Chesapeake empire marches on

[Pete]

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.

[Larry OKC]

What Pete said…
http://newsok.com/aubrey-mcclendon-i...rticle/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

[simbaokc]

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.

[onthestrip]

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.

[jn1780]

Nm

[OKCTalker]

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.

[Pete]

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.

[Oil Capital]

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.

[OKCTalker]

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!

[adaniel]

^^
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?

[Pete]

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.

Alison Oshel (the person in charge of recruiting new retail tenants for the chamber of commerce) was quoted as citing Aubrey McClendon's generosity as a key factor in luring Whole Foods and Anthropoligie.

And anyone in the commercial real estate field will tell you it is widely known CHK has given very strong financial inducements to virtually all the tenants at Classen Curve in the form of free build-outs, and free and/or drastically discounted rent. When I was in town a few weeks ago, I stopped and chatted with some of the tenants there and a few admitted they had received big incentives but did not want to provide specifics or provide any sort of statement on the record.


The first tenants at Classen Curve opened in early 2012, so we are closer to 2.5 years of completion.

They are currently only 28% vacant but that number is over 42% if you exclude Balliet's and the restaurant deals that were in place before opening.

[Oil Capital]

Alison Oshel (the person in charge of recruiting new retail tenants for the chamber of commerce) was quoted as citing Aubrey McClendon's generosity as a key factor in luring Whole Foods and Anthropoligie.

And anyone in the commercial real estate field will tell you it is widely known CHK has given very strong financial inducements to virtually all the tenants at Classen Curve in the form of free build-outs, and free and/or drastically discounted rent. When I was in town a few weeks ago, I stopped and chatted with some of the tenants there and a few admitted they had received big incentives but did not want to provide specifics or provide any sort of statement on the record.


The first tenants at Classen Curve opened in early 2012, so we are closer to 2.5 years of completion.

They are currently only 28% vacant but that number is over 42% if you exclude Balliet's and the restaurant deals that were in place before opening.

Here is the quote I imagine you were referring to and the question she was responding to. It's open to pretty broad interpretations.

"Why is Oklahoma City proving to be the exception in new retail development when so much of the rest of the county is stagnant?

A: The timing with the Horizon Group is good. They started thinking about this in 2007 when things were on the rise. And there were only two or three states without an outlet mall. But we also have the story of growing jobs, the economy, and we have the benevolence of Aubrey McClendon bringing retailers into Classen Curve that other developers might not have been able to bring in."

Incentives, including build-outs, for new tenants are not especially unusual in the commercial real estate field are they?

We're a lot closer to 2 years than we are to 4.

Your last line is hilariously ridiculous. I guess we could call it 100% vacancy if we exclude all of the signed tenants who have occupied space. What sense does it make to exclude Balliet's and the restaurant that signed deals before opening?

[ChargerAg]

His stat makes sense to me. If Classen Curve was such a great place why have they only leased out the remaining 58% of vacancies since the opening.

A more interesting question is if Classen Curve is sustainable at all without the subsidies.

[Pete]

Here is the quote I imagine you were referring to and the question she was responding to. It's open to pretty broad interpretations.

"Why is Oklahoma City proving to be the exception in new retail development when so much of the rest of the county is stagnant?

A: The timing with the Horizon Group is good. They started thinking about this in 2007 when things were on the rise. And there were only two or three states without an outlet mall. But we also have the story of growing jobs, the economy, and we have the benevolence of Aubrey McClendon bringing retailers into Classen Curve that other developers might not have been able to bring in."

Incentives, including build-outs, for new tenants are not especially unusual in the commercial real estate field are they?

We're a lot closer to 2 years than we are to 4.

Your last line is hilariously ridiculous. I guess we could call it 100% vacancy if we exclude all of the signed tenants who have occupied space. What sense does it make to exclude Balliet's and the restaurant that signed deals before opening?

I didn't mean any of my information to be argumentative, just informational.

And in the commercial real estate industry, there is always a distinction made being speculative space and that pre-leased. There is also a distinction drawn between anchor tenants and others.

And by the way, the 42% vacancy number does not exclude all restaurants and food service; just those deals that were signed in advance of the center opening. Since CC opened, they have actually petitioned the city to change the maximum amount of restaurants because they could not find enough retail tenants and thus singed a lease for another Tucker's and will no doubt be adding more.


And yes incentives are common but from my understanding, those provided at Classen Curve are way beyond what is typical in the market place which is why I raised the issue.

[MikeOKC]

And yes incentives are common but from my understanding, those provided at Classen Curve are way beyond what is typical in the market place which is why I raised the issue.

Not to mention that incentives from an oil & gas firm to retailers to locate in a shopping center designed by their pet architect makes this unique in almost a bizarre way. A CEO that should be busy taking care of his energy company on the floor with a tape measure is almost comical to picture. And we wonder why there's problems at CHK - gas prices or not.

[Oil Capital]

His stat makes sense to me. If Classen Curve was such a great place why have they only leased out the remaining 58% of vacancies since the opening.

First, I didn't say it was "such a great place", only that it is not fair to judge it a failure for being "only" 67% leased, after being opened less than 2 1/2 years (not counting the Triangle, which would increase the percentage).

