The developer that partnered with the University of Oklahoma to construct student housing on campus is suing for more than $750 million over claims that that the university misled investors and breached its contract.
The Norman Transcript reports that Provident Oklahoma Education Resources filed suit in Cleveland County District Court, contending that it was a victim of the university's "costly but hopelessly flawed vision” for the Cross Village development.
Provident partnered with the university to develop Cross Village, a housing development on the Norman campus for upperclassmen that was designed to provide food and shopping options in the same complex as student apartments.
The suit asserts that the university misrepresented the demand for housing at Cross and the profit the development could produce.
The university has disputed Provident’s claims.
"In an apparent attempt to gain leverage in an ongoing dispute, Provident today filed a lawsuit against the University, which parrots the same baseless claims it has previously put forth,” OU’s statement reads. "The University will respond to the lawsuit as appropriate. OU’s obligation remains to its students and the taxpayers of Oklahoma, not to Provident or its debt."
According to Provident’s suit, Oklahoma wanted to develop Cross as a “flagship housing project” for upperclassmen that would attract older students to on-campus housing. The university leased land to Provident to build the development with bond funding, and the university agreed to rent out the facilities Provident built.
Provident asserts in the suit that it would have funded only a basic student housing facility with dining and a surface parking lot, but that the university asked for a multi-level parking garage as well as commercial and retail spaces, which the university planned to use for shops and restaurants.
According to the suit, Provident and investors agreed to Oklahoma's request with the understanding that the university would use rent from the commercial spaces and parking revenue to help fund the spaces.
The university's Board of Regents canceled the parking and commercial leases in July 2019, according to the suit, leaving Provident reliant on student rent alone. The suit also alleges that the university misled Provident about profits from student rent, which should have made up about two-thirds of the revenue from Cross Village.
Provident also contends that Oklahoma misrepresented student demand for the type of housing it was building at Cross.
"The university had a flawed vision of the demand for on-campus upperclassmen housing and the type of units upperclassmen would rent,” the suit argues. "In order to induce the construction of student housing that fit its misguided view, the University misrepresented the core facts.”
