Pete - Are they simply finishing it to "white box" condition, or do you hear of more specific, extensive buildout going on?

I was told they have already built an upstairs office and they have a ton of construction materials in there.

How about stopping by for some photos? You can just pop your head in and snap a few.

I'll try to stop by next week.

Article today in the Journal Record saying that the CHK-backed grocery store is moving forward.

doesn't whole foods have chk backing as well? sounds as if they're supporting two things that compete against each other. -M

Here's the full article:



Work starts on store at Nichols Hills Plaza

By Brianna Bailey
Oklahoma City reporter. Contact: 405-278-2847, brianna.bailey@journalrecord.com, @briannabailey80.
Posted: 07:13 PM Friday, August 31, 2012

NICHOLS HILLS – Plans are moving ahead for a Chesapeake Energy-run grocery store at Nichols Hills Plaza, but it remains unclear when the new market might open.

Chesapeake Energy promised the city of Nichols Hills last year that a new grocery store would be open in Nichols Hills Plaza by fall 2012 after the long-running Crescent Market closed its doors there. In preparation, demolition work recently began on the now-vacant space that Crescent once inhabited at the Chesapeake-owned plaza.

Kelly Hurley, a building inspector for Nichols Hills, said a contractor for the new grocery store told him that formal plans and building permit applications should be submitted to the city in about six weeks.

Nichols Hills Mayor Peter Hoffman said the city is pleased Chesapeake has continued with its plans for the store. The company has been a good neighbor to the city, he said.

Chesapeake has invested money in numerous improvements at Nichols Hills Plaza over the past several months, including new landscaping, parking and security lighting, and is actively recruiting new tenants for empty storefronts there, Hoffman said. However, the city has not been told when the store might open.

“Chesapeake is continuing to develop the concept so that it will ultimately be the best possible store for Nichols Hills and the surrounding area,” Hoffman said.

Two to three Chesapeake employees hired to run the store work in an office in an upstairs corridor at the plaza, but declined to comment on an opening date. Jim Gipson, a spokesman for Chesapeake, said, there is no firm timeline.

Jay Black, owner of Nichols Hills Drug, which was once supposed to be relocated inside the new grocery store, said his drugstore is no longer included in Chesapeake’s plans. A soda fountain that had been in operation at Nichols Hills Drug since 1963 closed at Nichols Hills Plaza last year when the drugstore had to move to a new, smaller storefront in the plaza to accommodate construction plans.

The gourmet food retailer Crescent Market closed its doors at the end of October, leaving a vacant storefront that used to generate sales tax revenue for the small city, which only encompasses a few square miles.

That is just weird.

The whole thing is beyond bizarre.

Chesapeake already spent a lot of money to lure Whole Foods, then forcibly chased out Crescent and closed down the drug store's soda fountain.

Now, they've hired in-house employees to open and operate a new grocery store and soda fountain??


I wouldn't be surprised if the new CHK chairman and board intercede once they realize this completely ancillary project is going to cost millions. Grocery stores are very expensive to operate.

I am betting that the guys sitting on site are doing nothing. They are probably sitting around waiting for word on what to do next.

Nichols Hills Market Takes Shape

We are all curious about the future Nichols Hills Market. After hearing lots of rumors I decided to go to the source and was able to sit down with Tom Sladek, Assistant Store Director, to get the inside scoop. He moved to Nichols Hills from Kalispell, Montana to help bring Nichols Hills Market to life.

His excitement about the store is infectious. His office is papered with labels from all kinds of foods and display options. I could immediately see what the main challenge of the store will be. “With 12,000 square feet, we will have to pick our items very carefully,” Sladek says. “We will try to offer the things everybody wants, but may not be able to stock every size in every item.” For now, they anticipate offering at least 50% traditional grocery store items and the rest new and specialty items. Tom is very health conscious and is excited about many of the lines they will offer that will make meal planning nutritious and delicious. He invited me to sample a Kize nutrition bar. They are made in Oklahoma, really yummy, and healthy unless you eat a whole bag of them!

I asked what will set Nichols Hills Market apart from other area stores. “Service!,” Sladek answered quickly. They intend to be very responsive to customers’ special requests. They hope to offer delivery service and charge accounts.

Customers will be able to watch the on-site chef prepare foods, and recipes and ingredients will be available for those who would like to try cooking for themselves. And there will be prepared meals for those who need something quick to go - HMR, Home Meal Replacement, is a popular category.

The highly anticipated counter service will be part of the market, and features increased seating and expanded service. The counter will be open for breakfast and lunch, and will include the traditional hamburgers, malts and other favorites.

