I know they started with very strong sales numbers but I wonder if being a stand-alone retailer in that spot is going to work for them. Typically, they are found in malls and dense shopping districts.

I'm sure nobody is walking between there and Classen Curve. And Whole Foods doesn't provide the same type of traffic that other mall-type tenants would.

Even when that space to the west of them is filled and the area north of the creek is developed, they are somewhat on an island in that spot.

I know they started with very strong sales numbers but I wonder if being a stand-alone retailer in that spot is going to work for them. Typically, they are found in malls and dense shopping districts.

I'm sure nobody is walking between there and Classen Curve. And Whole Foods doesn't provide the same type of traffic that other mall-type tenants would.

Even when that space to the west of them is filled and the area north of the creek is developed, they are somewhat on an island in that spot.

The whole area is strange how they don't make it more pedestrian friendly. It doesn't really make sense why they spread it out so much.

Anthropologie doesn't seem to attract many shoppers. I don't know if that is by design, if shoppers spend money in less-apparent ways, or if they're simply not performing well.

They probably aren't getting many shoppers just by themselves, or not as much as they should be. Most of the time these type of retailers have some co-tenancy requirements(being located next to other similar retailers) but here they obviously aren't. Makes me think it was that much more of a sweetheart lease from Aubrey just so they would go there.

Makes me think it was that much more of a sweetheart lease from Aubrey just so they would go there.

You can bet on that; same with Whole Foods and probably most everyone in Classen Curve as well.

The whole area is strange how they don't make it more pedestrian friendly. It doesn't really make sense why they spread it out so much.

It would be pretty interesting to see some retailers not make it due to the suburban parking lot-centric site plan of all of these developments.

In case this hasn't been posted, quite an article was posted in the Wall Street Journal (http://http://online.wsj.com/article/SB10001424052702304065704577424791188903240.html) on May 28.

In case this hasn't been posted, quite an article was posted in the Wall Street Journal (http://http://online.wsj.com/article/SB10001424052702304065704577424791188903240.html) on May 28.

Link didn't work for me. Here it is:

http://online.wsj.com/article/SB10001424052702304065704577424791188903240.html

Well it was only a matter of time until what we've been thinking and feeling about this gets dragged into the national media.

Anthropologie doesn't seem to attract many shoppers. I don't know if that is by design, if shoppers spend money in less-apparent ways, or if they're simply not performing well.

I think they're doing fine financially. I was told "better than expected". I think you'd probably find Anthropologie has more people going there to buy rather than just window shop. Places with high traffic may get more shoppers, but probably more lookers than buyers.

Not saying that isn't the case, but many lookers become buyers....in other words, it is probably safe to say that most of the buyers started out as lookers??? Otherwise, might as well be "by appointment only"

Just in case anyone doesn't think important people don't follow this site:

Chesapeake says Nichols Hills Plaza isn't for sale (http://newsok.com/chesapeake-says-nichols-hills-plaza-isnt-for-sale/article/3684695?custom_click=pod_headline_business)


In the past week or so, at least one local blogger and a widely followed discussion board passed along the rumor that the property was for sale.

Some Chesapeake campus photos. The scale of all of this is hard to comprehend unless you get out and walk (or at least try to). All the newer stuff east of Classen is a complete mess and feels quite separate from the "core" campus.


http://www.okctalk.com/images/pete/chk61412a.jpg

http://www.okctalk.com/images/pete/chk61412b.jpg

http://www.okctalk.com/images/pete/chk61412c.jpg

http://www.okctalk.com/images/pete/chk61412d.jpg

http://www.okctalk.com/images/pete/chk61412e.jpg

http://www.okctalk.com/images/pete/chk61412f.jpg

http://www.okctalk.com/images/pete/chk61412g.jpg

http://www.okctalk.com/images/pete/chk61412h.jpg

http://www.okctalk.com/images/pete/chk61412i.jpg

http://www.okctalk.com/images/pete/chk61412j.jpg

http://www.okctalk.com/images/pete/chk61412k.jpg

Any chance we could get Chesapeake to take over redevelopment of Lightning Creek and the Oklahoma River?

[center]http://www.okctalk.com/images/pete/chk61412a.jpg

Excellent photos, Pete! What is the building in this picture? Also, their campus landscape is top-notch.

As I'm not familiar with construction techniques at all, I have a question regarding Chesapeake's new buildings all having large basements. For example, their RTC lab that is under construction has been nothing but a basement for at least a month. What is the point? They have constructed all of their buildings this way on the SmithandPickel webcams, and I would like to know more about it.

^

That building just opened and is a big dining facility for employees.

As for the basements, I don't get it either as it adds tremendous expense and time to construction. You notice it takes them fully 2 years to open a building once it breaks ground. The entire Devon complex took only slightly longer.

It won't happen now, but I really wish they had built their headquarters downtown. I believe it would have been a tremendous addition.

I walked around almost the entire complex and it's incredibly inefficient, as the buildings are already really spread out and they aren't even halfway done with their east campus projects. In some cases, those buildings will be almost a half mile apart.

