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SandRidge proxy fight could affect downtown Oklahoma City

Downtown Oklahoma City observers are watching the SandRidge activist shareholder drama closely, noting that in just five years the company has become a major anchor of central business district.
by Steve Lackmeyer Published: February 25, 2013

Just a year earlier, Anadarko acquired Kerr-McGee and left empty the company's 29-story tower at 123 Robert S. Kerr Ave. Chesapeake bought some of Kerr-McGee's energy holdings and its downtown real estate, and then sold the real estate to SandRidge for $22.3 million.

SandRidge under Ward's leadership quickly established itself as a major corporate anchor downtown, embarking on a $100 million redevelopment of the old Kerr-McGee headquarters now known as SandRidge Commons. The project includes an extensive renovation of the adjoining historic Braniff Building, which will provide additional office space for the company's workforce, while the ground floor is already leased to a popular new restaurant, Kitchen No. 324, and the Barber Salon, which moved from First National Center.

With renovations wrapping up at the Braniff Building, the company this past year started construction on a new five-story “amenities” building at 120 Robert S. Kerr Ave. that will house a new company auditorium, fitness center, child care operation and restaurant.

Williams noted the company financially supported the construction of a children's pavilion and zip line venue along the Oklahoma River, while Ward also is a partner in the ownership of the Oklahoma City Thunder. SandRidge also partnered with Chesapeake in redesigning and rebuilding Kerr Park at Robert S. Kerr Avenue and Broadway.

“We're so fortunate in Oklahoma City, and we take it for granted that headquarter companies do this in every community they are located in,” Williams said. “But in reality, that's not always the norm.”

Tim Strange, managing director at Sperry Van Ness/William T. Strange & Associates, sees the shareholder challenge as an uncertainty casting a shadow on downtown's momentum.

“I just have to think in terms of perception … it would be a disaster,” Strange said. “We got lucky years ago when they did the Anadarko/Chesapeake deal that gave them control of that 500,000 square feet that was Kerr-McGee. To have that back on the market, it wouldn't be good.”

Strange said the downtown market, with Class A office vacancy estimated at 5 percent, is better than it was in 2007. But with all the changes to the property by SandRidge, it may be more difficult than some may think to market to a new company should the worst-case scenario for the city be realized with a Kerr-McGee-type demise.

“It's all so special purpose in terms of their design and how they're doing the block, and how they are repurposing it all for their own use,” Strange said. “Would someone else want to use it? ”

Uncertainty with both SandRidge and Chesapeake further north, Strange said, could lead to a lot of instability in the downtown and north-central office markets in years to come.

Williams echoed Strange's concerns, adding Oklahoma City has been blessed not to end up with a major corporate headquarters sitting empty for years as has been witnessed in other cities.

For now, Williams said, he is, like most others, waiting and watching what happens next.

“It's on the top of everyone's mind, it's being talked about,” Williams said. “What you never know is the depth of the passion out there on the other side — the other fund groups taking this initiative forward. You don't know how deep their support is or what their intent is. Everyone I talk to wants to see Tom remain, the board remain, and see the company continue to grow here.”

by Steve Lackmeyer
Business Reporter
Steve Lackmeyer is a reporter and columnist who started his career at The Oklahoman in 1990. Since then, he has won numerous awards for his coverage, which included the 1995 bombing of the Alfred P. Murrah Federal Building, the city's Metropolitan...
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