Although a cheery banner overlooking Avondale Drive briefly promised that a grocery store would be open in Nichols Hills Plaza by fall 2012, Chesapeake Energy Corp. appears to have scrapped its plans to open a company-run grocer in the shopping center.
The banner disappeared months ago and an office in Nichols Hills Plaza once staffed with at least two Chesapeake Energy employees tasked with opening the supermarket is now dark, locked and empty.
Officials with Chesapeake Energy declined to comment about the grocery or the future of the shopping center.
Construction workers were putting the finishing touches on exterior renovations and landscapers were planting new flowers one recent afternoon on the south end of Nichols Hills Plaza, but the city has yet to receive a building permit application for the store's interior.
“They've gone about as far as they can go without a building permit,” Nichols Hills Building Inspector Kelly Hurley said.
While most of Nichols Hills Plaza still bustles with shoppers and restaurant patrons, the southern half of the shopping center has been largely vacant for months.
It was there that generations of shoppers patronized Crescent Market and Nichols Hills Drug, a family-run drugstore complete with a 1960s-era lunch counter.
Crescent Market closed in fall 2011, and soon after its owner Robert Pemberton reported its demise was hastened by a $6,000 a month rent increase sought by Chesapeake and competition brought on by Whole Foods.
The neighboring Nichols Hills Drug closed its lunch counter despite a community outcry and survived in a smaller storefront at the plaza until January, at which time owner J. Black gave up on promises made by Henry Hood, Chesapeake Energy vice president of land, that his pharmacy would be incorporated into the planned grocery store.
Black ended a half century at the plaza and moved to a new location a few miles west in Oklahoma City.
Nichols Hills has seen double-digit percentage declines in its sales tax revenue since several merchants have left the Plaza shopping center in Crescent Market's wake.
The two-square mile city has precious few retailers to generate sales tax revenue Nichols Hills Mayor Peter Hoffman said. However, the city is still doing well, because of increased tax revenue from new home construction and its initiative to refinance some municipal bonds, he said.
Hoffman believes that although Chesapeake Energy CEO Aubrey McClendon, the driving force behind much of the company's real estate development, is leaving the company, McClendon will continue to play an active role in the future of Nichols Hills.
“He wants to be actively involved and a visionary with real estate for our city,” Hoffman said. “His heart has always been in the right place and will continue to be.”
However, Hoffman and other city officials are still short on specifics about what Chesapeake's plans are for Nichols Hills Plaza, he said.
“I fully expect that it will be developed to its highest and best use,” Hoffman said.
Nichols Hills Councilwoman Sody Clements continues to be optimistic about the future of Nichols Hills Plaza.
“It's early days yet,” Clements said. “I assume everything is going to proceed as we've been told.”
At a City Council meeting in November 2011, Hood promised city officials that the company would bring a new grocer to the empty storefront by fall 2012. That date was pushed back to spring 2013. Nichols Hills, meanwhile, saw sales tax collections drop 17 percent for the year ending June 30, 2012, compared to the same period the previous year.
In a June 7, 2012, story, Reuters reported internal records at Chesapeake showed the energy company had put two grocery store managers on its payroll with combined salaries exceeding $200,000. The employees oversaw planning from a second-floor office in the same building that once housed Nichols Hills Drug
One of those two employees, Tom Sladek, now runs a sprinkler company in Kalispell, Mont. Sladek lost his job in November after he was told Chesapeake was reining in its focus to its oil and natural gas assets after former ConocoPhillips executive Archie Dunham was named Chesapeake's new chairman.
“They definitely took a different turn of direction,” Sladek said. “They got a new board of directors and wanted to completely get out of everything that wasn't oil and gas.”
Sladek said that as he left, specialty grocer Trader Joes had plans to take over the market space.
Properties for sale?
Pemberton, who fought off tears as he closed his family's 122-year-old Crescent Market, now finds it ironic that a prominent developer, whom he would not name, recently told him the Trader Joe's deal had fallen through due to Chesapeake CEO Aubrey McClendon's departure. Pemberton said he was invited by the developer to reopen Crescent Market in its old location at Nichols Hills Plaza.
The building, however, is an empty shell. Pemberton sold all his furnishings and equipment at auction and his veteran staff has dispersed to other groceries throughout the metro.
Pemberton said he was informed by the developer that Nichols Hills Plaza, Metro Shopping Center, Classen Curve, Triangle and other area commercial investments were all up for sale. Other area real estate investors have privately confirmed to The Oklahoman the properties are up for sale.
Pemberton said he has considered buying the Shell station at the entrance to the Nichols Hills Plaza and adding limited food sales, but isn't interested in reopening Crescent Market.
“I don't have the pockets to compete with Whole Foods — they would still be competition,” Pemberton said. “The old store is just a skeleton now. It would take a lot to get it going again.”
Pemberton predicts “upheaval” is ahead for the entire area — a costly consequence of McClendon's experimentation with commercial development.
“When they ventured off from oil and gas, they were in over their heads no matter what they were doing,” Pemberton said. “Their philosophy was to pay two to three times what a property was worth, and you can't make money doing that.”