Chesapeake empire marches on

[Pete]

Chesapeake holdings shown in yellow / pink; green are properties they are actively trying to acquire.

1. MAIN CAMPUS


1A. SOUTH CAMPUS


2. TRIANGLE AT CLASSEN CURVE


3. CLASSEN CURVE


4. WESTERN TRIANGLE


5. NICHOLS HILLS PLAZA


6. NORTH WESTERN AREA


8. NW 63RD & PORTLAND


10. CENTRAL PARK I & II


11. NW 50TH & WESTERN

[Patrick]

I agree Malibusooner. It's much easier to go from floor 2 to floor 75 for your meeting. Thew further the campus spreads, the more silly it will be. OU Med Center has a campus, yet we still have 10 story towers, and parking garages.

Think about how large the OU Campus is in Norman, though. Chesapeake can stille expand a long ways.

[Spartan]

I think there is a differance between a university and a corporate headquarters...certain things are appropriate. That's not to say you can't emulate the architecture of universities, by all means!

[Pete]

Even though they call it a "campus" it is in fact nothing more than a private office park.

There is tons of surface parking between most the buildings and of course, on a real campus you can walk great distances without encountering a moving or parked car.

At least in California and the West where you typically see corporate campuses on this scale, the weather is nice the majority of the time. And the ones I have seen (and I've seen a bunch) are all laid out to facilitate movement between the buildings.


And I'd be much happier if they expanded to the east rather than across Western. The properties to the east are older and not worth much. Also makes you wonder why they are playing $12 million for a relatively small piece of property when there is much cheaper property all around there. You would think their shareholders would start calling them on this.

Why do they need to buy expensive, existing buildings with operating businesses on major streets like 63rd & Western to build office buildings? CHK paid $3 million per acre for that 4-acre tract, plus they'll have to put more in for demolition. The county assessor lists current market value around $1.5 million.

[Spartan]

Have you ever actually been on the Chesapeake campus once in your life?

[Pete]

Yes.

[zuluwarrior0760]

Cheaper property to the east????
If Chesapeake is the prospective buyer,
there's no such thing......

Hahn Cook's getting a brand new facility and
a suitcase full of cash and Chesapeake buys
themselves "options for the future"

Here's a far fetched prediction ripe for debate:
How likely might it be that in 10 years, Western Ave.
will dead end into the Chesapeake campus.....
or go underneath it , ala 23rd @ Lincoln Ave...????

[Spartan]

If that's a prediction, I think you're off.

Am I the only one left to see this for what it is? Good development?

Nah! Let's build us another Wal Mart. Yeeee-haaaaw!

[Martin]

hey spartan,

fwiw i've never had a problem with this development... i don't think anything noteworthy has been demolished. when pearl's goes, i'll miss that... but it's not as if it anchors the area or anything.

i do agree, however, that further expansion would be better east than north across western. -M

[The Old Downtown Guy]

I am at Chesapeake several times a week and though I agree with some of the points about distance and surface parking, I don't think the few really bad weather days we have in OKC are that much of a problem and the walk from building to building is pretty short. The spaces between the buildings are very nicely landscaped, there are lots of water features and the entire area is very well maintained. I would find it a plesant environment to work in. The health club, day care, food service and other ammenities are all first rate and a model for what it takes to attract the creative talent necessary for success in today's workplace. The interiors of buildings are light and have a nice feel. Each building has a large open gathering space at the ends where the bay windows are. A parking garage is under construction on the east side of Classen which will help with the parking issues.

Not perfect perhaps, but that is the model they have carefully choosen and they are obviously sticking to it.

[BDP]

Nah! Let's build us another Wal Mart. Yeeee-haaaaw!

Actually, a couple of the displaced are moving into Wal-Mart type pad developments (Laredo's and Pearl's), so this development is encouraging that type of development through its displacements. These businesses have to go somewhere and, unfortunately, in OKC that's usually in orbit around a big-box store or mall. The net effect of some of Chesapeake's moves is more of such development.

Am I the only one left to see this for what it is? Good development?

It's really more re-development of an already viable district. If you drive down Wilshire between Western and 235, you see lots of nothing accented by single story concrete office strips. Placing a corporate campus on this isolated and somewhat unused land would have been considered good development and would have reinvented a drab and desolate area of the city into a nice office park. It also would have come at a considerable discount compared to buying up healthy businesses and displacing them.

I know these businesses and property owners get paid and, in a sense, they're the real winners. However, Chesapeake could have added to the area at a lower cost without re-imagining Western Ave. As a community we would have gained two fold, by maintaining a healthy Western Ave. district and adding a new vibrant Wilshire district.

