14. special section - Outlook business by Darla Lindauer

SUNDAY, APRIL 25, 2010

OUTLOOK | BUSINESS & TECHNOLOGY

THE OKLAHOMAN | NEWSOK.COM

ENERGY COMPANIES INVEST IN IMPROVING OKLAHOMA CITY

Devon, Chesapeake help revitalize city BY STEVE LACKMEYER Business Writer slackmeyer@opubco.com

Two companies that still were relatively obscure at the 1993 passage of the original MAPS ballot are being credited with helping transform Oklahoma City into a major league city. Devon Energy is transforming the downtown skyline with construction of a $750 million, 50story tower and the creation of a tax increment finance district that will make over downtown streets and parks. Chesapeake Energy, meanwhile, continues its transformation of an entire neighborhood centered on NW 63 and Western. The improvements include not just the ongoing expansion of Chesapeake’s corporate campus, but also investments in the neighborhood itself — most recently highlighted by the development of the upscale Classen Curve shopping center. Together the companies also are transforming the Oklahoma River, first with construction of the Chesapeake Boathouse, then with the addition of the Devon river cruisers and construction of a Devon boathouse, and next with construction of a Chesapeake finish line tower. Architect Rand Elliott has worked with both companies designing their projects along the Oklahoma River. “Obviously we wouldn’t have what we have without them,” Elliott said. “They focus on not just the big ideas but the details.” Elliott recalled an early conversation with Larry Nichols, chief executive officer of Devon, about planning for restrooms at Devon Boathouse. “Not many CEOs are concerned with that level of detail,” Elliott said. “Meanwhile, Aubrey (McClendon, chief executive officer of Chesapeake) took an interest in doing the first boathouse believing it would be of value to downtown, the river and the community. We are building on those things today.”

This artist’s rendering depicts plans for the Chesapeake Finish Line Tower. PROVIDED BY CHESAPEAKE ENERGY CORP.

Leadership, Elliott said, sometimes means being the catalyst for things to follow. “Great cities have great leadership, and that’s what we have in Chesapeake and Devon,” Elliott said. “They have stepped out and taken risks for the benefit of our community.” Roy Williams, president of the Greater Oklahoma City Chamber, noted both companies also have been listed on the top 100 places to work. “They are not just creating great buildings, but also great places to work inside those buildings,” Williams said. “And word filters out about that across the country.” Williams said Nichols and McClendon set an example of community service that is followed by their employees, and their impact can be seen not just along the Oklahoma River, but also in schools, United Way and area universities.

“They are the epitome of a great citizen,” Williams said. “You don’t have great communities without great corporations.” Williams added that the companies’ impact on Oklahoma City becoming a major league city is also evident within its leap to becoming an NBA city. “They were extremely supportive when the Hornets came,” Williams said, recalling the temporary relocation of the team from New Orleans when that city was hit by Hurricane Katrina. “They’ve since been significant contributors to the Thunder and other sports — from the Olympic teams to the Big 12 to collegiate athletics.” Williams looks back at the past decade as one in which both companies emerged as leaders in perfect timing with the city’s own emergence from the doldrums of the 1980s. “It’s really been in the last decade that they’ve surfaced in

A view of the Chesapeake Boathouse and downtown Oklahoma City is shown in 2008 during rowing practice on the Oklahoma River. PHOTO BY NATE BILLINGS, OKLAHOMAN ARCHIVE

their community,” Williams said. “And as they became successful, they came up for air and began to see the importance of

attracting the best talent and that Oklahoma City needs to be the best place to live if they want to attract that talent.”

Drilling company continues investment in Enid BY JAY F. MARKS Business Writer jmarks@opubco.com

ENID — Harold Hamm had an office in Oklahoma City when he formed his drilling company more than 40 years ago. But he chose Enid as the headquarters for Continental Resources Inc. and hasn’t looked back since. Through the years, Continental has grown into one of Enid’s largest employers and biggest success stories. It gives northwest Oklahoma’s largest city a national outlook on a global product. As the company has grown, Hamm and his company have worked to bolster Enid as well. “It’s our city,” he said. “We’re at home here.” Greater Enid Chamber of Commerce CEO Jon Blankenship said Enid is fortunate to have Continental, which he called an outstanding company.

