Unfinished business: Chesapeake, McClendon real estate developments incomplete as company leadership changes
Much of Aubrey McClendon's vision for developing the area around Chesapeake Energy Corp.'s Oklahoma City headquarters will be incomplete when he leaves the company April 1.
An exposed steel frame rises out of Chesapeake Energy CEO Aubrey McClendon's unfinished wine cellar like the skeleton of a beached whale laid out in the middle of the Manor Hill neighborhood at NW 68 and Classen Boulevard.
McClendon personally purchased an office building and at least one house to make way for the wine cellar in 2006 and 2007, but construction stalled after the site was cleared, the concrete foundation was poured and ark-like steel eves were erected in 2008. Stacks of unused building materials, including rusting metal beams still clutter the site.
“I think it's an eyesore,” said Manor Hill resident Linda Ross, who lives two doors down from the back side of the incomplete wine cellar. “All of the building materials are just sitting there rotting. I don't appreciate Aubrey just leaving it there half finished.”
Like the wine cellar, much of McClendon's grand vision for Chesapeake Energy's campus and ancillary development will be incomplete when he leaves the company he co-founded April 1 in the wake of a boardroom shake up.
Chesapeake Energy Corp.'s real estate timeline
1989: Aubrey McClendon and Tom Ward start Chesapeake Energy. They pay $240,000 for a single 6,000-square-foot office building in 1989 at the office park known as “Three Chopt Square,” 6200 N Western Ave. Over the next few years the company buys the entire office park for its headquarters.
1997: Chesapeake Energy buys adjacent land for expansion.
2000: Chesapeake Energy begins building new, Georgian style brick buildings as it continues headquarters expansion.
Early 2000s: Chesapeake Energy begins buying nearby office and warehouse properties.
2005: Chesapeake Energy and its affiliates begin to buy retail properties, including Glenbook Centre, 1140 NW 63, for $8.5 million.
2006: Chesapeake Energy buys Nichols Hills Plaza for $27.5 million. When asked about talk of Nichols Hills Plaza being turned into “another Utica Square” — the popular Tulsa retail-restaurant center — Executive Vice President Tom Price Jr. responds Chesapeake is an oil and gas company, first and foremost, and not a real estate developer. That same year the company buys Metro Center, 6418 N Western, a retail and office complex home to the upscale Metro restaurant, for $1.85 million.
2008: Deep Fork Acquisition, a company sharing the same post office box with Chesapeake Land Development, buys Deep Fork Restaurant, 5418 N Western, for $4.5 million. The property previously sold for $775,000 in 2000. Chesapeake buys a 2,000-square-foot Shell station at 6405 N Western built in 1969 for $3 million. McClendon also begins approaching upscale retailers about moving into a planned upscale shopping center, Classen Curve, that the company sought to build at Classen and Grand Boulevards.
2010: Classen Curve opens. Whole Foods confirms it will anchor a second shopping center, Triangle, that Chesapeake Energy will build just north of Classen Curve.
2011: Crescent Market, a 122-year-old grocery at Nichols Hills Plaza, closes and the owner blames its demise on a $6,000 per month rent increase by landlord Chesapeake. The company announces plans to open its own grocery in the same spot. The adjoining Nichols Hills Drugstore closes its lunch counter and moves into a smaller storefront after being assured by Chesapeake the pharmacy will be included in the new grocery.
2013: Nichols Hills Drugstore leaves Nichols Hills Plaza. The grocery and other commercial projects are left in doubt as McClendon is set to leave Chesapeake Energy on April 1.
STEVE LACKMEYER AND BRIANNA BAILEY, Business Writers
A review of court records, speech transcripts, and planning documents by The Oklahoman show a vision that went far beyond the headquarters.
Chesapeake's plans for the area around its campus included company-owned shopping centers, a hotel, high-end condominiums and a chain of modern convenience stores dubbed “Peake” that would feature pumps with compressed natural gas.
That vision, far from complete, would have complemented a corporate headquarters that features such amenities as a 2.5-acre community garden, a 72,000 square-foot fitness center and a $10-million, 63,000 square-foot employee child care center topped with a steel-tube sculpture spelling the word “Hi.”
Although Chesapeake has said it is slashing costs and selling billions of dollars in assets in the face of a bearish natural gas market and a board shake up, the company has remained mum about its plans for the hundreds of millions of dollars of real estate it owns in Oklahoma City or for several development projects in various stages of completion.
Chesapeake Energy officials declined to comment on its future real estate development plans to The Oklahoman.
CEO drove vision
Much of Chesapeake's land development activities have been intertwined with its charismatic CEO since McClendon co-founded the company in 1989 with Tom Ward, now CEO at SandRidge Energy Inc.
McClendon modeled Chesapeake Energy's original signature red brick five-story buildings on a university-style setting — one he said he hoped would create a comfortable arrival for younger hires. By the early 2000s, McClendon's interest in real estate evolved from the campus itself to nearby properties — many of which were bought at prices far above market value.
The Chesapeake-owned Nichols Hills Plaza shopping center is on the same street as the company's headquarters, and less than a mile from McClendon's Hills home.
The company's $27.5 million purchase of Nichols Hills Plaza, $215 per square foot in 2006, was described as “phenomenal” at the time by retail property specialist Mary Grace of Grace Commercial Real Estate.
McClendon has an ownership interest in multiple Oklahoma City restaurants that Chesapeake plays landlord to, according to loan documents and county real estate records, including Irma's Burger Shack, the Metro Wine Bar & Bistro and Deep Fork Grill.
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