Chesapeake empire marches on

[okclee]

I had heard that the original Irma's was going to stay as part of "The Empire".

[keving]

You are right about the new Laredo's location, just next to the Chili's and IHop on the West End of the Belle Isle Plaza off of Classen. It's been in its current state for about a year now. I believe someone else in this thread noted they were having serious contractor/construction issues. I heard they'd lost their shirts more or less and that the whole thing is wrapped up in court. I don't have a source to back that up, so it may be just rumor.

I'm not sure about the contractor issue but what I do know is this. When designing the new restaurant, they decided to go bigger but did not properly anticipate the extra construction costs. They also do not believe in getting credit to build a restaurant. If you notice, they now have windows when this time last year they didn't. I have reliable sources.

[metro]

I had heard that the original Irma's was going to stay as part of "The Empire".

That wasn't a rumor okclee, that was published in the paper last week. I can't remember which paper (JR, OKCBusiness or Daily Disappointment). Irma's had mentioned they are staying put and not going anywhere soon. I imagine Aubrey will keep that place put for awhile at least until he gets some of his private retail going.

[john60]

Something tells me Aubrey McClendon won't mess with Irma's too much. If he likes the place enough to take his family there, he will make sure that a suitable replacement location is found for them, similar to the whole thing with Pearl's.

As much as the ambiance of that old building is great, it is a little ridiculous, and I'm sure they wouldn't mind some new digs if it came to that.

Who owns Irma's? I wonder if Aubrey has a personal relationship with that ownership group...

[Martin]

i agree that the irma's structure on 63rd & western is a bit ridiculous... however, i think the ambiance outweighs that. the same was true with pearl's. the design of that building caused some quirkiness but it had character. while the new pearl's location is a lovely facility, it just doesn't have the character that the old one did. if irma's were to move to new digs, i think that the same would be true.

-M

[okclee]

^^ I think that the Pearl's situation with their old building vs. new building is what Okc is all about.

Many in Okc think that a new, planned, and well designed building is always better. That is not always the case, because you can't necessarily design character.

[CuatrodeMayo]

Amen.

[FritterGirl]

^^ I think that the Pearl's situation with their old building vs. new building is what Okc is all about.

Many in Okc think that a new, planned, and well designed building is always better. That is not always the case, because you can't necessarily design character.

And Irma's is a perfect example of that. As others will discover, the Midtown Irma's is fine, but lacks is terribly lacking in ambiance - something the original Irma's has in spades. You can't put a price on character, nor attempt to replace it any cost. It simply does not work.

[Pete]

Thus far, CHK has not renovated anything they own... They merely completely scrape buildings then replace them with something new.

Apart from the obvious loss of history and true (versus manufactured) character, it also means they have to clear out lots of existing businesses then at some point try to get them and additional ones to come back to an area that is gradually becoming vacated (we've already lost Pearls, Wendys, Subway, Laredo and The Varsity).

My biggest fear is that they'll build some beautiful new buildings but that all the businesses in that area will have already relocated or decided just to cash their big checks and move on.

[betts]

There's a long article about Aubrey and his plans in the DOK today that will undoubtedly be posted here. The quote I thought was interesting and probably refers to what I had heard about a "Chesapeake City" plan is:

"The concept we want to establish is a place where you can live, work and play,” McClendon said. "I want a place where you can walk to work, or to a restaurant, or to a bar or the cleaners ... I'm not trying to replicate anything. We're trying to do something original.”

[metro]

Here you go betts:

Chesapeake CEO spends his energy on city's future

By Steve Lackmeyer
Business Writer

DRAW UP A LIST of civic leaders changing the face of Oklahoma City and it will include Aubrey McClendon.
In the past month alone, the 48-year-old chief executive of Chesapeake Energy Corp. has completed deals that include downtown's landmark Kerr-McGee tower, a large swath of land along the Oklahoma River and, of course, additions to his company's campus at NW 63 and Western.





