Forest fire, prairie blaze: McClendon burns up county land inventory
McClendon burns up county land inventory

AUBREY K. McClendon has found his bonanza underground, in natural gas fields from the mid-continent to West Texas to the Gulf Coast and Appalachia, but lately his other interests have come to the surface at home in central Oklahoma.

McClendon, chairman, chief executive and co-founder of Oklahoma City's Chesapeake Energy Corp., is gambling on the risky trifecta that historically has led to riches for forward-thinking, and lucky, Oklahomans — and rags for those out of step with the times:

First, energy. Now land and cattle.

The future looks rich for the already wealthy McClendon, holder of one of Oklahoma's largest personal fortunes.

In the past decade, McClendon, 47, has acquired some 12,000 acres of farm land and raw woodlands north and east of Oklahoma City, most in Oklahoma County, some in Logan County, most of it the past few years.

County records show that his Arcadia Farm LLC, formed in March 1997, has paid more than $70 million for just more than 9,000 acres in Oklahoma County alone.

By last week, Arcadia Farm had acquired 107 separate parcels of land, ranging in size from a 1.2-acre commercial lot at 11000 NE Highway 66 in Edmond for $575,000 on April 11, 2005, to a dozen 160-acre parcels in Edmond, Deer Creek, Luther and Jones bought in 2004-2006, records show.

It's a huge investment, especially since almost all of it is classified as agricultural land, but it represents less than 5 percent of McClendon's personal wealth, estimated last year by Forbes magazine at $1.6 billion.

McClendon said it started in 1997 with 850 acres at Westminster and State Highway 66 in Arcadia, where his first high-visibility commercial enterprise outside his leadership of Chesapeake Energy is scheduled to open with a splash — and some fizz — this summer.

"POPS” will be a combination tourist stop, gasoline station and cafe, complete with a collection of 12,000 pop bottles of all hues and brands, in a Route 66-inspired design by Oklahoma City architect Rand Elliott.

Meanwhile, signs of McClendon's other, quieter enterprises, land investment and pasture leasing, are popping up at crossroads and on fence lines across north and east Oklahoma County: "Arcadia Farm, LLC. No trespassing! ... Arcadia, OK,” announce the signs, which are white, black and blue with a headshot of a bovine.

"I'm really reluctant to talk about something like this. It's not ... Chesapeake. It's done through me, personally,” he said, trying to discourage a story about his land buys.

But the purchase of 12,000 acres — in so many relatively small parcels, about 85 acres on average in Oklahoma County, with none larger than a quarter-section, or 160 acres — is hard to ignore.

McClendon said he owns and operates three ranches in southern Oklahoma but that he has bought the acreage near Oklahoma City strictly as an investment.

His purchases include grazing land leased to cattle raisers, as well as thickly wooded parcels. Oklahoma County's 25,000 beef cows and calves and its 600 or so cattle raisers haven't noticed much difference, since no grazing land has been taken out of production. Woodlands unsuitable for grazing remain undisturbed.

McClendon said his favorite property is in the Cross Timber, the belt of postoak, blackjack, hickory, chinkapin oak and other hardwoods that novelist Washington Irving famously called "forests of cast iron” after a tour of the prairie with Army rangers in 1832.

McClendon's purchases have other rings of history to them, as well.

Anton Classen, Charles Colcord, G.A. Nichols, I.M. Putnam, E.K. Gaylord — all land investors or developers with broad business interests and all considered visionaries — came to mind for historian Bob Blackburn when he was asked about the magnitude of McClendon's acquisitions.

Classen, for example, in the years before the turn of the 20th century, was buying land in numerous parcels where Oklahoma City's Gatewood neighborhood is now, as well as along Classen Boulevard near what would become the popular Belle Isle Lake area, Blackburn said.

"He was buying all that land in 1897, 1898, 1899, and the city caught up with him,” said Blackburn, executive director of the Oklahoma Historical Society. "If you were going to buy land at the right time, Anton Classen bought it at the right time.”

It was the same with Putnam, for whom Putnam City schools are named, Colcord, a contemporary and business partner of Classen, Nichols, a dentist who developed Nichols Hills, and Gaylord, founder of The Oklahoma Publishing Co., publisher of The Oklahoman.

Each was a "visionary who could see the direction things were going” with "the foresight to see the city expanding,” Blackburn said. Most of the men, like McClendon, invested in land in their 30s and 40s. "They had a combination of skill sets, the networks and the capital to make it work,” Blackburn said.

McClendon's main target for investment dove-tails nicely with what, by all accounts, is Edmond's future: land ownership in the path of long-term growth east of Interstate 35, where developers see mostly homes on large wooded acreages, not small lots in typical residential additions.

McClendon has bought so much land so fast that some people wondered if he was trying to do personally what Chesapeake Energy has done around its corporate headquarters at NW 63 and Western in Oklahoma City: control development by buying everything in sight.

Chesapeake has made no secret of its aim to improve its neighborhood by owning it. As for McClendon, he has publicly repeated the old saw about the rancher who didn't want to own everything, just all the property next to his — but he did so in the context of Chesapeake's expansion.

Asked if he meant to control land development at the edges of the metro area, especially east of Edmond, by buying land and sitting on it, McClendon said, "It's not that complicated, really. I started to buy land out there because I think it was more attractively priced than land west of Edmond.”

Plus, he acknowledged, it's prettier.

"I'm not trying to influence anybody,” McClendon said. "I just thought it was an attractively priced asset. ... Now it's not so attractively priced. I'm not buying much these days. A lot of people have started to come in and buy. The cat's out of the bag, so to speak.”

McClendon's acquisitions got the attention of everyone in the land development business, said home builder Jeff Click, vice president and secretary-treasurer of the Central Oklahoma Home Builders Association, which has both builder and developer members.

"Naturally, there's a curiosity as to Mr. McClendon's long-term strategy among those who pay attention to land transactions, particularly with the land he has purchased in the outskirts of town,” Click said.

"But if you look at what he's done in the past and what is taking place at present, particularly with the Chesapeake campus ... combined with the contributions and other investments he's made in this city, it's more of an anxious anticipation, in my view.

"Real estate is a proven, long-term investment historically. If he chooses to hold his investments, it's difficult to question him based on the success of his strategies in other endeavors, aside from the fact that real estate is proven to be a sound long-term investment.”

Did McClendon buy so much land so fast that his own demand priced him out of the market?

He "started the movement” to invest in land east of Edmond, but price inflation was already under way, said Pat Patterson, a Realtor who sold McClendon that first 850 acres in Arcadia 10 years ago.

McClendon has created his own land mini market, said Patterson, a rural land specialist associated with Century 21 Mark V in Edmond.

"Some people have bought land and turned around and sold it to Aubrey — flipped it to him,” he said.

Now "it's pretty rare that anything comes up (available) out there.”

Patterson said raw land in the Cross Timber with no water or utilities and limited access is selling for $10,000 to $15,000 per acre — four to six times what it fetched 10 years ago.

"Land has gone up tremendously all over Oklahoma, (especially) in close to Edmond and central Oklahoma,” Patterson said.

"I've been dealing in land since 1976, and I've never seen it go up as fast as it has in the past five years.”

Patterson said he knew of land that might have sold for as little as $350 per acre going for $6,000 an acre now, although he acknowledged that was an extreme.

"It's not just one thing. But anytime oil does well, land does well,” he said.

The same goes for natural gas, McClendon might point out.

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