More than a slogan About half of Continental’s 425 or so employees are based in Enid, with jobs that are among the

CREDITS OUTLOOK COVER PHOTOGRAPHY

›

The Way We Live: Oklahoman staff and wire photography Business & Technology: Chris Landsberger, Steve Gooch and Paul Southerland/The Oklahoman Advancements in Health: Paul Southerland and file photos Education & Careers: Paul Southerland and Paul Hellstern/The Oklahoman Cover illustrations: Todd Pendleton

› › › ›

best-paying positions in the community, he said. Enid City Manager Eric Benson said Continental is one of the most admirable corporate citizens he’s ever encountered. The company and its people are willing to cooperate and participate in efforts to improve the community and the quality of life it offers, he said. They offer more than just money to address Enid’s problems. “They embody the refrain that Enid is their hometown,” Benson said. “It’s not just a slogan.” Hamm said the decision to keep Continental in Enid was a quality of life issue. The city has good schools and a lot of people with strong work ethics

employees like to do what they can to improve their community. “Our people get involved,” he said. “We like building stuff.”

Benefiting schools

Continental Resources Inc.’s office buildings dominate the skyline of downtown Enid. PHOTO PROVIDED

instilled in them by growing up in the area’s agricultural communities. “Today we have the

most creative, energetic people that you can hire,” he said. Hamm said he and his

Continental recently donated $1.5 million to Enid Public Schools. It also hosts the annual Great Land Run to raise money for school technology. “Continental Resources is an incredible friend to Enid Public Schools and northwest Oklahoma,” Superintendent Shawn Hime said. “Continental believes in investing in the community, and that commitment makes Enid a better place to live and to learn.” Benson said the compa-

ny’s commitment to Enid is a reflection of its leadership. Hamm, Continental’s CEO, is interested in what is best for Enid, not just his company or its employees, Benson said. He said he met Hamm at a pumpkin patch when he first came to Enid several years ago. The two men talked about the city, but Benson didn’t learn for some time that the other man was the head of Enid’s largest company. Benson said it is difficult to measure Hamm’s impact on the community because he supports a lot of entities and is always willing to help. “Every time I’ve asked him for some of his time, I got it,” he said.

THE OKLAHOMAN | NEWSOK.COM

SUNDAY, APRIL 25, 2010

OUTLOOK | BUSINESS & TECHNOLOGY

CONSTRUCTION OF SKYSCRAPER MAKES DOWNTOWN POSSIBILITIES A CONCRETE REALITY

Devon Tower to change more than landscape Devon tower construction site – March 21, 2010 A literalist eye would consider this watching concrete dry. That’s not so for those of us shivering in sub-freezing temperatures and blistering winds atop this downtown parking garage. When we peer over the ledge at the gaping hole in the earth below, we see something more. Yes, there’s concrete drying down there — about 26 million pounds of it, actually. But that’s not what we’re watching. We’re watching the future. This gargantuan hole in the ground is the foundation for the future Devon tower — a 50story skyscraper that will change Oklahoma City’s skyline radically and dwarf every other downtown building. Today is the concrete pour for the building’s foundation. For 15 consecutive hours, 45 concrete trucks will dump concrete in a foundation that hundreds of workers have spent months digging and prepping for today’s pour. It’s a major event because once the concrete dries, the building starts coming out of the ground and up to the sky. A couple dozen people are out in post-blizzard weather to watch the pour from a nearby parking garage that oversees the construction site. The frigid wind ripping across the snowpacked parking lot rooftop on this second day of spring is a chilling reminder of a failsafe fact of Oklahoma weather: Anything is possible — no matter the time. Such a theme feels appropriate today. Local economies nationwide have screeched to a halt as the Great Recession cripples the country’s finances

At left, Klay Kimker, vice president of administration at Devon Energy, takes a picture March 3 at the construction site of Devon Tower, shown above, in downtown Oklahoma City. PHOTO BY JOHN CLANTON,

An artist’s rendering shows what Devon Energy’s new office tower will look like.