To date, the community has been left to wonder about McClendon's grand vision — what might be the billionaire's next acquisition, what will be the city's new landmarks, and what will become of its existing landmarks?

After celebrating the opening Monday of his latest venture — the iconic "POPS” on Route 66 in Arcadia — McClendon agreed to reveal more about his vision for a city he's proud to call home.

This is clear: he's not spending time worrying about what people say about him, his company or his various projects. He points out he was considered a failure much of his career — and never discussed that failure with others. And he's not about to delve into chit-chat over his successes.


The Kerr legacy
Visitors to downtown Oklahoma City can not escape the Kerr name. When oilman Robert S. Kerr died in 1963, he not only guided the city's largest company, Kerr-McGee Corp., but was also considered the uncrowned "king of the U.S. Senate.” His name graces downtown's Kerr Park and Robert S. Kerr Avenue. And his great grand-nephew is none other than Aubrey Kerr McClendon.
"My father worked at the company for 35 years,” McClendon said. "Robert S. Kerr was my great uncle, and growing up with the name Kerr, you always paid attention to how the company was doing.”

As a child, he visited his father at work, toured the executive offices at Kerr-McGee tower as a teen, and then spent lunches at Kerr Park as a young accountant at a downtown energy company.

"I remember the concerts at the park,” McClendon said. "It was quite lively back then. Kerr-McGee was the center of the universe.”

But it wouldn't remain that way forever. When The Woodlands, Texas-based Anadarko Petroleum acquired Kerr-McGee in 2006, McClendon didn't waste time looking at ways to prevent the tower from going dark.

"I was sad like most people in Oklahoma City,” McClendon said. "It was a company around here for 77 years. I was worried about it leaving and about the impact to the community.”

His first reaction was to see whether Chesapeake Energy could move some of its employees into the downtown tower. He and a broker toured the property and talked to "our good friends at Anadarko.”

"We're always short on office space at our main complex,” McClendon said. "So we looked at it ... when we realized it wasn't going to meet our needs, we moved on.”

Within a few months, McClendon learned that Oklahoma City-based American Fidelity Assurance Co. and SandRidge Energy, a company started by his longtime partner Tom Ward, were not progressing in efforts to buy and move into the empty Kerr-McGee Tower.

That part of this story was told and celebrated over the past few weeks: McClendon, in talks to buy natural gas properties from Anadarko Petroleum, sealed the deal by including the Houston-area company's former Kerr-McGee real estate. Chesapeake, in turn, sold the downtown Kerr-McGee tower and other adjoining properties to SandRidge to become that company's new corporate headquarters.


Boom and bust survivor
The 1980s represented the best and worst of times for Oklahoma's oil and gas industry. In Oct. 1988 The Oklahoman published a brief story about Chesapeake completing a $100,000 renovation of newly acquired offices at 6104 N Western Ave. Architect Rand Elliott was to oversee design work for the 6,000-square-foot building, which Chesapeake had bought for $240,000.
McClendon graduated from Duke University and returned home in 1981 to an Oklahoma awash in oil and gas money.

"The boom was characterized by disc jockeys starting oil and gas companies,” McClendon said. "Rock band singers were becoming oil and gas guys, proverbial shoe salesmen were becoming oil and gas guys.”

McClendon was "a kid making $18,000 as an oil and gas accountant.” And he admits if he had been a couple years older, he too might have been drawn into some of the more speculative ventures that would ultimately turn into a decade-long economic depression for both the city and state.

"Tom Ward and I started Chesapeake ... at the bottom of the bust,” McClendon said. "We didn't have much money — $50,000 to start our company. The way we saw it was everybody else's difficulties and challenges might create an opportunity for us.”


Changes
On the same week that McClendon and Ward were announcing their deal with Anadarko Petroleum, Chesapeake was closing on another $10 million purchase: the Nichols Hills First Church of Christ Scientist. It is one of dozens of property transactions surrounding Chesapeake Energy's campus over the past decade.
In the 1990s, McClendon and Ward were too focused on building the company to consider how they could change their community. Early on, they decided to buy, and not lease, a corporate home. Before settling for a building in a quiet office park at NW 63 and Western, the pair looked at sites along NW 122 and May Avenue, NW 63 and Broadway Extension and downtown.

