When Devon Energy announced it was building a new 50-story headquarters, some civic leaders worried the development would create a huge vacancy in the office market and hamper the revival of downtown Oklahoma City.
With the grand opening of Devon Energy Center set for Tuesday, however, quite the opposite picture is emerging, and several sources have told The Oklahoman at least one corporation — and possibly more — is set to build new headquarters downtown.
Mark Beffort, a partner in the group that owns Leadership Square, CityPlace, Corporate Tower and Oklahoma Tower and a veteran downtown office broker, started the year with a prediction the city would see another downtown headquarters announced in 2012.
“I still believe, absolutely, we will see a new building announced,” Beffort said. “It just hasn't happened yet. But there are multiple people looking, and there are opportunities for one, maybe up to three buildings to be announced in 2013.”
Beffort's buildings have seen most of the space once occupied by Devon taken by new companies moving in over the past year.
While some of the growth involves energy companies such as Enogex, RKI Exploration and Flogistix, others are Booz Allen Hamilton, a technology consulting company with contracts at Tinker Air Force Base, Staple Gun Advertising and Covenant Financial.
Devon, which will move up to 300 employees from its Houston operation to Devon Energy Center, is retaining space at Corporate Tower for vendors and affiliate companies. The company employs about 1,700 people downtown, though the total workforce at Devon Energy Center, including contractors and food service workers, tops 2,200.
Rapid growth, meanwhile, is being reported by two other major companies that grabbed vacant headquarters: Continental Resources, which bought the old Devon building at 20 N Broadway; and SandRidge Energy, which is leasing three floors at CityPlace Tower as the company fills up its tower at 123 Robert S. Kerr Ave., and is preparing to move even more employees into the adjoining Braniff building as its renovation is wrapped up next year.
While executives at Devon and Continental have shied from directly answering whether all this growth might translate into additional construction, SandRidge early on presented a master plan for its downtown move that calls for a series of buildings along Broadway.
Two SandRidge projects are certain to proceed. Site work is under way on a five-story “amenities” building at 120 Robert S. Kerr Ave. that will be home to a restaurant, auditorium, day care and fitness center. A second new building, eight to 14 stories high, will span Broadway between Robert S. Kerr and Dean A. McGee Avenues. That building is “under study,” Dewey said, though construction likely won't begin until late 2014.
“Future growth at this point is tied to the Mississippian (field) ... and that play is going very well for us right now,” Dewey said.
SandRidge employs 722 people downtown. Dewey said once the building on Broadway is built, the SandRidge Commons will be big enough to accommodate up to 2,000 people the company expects to employ within five years.
Could Continental Resources see growth beyond its headquarters at 20 N Broadway? That question is quietly being asked by downtown observers who have noted the company is growing far faster than projected when it moved its headquarters from Enid.
The company had 599 employees, including 335 headquarters employees, a year ago. The count is up to 722, including 416 at the headquarters. The company projects it will employ 1,000 by 2014, including about 600 at its Oklahoma City headquarters.
“We recently finalized our move into the Continental Oil Center as of mid-August,” said Kristin Miscovsky, vice president of public relations at Continental. “We are focused on growing the company and growing jobs. We do not currently have any plans beyond our existing real estate but are excited to call Oklahoma City home. The company will continue its expansion as we execute our five-year plan.”
Patterns of growth
Klay Kimker, Devon vice president of administration, has witnessed two expansions of the downtown skyline.
As a young executive at Liberty Bank, Kimker helped guide construction of its headquarters at Broadway and Park Avenue and saw the rise of Fidelity Tower (now BOK Plaza) and Kerr-McGee Tower (now SandRidge Tower) in the early 1970s. He also saw the construction of Mid-America Tower (now Continental Oil Center), Leadership Square, and the Galleria towers (now Corporate and Oklahoma towers).
At the start of construction on Devon Energy Center, Kimker was among a few veteran downtown observers who pointed to the experience of Charlotte, N.C., which saw its downtown skyline expand with construction of the Bank of America headquarters in the late 1980s. He questioned three years ago whether the emergence of Devon Energy Center might lead to future growth of downtown Oklahoma City.
Now, he's more hopeful such growth will occur.
“The building Hugh McColl (then chairman of North Carolina National Bank) built, now the Bank of America, they told him he could only fill half of it when it was built,” Kimker said. “But he anticipated growth with Bank of America (the eventual successor to North Carolina National Bank). And he anticipated it would jump-start the economy of Charlotte when it was built.”
Kimker notes that a couple of years later, the downtown Charlotte skyline did grow with the addition of towers built by Wachovia and Duke Energy.
“So there is precedent for my hope that will be the case here,” Kimker said. “I'm optimistic we'll see some change.”
Pain with change?
With that change, however, more growing pains may be experienced. Cathy O'Connor, president of The Alliance for Economic Development of Oklahoma City, is fast-tracking construction of a 750-space garage along Main Street just west of Devon Energy Center, and is involved in talks to expand the Century Center garage and potentially develop other new parking garages.
“There is definitely a lot of energy downtown right now,” O'Connor said. “Companies there are growing. We hope they will attract other companies downtown that will develop new projects. … We will definitely see changes to our skyline in the next five years.”
Where that change might take place is still unknown. Development bids are being considered by the Oklahoma City Community Foundation, which owns the closed Stage Center at Sheridan and Hudson Avenues.
Gary Pierson, chief executive officer of the Oklahoma Publishing Co., said the company has sold land it owned at NW 4 and E.K. Gaylord to an affiliate of SandRidge Energy. Representatives of SandRidge declined to comment on the purchase.
“Strategically, it makes much more sense for an affiliate of SandRidge to own this property than OPUBCO,” Pierson said. “SandRidge is building a campus on adjoining land; OPUBCO moved out of downtown 22 years ago.”
O'Connor and Beffort agree that with the expansion of corporate workforces downtown — and the ongoing public investment with the Project 180 makeover of streets and public spaces and the MAPS 3 plan for a streetcar system, park and convention center, and construction set to start on a new elementary — growth to the skyline is a certainty.
“I think we're going to see more and more companies coming downtown because it's the place to be,” O'Connor said. “It's attractive to the younger, more creative employees they're trying to attract.”
Beffort urges everyone to wait and watch.
“The skyline is going to grow,” he said. “There is no doubt in my mind it's going to grow.”
Even without the emergence of new high-rise office towers, downtown's skyline is set to see more low- to mid-rise buildings added in the next couple of years. New hotels include the 11-story Hilton Garden Inn in Bricktown, a six- to eight-story Marriott Springhill Suites at Russell Perry and NE 1 in Deep Deuce, and two more hotels, each six to eight stories high, on the south side of Sheridan Avenue at Byers Avenue. SandRidge Energy will build a five-story amenities building at 120 Robert S. Kerr Ave. and a building up to 14 stories high at Broadway and Robert S. Kerr Ave. A four-story apartment complex is being built at NE 4 and Oklahoma. A convention center will be built, likely two to three stories high, south of Myriad Gardens, and a three-story elementary will be built at Sheridan and Walker Avenues.