THE OKLAHOMAN

ONLINE

RENDERING PROVIDED BY DEVON ENERGY CORP.

and, in the process, its capacity for progress. Oklahoma City is not wholly immune. Unemployment here is noticeably up from 2009 and looming budget cuts in city government threaten the basic city services on which residents depend. But this city has weathered the recession better than most. As a result, anything is possible — no matter the time. The proof is in the concrete pouring into the dirt here at a time when no other major U.S. city has a skyscraper coming out of the ground. For that reason alone, the Devon tower construction site is a place unlike any other in the country. What a sight it is. Four concrete trucks are hooked up to towering robotic cherry-picker arms that suck up the concrete and shoot it into the foundation below. Doz-

ens more trucks line the snowtinged construction site in a parade-like procession, awaiting their turn to pour. Trucks that have already dumped concrete in the foundation leave a trail of dirt on downtown’s streets that leads back to the Devon tower site like cookie crumbs to a pot of sugary gold. The concrete trucks are painted dark green, much like military vehicles. The color seems just right considering the military precision of today’s operations.

And despite the often-brute nature of construction work, this concrete pour unfolds like a carefully choreographed ballet. There’s an artful elegance to it. The cold is forgotten as I watch truck after truck approach the hole and pour in the foundation for a place that will stand taller than all others — both man and nature-made — in this state. I close my eyes and picture what’s to come. My eyes open, and I see that from here there’s nowhere to go but up 850 feet. JOHN ESTUS, STAFF WRITER

Accompany The Oklahoman’s photographers and writers as they investigate some of our state’s most intriguing places — seeing what they see, hearing what they hear and feeling what they feel. PLACES.NEWSOK.COM

LIVE VIDEO To watch a live feed of the Devon Tower construction, go online to NewsOK.com/ okcskyline.

SUNDAY, APRIL 25, 2010

OUTLOOK | BUSINESS & TECHNOLOGY

THE OKLAHOMAN | NEWSOK.COM

SUBURBAN SPACES HAVE BEEN HIT HARDEST BY ECONOMIC DOWNTURN, REPORT SAYS

Vacant office space brings challenges BY RICHARD MIZE Real Estate Editor richardmize@opubco.com

The Devon Energy tower, not even in place, hasn’t gone anywhere: It still casts a shadow over the market for office space in downtown Oklahoma City. When Devon leaves about 900,000 square feet of mostly leased space behind to occupy its new 50story, 1.8-million-squarefoot corporate headquarters in a few years, who knows how the empty space will be filled? Downtown has dodged similar, although smaller, bullets in the past — most recently, the empty KerrMcGee buildings that never hit the rent rolls since SandRidge Energy Corp. bought them. So the real estate business is putting off worrying too much about the impact of Devon’s project, especially since the skyscraper is itself part of the ongoing renaissance of downtown. Challenging times are ahead, no doubt. In the meantime, Price Edwards & Co., commercial realty, is among those pointing out that there is plenty to crow about downtown, from the $777 million MAPS 3 projects to Project 180’s user-friendly streets and sidewalks, a new convention center and improvements along the Oklahoma River. “Despite the coming glut of space, there are many positive aspects in (downtown’s) future which should make it a more attractive office location than it has been,” Price Edwards said in an office market report at the first of the year. “Oklahoma City is busy building a great downtown and we feel those efforts will be rewarded with both residents and office tenants looking to (downtown) for their future homes.” Last year was “not pretty,” the firm reported, ending 2009 with a metrowide office vacancy rate of 17.1 percent, up 2.1 percentage points from 2008, a downtown vacancy of 24 percent, up slightly from 2008; and a suburban vacancy of 13.6 percent, up more than 3 percentage points. The basics of the yearend report haven’t changed, said Craig Tucker, senior vice president of Price Edwards’ office division. “Our city had avoided the majority of economic turmoil since the collapse of the financial markets began in 2007, but the local office market was hit (in 2009) with the effects of a rising unemployment rate and general economic uncertainty that led to office closings, space reductions and the shelving of many expansion plans,” the firm reported.