I also noticed a bunch of people cutting across the grassy median on Classen and of course having great difficulty navigating around all the construction.

Consider the Devon setup where every single one of their employees were provided a home under one roof in just over two years and who can meet by merely pushing an elevator button. CHK has been building for over a decade, is nowhere close to being able to house all their employees on their campus (even after they complete their current construction) and they are scattered over the better part of a square mile. How many days in Oklahoma is it blazing hot, rainy, freezing, snowing or otherwise miserable to walk a quarter mile or so? Not to mention all time time wasted by employees having to hoof it all over campus.

CHK is also not a super casual dress code; business casual is the standard so it's not like you're going to see the company providing free bikes like they do at the Googleplex and other large campuses in California.


I will also say that I didn't see ANYONE walking to Classen Curve at lunch time. I had lunch at Republic yesterday and there were clearly lots of CHK people there, but I guarantee you every single one of them took a long walk to one of their parking structures, piled in their car, worked there way down several parking levels, drove across the street, ate, and did all of it again in reverse.

I also didn't see ANYONE going from the restaurants to the shops. Employees came there to eat, then left. In fact, I didn't see hardly anyone at Classen Curve shopping, and I've been there a few times now at different times during the day.


If your employees actually have to get in their cars to visit these establishments, what difference does it make if it's across the street or a few miles away?

The CHK argument that all this non-campus real estate development was needed to attract and retain the best and brightest was spurious at best but now I'm very sure -- especially given the way this has all been laid out -- it makes zero sense.

There were plenty of decent restaurants before CHK pulled them all down and NH Plaza is every bit as close if not closer than CC. Even if CHK hadn't bought NH Plaza, it would have retained and probably added to the restaurants, grocery, and shops that have always been there. And there has always been lots of good restaurants and shopping on N. Western that is just as close as CC.

I really hate to say this but I think Classen Curve just doesn't work and I don't think the planned expansion is going to make much difference.

I love the fact they tried to do something modern and new but the location makes no sense and it just doesn't work for retail. As a courtyard of restaurants, I've always thought it would do pretty well, and not coincidentally CHK just petitioned to allow more restaurants as part of the planned unit development.

And it really doesn't make sense given the fact CHK already owns NH Plaza tons of other much better situated properties that could have been developed for retail. And of course, they are mainly sitting vacant on major thoroughfares while they go to considerable expense and effort to wedge an ellobarte development into a residential neighborhood that borders a graveyard.

Add to all of that no good direct access to/from the Chesapeake campus and I have to say this all seems to have been misguided.


What is going to happen to CC when Chesapeake stops giving huge incentives for businesses to operate there? I truly believe that is the only reason retail tenants have moved there and that gravy train sure looks like it's grinding to a halt.

Pete - I am not sure if you are familiar with term 'Radiant City' or not, but it would explain the Chesapeake campus (and Sandridge and Leadership Sq and Chase Tower and Devon Tower and Bank of Oklahoma building and the entire Pei Plan).

We owe it all to this clown.

http://en.wikipedia.org/wiki/Le_Corbusier

I really hate to say this but I think Classen Curve just doesn't work and I don't think the planned expansion is going to make much difference.


I agree. While it may be a cool and interesting design to look at, it is awfully laid out for succesful retail. The fact that they tried to pass off its failure of attracting new, desired national tenants because it was intended for local tenents is a joke. It was definitely built to attract new national tenants but it is so poorly laid out that theyve had to settle for taking existing, nearby tenants and giving them incentives to relocate at CC. You cant tell me that Aubrey has deliberately turned down national tenants because he only wanted CC for locals.

I agree. While it may be a cool and interesting design to look at, it is awfully laid out for succesful retail. The fact that they tried to pass off its failure of attracting new, desired national tenants because it was intended for local tenents is a joke. It was definitely built to attract new national tenants but it is so poorly laid out that theyve had to settle for taking existing, nearby tenants and giving them incentives to relocate at CC. You cant tell me that Aubrey has deliberately turned down national tenants because he only wanted CC for locals.

I don't know if their plans changed, but when CC was under construction, a person fairly close to Aubrey told me that they wanted no national tenants in the Curve. I'm sure they'd like more local or otherwise tenants, but I think it would be VERY successful if it were full of tenants. It's not really a big deal to walk between stores. It's not as if it's really that different from Nichols Hills Plaza, except that you cannot see all of the stores at once. But, that's never stopped a determined shopper.

Yeah. I was excited about Classen Curve and it'smodern design initially, but it is terribly designed. Even the stores are too spread out. Not many people would walk from Upper Crust to the Shave Shop. A few places can make it there, but they'll succeed indidually, not collectively. It's a shame.

Yeah. I was excited about Classen Curve and it'smodern design initially, but it is terribly designed. Even the stores are too spread out. Not many people would walk from Upper Crust to the Shave Shop. A few places can make it there, but they'll succeed indidually, not collectively. It's a shame.