Tom’s business partner is from Seattle. They each have over 32 years of grocery experience. They understand the tradition we have in Nichols Hills and are eager to preserve the traditions and introduce some new features. They are currently planning a May 5th, 2013 opening. I predict Nichols Hills citizens will be very impressed with Nichols Hills Market and will grow to love it.

Sody McCampbell Clements
City Councilman

Sounds promising but I still don't get it.

This sounds a lot like Whole Foods and they already had a soda fountain.


However, I'm sure it will be very, very nice.

Even with more specifics it doesn't make any more sense to me. They won't pick up Crescent Market's customer base because they've already scattered to the winds. I don't see enough differentiation between Nichols Hills Market and Whole Foods to drive customers to them. And I don't believe that this area can support three specialty grocers (including Sprouts), especially with notoriously thin industry margins. I fear that it will pit three specialty grocers against each other, with not enough business to keep them all alive. Whole Foods is the best-capitalized, best-known of the three, so I'd put my money on them.

And if I were Whole Foods, I'd feel betrayed by Aubrey for not only allowing a competitor to open within a few hundred feet in one of his buildings, but one that he is part or sole owner of. That could make it personal for Whole Foods.

Can Cheasapeak ever build anything without the completion date being a year away. How long has it been since they shut down the market?

Crescent Market closed in November of 2011, so there will be about a 1.5 year gap between the two grocery stores.

I am all for nicer grocery stores in OKC, but will having two so close together work? I could understand this if it was being built a good distance away from Whole Foods but being so close can both survive? Little Rock supports Fresh Market and Whole Foods very close to each other, but then again Arkansas allows wine sales in grocery stores so they have a greater profit margin.

Pete, do you think we ever see the housing built that was rumored to exist in the plans for NH Plaza or has that ship sailed?

Pete, do you think we ever see the housing built that was rumored to exist in the plans for NH Plaza or has that ship sailed?

It's very hard to say.

CHK has stopped acquiring condos to the west of NH Plaza, after purchasing all the units in Kings Court on 63rd (now razed) and most the units in three other projects along Grand and Sherwood. This stop seemed to happen after the City of NH threw cold water on their plan to tear down the southern section of the plaza and expand in all directions.

They bought NH Plaza in 2006 and most the condos in 2007/08, so lots of time has passed. I know they are still hoping to purchase NH City Hall.

I believe their plan was to replace the existing condos to the west with new, upscale housing but it seems that plan has completely stalled.

if LR can do it with, then OKC should be able to do it without. You think?

Nothing wrong with a bit of competition and options.

I too wonder how Nichols Hills Market will fare against the proximity to Whole Foods. However, I have done some reading about Fresh Market and learned that there is a location at 81st and Yale in Tulsa. Then I found out that family members in NW Arkansas like the Fresh Market located in Rogers. I am kind of surprised that Fresh Market has not looked for a location in OKC or Edmond. I think it would work well here.

Hopefully the Nichols Hills Market will make an equally successful and unique place for itself when it opens.

Maybe NH Market will cater to the folks who don't want to mix with the "riff raff" at Whole Foods.

:)

If I were competing with Whole Foods, I'd have carryout and perhaps even grocery delivery. The people who really liked Crescent were the elderly, who'd grown up with it, but who also really liked having their groceries carried out. That and a smaller parking lot are about the only niche available to a smaller market.

I'm hearing that Chesapeake has backed off the idea of trying to run this grocery store itself and is now looking for an operator. It seems the new board is starting to rein Aubrey in a bit.

These photos are from last week and if you compare the first one to those I took in June, almost nothing has been done to the interior of the old Crescent Market space. They have been working on the facade but they are doing that across the board in the southern section of this center, along with completely redoing the parking lot and landscaping.



http://www.okctalk.com/images/pete/nhplaza102312a.jpg


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I heard a rumor a month or two back from people in Nichols Hills that Chesapeake also had plans for a liquor store or a wine shop next to Nichols Hills Market, but I was never able to confirm that with anybody. Just a rumor. However, I did heard it from multiple people. Perhaps, if true, this has stalled now as well.

By far the biggest loser in all this is the City of Nichols Hills.

Chesapeake chased out the two biggest sales-tax generators and promised to promptly replace them, but it's been over a year now and they are not close to opening a grocery or lunch counter, if that even happens at all.

Aubrey should concentrate his real estate attention below the surface, not above it.

Recent photo showing the demolition of two small buildings just south of the NH City Hall; one was formerly a rug shop and both are owned by Chesapeake.