Above: Newer speculative office buildings like this one at 4811 Gaillardia put upward pressure on rents in northwest Oklahoma City just as the recession was hitting here, real estate specialists say. Left: Leadership Square and other downtown office buildings will face a whole new property-leasing market when Devon Energy moves into its new 1.8-millionsquare-foot corporate tower in a few years. PHOTOS BY CHRIS LANDSBERGER, OKLAHOMAN ARCHIVE

Suburban offices Suburban Class A office buildings were hit hardest, with vacancy almost doubling to 21.6 percent, Price Edwards said, but probably will lead the market back out of the downturn. Asking rents as high as $25 per square foot per year in the newest speculative buildings, concentrated in northwest Oklahoma City, were based partly on peak construction costs and yields based on economic conditions that no longer exist, according to Grubb & EllisLevy Beffort’s year-end office trends report. “With market vacancy creeping higher and a lack of activity in the market, landlords of these new Class A properties have been forced to lower their expected yields and drop asking rental rates in hopes of attracting new tenants,” Grubb & Ellis-Levy Beffort said in the report, which was prepared by analyst Douglas Opp. Too many new buildings hit the market in 2008 and 2009, and were just too late to the party,” Price Edwards said in its report. “But history tells us there is hope for these buildings. “In the 24 years our company has collected data and published this report, the suburban market has never experienced three consecutive years of negative absorption and 2009 now marks the second year in a row. “And, if history repeats itself, it will be the Class A buildings that lead us out of the vacancy wilderness in 2010 as the reduced rents and concessions offered by those landlords will begin to attract sound companies on the front end of the economic recovery which now appears to be gaining solid footing.”

Devon Energy will put pressure on Oklahoma Tower, 210 Park Ave., and other office buildings downtown when it moves into its new headquarters and leaves 900,000 square feet of empty space, most of it leased, behind. PHOTO BY DOUG HOKE, THE OKLAHOMAN

THE OKLAHOMAN | NEWSOK.COM

OUTLOOK | BUSINESS & TECHNOLOGY

SUNDAY, APRIL 25, 2010

Downtown businesses look ahead to transformation from MAPS 3 An artist’s rendering shows the proposed MAPS 3 Oklahoma City Convention Center. RENDERING PROVIDED

BY STEVE LACKMEYER Business Writer slackmeyer@opubco.com

The passage of MAPS 3 in December will translate into $600 million more being pumped into the central city, though the timing and logistics of much of the work has yet to be determined. Even so, downtown businesses are looking forward to how MAPS 3 will continue the transformation of the center of the city. Jim Cowan, director of the Bricktown Association, is hoping a new convention center will be located where it ties in directly with the entertainment district, maintaining a flow of business that has been established with the current Cox Convention Center. He’s also eager to see how a streetcar system running through the district might better connect the area with other downtown attractions. “The convention center will be critical,” Cowan said. “It currently makes up as much as 40 percent of our annual business.” John Williams, general manager of the Skirvin Hilton Hotel, shares Cowan’s enthusiasm for what’s ahead. He said rowing events along the Oklahoma River already are a big source of business for the hotel, and he looks forward to what business might be sparked by more investments along the waterway. “The river component of MAPS 3 is going to be a significant factor on tourism,” Williams said. “We’re going to see more