If not many people would walk that far, it's not a great statement about how far people in OKC are willing to walk. I walk for miles in Chicago shopping, and while not all the buildings are occupied, at least most of the unoccupied ones are south. There's some great windown shopping at the Curve. While I agree that the design is not great, again, people who are true shoppers pay more attention to the options than the design.

Pete: You're absolutely right, but I prefer to think of the ways that CHK can fix this and get this misguided development to actually benefit their corporate environment. I've had to go pick up a friend of mine at Fuel once because the bus didn't come to get them, and they couldn't make it from Grand Blvd, through the construction, to the completed part of campus.

The city is going to embark on the Western Avenue streetscape here soon. Western, as you probably noticed Pete, desperately needs some work. There is virtually no difference in terms of aesthetic and pedestrian access between that stretch of Western and Western 8 miles north of there. It's just the exact same 4-lane road as you see everywhere around town, and that's unfortunate because this area is more important than that. I really think beyond just the Western Avenue streetscape which we know is coming, the city needs to look at an integrated streetscape package for this entire area of town, and perhaps even as an early far-northern streetscape extension. Mark Beffort and all the old school players who can still admit we need to do more for rail would jump for joy at that.

The next difference maker is that CHK needs some employee housing desperately. Their intern housing, which is contracted out to Legacy at Central Park or wherever else they can get them in at, is a disaster. They have had to re-sort a bunch of universities as "commuter distance" such as OSU (where they get the majority of their interns) and TU, which is crazy. Whereas interns from UT or Arky get housing as expected. They also need this housing because Aubrey gets a lot of after-5 office hours out of his employees, and it's almost become expected as part of the deal at CHK. Additionally, it's become a norm for these kinds of innovative HQs to come with housing, so this is a reasonable corporate need. Once they get that housing, then employees will start leaving their cars there - or CHK could even achieve the same commuter affect by locating some parking garages across Western. Just do something to get employees used to crossing Western.

I think CHK has spent too much time and too much money on these non-game changers and they've screwed the pooch too soon that they might not ever get to the parts of their campus plan that will be the game changers that will tie this all together. Classen Curve is weird, I've said it a million times. The parking lot at Whole Foods is probably the most tragic piece of that scheme, which could have otherwise tied it all together.

I agree with Kerry that this is very much beginning to resemble Le Corbusier's "radiant city," and I personally know that Rand is a huge Le Corbusier fan. I am not one.

While I agree that the design is not great, again, people who are true shoppers pay more attention to the options than the design.

The problem is that urban design and layout is important. The reason that indoor shopping malls thrived is because people still wanted to indulge in window shopping but didn't want to do it outdoors. Trying to combine suburban layout and window shopping is a horrible idea destined for failure.

I think in 50 years we're going to be preserving this complex (because it will probably not be sustainable enough to maintain its success as Pete predicates) and some intrigued developer will be saying, "It's really not that bad, the layout is weird, but once you get past that these turn of the century modern buildings are actually kind of cool.."

The campus would have made allot more sense and been allot more cool if they had built some kind of people mover to go around campus. A simple loop would have gotten the job done.

[center]http://www.okctalk.com/images/pete/chk61412a.jpg

Excellent photos, Pete! What is the building in this picture? Also, their campus landscape is top-notch.

As I'm not familiar with construction techniques at all, I have a question regarding Chesapeake's new buildings all having large basements. For example, their RTC lab that is under construction has been nothing but a basement for at least a month. What is the point? They have constructed all of their buildings this way on the SmithandPickel webcams, and I would like to know more about it.

That particular building has a big wine cellar in the basement.

That particular building has a big wine cellar in the basement.

What would be the point of a wine cellar? I wouldn't think the employees are allowed to drink on campus. Is this another perk for the CEO?

Just reading through Pete's last few postings.. Why in the world did they not design Classen Curve to face the street?

I am not sure if I can explain it correctly, but instead of a "suburban" strip mall design facing the street with ample parking in front, in one article they stated the design was to put a modern twist on the pedestrian friendly main street/downtown shopping experience. Where stores are across the street from each other. Once inside the place, the buildings do "face the street". Just from the outside it doesn't look that way.

I also think they didn't want the storefronts looking out onto a graveyard.


One other thing I meant to mention, just navigating your car into and around that place is bizarre. You turn in at a weird angle near Whole Foods, and that Triangle parking lot is really nonsensical too.

Rand Elliott does some good work but just giving him this massive retail and office project when he had never done anything like this in the past was clearly not the right move. The way everything flows and how the various areas relate to one another is very, very poor.

From campus to CC isn't that far but due to the layout, I just don't think people walk even on the nicest day.

CNG station accident spooks residents
By Brianna Bailey
Journal Record
Oklahoma City reporter - Contact 405-278-2847
Posted: 08:03 PM Monday, June 18, 2012

OKLAHOMA CITY – Longtime NW 49th Street resident JoEllen Aaron’s flower-lined front porch overlooks a site near NW 50th Street and N. Western Avenue, where Chesapeake Energy Corp. wants to build a modern-looking, 24-hour CNG fueling station and convenience store she claims would bring excessive traffic and noise to her neighborhood.

