which Gallogly made it clear that he did not support the project and that he would do only what he was required to do by the literal wording of the contracts, says Hicks.
When Hicks warned the new president that legal action might result, he says Gallogly responded that he was a pretty good lawyer himself.
The ground lease between the university and Provident specified that the university would rent the ground-floor spaces and parking spaces on a yearly basis. As in many other states, Oklahoma law prohibits public entities from signing multiyear contracts. Annual payments to Provident started at more than $6 million and were set to rise during the term of the deal.
The size of that annual payment resulted from an unusual wrinkle in the deal that the institution itself had asked for: It wanted to front-load the amount of revenue it received for the ground lease. Instead of getting $1 million a year from Provident over the life of the deal, the university asked for $20 million upfront.
Hicks says university officials wanted the money to cover a $20 million cut in the institution’s 2016-17 budget brought on by a looming $1-billion state-budget shortfall.
The additional debt added to the deal by the upfront payment led Provident to charge higher-than-market price for the parking and retail space. Much higher. The commercial lease between the university and Provident pegs the payment for dining and retail space in Cross Village at $94 a square foot.
According to Brad Worster, a commercial real-estate agent in Norman, higher-end retail and dining space in town would probably rent for $30 to $35 a square foot.
“The above-market rates were agreed to” by the administration, Hicks says in an email.
After the first year, Gallogly balked at the arrangement. While the university paid Provident about $6.8 million to rent the parking and retail spaces for the 2018-19 academic year, it earned only about $40,000 in rent from the dining and retail space.