Remember that CHK was trying to swap NH the abandoned church site for their City Hall properties so their could expand the Plaza. But after the City renewed interest, nothing has happened here and I suspect this is part of the Chesapeake pull-back due to the new board. What may be happening is that CHK has decided to sell these now demolished property to the City so they can expand their facilities.



http://www.okctalk.com/images/pete/chk111912.jpg

http://www.okctalk.com/images/pete/chk5.jpg

Nichols Hills Drug has apparently announced that they are moving from Nichols Hills Plaza to a retail location near Grand Boulevard & May Avenue, SE of the intersection. That's another blow to the City of NH, but it has a greater impact on NH Plaza which - under CHK's ownership - has now lost its grocery store AND pharmacy anchors. And one more...

Avondale Galleries (formerly near CoolGreens) has also moved. They're now in the strip center west of Penn Square Mall.

Is Nichols Hills going to have their own Crossroads Mall by the time this is over?

The drug store was already reduced to not more than just a pharmacy.

Sure hope CHK finds tenants soon because half the south section of the plaza is already empty.

Just learned the drug store is now relocating to May & Grand; evidently they are tired of dealing with Chesapeake Land Co.


Also, there doesn't seem to be any movement on the proposed market and lunch counter. After failing to find a good operator, Chesapeake hired a couple of full-time employees with the idea of running the market itself, but it seems that is now off the table due to the new board's oversight.

I'm hearing they've now gone back to trying to find an operator and aren't having much luck.


So, Chesapeake drove out Crescent Market and now the drug store is completely gone along with the much-loved lunch counter. Not only are those businesses missed, there is now a huge amount of vacancy and the City of NH has lost a big chunk of their income due to diminished sales tax.

Also, it's commonly known that CHK gave big incentives to the tenants in Classen Curve and NH Plaza. With the new board keeping close watch, it might not be easy for them to fill up some pretty big empty chunks in those properties.

Just learned the drug store is now relocating to May & Grand; evidently they are tired of dealing with Chesapeake Land Co.


Also, there doesn't seem to be any movement on the proposed market and lunch counter. After failing to find a good operator, Chesapeake hired a couple of full-time employees with the idea of running the market itself, but it seems that is now off the table due to the new board's oversight.

I'm hearing they've now gone back to trying to find an operator and aren't having much luck.


So, Chesapeake drove out Crescent Market and now the drug store is completely gone along with the much-loved lunch counter. Not only are those businesses missed, there is now a huge amount of vacancy and the City of NH has lost a big chunk of their income due to diminished sales tax.

Also, it's commonly known that CHK gave big incentives to the tenants in Classen Curve and NH Plaza. With the new board keeping close watch, it might not be easy for them to fill up some pretty big empty chunks in those properties.

Sad.

will they bring back the lunch counter at the new location? i miss going to this with my kids.

So why has there been no media reporting on this project?

Because I'm on a much needed vacation - heard about it on Friday. Will report next week.

Because I'm on a much needed vacation - heard about it on Friday. Will report next week.

Enjoy your vacation Steve and we'll look forward to your story when it comes out. Spartan probably never takes a vacation. LOL

Of course I take vacations...to OKC :P


Because I'm on a much needed vacation - heard about it on Friday. Will report next week.

Is this really your beat to worry about? I didn't mean to implicate you Steve Lol

Meh, no offense taken. By default, it pretty much ends up on my watch... difficult to explain... I look forward to another really good reporter joining the business desk next week .... as an aside, please forgive me in advance if I don't do a good job at moderating or finding the right pitch in my comments on OKC Talk right now. I've caught myself a couple of times typing up comments that were too "edgy" or blunt. I'm a human being like everyone else, prone to good times and bad times. And let's just say, I'm needing this time off.

...
Is Nichols Hills going to have their own Crossroads Mall by the time this is over?

Nah, but they might be wishing it was at least as good as CRM once all the smoke clears.

Nah, but they might be wishing it was at least as good as CRM once all the smoke clears.

That location with those demographics will never be like Crossroads Mall. When Aubrey is through playing with it, someone else will buy it up and fill it up.

Recent photos of the old Crescent Market space.

Still no real interior build-out but the exterior will look very similar to the far west end which now houses CK & Company.

The last photo was taken inside the space looking out towards the parking lot.



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Another one of the old Crescent space:

http://www.okctalk.com/images/pete/nhplaza1912.jpg

Another one of the old Crescent space:

http://www.okctalk.com/images/pete/nhplaza1912.jpg

Looks like they are making slow progress on it.

That picture from the inside looking out on the christmas lights looks sharp.

More uncertainty about this shopping area being created by Chesapeake.