Designed by noted local architect Rand Elliott, the 20-pump fueling station would offer gasoline and diesel fuel, as well as compressed natural gas. Chesapeake purchased a much-smaller Conoco station and a car wash at NW 50th and Western several years ago for the planned fueling station and has since demolished the buildings. Plans for site submitted to city planners show at least three buildings for the development, including a convenience store.

“We don’t know why they are trying to do this in the middle of a neighborhood when they own land all over the city,” Aaron said.

Her husband, Henry Aaron, also worries about safety. On Sunday afternoon, firefighters responded to a report of a loud boom at the site of a Chesapeake-owned fueling station operated by OnCue Express at the corner of NW 49th Street and N. Western.

The Aarons returned home on Sunday afternoon to find Oklahoma City firefighters and Chesapeake Energy security cordoning off the site a few doors down from their home.

“That’s a little more excitement than I need,” Henry Aaron said.

The boom residents reported was caused by a leak in a fuel line on a bus refueling at the CNG station, said Brian Stanaland, a battalion chief for the Oklahoma City Fire Department.

Residents in the neighborhood protested plans for the larger Chesapeake fueling station to the Oklahoma City Planning Commission in May, where commissioners raised concerns about the development and passed the issue onto the City Council without recommending denial or approval for the station. At the meeting, Chesapeake representatives vowed to pay to have Oklahoma City close NW 49th Street to through traffic to keep cars and trucks from the station off the residential street.

The City Council is slated to consider plans for the CNG station in July.

Plans for the gas station, which would be operated under the brand name Peake, is one of a handful of CNG stations that Chesapeake subsidiary Peake Fuel Solutions plans to open around the city.

Jim Gipson, a spokesman for Chesapeake, declined to comment on the company’s CNG station plans. Chesapeake Energy also has plans to build a CNG station near the southwest corner of N. Pennsylvania Avenue and NW Expressway across from Penn Square Mall, according to residents on N. Barnes Avenue. A company with ties to Chesapeake has purchased an entire block of homes on N. Barnes, off N. Pennsylvania, paying more than double the listed market value of the properties, according to county assessor records.

Chesapeake Energy has plans to open several CNG fueling stations in Oklahoma City with the Peake brand name and will use the stations to educate the public on the benefits of CNG, CEO Aubrey McClendon told shareholders on June 8 at the company’s annual meeting.

Chesapeake also announced in March that its affiliate, Peake Fuel Solutions, would partner with GE to build 250 small, modular CNG fueling stations called CNG in a Box beginning this fall.

What would be the point of a wine cellar? I wouldn't think the employees are allowed to drink on campus. Is this another perk for the CEO?

Not that I care to defend all of McClendon's actions, but his dad started the company and he has run it ever since. He has a bit more right to have perks than most CEO's in the US though it seems he's clearly pushed the envelope. And, in case you weren't aware of it, bidness is done quite often over drinks.

I also think they didn't want the storefronts looking out onto a graveyard.


One other thing I meant to mention, just navigating your car into and around that place is bizarre. You turn in at a weird angle near Whole Foods, and that Triangle parking lot is really nonsensical too.

Rand Elliott does some good work but just giving him this massive retail and office project when he had never done anything like this in the past was clearly not the right move. The way everything flows and how the various areas relate to one another is very, very poor.

From campus to CC isn't that far but due to the layout, I just don't think people walk even on the nicest day.

Rand very clearly comes from the, "I like to give my clients a short walk from door to parking," camp of architecture.

Not that I care to defend all of McClendon's actions, but his dad started the company and he has run it ever since. He has a bit more right to have perks than most CEO's in the US though it seems he's clearly pushed the envelope. And, in case you weren't aware of it, bidness is done quite often over drinks.

Sorry, that gives him no more right to abuse his power. When you are a public company, most of the "I'll do whatever I want" attitude should have gone out the window.

Also, Larry Nichols dad started Devon and then he took it over. He seems to understand reasonableness.

What would be the point of a wine cellar? I wouldn't think the employees are allowed to drink on campus. Is this another perk for the CEO?

AM is a huge wine collector.

Not that I care to defend all of McClendon's actions, but his dad started the company and he has run it ever since. He has a bit more right to have perks than most CEO's in the US though it seems he's clearly pushed the envelope. And, in case you weren't aware of it, bidness is done quite often over drinks.

Are you saying McClendon's dad started Chesapeake? From everything I have heard it was founded by McClendon and Tom Ward. Part of the problem is he still runs it like it was his private company and does not have to answer to shareholders.

CNG station accident spooks residents
By Brianna Bailey
Journal Record
Oklahoma City reporter - Contact 405-278-2847
Posted: 08:03 PM Monday, June 18, 2012

OKLAHOMA CITY – Longtime NW 49th Street resident JoEllen Aaron’s flower-lined front porch overlooks a site near NW 50th Street and N. Western Avenue, where Chesapeake Energy Corp. wants to build a modern-looking, 24-hour CNG fueling station and convenience store she claims would bring excessive traffic and noise to her neighborhood.

