Tuesday, August 13, 2013

Executive Who Helped Give Birth To Campus Crest Steps Away From House He Built With Ted Rollins

Mike Hartnett and Ted Rollins, when
Campus Crest was founded in 2004
The No. 2 executive at Campus Crest Communities, behind only CEO Ted Rollins, is stepping down, according to a recent report in the business press.

Mike Hartnett, chief investment officer and co-chairman of the board, is beginning a gradual process to step away from the company, Yahoo! Finance reports. Hartnett and Rollins co-founded Campus Crest in 2004, and it has developed some 40 student-housing complexes near public universities around the country.

The news has special significance at Legal Schnauzer for two reasons: (1) Campus Crest has properties near four universities in our state (South Alabama, Troy, Jacksonville State, and Auburn), with plans to build one in Tuscaloosa at the University of Alabama; (2) Ted Rollins played a central role in Rollins v. Rollins, a divorce case unlawfully decided in Shelby County and described here as the worst courtroom cheat job we've encountered in the civil arena.

Here is how Yahoo! Finance describes Hartnett's plans:

On August 5, 2013, Campus Crest Communities, Inc. (the "Company") and Michael S. Hartnett, Chief Investment Officer and Co-Chairman of the Board of Directors, entered into an Amended and Restated Employment Agreement (the "Amended and Restated Employment Agreement"). Pursuant to the Amended and Restated Employment Agreement, Mr. Hartnett will relinquish the title and role of Chief Investment Officer and Co-Chairman of the Board of Directors on October 19, 2013. Effective October 19, 2013, Mr. Hartnett will commence a three year term of employment during which he will serve as the Company's Vice-Chairman, Special Projects. Mr. Hartnett will remain on the Board of Directors through the expiration of his current term and will not stand for re-election to the Board of Directors at the 2014 annual meeting of the Company's stockholders.

What does Mike Hartnett's exit mean? The answer to that question remains unclear, but our Campus Crest-connected sources in Alabama were shocked by the news. One of those sources is Birmingham resident Sherry Carroll Rollins, who was married to Ted Rollins when the company started. She says Hartnett was more or less the conscience of the company, and his departure almost certainly is a sign of conflict and upheaval.

Campus Crest seems to have a solid bottom line, and it recently announced plans to dip a toe in international waters, with plans for a student-housing complex in Montreal. But the company continues to be plagued with complaints about shoddy construction, faulty utilities, and other operational problems. (Here is an example from the student newspaper at the University of Northern Colorado.)

Rollins recently entered the market in State College, Pennsylvania, home to the Jerry Sandusky child sexual abuse scandal at Penn State. That was a curious choice, given Rollins own documented ties to the physical abuse of his stepson, plus an investigation for child sexual abuse of the same stepson, based on a complaint from an anonymous citizen in North Carolina.

The choice becomes even more odd, based on recent press reports in Central Pennsylvania that some 21,000 individuals associated with Penn State have been subjected to background checks in the wake of the Sandusky scandal--and that process is ongoing. Will Ted Rollins be the target of a background check, and if so, will he pass it? Not if it's done by someone with even a sliver of competence.

Is Mike Hartnett distancing himself from some of the problems bubbling beneath the surface at Campus Crest Communities. Sherry Rollins, in an e-mail to us, says the answer probably is yes:

If Mike Hartnett is getting out, it is because, as I have often suspected, he has a conscience. He has one daughter (graduated SMU) and a nice wife, Terry. I would imagine he would rather stay home and spend his fortune slowly and carefully than continue with the tomfoolery of Ted Rollins. And I suspect he might be concerned about his reputation. . . .  Mike was reared by caring , nice parents in Maine. He is not from the same background as Ted--and it's good that he isn't. Something must have really [conflicted with] his morals.


Anonymous said...

Sounds like trouble in paradise at Campus Crest. Can't be good news when the cofounder bails out.

Anonymous said...

Looks like Hartnett is taking his sweet time about hitting the door. Wonder what that's about. Trying to make it look like a "mutual decision"?

Anonymous said...

Campus Crest is going to build in Montreal? Gee, the Canadians ought to be thrilled about that.

Anonymous said...

Penn State has done 21,000 background checks? That sounds like a bunch. Who is involved?

legalschnauzer said...

Anon at 2:19--

The background checks were part of the recommendations that came from the Sandusky-related investigation by former FBI director Louis Freeh. According to published reports, the checks are focusing for now on Penn State employees, contractors, and volunteers. It sounds like they eventually will include just about everyone affiliated with the university in any way.

Anonymous said...

I'm sure Hartnett is leaving because of "philosophical differences." Oh wait, maybe he "wants to spend more time with his family." Either way, nothing to see here. Move along.

Anonymous said...

If I were Ted Rollins, I would "skip school" the day they were conducting background checks at Penn State.

Anonymous said...

Anonymous@ 3:19 pm: I absolutely hate it when this person writes in and backs up Mr. Rollins at every chance and usually ends by saying: "nothing to see here, move along"....its really getting boring, your catch phrases. And are you "sure" the differences between Rollins and Hartnett were philosophical? If you are so sure, then why don't you share with the rest of us? Try to convince us how ethical and sound Ted Rollins judgement might be and how he is qualified to run a publicly traded company. Please enlighten us and stop telling people what to do.

legalschnauzer said...

I'm not qualified to speak for @3:19, but the use of quotation marks makes me think the commenter is being sarcastic and/or ironic. I took the comment to mean that there really is something to see here, and this was a humorous attempt to make that point. I hope @3:19 will correct me if I'm wrong, but I took the comment to be a poke at Rollins and Hartnett, not a statement of support.

Anonymous said...

Maybe the man has a conscience and knows what is going on and can't be a part of it.

Anonymous said...

WTF is going on in this country? It shouldn't have taken this guy this long to part ways with this pedofile! He can't be this stupid and slow.

e.a.f. said...

He has most likely always known about Rollin's act. However, now that there is more focus on Rollins and his act, Hartnett has decided to start looking for an exit strategy, but not too quickly just in case nothing goes sideways.

Campus Crest will first have to learn to speak French. Nothing much gets done in Quebec without speaking French. This could be fun. The province is also in the mist of a large corruption investigation into the construction industry. Rollins might find he has more than he bargained for.

legalschnauzer said...


As always, thanks for the comment. Campus Crest and a partner are purchasing a hotel in downtown Montreal and converting it to student housing. The property is near three universities. I guess it will be more of a remodeling job than a ground-up build job, but still seems part of construction business. Interesting about the corruption inquiry in Quebec. Is this story part of what you reference?


e.a.f. said...

Yes the Charboneau inquest. For english readers there are english newspapers in Montreal. However, a very good source of news, for all of canada is C.B.C. News.

there had been a system of "kick backs" to politicians in the awarding of contracts, the usual sort of thing. However, it got to a point not even Quebec could put up with it anymore. Hence the enquiry. Quebec has a provincial police force and it is they who started the enquiry.

The current Premier of Quebec is very much what we call a "sepratiste". However, in the past "seperatiste" premiers provided very good government. The only think I objected to was their wish to leave Canada.

legalschnauzer said...

Thanks for your insights, e.a.f. One of my goals is to be able to visit your fine country one day. (Huge Guess Who fan here: Love Burton Cummings, Randy Bachmann and the boys. Amazing that all that talent came from the prairie town of Winnipeg.) Sounds like the corruption in Quebec mostly involves public works projects?