Drugstore to leave Nichols Hills Plaza after 49 years | NewsOK.com (http://newsok.com/drugstore-to-leave-nichols-hills-plaza-after-49-years/article/3746474)

Great article by Steve!


After the loss of Crescent Market, sales tax collections for Nichols Hills dropped 17 percent, for the year ending June 30, 2011, when compared to the same period the previous year, Oklahoma Tax Commission records show.

And when you throw in the loss of the lunch counter and now the complete loss of the drug store, you know that number is higher now.

That's huge for the City of NH which has almost no other source of income.


Nice job Chesapeake! Chased out two very unique 50-year institutions and have left a bunch of empty space and a huge revenue hole for NH for about two years and counting.


Thank goodness they at least put in Classen Curve and Whole Foods before this whole thing started to turn south, which we all saw coming from a mile away.

Crescent Market was 122 years old, but their closure can't be totally blamed on Chesapeake.

What you CAN blame Chesapeake for is tossing Crescent out before a successor grocer was ready to go, with ink dry on the new lease. And also for setting up the NH city council members - they were duped into believing that the deal was done, and it wasn't. They won't make that same mistake twice.

Yes, but Whole Foods and Classen Curve are located outside of Nichols Hills and the drugstore will be too. Nice corporate neighbors, CHK!

Crescent Market was 122 years old, but their closure can't be totally blamed on Chesapeake.

What you CAN blame Chesapeake for is tossing Crescent out before a successor grocer was ready to go, with ink dry on the new lease. And also for setting up the NH city council members - they were duped into believing that the deal was done, and it wasn't. They won't make that same mistake twice.

if the NH city council had not pushed back against CHK all of NHP would be redone right now and they would have a much bigger tax base .. and they would have a new city hall

if the NH city council had not pushed back against CHK all of NHP would be redone right now and they would have a much bigger tax base .. and they would have a new city hall

Or, the whole place could be a grassy lot with no money to rebuild, as is the case with tons of their other properties in the immediate area.

Yes, but Whole Foods and Classen Curve are located outside of Nichols Hills and the drugstore will be too. Nice corporate neighbors, CHK!

And Starbucks is reportedly moving to Classen Curve. That will hurt the NH tax base as well.

if the NH city council had not pushed back against CHK all of NHP would be redone right now and they would have a much bigger tax base .. and they would have a new city hall

NH council asked for project specifics from CHK which is what every other city council asks of every developer around the country. But CHK did what they always do - they refused - and so they were turned down. You can't hang this one on the city of NH. Remember, Hoffman and Clements trusted CHK's word on the grocery deal, and look where that got them.

As far as CHK "getting things done," they move more slowly on their real estate projects than any other developer out there, whether it's their parking garages, on-campus construction, off-campus renovation, or retail at CC and the Triangle. There may be a few exceptions, but they are otherwise secretive plodders who can't be taken at their word.

IIRC, as I lived there at the time, there was opposition from some residents (as I believe Aubrey originally intended to put Whole Foods there) who feared that changes to the Plaza would increase traffic. They also objected to plans to put some parking immediately north of the Plaza on the south side of Fenwick, as well as plans for a 3rd residential floor. What usually happens in NH is that residents, who have an inordinate amount of power relative to OKC, are able to block changes they fear. It doesn't require much in the way of numbers to stop action there. What they didn't think about was that their beloved police and fire departments, who are extraordinarily efficient and helpful, are funded by water sales and sales taxes at the Plaza and the Oklahoma City Golf and Country Club. What they should fear is the possibility that the city won't be able to afford those services if a significant amount of revenue once generated by the Plaza is lost.

In my opinion, NHP would be the perfect place for Trader Joe's.

So the more I read about this, the more I realize how we as a society are doomed to do the same stupid things over and over again. When I read about Nichols Hills Plaza I am reminded so much about what I have read about OKC and its Pei Plan of the 1970's. With the Pei Plan the problem as far as I can tell wasn't so much the architectural / city-scape plan or whatever you call it, after all it was put together by a world-class innovator, and it really wasn't even so much the destruction of buildings downtown (let's be honest, most were dilapidated and architecturally uninteresting). The reason the plan was a failure was because it was far too monolithic in its approach. In other words step 1. plan, step 2. destroy everything, step 3. figure out who's going to commit to move in downtown, step 4. build everything. With a plan like that there is no room for error... you go off the rails at any point and you are just screwed. That's what happened to OKC... it lost its money and potential corporate backing when O&G went south, and so "step 2" happened and we never saw anything after that. This is exactly the same scenario as what is happening in Nichols Hills. It's even the same industry. It doesn't take a rocket scientist to see and try to avoid the same problems we've come across in the past.... Also, I agree with Pete. NH is lucky that CHK didn't take a hit sooner... could have left all of NH in a pretty terrible condition. Can you imagine where NH would be at if all of this had happened as they were clearing ground for Classen Curve and Whole Foods? If anything all such projects should be done in manageable phases, and with lots of transparency. Learn from the past....