As the Chesapeake campus began to expand through the late 1990s, the public was told repeatedly McClendon had no grand plan for the area.

Elliott, who has been at McClendon's side as both an architect and friend over the past 20 years, said the expansion was a simple response to the company's growth.

McClendon no longer claims he has no grand plan. The company has hired a Boston firm, Antonio DiMambro and Associates, to draw up a 20-year master plan for the corporate campus and surrounding properties that is about 95 percent complete.

"They are a well-known urban planning firm that has done a lot of work in Fort Worth and Dallas. I took a lot of comfort that they are familiar with how people in the southwest live. I didn't want to hire people who think we're all going to get around by gondola or on bike.”

If McClendon has a favorite corporate campus or urban center that he has visited elsewhere, he won't share it with others. He doesn't want the Chesapeake campus compared to anywhere else.

"The concept we want to establish is a place where you can live, work and play,” McClendon said. "I want a place where you can walk to work, or to a restaurant, or to a bar or the cleaners ... I'm not trying to replicate anything. We're trying to do something original.”

McClendon is often asked about Nichols Hills Shopping Plaza, which the company acquired in 2005. Some people have suggested keeping it as is while others suggest razing it and starting from scratch. He said plans include modifications — but the extent of such changes will depend on talks with Nichols Hills city leaders.

The company's latest real estate acquisition adjoining the campus includes Irma's Burger Shack — a popular eatery where the building is considered charming partially because its construction and tight sloped footprint probably wouldn't be considered by today's builders.

Irma's, he said, has a long lease and won't be going away anytime soon. But he won't rule out the chance that a building considered unique or historic by some can't ultimately be torn down and replaced.

"All change can be disrupting to people,” McClendon said. "There are things in my life I don't want to change, that I get accustomed to. But that's the story of human history, of world progress.”

More acquisitions are almost a certainty. McClendon said the master plan will require a couple of parcels the company doesn't own, so details probably won't be shared with the public until those transactions are complete. All three Oklahoma County Commissioners have been approached about the possibility of Chesapeake buying the neighboring juvenile detention center as part of a plan to either expand the county jail or build a new facility.

"We've said we'll do everything we can to be helpful,” McClendon said. "It will be a slow process. A lot of money to raise and spend to make it all happen. ... We would like to help the city and county. It would be a classic win-win for all.”


Arcadia and the Oklahoma River
Billboards remind travelers that McClendon's interests go beyond NW 63 and Western Avenue. Travelers along Interstate 35 are being steered onto old Route 66, where "POPS” — a gas station/convenience store/cafe tribute to soda pop — opened Monday and seems destined to become an instant Route 66 icon. The deal with Anadarko and SandRidge, meanwhile, included a large swath of land at Western Avenue and the Oklahoma River that is across from the former Downtown Airpark being developed by former Mayor Kirk Humphreys.
When McClendon first began buying property in Arcadia, his initial energies went into developing a tree farm that now boasts thousands of plantings destined to add some green to the historically prairielike Oklahoma County. McClendon isn't worrying about the wrong development rising up around "POPS” — he already has secured surrounding properties. He predicts Arcadia will become a development hot spot in the future.

McClendon also has visited with Kirk Humphreys and his son Grant about their plans for the airpark property on the Oklahoma River and has assured them he wants to see Chesapeake's riverfront tie into their plans.

He expresses a love for Oklahoma City, and hopes his children, now in high school and college, might find it offers enough for them to still call it home, as well.

"They're not going to work at Chesapeake,” McClendon says. "They are independent, smart kids ... they'll find their own way in the world. I hope they'll recognize this is a great place to make a living, raise children and pursue your faith. And that's something that is harder to do in bigger cities.”

[Pete]

It sounds very much like he wants to scrape places like Irma's and NH Plaza if he can just get the various municipalities and leaders to go along.