What Chesapeake does usually ends up nice and they are a great corporate citizen, but the opportunity cost to OKC of their signature development will continue to baffle me.

[Patrick]

You have to admit, before Chesapeake took up residence in the area, there was an empty field with not a lot to cheer about. Chesapeake's landscaping is first class. We should praise them for their work. I wish all businesses had such pride in their landscape!

[jbrown84]

They have also brought up the standards of other new developments nearby. The Midfirst Bank next door is really good looking on the outside but you should see the inside. Looks like it belongs inside First National in the glory days. Also there is a small oil company nearby with a similarly fancy building. I do agree that expansion eastward would be better. No busy streets to cross, and that area just has some small, forgettable office parks and further east it's some pretty dumpy neighborhoods. I am glad they are building a garage though instead of more surface parking.

[Spartan]

hey spartan,

fwiw i've never had a problem with this development... i don't think anything noteworthy has been demolished. when pearl's goes, i'll miss that... but it's not as if it anchors the area or anything.

i do agree, however, that further expansion would be better east than north across western. -M

Everything, I repeat...Everything, will be rebuilt all-new. The old Pearl's location was probably the nicest one, but you can't deny that the new Pearl's location won't be even nicer. That's just one example. Everybody wins with this Chesapeake deal. Unless you're a Nichols Hills vigilante homeowner, in that case, you will loose, because people are getting real tired real quick of this NIMBY bs directed towards high-quality development.

It's not as if Wal Mart has anything to do with Chesapeake. Oh no, we don't need another beautiful collegiate-styled 3-4-story building with stylish dormers gracing the streets!!

[jbrown84]

Everything, I repeat...Everything, will be rebuilt all-new.

Tell that to Laredo's.

[Martin]

from the renderings i've seen floating around, the new pearl's does look pretty impressive. i find the current location a tad cramped and the parking is crazy... but it does have character. the new location will likely have a better kitchen, meaning a better menu and more spacious dining and parking, but it won't be unique. all-in-all it is a win.

i happened to lunch at pearl's today and looked north across 63rd while i was eating... nothing really unique there worth defending if more of those owners decide to sell... 63rd doesn't get all that nice till you get closer to western. i don't really understand the fuss.

-M

[Martin]

tell that to laredo's.

it's hardly chesapeake's fault that laredo's ran out of money before finishing their new location. -M

[jbrown84]

I didn't say that, but he was being very adamant that EVERYTHING was being replaced.

[BDP]

Unless you're a Nichols Hills vigilante homeowner, in that case, you will loose, because people are getting real tired real quick of this NIMBY bs directed towards high-quality development.

I'm not a Nichols Hills homeowner (not sure how I could be a vigilante in this case), but if Chesapeake's exapnsion continues as rumored, I still loose an area of the city that I used to visit. If Oklahoma City continues its long history of simply destroying viable properties for new development, we will all continue to lose.

The point is not that Chesapeake's developments are bad per se, it's that they come at an inexplicable opportunity cost to the community. Have you looked around this city? They could have easily set up shop with no negative impact or even had a total net gain in several locations. But they decided to take some things away in the process, because they were somehow attached to that district. I just like to see Oklahoma City development move us forward with the biggest net gain instead of laterally.

I don't live in the neighborhood, but it would benefit Oklahoma City greatly if the people who lived here did think of the city as their backyard. The reality is that most people in the city don't give a crap what goes up where and what goes down for it to go up. In fact, most people wouldn't have cared if Wal-Mart did set up shop there.

[Spartan]

BDP -- It's amazing in a way how much our opinion on this differs. My opinion is just that, my opinion, and it's worth about a grain of salt. I hate to break it to people like BDP and JBrown, but their opinion is also worth a grain of salt. I don't really think you can compare the upscale blah to the upscale wow that Chesapeake is building and wants to build more of.

I didn't say that, but he was being very adamant that EVERYTHING was being replaced.

Laredo's was going to be replaced. That was not Chesapeake's problem.

God forbid I be adamant about what IS and not piddle around with what ISN'T. Oh but we can continue to whine about the stores getting to build nicer locations, if you wish...

[zuluwarrior0760]

I agree.

Chesapeake gave Laredo's 600% of assessed value.

For them to attempt and fail to create a new location with
that kind of windfall, even if the son didn't get ALL of it,
is something indeed.....

I think instead of "tell that to Laredo's", it oughta be:
"Have Laredo's Tell Us"

what happened that is.........

