Monday, January 31, 2011

LAWSUITS, COMPLAINTS GROUNDLESS: Campus Crest founders claim

In part four of our series, Campus Crest leaders defend company, reject claims

COLUMBIA, 1/31/11  (Beat Byte) --  Lawsuits claiming racial discrimination, sexual harassment, and hostile working conditions are "groundless and without merit," Campus Crest Communities CEO Ted Rollins (left) told the Columbia Heart Beat in an in-depth interview. 

With Campus Crest co-founder Michael Hartnett (right), Rollins also discussed nationwide customer service problems and contractor payment complaints.

"As with any business, it's impossible to satisfy all your customers, although we try our best," Rollins explained.  "We believe the quality of our buildings is outstanding, and even superior to that of our industry peers." 

The North Carolina-based student housing developer/manager will present plans at upcoming Columbia City Council meetings to build a 632-bed apartment complex on the corner of Rock Quarry Road and Grindstone Parkway.  Meanwhile, Campus Crest is battling Federal employment lawsuits, Equal Employment Opportunity Commission (EEOC) complaints, and a growing chorus of bad publicity around the nation. 

"There are two sides to every story, and we're confident the truth will prevail," Hartnett said.

 Prevailing truth 

Racism, sexism, and wrongful termination are among several claims pending against Campus Crest and its subsidiaries. 

Basic to their wrongful termination charges, plaintiffs Heather McCormack and Nicole McAuliffe allege that Campus Crest officials ordered them to behave fraudulently in 2009, to investors and potential student tenants.   

McCormack claims she was ordered to "falsify an apartment occupancy report in connection with the sale of the property to one of Defendant’s investors, Harrison Street Real Estate Capital."  When she refused, McCormack allegedly overheard Campus Crest construction director Bryan Sharpe say, "Heather is not a team player.  We need to get that c--t out of the building."   A month and a half later, she was fired. 

"Regardless of whether the apartment buildings would be ready for occupancy by the beginning of the academic term," three different Campus Crest officials allegedly pressured Nicole McAuliffe "to bring in as many signed leases as possible, irrespective of whether they had to misrepresent the state of construction or readiness of the apartment buildings."  A few weeks after McAuliffe refused, she too was terminated. 

Hartnett, who with Rollins founded Campus Crest in 2004, said he "fully rejects the accusations."

"Claims of this nature are not at all uncommon in today's society," Hartnett told the Heart Beat.  "We have more than 500 employees, and we are very proud of our track record.  We are pleased with the way we've been able to cultivate a corporate culture that is conducive to serving our customers and growing our business." 

Liens and lawsuits 

Liens and lawsuits from building contractors alleging non-payment are old news, Ted Rollins told the Heart Beat.  "During that time, the real estate industry was going through one of its most difficult periods in history," Rollins explained.  "We are very proud to say that we successfully navigated through that national financial crisis, and every subcontractor was paid in full."

Slow financing and lack of access to capital, Rollins emphasized, were problems Campus Crest largely resolved this past October, with a widely-reported initial public stock offering (IPO) that raised more than $350 million.   The firm trades on the New York Stock Exchange under the symbol CCG.  

"One of the advantages of being a public company is our ability to access capital," Rollins said.  "Together with the funds generated from our IPO, this access ensures we are well positioned to fulfill all our financial obligations going forward."  

Industry superiority 

Tenant complaints about poor quality construction and broken lease promises "represent just a small fraction of the approximately 12,000 students who currently live in our communities," Mike Hartnett explained.  

"The fraction gets even smaller if you take into account the thousands of additional students who left our properties after graduation," he told the Heart Beat.  "While we take all complaints very seriously, we don't believe this small faction paints an accurate picture of what our company and our communities are about.  We have thousands of very satisfied residents, but it is understandably not typical for people to be as outspoken when they are satisfied."

Leasing rates, Rollins explained, are on the upswing for the 2011-2012 academic year.  "Students find places to live by word of mouth endorsement," he said.  "The fact that our leasing rate has improved over the past year illustrates that our renters are satisfied with our communities and the services we provide, and they're telling their friends about us." 

For concerned members of nearby communities, Campus Crest, Hartnett maintains, uses "top-quality materials", and "ongoing research to improve our design structure," all in an effort to benefit "not only our residents but the surrounding community and the environment."   


The Campus Crest Controversy

Part One
Part Five

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