Designed by noted local architect Rand Elliott, the 20-pump fueling station would offer gasoline and diesel fuel, as well as compressed natural gas. Chesapeake purchased a much-smaller Conoco station and a car wash at NW 50th and Western several years ago for the planned fueling station and has since demolished the buildings. Plans for site submitted to city planners show at least three buildings for the development, including a convenience store.

“We don’t know why they are trying to do this in the middle of a neighborhood when they own land all over the city,” Aaron said.

Her husband, Henry Aaron, also worries about safety. On Sunday afternoon, firefighters responded to a report of a loud boom at the site of a Chesapeake-owned fueling station operated by OnCue Express at the corner of NW 49th Street and N. Western.

The Aarons returned home on Sunday afternoon to find Oklahoma City firefighters and Chesapeake Energy security cordoning off the site a few doors down from their home.

“That’s a little more excitement than I need,” Henry Aaron said.

The boom residents reported was caused by a leak in a fuel line on a bus refueling at the CNG station, said Brian Stanaland, a battalion chief for the Oklahoma City Fire Department.

Residents in the neighborhood protested plans for the larger Chesapeake fueling station to the Oklahoma City Planning Commission in May, where commissioners raised concerns about the development and passed the issue onto the City Council without recommending denial or approval for the station. At the meeting, Chesapeake representatives vowed to pay to have Oklahoma City close NW 49th Street to through traffic to keep cars and trucks from the station off the residential street.

The City Council is slated to consider plans for the CNG station in July.

Plans for the gas station, which would be operated under the brand name Peake, is one of a handful of CNG stations that Chesapeake subsidiary Peake Fuel Solutions plans to open around the city.

Jim Gipson, a spokesman for Chesapeake, declined to comment on the company’s CNG station plans. Chesapeake Energy also has plans to build a CNG station near the southwest corner of N. Pennsylvania Avenue and NW Expressway across from Penn Square Mall, according to residents on N. Barnes Avenue. A company with ties to Chesapeake has purchased an entire block of homes on N. Barnes, off N. Pennsylvania, paying more than double the listed market value of the properties, according to county assessor records.

Chesapeake Energy has plans to open several CNG fueling stations in Oklahoma City with the Peake brand name and will use the stations to educate the public on the benefits of CNG, CEO Aubrey McClendon told shareholders on June 8 at the company’s annual meeting.

Chesapeake also announced in March that its affiliate, Peake Fuel Solutions, would partner with GE to build 250 small, modular CNG fueling stations called CNG in a Box beginning this fall.


this is not in the middle of a neighbor hood ....... the property is zoned C-3 which lets lots and lots of much more intrusive uses

I heard a very interesting anecdote from someone who would know...

He said that McClendon has very much to say in not only the development of their various properties but also the planning of them. A recent Reuters article gave several examples of him getting into the details of lots of things; whether he's a controlling micro-manager or merely very thorough depends on your perspective I suppose.

I was told that the proposed redevelopment of NH Plaza (which was ultimately rejected by the city of NH) was pretty much his vision. That he sketched out his ideas.

I have the feeling that Rand Elliott is often left trying to make things work after Aubrey comes up with a basic plan. It would certainly explain why AKM and CHK use Rand exclusively.

Were there ever renderings for what the redeveloped Nichols Hills Plaza would look like according to Aubrey's vision?

I know they met with tenants there several years back and showed them something that indicated demolishing the south portion and pushing the development all the way to 63rd, with some living units above.

But they were careful not to distribute anything and just recently, their lead counsel said they never had any intention of razing the south section as a way of deflecting criticism for booting Crescent Market and the lunch counter.

The NH Plaza tenants used to have a FB group and when that statement was made, they all pointed out the previous meeting where that exact idea had been discussed.


If you haven't noticed, they don't ever release renderings, even of the recently finished projects and those that are well under construction. Can't find any recent ones on Rand Elliott's website either and when I asked him about it, he referred me to their PR firm who never returned my emails or calls. I told him, "These are buildings that are halfway finished. Why can't you just release the renderings of what they will look like when complete?" He said, "You need to talk to the Gooden Group about that." I've learned that's CHK code for "No one is going to talk to you about this."

Were there ever renderings for what the redeveloped Nichols Hills Plaza would look like according to Aubrey's vision?

I saw renderings very early on. It was pretty impressive. Three stories, with residential on the third floor. The buildings were half-timbered, completely brick and very much Tudor in appearance, which would have matched with Nichols' original vision, the demolished gas station at the Plaza, etc. It reminded me very much of the Liberty of London store, only in brick.

betts, when/where did you see this?

Apologies to thunder...

I also saw renderings of NHP similar to what Betts described. It was perhaps two years ago and in one of the local papers. Very impressive.

Chesapeake Fall Threatens Oklahoma Real Estate Fire Sale: Energy
2012-07-11 23:00:01.5 GMT


By John Helyar and David Wethe

July 12 (Bloomberg) -- Chesapeake Energy Corp., whose $805 million investment in Oklahoma City’s land and buildings has helped reduce commercial real estate vacancies, threatens to collapse the market as it faces a cash squeeze and seeks to sell assets.

