million dollar stock raises must be coming in handy.

His ex wife and daughter ride in a beat up subaru with a broken windshield, tires purchased by a sister, and without a current tag. Ted Rollins and Holly Rollins elect to ignore the tag purchase for this car each year as he and the new missus are the OWNERS of the beat up Subaru that they refused to simply give to Sherry Rollins as promised in some sort of negotiation. Over the past 5 years Ms. Rollins racks up at least 3 tickets peryear for having an expired tag. Then she is held accountable to the courts for the $200 dollars for each ticket. All the while Mr. Rollins finds that his Falcon 10 jet is just not good enough or quick enough or LARGE and impressive enough for a man of his worth and place in the world.

I am told that he recently took his daughter, Sarah on a trip to Santa Fe with him where she was made to travel by commercial planes , economy class and had layovers for an all day travel schedule on Easter sunday . I wonder when one decides that the seat for his daughter, who is 19, and time spent flying is just good enough for her but not for him and the third Mrs. Rollins? The third Mrs. Rollins who prior to her marriage to ted rollins, resided in a small house on a bad side of town in Greenville, S.C., driving an old beat up SUV , now finds that she too is too good to fly commercial. I am sure from what I know of this couple that they now feel that they need a Gulfstream to reach that next level of success and to command some" major sucking up" from their constituency and "friend" list. They are both pathetic excuses for parents who gave up parenting for the big life for themselves and are embarassment to themselves and their children.

legalschnauzer said...

So Ted Rollins can buy a new jet, but he pays $500 a month in child support, if my memory is correct?

A class act, certainly worthy of Wall Street support.

Anonymous said...

Maybe it'll crash in a field with only he and the 3rd Mrs. Wouldn't Karma be grand!

Anonymous said...

Maybe the Penn State donors liked the name Fagus sylvatica (the proper name for copper beech trees) as the name of the company. Sorry, referring to the name of the Copper Beech tree and wondering what meaning it had for the McWhirters who chose it. Still thinking.

Anonymous said...

LS: I am wondering what happened to Ted's oldest daughter, Sarah's, career at Sewanee, University of the South. She was telling people in Birmingham that she loved the school. Now she is living in one of his apartments and not in college at all. Do you think he got tired of paying the tuition and arranged for her to not enjoy it anymore? Does this CEO with very expensive college degrees care if his daughter has a college degree from a fine university? Does he maybe need her tuition money to fund the Gulfstream V I just read about on your blog?

legalschnauzer said...

Anon at 1:10--

Good question about Sarah Rollins. My understanding is that she was doing very well at Sewanee, loved the school, and then she withdraws. I also hear her father has unpaid bills from Sewanee. Not sure how that happened--perhaps it's been cleared up by now, not sure.

I do know that Sarah Rollins possesses a trust account, set up by John Rollins Sr. (her grandfather, Ted's father), and she knows nothing about it. It's been kept from her completely, and she's 19 years old. Has someone raided her funds, without her knowledge?

This reminds me of the ongoing ATL lawsuit involving the children of Gary Rollins, who were treated in a similar manner. The Rollins big wigs have a tendency to "eat their young"--or at least conceal/steal from their young.

Sarah Rollins probably has enough money, of her own, to go to any top-notch university in the country. But she's not enrolled anywhere at the moment. Her father wants her to go to massage school.

We know Ted Rollins physically abused his stepson, Zac Parrish. Is this a form of abuse against his own flesh and blood, Sarah Rollins? I guess Emma Rollins, age 15, will be next in line.

Anonymous said...

Haven't there been stories about Jerry Sandusky procuring boys as sexual playthings for big Penn State donors?

legalschnauzer said...

Anon at 2:13--

Yes, here is one such story from Huffington Post. PA radio host Mark Madden has been out front on this story.


Anonymous said...

WTH??? If my father treated me and my sister and mother like this piece of s*** treats his family no way would even talk to him on the phone much less go on a trip with him. Have they lost their mind. Sleeping with the enemy?

Anonymous said...

You should see how badly the IUP Grove complex in Indiana PA was at move in. drywall plaster everywhere-no door knobs, no aprartment numbers-etc.

Now-The cable has been cut off for days and they keep saying its a part they don't have...

Then they brought the manager from the local Copper Beech complex in to manage- he cut off the internet because students didn't pay electric bill within days of receiving them. Said it was company policy-
Oh yeah and he gave all copper beech residents access to the grove amenities for $10 a month...

Unknown said...

This company Campus Crest, is the absolute worst leasing company, maybe any company I have ever dealt with. While I lived there, I had multiple issues with payments, none of which were my own fault. They entered a $500 payment as $50, and even after I showed them proof, they promised to fix it, that was over a year ago, and still say I owe that $450, they also tried to tell me that leases are "implied" so even if you do not sign a new lease after a year, you are bound by a lease... they also over charger me for about a year, as I was supposed to move into a larger apartment, they decided to move someone else into the apartment, but charged me for the larger apartment, despite the fact that I only ever lived in a smaller unit. STUDENTS BEWARE!!! PARENTS BEWARE!!! AND INVESTORS BEWARE!!! A company that treats there customer's like shit... will not have customer's for long. Especially when their customers are forced to seek legal action. Seriously... the WORST company I have ever dealt with, HANDS DOWN!

Anonymous said...

Campus Crest/Grove Apartments are a HUGE ripoff. Say for instance you decide to change schools/have an illness and can no longer stay, you still must pay rent. Even if you never moved in. They don't even try to let you pay a small fee for breaking a contract. I had to pay 5700 dollars for an apartment I never even lived in.