It's a tough retail leasing market, folks. See, e.g., the Shops at Park Lane in Dallas, which has been open nearly 3 1/2 years and still has lots of vacant retail space. See, also, West Ave in Houston, which has been open approximately as long as Classen Curve and still has a bunch of vacant space.

[Pete]

I've said all the way along that I thought Classen Curve would work much better as a restaurant location than for retail.

And while it has been a tough national retail environment, remember Classen Curve (excluding the Triangle) has specifically targeted only local retailers, and the economy in OKC has been fantastic during this period. You could argue it's been the best possible time to try and lease space given those parameters.


I am by no means saying I think CC is a failure but I would say it's appeal for pure retailers is questionable and I would be very concerned about it's viability if regarded as an actual investment rather than what seems to be a heavily subsidized amenity for Chesapeake employees.

I've tracked all the real estate purchases and building permits sunk into CC thus far (with more expansion on the way) and that number is already north of $21 million, excluding the Triangle portion. Most of that money was sunk 4-5 years ago.

[dcsooner]

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.

YES!! I am a huge Aubrey fan. He loves this city and state, his investments demonstrate that. We are fortunate we have visionaries like Aubrey McClendon remaining in Oklahoma and trying to raise the bar rather than leaving for Dallas/Houston. Some posters on this board simply amaze me.

[catch22]

YES!! I am a huge Aubrey fan. He loves this city and state, his investments demonstrate that. We are fortunate we have visionaries like Aubrey McClendon remaining in Oklahoma and trying to raise the bar rather than leaving for Dallas/Houston. Some posters on this board simply amaze me.

I don't think anyone here is saying what he has done for the city has not been great. They are saying he is a tremendous liability to the city. He provided so much that wasn't really his to provide, and now that the city is used to the economic impact of CHK, it will hurt if/when they start cutting back more.

[progressiveboy]

I don't think anyone here is saying what he has done for the city has not been great. They are saying he is a tremendous liability to the city. He provided so much that wasn't really his to provide, and now that the city is used to the economic impact of CHK, it will hurt if/when they start cutting back more.

What will really hurt if CHK goes bankrupt or sell the entire operations to out of state owners who will then move it to Houston or Dallas. Once again, my hometown will lose out. Did OKC really learn their lesson from Penn Square Bank? One may be thinking, "What does this have to do with CHK"? It is called lessons that should have been learned from the oil bust of the 80"s and that OKC is till very highly dependent on the Oil and Gas Industry. Anyone that says that is not the case, is in denial of the fact. You never put all your eggs in one basket.

[dankrutka]

YES!! I am a huge Aubrey fan. He loves this city and state, his investments demonstrate that. We are fortunate we have visionaries like Aubrey McClendon remaining in Oklahoma and trying to raise the bar rather than leaving for Dallas/Houston. Some posters on this board simply amaze me.

Aubrey has done great things for the city, but there are legitimate reasons why people are concerned with him. To be amazed that his flaws are addressed (especially when they can have huge implications for OKC) shows a blind dedication that is equally amazing.

[Spartan]

YES!! I am a huge Aubrey fan. He loves this city and state, his investments demonstrate that. We are fortunate we have visionaries like Aubrey McClendon remaining in Oklahoma and trying to raise the bar rather than leaving for Dallas/Houston. Some posters on this board simply amaze me.

I am constantly disturbed by the willingness of people to turn on Aubrey. But I also think we can agree that good corporate governance of quite possibly our city's most important private employer is definitely in the city's best interest.

[warreng88]

I was out on the track on campus today and I saw they were putting in the frames for the windows in the building directly east of it. It also looks like the facilities north of the park are coming along pretty well.

[ChargerAg]

I was out on the track on campus today and I saw they were putting in the frames for the windows in the building directly east of it. It also looks like the facilities north of the park are coming along pretty well.

When you were on the track could you figure out what they are building on the roof of building 1? I can't figure out how that structure they are building will keep the elements out.

[Oil Capital]

I've said all the way along that I thought Classen Curve would work much better as a restaurant location than for retail.

And while it has been a tough national retail environment, remember Classen Curve (excluding the Triangle) has specifically targeted only local retailers, and the economy in OKC has been fantastic during this period. You could argue it's been the best possible time to try and lease space given those parameters.


I am by no means saying I think CC is a failure but I would say it's appeal for pure retailers is questionable and I would be very concerned about it's viability if regarded as an actual investment rather than what seems to be a heavily subsidized amenity for Chesapeake employees.

I've tracked all the real estate purchases and building permits sunk into CC thus far (with more expansion on the way) and that number is already north of $21 million, excluding the Triangle portion. Most of that money was sunk 4-5 years ago.

All fair statements. (Although I'm not sure that leasing primarily to local retailers should have made it so much easier as you suggest; even though the economy has been great in Oklahoma City, I suspect getting financing for retail stores has still been very difficult.)

Another note: Many recent retail developments in other cities have found themselves leasing to far more restaurants than they had planned, even in cities with similarly strong economies (e.g. Houston and Dallas).