I think this is why he's so incredibly tight-lipped about his plans. It's clear they are very ambitious and no doubt will involve removing lots of existing properties.

[CuatrodeMayo]

I am very uncomfortable about this.

[betts]

There are a few "Irmas" in the area that are great and full of character. But most of the land he's bought is full of uuuuuugly buildings built in the 60's and 70's and houses that are not particulary significant architecturally and would need to be gutted to be renovated. I suspect he wants a planned community similar to Seaside and others of it's ilk. As long as every house or condo doesn't look exactly like a mini Chesapeake building, and as long as you don't "owe your soul to the company store", I think it's fine. Nichols Hills is already a community similar to that: you can walk to the Plaza, which has a grocery store and pharmacy, and you could walk to Chesapeake or the other businesses in the area. That's actually one of my favorite things about the neighborhood. It feels like a small town. It may be that he wants the same for thing for his employees who cannot afford to live in Nichols Hills.

[Misty]

I'm picturing Plano. Yuck.

[soonergal]

sorry, but I can't go along with all this...AM is not doing this for the goodness of all. I think in time the real story behind all this goodness will come out or the bottom will drop out of the oil/gas boom and well, you know the rest of the story...

[shane453]

The great thing is, CHK is quite a lot more shielded from energy crises than the average energy company, because of all the raw real estate they own around the state under various subsidiaries.

I'm not feeling mixed use vibes from the CHK campus yet. I think it would be nice for them to acquire the juvie property so that they could at least briefly postpone any demolition of the retail properties. I wish they would just build a little denser and they wouldn't have to worry about hurting the feelings of famous local businesses and the customers who frequent them.

[metro]

I hear that they would have already bought the Juvenile facility along time ago but the County Commissioners want to use it as a pawn in an upcoming election so we can get a new jail, etc. Otherwise, they're afraid the bond won't pass to build a new jail on it's own, they need the juvenile facility as leverage. We all know from the money Chesapeake pays for the facility PLUS a bond issue. We could build them all a 5 star resort on the outskirts of town. Personally, I think we should do it, the money from Chesapeake will be generous and is obviously private money so it's not costing us tax payers. Plus it gets lawbreakers out of the heart of the city, and I'd LOVEEEEEEEE to see the County Jail move out of the downtown area and move it on the outskirts of town. Tear it down, and have the land available for future downtown development.

[Pete]

Nichols Hills look at city hall swap deal
By Robert Medley Staff Writer
Robert Medley: 475-3566, rmedley@oklahoman.com

NICHOLS HILLS — An offer to Nichols Hills city officials from Chesapeake Energy Corp. to relocate city hall to a church building will be explored soon by a committee, City Manager David Poole said.

Chesapeake has purchased the Christian Science Church at 1203 Sherwood Lane, a company spokesman said.

In two years, the church will relocate, leaving the building empty. Chesapeake officials want to acquire the current Nichols Hills city hall, 6407 Avondale Drive. The building, near Nichols Hills Plaza, also houses police and fire services. Chesapeake bought Nichols Hills Plaza two years ago.

Chesapeake officials are willing to swap for the church building, Poole said.
He said a committee of three will be appointed Sept. 14 by Nichols Hills city councilors.

[betts]

There's a NH meeting tonight to begin talks about plans for the Nichols Hills Plaza. I'm going to try and go and will report back if there's any interesting news.

[Pete]

That would be great, betts.

Sounds like CHK is trying to get all their ducks in a row so they can start moving forward in the near future. Since the church won't be vacating for a couple of years, that gives them plenty of time to get things smoothed over.

I'd love to see some preliminary renderings of what they have in mind for that site.

[y_h]

There was a brief article in this morning's Wall St. Journal which stated that CHK has embarked on a substantial cost-cutting campaign. It will be interesting to see whether this will have any effect upon their planned real estate developments.

