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Some could argue that in addition to being in the natural gas business, Chesapeake Energy is in the Oklahoma City business.
From shopping centers to the support of nonprofits and the arts, many rely on Chesapeake dollars. With the announced departure of Chesapeake co-founder and CEO Aubrey McClendon by April 1, many who have benefited, and continue to benefit from the energy company’s philanthropic efforts, wonder what’s next.
The nonprofit sector was put on notice by the company in January with a U.S. Securities and Exchange Commission filing that stated Chesapeake planned to significantly reduce its charitable giving going forward. The company did not disclose how much less it would be giving to charitable causes. Chesapeake’s 2011 annual report showed, for that year, the company donated more than $31 million to support charitable causes and initiatives.
Marnie Taylor, president and CEO of the Oklahoma Center for Nonprofits, said many nonprofits in the state have gotten a bit spoiled with corporate dollars. For many, CEO’s like Aubrey McClendon, Larry Nichols and Harold Hamm seem like old friends, rather than the people who answer to boards and shareholders.
“Sometimes we forget these are large, publicly traded corporations with boards of directors who are not all Oklahomans,” she said. “It creates a different feel to the relationship that we have all appreciated.”
With the future of Chesapeake’s giving unknown, Taylor said she has worked to stress a message she has given to nonprofits all along: Have 90 to 120 days of working cash on hand, and don’t always count on donors, corporations or the government to maintain funding.
“We always tell our own nonprofits a diversified funding stream is the strongest,” she said. “You really have to be prepared in our sector if one of your funders goes away.”
Chesapeake dollars do help nonprofits operate, but the company does not solely keep them afloat. Taylor said her center received $70,000 per year for the last few years from Chesapeake. That amount is only a small portion of her $1.2 million budget. The Regional Food Bank also has reaped the benefits of Chesapeake donations, but the company is not its sole supporter.
Food Bank Executive Director Rodney Bivens said Chesapeake provided $2.5 million in matching gifts over the last three years. Those monies paid for nearly 18 million meals for those in need in Central and Western Oklahoma.
“While we are saddened by the news of Aubrey McClendon’s retirement, we are hopeful that Chesapeake and its employees will continue to support our efforts to fight hunger in Oklahoma,” Bivens said. “Aubrey and Chesapeake Energy have been extremely generous to the Regional Food Bank for more than a decade – not just financially, but through volunteerism and being advocates for our mission.”
Chesapeake is also in the retail real estate business. McClendon is responsible for the construction of Classen Curve, the Triangle at Classen Curve and the purchase of Nichols Hills Plaza. All are within walking distance of the company’s campus at N.W. 63rd and Western. At the Triangle, he brought in Whole Foods Market and Anthropologie. At Classen Curve, the tenant mix includes upscale, local eateries and shops. Nichols Hills Plaza is home to several local eateries and retailers, and a Starbucks Coffee.
With McClendon soon to be out of the picture, some wonder what’s next for those centers.
In May, Danielle Keogh opened her 2,500-square-foot Liberté at Classen Curve. The upscale women’s clothing and accessory store was a dream of Keogh’s, and she was encouraged by McClendon’s vision for the center. She said it came as a surprise that he would be leaving the company, but she has confidence in the future of Classen Curve.
“Change can bring a sense of uneasiness, but it can also allow the opportunity for creativity and growth,” she said. “For Liberté, we will continue pushing onward and upward.”
As of yet, no one from the company has reached out to Keogh about any possible changes.
“Understanding that the company is in a state of change demands all parties associated with it a temporary surrender of security,” she said. “I expect if there are any plans for changes to be made at Classen Curve that they will brief us post-haste as they do with any other business concern.”
Mark Inman, a commercial retail broker with CB Richard Ellis Oklahoma, said if handled correctly, all three shopping centers could be brought together to create an open-air lifestyle center, an amenity the city is lacking. He said a traditional lifestyle center has at least 250,000 square feet, which could be accomplished by combining all three shopping centers, and continuing to build a connection between them.
“That could work there,” he said. “It could be something quite nice for our market.”
The challenge could come if a new CEO at Chesapeake or the board deemed it not worthwhile. Inman said another option could be to sell or turn over those properties to a retail developer who would aggressively work toward creating a lifestyle center. He said the area has plenty of retail potential with what is already there, the abundance of Chesapeake employees nearby, and its close proximity to Penn Square Mall.
“There’s a lot of potential, at least in the long term, to continue developing those projects,” he said.