The second-largest U.S. natural-gas producer has spent $448.7 million to build a 120-acre (50-hectare) headquarters campus in the northwestern part of the city and an additional $356.7 million to develop three nearby retail centers and buy office buildings and more land, according to Peter Brzycki, a former Oklahoma City real estate broker who tracks the company’s properties.

While a sell-off of its commercial property may please the company’s investors, who have seen share prices decline as Chesapeake struggles to fill a cash-flow shortfall, a quick divestiture would also depress Oklahoma City’s office market, local real estate professionals said.

If something were to happen to Chesapeake, the whole northwestern market would collapse,” said Don Karchmer, a local developer and investor who’s been involved with some of the company’s real estate activities. “The whole community has a fear of what could happen. It would be a huge hurt.”

Chesapeake, the second-largest private employer in Oklahoma City, is seeking to sell as much as $14 billion in assets in 2012 to raise cash. Its shares have declined 14 percent this year as gas prices fell and after reports that Chief Executive Officer Aubrey McClendon was getting personal loans from companies that were also financing Chesapeake.

The Oklahoma City properties aren’t part of Chesapeake’s planned divestiture program, said Michael Kehs, a company spokesman.

No Sale

We use our real estate every day, so it’s not for sale,” he said. Kehs said Brzycki’s tally of spending on Chesapeake’s campus was low and the figure for other real-estate development was high. He declined to comment on the total investment number.

Investors, including billionaire Carl Icahn, have called for the company to get rid of assets that aren’t central to its energy production business.

“You’ve got a cash crunch, and you’re not a real estate developer,” said David Dreman, chairman of Dreman Value Management Inc. in Jersey City, New Jersey, which controls about 1 million Chesapeake shares. “If I had a cash crunch and I had really good wells and very promising property, I don’t think I’d be in the restaurant business.”

Leading Recovery

Chesapeake’s real estate holdings include shopping centers and land on which a restaurant co-owned by McClendon operates.

In recent years, Chesapeake has helped to cushion Oklahoma City from the nation’s recession and tepid recovery. The city’s 4.5 percent unemployment rate was the lowest of any metropolitan area with a population over 1 million, according to a May survey by the U.S. Bureau of Labor Statistics. Chesapeake had 5,000 local employees at the end of 2011, the city’s second-largest private employer after Integris Health.

The company has led a recovery of vacancy rates for top- tier office space in the city to “near pre-recession levels,”according to a report by broker Cushman & Wakefield Inc. The market’s 11.2 percent vacancy rate during the first three months of the year represents a 1.6 percentage point decline from a year earlier, it said. Less inventory has increased average Class A office rent to $21 a square foot.

Kerr-McGee Lessons

The $67 million Chesapeake spent to acquire three office buildings in the latter half of last year accounted for 75 percent of Oklahoma City’s total transactions in that real estate segment.

Now the company faces an estimated cash shortfall of $18.6 billion by the end of 2013, according to Alembic Global Advisors. Chesapeake has lost about $7 billion in market value in the past year amid falling energy prices and shareholder unrest about McClendon’s personal stakes -- and related debts – in company wells. The board last month replaced McClendon as chairman and named four new directors.

*Larkin Warner, a retired Oklahoma State University economics professor who lives near Chesapeake’s campus, recalls the departure of Kerr-McGee Corp., the Oklahoma energy company co-founded by McClendon’s great-uncle Robert Kerr that was bought by Houston-based Anadarko Petroleum Corp. in 2006.

“The day you begin to think the last few years are going to go on forever, that’s when you’re in trouble,” said Warner. For Kerr-McGee, “what happened was like the smile on the Cheshire Cat. It just gradually shrunk.”

Assessed Values

The company, which has leased 16 million acres of land nationally for drilling, has also been aggressive in its back yard, accumulating 3 million square feet of office space and paying top dollar for properties.

Chesapeake “routinely paid two to five times the current assessed value for virtually everything they acquired, and then added substantial construction costs on top of that,” said Brzycki, who has tracked 445 Chesapeake real estate purchases since 2005 using county and municipal records and who posts his findings on an okctalk.com forum.

Since 2005, the company has spent $152 million to acquire and upgrade office buildings away from its campus. Those 12 properties’ assessed value is now $106.2 million, according to municipal and county records. Chesapeake also put $152 million into development plans for three retail complexes, which now are 27 percent vacant and have an assessed value of $50.9 million.

Attracting Talent

While Oklahoma City commercial building valuations are based partly on comparable properties’ recent sales, according to the county assessor’s website, their assessed value doesn’t necessarily reflect market value.

Kehs said the main purpose of Chesapeake’s campus and adjacent retail development “is to create a work environment that is able to help us attract the best talent.” He declined to discuss the company’s real estate investment performance and said its office costs are lower than other large employers.