[betts]

I couldn't make it to the meeting Tuesday night, but I'll find out what I can about what went on. Here's what I read about Chesapeake's land sales in the Motley Fool, FWIW:

By David Lee Smith September 6, 2007
6
Recommendations
Chesapeake Energy (NYSE: CHK) is taking steps to deal with sliding natural gas prices and the progressively louder sounds of credit being crunched. The company, which is a Motley Fool Inside Value selection, will deal with these probably somewhat temporary maladies by lowering its production rate, selling marginal properties, trimming its drilling program, and spinning off its midstream operations.

Management of the rapidly growing Oklahoma City-based company has hired the energy consulting firm of Jefferies Randall & Dewey to help market stakes it currently holds in properties in Kentucky and West Virginia. Those properties include about 1.5% of Chesapeake's total reserves and production, and they're expected to fetch about $550 million for the company. They will be the first to go in a planned program that the company has put in place to raise about $2 billion through property sales each six months during the next two years.

At the same time, the company will reduce its current production by about 6%, cut drilling expenditures by about 10% for the next two years, and divest its midstream assets into a master limited partnership or other structure. All in all, Chesapeake expects to monetize about $3.5 billion in assets that it believes aren't reflected in its current market valuation.

In the less than two decades since it was founded, Chesapeake has blown past industry leader ExxonMobil (NYSE: XOM) and such other U.S. independent producers Apache (NYSE: APA), Anadarko (NYSE: APC), and Devon (NYSE: DVN) to become the third-largest domestic natural gas producer. In terms of U.S. production, it trails only giants BP (NYSE: BP) and ConocoPhillips (NYSE: COP). When he released results for the company's June quarter, CEO Aubrey McClendon predicted that some time next year the company will move into first place. The company is also in the process of drilling several dozen wells at the Dallas Fort Worth Regional Airport, which rests atop the Fort Worth Barnett Shale, a play management has called the company's most important growth area.

But in the past six weeks, with gas prices sliding and a generalized credit tightening fueling concerns about the company's ability to fund all of its programs, its share price has dropped about 10% to Wednesday's close at $33.89. Tuesday's announced program appears to be a sensible way of dealing with recently changed circumstances.

For instance, the planned property sales clearly involve areas of less importance and promise than, for instance, the Barnett or the Ark-La-Tex, and it's not the role of any producing company to become property pack rats. On the drilling front, I've long been amazed at the scope of Chesapeake's program, so a slight pullback actually could be beneficial. And I won't be saddened to see the midstream separated off. The company's strength has been in finding gas in a concentrated manner, and there seems little to be lost from the spinoff.

All in all, these announced steps seem reflective of a capable and decisive management team that realizes that changing times frequently demand altered approaches.

[securityinfo]

[QUOTE=MalibuSooner;80049]I took a stab at plotting all the properites they own near 63rd & Western.

The different colors are used just to show they are all separate tracts acquired in multiple transactions.

They also own quite a few properties south of I-44 in the Western corridor and a few others around town that I'll plot later.

--nice map excluded--

Interesting to note that the property just south of 63rd, on the west side of Classen (6213 North Classen), has been demolished, but no mention of a sale on the County Assessor's site.... hmmmm, how do you manage that, I wonder? It's been down for several weeks now... I understand that a last, best final offer has been made to the few homeowners to the east... I suppose CHK is trying to make sure as little information is provided as possible to anyone else with land they would like to obtain. I suppose some type of eminent domain deal with the city is next for them....

Your map is great!

[Pete]

I need to update all my maps and aerials because CHK has bought several more properties in the area just in the last few months.

That area east of Classen is really a ghost town now. A lot of properties have been demolished and the ones that remain look largely vacant.

Also, Pearls and the other properties on the south side of 63rd are already torn down, which is strange because I don't think Chesapeake has any immediate plans for those properties. At least none they've talked about.


In another thread, betts mentioned CHK is also acquiring the Metromark condos behind NH Plaza. That means they may soon own everything between Grand and Western and could create a development there almost the size of Utica Square, especially if they include some of the properties they own east of Western.