IIRC, as I lived there at the time, there was opposition from some residents (as I believe Aubrey originally intended to put Whole Foods there) who feared that changes to the Plaza would increase traffic. They also objected to plans to put some parking immediately north of the Plaza on the south side of Fenwick, as well as plans for a 3rd residential floor. What usually happens in NH is that residents, who have an inordinate amount of power relative to OKC, are able to block changes they fear. It doesn't require much in the way of numbers to stop action there. What they didn't think about was that their beloved police and fire departments, who are extraordinarily efficient and helpful, are funded by water sales and sales taxes at the Plaza and the Oklahoma City Golf and Country Club. What they should fear is the possibility that the city won't be able to afford those services if a significant amount of revenue once generated by the Plaza is lost.

So, if I am reading and interpreting correctly what you are saying is that the people of NH shot themselves in the foot. While I liked Crescent, it was not necessarily keeping up. All the Chesapeake haters will still blame them, but Crescent and the people of NH were very myopic also. NH wants NO change. They want NO inconvenience. But they want the money.

This is a perfect example how narrow minded protectionism can not only impede progress, but can incur debilitating consequences.

So the more I read about this, the more I realize how we as a society are doomed to do the same stupid things over and over again. When I read about Nichols Hills Plaza I am reminded so much about what I have read about OKC and its Pei Plan of the 1970's. With the Pei Plan the problem as far as I can tell wasn't so much the architectural / city-scape plan or whatever you call it, after all it was put together by a world-class innovator, and it really wasn't even so much the destruction of buildings downtown (let's be honest, most were dilapidated and architecturally uninteresting). The reason the plan was a failure was because it was far too monolithic in its approach. In other words step 1. plan, step 2. destroy everything, step 3. figure out who's going to commit to move in downtown, step 4. build everything. With a plan like that there is no room for error... you go off the rails at any point and you are just screwed. That's what happened to OKC... it lost its money and potential corporate backing when O&G went south, and so "step 2" happened and we never saw anything after that. This is exactly the same scenario as what is happening in Nichols Hills. It's even the same industry. It doesn't take a rocket scientist to see and try to avoid the same problems we've come across in the past.... Also, I agree with Pete. NH is lucky that CHK didn't take a hit sooner... could have left all of NH in a pretty terrible condition. Can you imagine where NH would be at if all of this had happened as they were clearing ground for Classen Curve and Whole Foods? If anything all such projects should be done in manageable phases, and with lots of transparency. Learn from the past....

Do you think the people of NH would even care if there are holes south of them? They only wanted the inconvenience of retail on one outlying corner of their incorporation. They wanted shopping and tax dollars, but no traffic at all. The only outside visitors they wanted to the neighborhood were the dollars. Their protectionism bit them in the butt.

Don't make the mistake of painting NH residents (or those of any neighborhood) are one-dimensional, myopic, short-sighted or greedy. They're no different than anyone else - they want to know the facts, to have a say in the outcome, for their elected officials to adhere to a master plan of some kind, to pay a reasonable amount in taxes and fees, and for developers to complete their projects promptly and efficiently.

It is now clear that CHK doesn't share information willingly, they don't keep their promises, they're not very good at retail development, they can't profitably operate retail properties, and none of their neighbors are happy. Hopefully their non-core property sales will continue, and this real estate episode will be an all-but-forgotten chapter in their corporate history.

And remember, Cheasapeake has always been so vague and tight-lipped about any of their larger plans that even the OKC Planning Commission threatened to withhold approvals.

CHK basically replied, "We don't have a bigger plan, but close 20 streets and let us demolish dozens of structures anyway".

And when pressed, they have either lied (sure Crescent is gone and so is the lunch counter but both will be replaced by Fall of 2012) or have completely evaded direct questions.


I am not aware of the City of NH denying a single application from Chesapeake. All they did was raise some concerns about some very ambitious and pretty vague plans, and those worries certainly seem more than justified given the fact there are grassy lots surrounding the plaza, and some have been there for almost 10 years.

The property tax cuts for Nicolas Hills sound pretty significant. Has the city had to cut back on any services as a result of the lost tax revenues.

I just heard that Trader Joes is going into the old Crescent Market location

Hope that's true!

Would be a perfect fit all around.

Agreed!