[Patrick]

Chesapeake is giving everyone way more than market value. That's better than what OSU is pulling up in Stillwater.

Anyways, Chesapeake will continue to expand, but at the same time, I think they'll continue to increase the quality of product offered in the Western Avenue District. The new Pearls will be better than the old Pearls.

What are we really losing that's all that significant? The Wendy's wasn't a huge loss. And much of the land to the east has dilapidated buildings and homes on site. As Chesapeake expands, I have a feeling they'll improive the retail and mixed use developments in the area as well.

[Pete]

I didn't realize they had purchased the Home Builders property... That's a pretty good distance from their campus and probably signals the end of a great meeting space.

Also, at what point do these journalists actually ask them questions about their plans??? It would be nice to see a map plotted with all their properties. I did a search on the county assessor site and came up with over 200.

********************
Let's Make a Deal
Chesapeake plays Monopoly rounds with property

By Richard Mize
Real Estate Editor

Chesapeake Energy Corp. stuck to its quest to own or control the neighborhood around its booming corporate campus in 2006 with almost 50 transactions worth more than $80 million, county records show.

Not all were near company headquarters at NW 63 and Western Avenue.

Rather than one big transaction to capture the public's attention — such as the acquisition of the longtime family-owned Nichols Hills Plaza in late 2005 — this year Chesapeake turned heads by playing its own version of Monopoly.

The company bought, sold and traded property, from office buildings, retail centers, even single-family homes. It bought some real estate to use, some houses to tear down to make room for parking for its work force — 2,200 and counting — and some buildings it didn't need to trade for property it did want.

Not that the purchases were run-of-the-mill. Last fall, Chesapeake bought Hahn-Cook/Street & Draper, a funeral operation at 6006 NW Grand Blvd. since 1967, for $11.7 million, and Reserve National Insurance Co., at 6100 NW Grand since 1969, for $13 million.

Chesapeake is giving each company plenty of time to build new space, said Henry Hood, Chesapeake's general counsel.

Just last week, the Central Oklahoma Home Builders Association revealed that it had decided to sell Chesapeake its headquarters at 625 NW Grand, adjacent to some of the energy company's office buildings.

Two of the year's biggest purchases were acquisitions made away from Chesapeake's campus to have something to trade for property it did want closer by.

Chesapeake paid $1.8 million for Santa Fe Fitness & Racquet Club at 6300 N Santa Fe Ave., to swap it for the Knights of Columbus Hall at 6501 Classen Blvd., in another pair of autumn deals.

Earlier in the year, Chesapeake paid $1.36 million for Nantucket Office Building at 3232 W Britton Road to trade for the former TapWerks Ale House & Cafe at 5700 N Western Ave.

Chesapeake's real estate transactions can be complex, Hood said, and "banking property for trade is an important part of it.”

Owners of some of the properties Chesapeake wants aim to maintain their rent income and don't care what kind of property it takes, Hood said, explaining how retail and mixed-use property can come into the mix.

"For some others, location is everything and they have a personal stake in the property,” he said. "It has been a challenge. In fact, sometimes it's a three-way deal.”

Real estate concerns are a tiny part of Chesapeake's multibillion-dollar business, but property dealing is important to the company's goals for its corporate headquarters and surrounding north Oklahoma City neighborhood, said Tom Price Jr., executive vice president for corporate development.

"So many people are looking for property they can swap on a like-kind exchange,” Price said, referring to 1031 exchange transactions, which allow investors to exchange properties free of capital gains taxation under Section 1031 of the Internal Revenue Code.

For many such realty investors — and potential sellers to Chesapeake — property "in any area with some commercial viability on a major thoroughfare” is something Chesapeake might be willing to buy to trade, Price said. Chesapeake only buys property to trade when it knows a seller wants it, not "on spec,” he said.

Chesapeake has not been fully successful in its property quest.

The lessee of space for a Subway sandwich shop on NW 63, smack in the middle of Chesapeake's plans, has refused to let the energy company buy out his lease. He renewed it for five years just one month before Chesapeake closed on the strip center that used to be attached to the shop.

The owner of a veterinary clinic nearby also has dug in his heels, refusing to deal.

Such obstacles are rare for Chesapeake, which has developed a reputation for not only paying top dollar for the property it wants, but also for its willingness to find creative ways to satisfy sellers.

"There's no deal that can't be made if everybody is satisfied,” Hood said. "We don't like to take no for an answer. We like to make deals happen.”

[Martin]

it would be nice to see a map plotted with all their properties.

now that sounds like a fun project... wish i had the time! -M

[Pete]

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.