Chesapeake bought three tracts of land just south of its headquarters for $1.2 million in 2004. Within a year, it sold the parcels in two transactions for a total of $865,000, a 28 percent loss. The sale in part was in the form of a swap to add land to its campus.

Chesapeake spent $38.2 million in 2011 to buy an office building called Caliber Center, which had sold for $20.1 million four years earlier. The company’s $7 million purchase of an office building called Possum Creek in 2010 was two-and-a-half times what the property fetched five years earlier.

Nichols Hills

McClendon, who began his career as a land man buying up drilling rights, has been closely involved in Chesapeake’s real estate activities. He’s personally contacted owners of properties of interest to Chesapeake and sketched out plans to redevelop Nichols Hills Plaza on a paper napkin while lunching with then-tenant Robert Pemberton, owner of the Crescent Market.

That grocery store’s departure is one reason this effort hasn’t gone well with some residents and officials of Nichols Hills, an upscale suburb across the street from Chesapeake’s campus where McClendon and his wife and other prominent families reside.

After spending $66.5 million to purchase a variety of properties there, Chesapeake’s plans have been blocked by town officials concerned that a makeover of the retail center will cause shops to close for an extended period. The community of Nichols Hills counts on sales tax receipts from merchants for the majority of municipal revenue.

Whole Foods

The company also has met opposition from Nichols Hills Plaza patrons, some of whom staged a rally last October. The patrons were protesting the demise of two longstanding businesses, including Crescent Market. Pemberton, who said his family-owned business dates back to the Oklahoma land run in 1889, couldn’t compete with the new Whole Foods Market Inc. store in a Chesapeake-owned shopping center.

“Aubrey saw himself creating a new kind of market that Oklahoma City is ready for and there’s some logic to that, but it hasn’t worked out that way,” said Karchmer, the real estate developer who considers himself an admirer of McClendon.

For now, Chesapeake continues to expand its headquarters campus. Four construction tower cranes overlook eight new buildings and earthmoving equipment lays groundwork for more.

A 40-foot (12-meter) pile of dirt towers over the back yard of Charlie Maupin, a 63-year-old landscaper. Chesapeake has bought up scores of homes to expand its campus, and his could be next. The house, built with his hands, once looked out on trees. It now faces a clay-colored retention pond.

The landscaper said he’s gotten occasional calls from Chesapeake’s CEO asking if he’s ready to move.

Maupin expects to be compensated fairly by Chesapeake when he does move, and he thinks McClendon will turnaround the company. “He’s going to pull rabbits out of his hat for the next 10 years.”

I may have just missed it, but what restaurant does McClendon co-own?

I may have just missed it, but what restaurant does McClendon co-own?

49% owner in Deep Fork Grill, a property Chesapeake bought at many multiples of assessed value.

It would be interesting to see how the triangle and classen curve would suddenly build out if they were under different management.

Also the article talks about them breaking new ground at campus for new buildings. Parking Garage #5 was the last thing I was aware they started. I have been assuming it will be the last.

49% owner in Deep Fork Grill, a property Chesapeake bought at many multiples of assessed value.

And then has chk use Deep Fork for about $500,000 or more in catering services in one year. Just another way he's taken company money and put it in his own pocket. Just like he did when he bought the landscaping company Total Enviroment and then uses them to do all of chk landscaping. Just like he did when he had chk buy the naming rights to the arena putting another $3-400,000 a year in his own pocket.

And then has chk use Deep Fork for about $500,000 or more in catering services in one year. Just another way he's taken company money and put it in his own pocket. Just like he did when he bought the landscaping company Total Enviroment and then uses them to do all of chk landscaping. Just like he did when he had chk buy the naming rights to the arena putting another $3-400,000 a year in his own pocket.

again he makes no money from the arena naming rights ..

again he makes no money from the arena naming rights ..

As a partial owner of the Thunder he absolutely is getting money from the Chesapeake naming rights.

Only after this issue was raised and he was questioned about it did he then promise to donate his proceeds to charity, although nothing specific was identified.

What Pete said…
http://newsok.com/aubrey-mcclendon-intends-to-donate-share-of-arena-naming-proceeds-to-schools/article/3670563


Chesapeake Energy Chief Executive Officer Aubrey McClendon is planning to donate proceeds he collects as part-owner of the Oklahoma City Thunder from an arena naming rights agreement between the company and the team.

…McClendon has a 19.2 percent ownership in the team, which stands to collect more than $34 million from Chesapeake for advertising, sponsorship and the arena naming rights.

...for at least each of the first two seasons covered by the agreement.”

The article mention OKCPS as the probable recipient

Isn't it the Deep Fork owner that is in recent legal trouble about a victory party involving the D.A.? Not trying to imply anything here since his problem with the D.A. was with another of his restaurants
http://www.okctalk.com/showthread.php?t=30680

You arm chair quarterbacks make me tired. You talk of what Aubrey does for his own account, what about focusing what he does for his employees and fellow citizens of Oklahoma City. If you all are so smart, why is this blog not about you. If you could of, you would have...but you haven't. Give Aubrey some credit for his vision and risk taking for the state, city, his neighborhood and employees. While you talk about how you would do it and chase after his moves, he has done it and done it well without resorting to consulting you for your opinion. Always one step late and then want to inject how you would have done it. I for one applaud Aubrey and his vision. Better here than in Houston, Dallas or Austin! So let's continue to feed the negative press and maybe the Rockets can play in Chesapeake Arena in Houston.

