Facing the fallout

Photo by Robert Noles

After closing Roundhouse Dec. 14, owner Kyle Sandler faces financial misconduct allegations, has criminal history

By Rebekah Martin
Associate Editor

Billed as a startup accelerator and coworking space for tech-based entrepreneurs, the Round House was supposed to serve as a hub for Opelika start-ups. The incubator, which first opened in the old depot on South Railroad Avenue in January 2015, was permanently closed Dec. 14. Its founder, Kyle Sandler, now faces allegations of issuing bad checks and breaches of contract, and Sandler is no novice to the charges.
Dubbed a “serial entrepreneur” in a 2012 article in “Ignite Alabama,” Sandler’s background includes a litany of breach-of-contract disputes and financial mismanagement.
Accusations of fraud go as far back as 2008, when Sandler owned and operated First Carolina DJ’s in Greensboro, N.C. Multiple complaints submitted to InsiderPages.com assert that Sandler booked deejaying jobs and accepted payments but never rendered services. Similar complaints were submitted to ripoffreport.com and weddingwire.com in 2010 and 2011.
Sandler has criminal records dating back to the ’90s, when he was convicted of multiple counts of theft in Montgomery County, Md. He was convicted of 14 felony forgery and uttering forged papers charges in 2010 in Guilford County, N.C. According to the North Carolina Department of Public Safety, Sandler received probation in all these cases.
According to a 2013 transcript of a newscast by WREG News Channel 3 in Memphis, Tenn., the Everywhere Else Conference, a start-up conference sponsored by FedEx and managed by Sandler, lost FedEx’s sponsorship because Damien Echols, a convicted murderer, was asked to be the keynote speaker. In an April 10, 2014, article, the “Memphis Daily News” reported that Everywhere Else was set to return to The Bluff City after its inaugural year was plagued with problems. The article said Sandler was pushed out of the 2013 conference because of “problems with vendor payments, an unscheduled shift in venue and programming aspects that caused … FedEx to pull out.”
In a May 2015 article in Business Alabama magazine, Sandler said he was Google employee #240 but left the company after eight years. According to Google, the company has no record of Sandler’s employment.
An article coauthored by Auburn University’s David J. Ketchen, Jr. and Sandler asserts that Sandler spent time as the “entrepreneur-in-residence” at the Auburn Business Incubator connected with the Auburn Research and Technology Foundation before founding Round House. Cary Chandler, the current business director of the foundation, said Sandler was only a tenant at the incubator. “The only association Mr. Sandler had here was as a tenant in the Auburn Business Incubator,” Chandler said in an email. “We do not have now, nor have we ever had, the position of entrepreneur-in-residence at the incubator.”
Days after Round House closed and the logos were removed from the windows, Sandler wrote in a Facebook post that any questions related to Round House should be directed to John Sweatman, who is the chairman of the advisory board for the permanently-closed incubator. Sweatman said the board has no official comment on Sandler or the future of Round House.
In Sandler’s post, he offered apologies to those his actions have harmed. “Please turn any attention and support to those that my actions have hurt, people who are rebuilding themselves and people who had nothing to do with my actions,” Sandler wrote. “I’m sorry to the amazing people and friends I made in Opelika. I had a big chance to do something amazing and totally screwed it up solely by my own actions. The city is amazing and full of love. I’ve let down so many people.”
Sandler said in the post that he will cooperate with the advisory board of Round House and the authorities.
First-Aid Kits
In December 2014, then-13-year-old Taylor Rosenthal won the Opelika Middle School Young Entrepreneur Academy with his budding business RECMED, a company that sells first-aid kits and supplies in vending machines.
Terry Rosenthal, Taylor’s father, said they first met Sandler the night Taylor won the competition. RECMED soon began operating from Round House, and Sandler became a mentor to Taylor.
In November 2015, Roundhouse announced that Taylor had been offered and turned down $30 million to sell RECMED. Soon after, Taylor was invited to participate in CES and Tech Crunch Disrupt, two consumer electronic trade shows, multiple national media outlets, including CNN, MSNBC and The Huffington Post, picked up the story about the teenage CEO who had turned down a multimillion-dollar buyout.
Terry said there has been a great deal of response and interest surrounding RECMED, especially after their trips to CES and Tech Crunch. “We had some meetings in June with a national healthcare company … I can’t disclose who, but we traveled up there and I was in those meetings at their corporate offices so I know there was a lot of interest,” he said.
As far as the future of RECMED goes, Terry said things have been delayed, but they are working hard to get back to business.
“We’re working through some things obviously. It’s kind of slowed us down, but we’re trying to get the company back to where it should have been before these delays,” Terry said.
Terry said RECMED and its board of directors have had very little conversation with Sandler in the month the business has been closed.
One-gig internet
In 2014 Opelika added its one-gigabit-per-second fiber internet services, recognizably faster than the national average of 6.7 megabit-per-second, becoming Alabama’s first “gig city.” In a January 2015 article, Sandler told the Observer that Opelika’s fiber infrastructure did not drive his decision to open Round House, “but it was certainly a nice bonus.”
In a resolution passed by the Opelika City Council Dec. 16, 2014, Opelika’s Economic Development department would offer Roundhouse a two-staged incentive. Roundhouse would receive one-gigabit internet services furnished by Opelika Power Services for a period of two years at two-thirds of the regular rate. As a part of the incentive, Economic Development paid $2,083.34 per month to furnish those services, a two-year total of $50,000.
Without the 23-percent discount, the normal monthly rate for fiber services would be $2,700. The remaining balance, a two-year total of $14,800, was absorbed by OPS.
Economic Development Director Lori Huguley said it is always a disappointment when an Opelika business does not succeed. “I’m very disappointed that it closed and that it didn’t work out because anytime that we support an economic development effort, we’re always hopeful that it will continue and be successful,” Huguley said. “If you look at what (Round House) was supposed to do … our thought was that businesses would come out of there, and hopefully become Opelika Power customers, and so of course we are disappointed that we didn’t have more come out of there.”
While Round House has been permanently closed, the building, located at 216 S. 8th St.,  is not sitting empty. Collaboration Station, a similar coworking space, will open soon.
Emily Baas worked for Sandler for two years and now works at the new business, retaining her title as community director. Owner Daniel Sexton said he did not know Baas before deciding to open the new business, but that she came highly recommended.
Baas said it was a shock to witness the demise of Roundhouse, but she is as determined as ever to help small business owners in Opelika realize their dreams.
“I have a passion for helping small business, or any entrepreneur at any age. I truly have a calling in my life to help people, and I want to continue that,” Baas said. “I don’t want one person’s failure to dampen the entrepreneurial spirit of Opelika.”
Baas said it is a struggle to open a business, especially in a small town, and Collaboration Station will have the resources and community to help people create their dreams. “It’s not easy … to launch something. You need support, you need resources, you need a place like this that can help you grow without the daunting feeling of not being able to do it alone. It’s possible; anyone with the drive and tenacity can do it; they just sometimes need a little help.”
The Observer reached out to Sandler, but he declined to comment.


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