You arm chair quarterbacks make me tired. You talk of what Aubrey does for his own account, what about focusing what he does for his employees and fellow citizens of Oklahoma City. If you all are so smart, why is this blog not about you. If you could of, you would have...but you haven't. Give Aubrey some credit for his vision and risk taking for the state, city, his neighborhood and employees. While you talk about how you would do it and chase after his moves, he has done it and done it well without resorting to consulting you for your opinion. Always one step late and then want to inject how you would have done it. I for one applaud Aubrey and his vision. Better here than in Houston, Dallas or Austin! So let's continue to feed the negative press and maybe the Rockets can play in Chesapeake Arena in Houston.

If you have read any of this thread you will see people saying that chk has definitely been good for OKC's economy. What you will also see are people worried and critical of his reckless and greedy business practices. Do people want chk to continue to succeed? Absolutely. But will we be critical of his wrong decisions that could possibly leave many without jobs or cause the company do disband or be sold off? Absolutely

And the next time Aubrey way overpays for non essential property, colludes with a competitor to keep lease prices down, run a hedge fund, or takes out an quasi unethical company loan...yes, he should probably consult with someone.

Nm

After spending $66.5 million to purchase a variety of properties there [Nichols Hills], Chesapeake’s plans have been blocked by town officials concerned that a makeover of the retail center will cause shops to close for an extended period. The community of Nichols Hills counts on sales tax receipts from merchants for the majority of municipal revenue.

Clarification: Their plan wasn't "blocked" - Chesapeake refused to submit a complete PUD application showing everything that they planned to do, which is a typical requirement in any city. Unfortunately, it is typical of Chesapeake NOT to disclose anything, and this is an instance where a city held to its guns and said "no." In essence, "Tell us what you're going to do and we'll tell you whether or not we'll approve it."

Given Chesapeake's lack of success with other retail projects (as measured by high vacancy rates four years later, even after widely-reported financial inducements to sign tenants), perhaps a traditional renovation of NH Plaza will turn out to be a blessing.

But isn't it fair to say that City of NH was not happy with what Chesapeake originally proposed which is why CHK never submitted any formal application?

My understanding is that there was a meeting of NH Plaza tenants and others on the CHK campus where they were shown renderings of a complete tear-down of the south portion and a rebuild involving living units above.

I heard that the City bristled over such a drastic change and that the project never went any further.

Given Chesapeake's lack of success with other retail projects (as measured by high vacancy rates four years later, even after widely-reported financial inducements to sign tenants), perhaps a traditional renovation of NH Plaza will turn out to be a blessing.

I'm not sure it's fair to declare a lack of success on Classen Curve. It has about 33% vacancy (not counting the Triangle portion, which would lower the overall vacancy rate, if included) just 2 years after opening for business in what is still a difficult retail market. Especially, if they are really focusing on getting local retailers, as seems to be the case.

And it would be far more accurate to call it "widely-rumored financial inducements" rather than "widely-reported." So far as I know, such rumors are nothing more than totally unfounded gossip.

Pete - CHK tossed out a variety of renderings, schematics, elevations and diagrams, all of which they stated were conceptual and not necessarily what they intended to actually develop. This occurred with everyone from Art Pemberton (Reuters) to NHP tenants to multiple NH town hall meetings with residents (on campus and off). To my knowledge they never said "THIS IS WHAT WE PROPOSE TO BUILD." In fact, I recall Dan LeDonne (CHK R/E guy) telling the NH City Council that CHK had no formal development plan, which wasn't believable. The next month Henry Hood (CHK lead attorney) appeared and said the same thing (Henry also said recently that the board was aware of Aubrey's large borrowings, which was immediately disputed by board members). Then Aubrey gave an interview to the DO and said "Of course we have a formal development plan - always have had," and provided the name of their consultants. I don't have a problem with creating a dynamic plan subject to change and modification depending upon economics, demand, even aesthetics or other considerations, but you have to start the process by committing to something - "THIS IS IT" - which they never did with ANYONE. They asked for their incomplete PUD to be approved, and the result could have been in the style of their main campus buildings, or more adventurous designs by Rand Elliott. I don't blame city officials for not making an exception for CHK.

OilCap - You're absolutely correct with my misuse of reporting v. rumor-mongering! I sure ain't no Steve Lackmeyer, and all one has to do is see the "Mystery Tower" thread here to see what a rumor is!

^^
If that's the case then I certainly don't blame Nichols Hills for telling CHK to "put up or shut up."

For a city the size of Nichols Hills, despite its outward affluence, the destruction of the city's main sales tax driver with no concrete plan in place to redevelop it is way too risky.

Does anyone know what the current vacancy of NHP is?