AT A GLANCE MAPS 3

› › › ›

Convention center: $280 million Transit system: $130 million Central park: $130 million River improvements: $60 million

and more rowing competitions, and this is going to reinforce Oklahoma City as a destination for competitive rowers. It’s going to bring us a lot of weekend business.” Williams, who has managed hotels in New York City, Washington and Minneapolis, says he is a “great believer” in the MAPS 3 streetcar system. “You’ve got many different elements and dots in Oklahoma City,” Williams said. “You’ve got Bricktown, the Oklahoma Health Center, and the new convention center coming. A logical and a costeffective way to connect those dots is by trolley.” Williams said having an effective streetcar system that allows visitors to get from their hotels to the convention center will go a long way in furthering the city’s positive image. “Those people will go back home, and they’ll talk with others who will be deciding travel plans and where to schedule conferences,” Williams said. “And they’ll recommend what a great place Oklahoma City is for conventions.”

Shown is a rendering for a MAPS 3 project on the Oklahoma River. RENDERING PROVIDED

SUNDAY, APRIL 25, 2010

OUTLOOK | BUSINESS & TECHNOLOGY

Bricktown works on wireless plan kinks FROM STAFF REPORTS

Jim Cowan is excited about the potential of having free wireless Internet access throughout Bricktown. The head of the Bricktown Association said the development will enhance visitors’ experience in Oklahoma City’s popular entertainment district. “It will make it easier for people having meetings, corresponding during lunch or dinner time, and we think it might even be used for dining reservations,” Cowan said. “There is a convention going on right now and I’m seeing people on their laptops. “It enhances the overall experience if you can have free Wi-Fi.” The experience hasn’t been without some headaches, however. “We’ve been working on it for a year,” Cowan said. “It’s not 100 percent yet. We still have a couple of areas it doesn’t work in, but we’re making progress. “It was much more difficult than we anticipated to have free Wi-Fi set up on the streets and also inside each merchant.” The Greater Oklahoma City Chamber of Commerce learned a similar lesson several years ago, after offering a $150,000 incentive to spur the development of wireless hotspots in key areas across the city. Officials abandoned the plan a few months after it was announced in 2006. “Once we got into it, we realized the bottom line was, the private market was already providing that service. With all the 3G technology coming online, people can get connected with any device they want with a pretty low cost,” project overseer Drew Du-

This view of Bricktown is looking east on Sheridan Avenue from the Colcord Hotel. PHOTO BY STEVE GOOCH, OKLAHOMAN ARCHIVE

gan said last year. Shortly after the chamber called off its project search, wireless service provider EarthLink canceled services in Philadelphia and San Francisco like the one Oklahoma City officials had been hoping to establish. The city still has a number of wireless hotspots, including the Cox Convention Center and Will

Rogers World Airport. Many other restaurants and other business offer free Wi-Fi as well. The Bricktown Association got a free deal from @Link Wireless, a local Internet provider that wanted to get more brand recognition for their product. “They felt by providing it for Bricktown, it would raise the awareness in central Oklahoma,” Cowan said.

THE OKLAHOMAN | NEWSOK.COM

OUTLOOK I BUSINESS & TECHNOLOGY

SUNDAY, APRIL 25, 2010

IN ITS SIX YEARS, GOVERNOR’S CUP HAS HELPED LAUNCH MORE THAN 15 ENTREPRENEURIAL OKLAHOMA COMPANIES

Contest rewards business innovation BY DON MECOY Business Writer dmecoy@opubco.com

Since the advent of the Donald W. Reynolds Governor’s Cup six years ago, the collegiate business plan competition has awarded nearly $900,000 in cash and $250,000 of in-kind commercialization services. About $30,000 in scholarships and $80,000 in paid fellowships have been earned by some of the more than 800 students who have tested their entrepreneurial skills. More than 26 campuses across the state have participated, and schools have built entrepreneurship classes around the competition as they seek to select the best participants. The event also has helped establish relationships across those schools’ disciplines such as marketing, business, engineering and finance. The competition has helped create and boost more than 220 innovative ideas. Perhaps most impressively, the Governor’s Cup event has launched more than 15 entrepreneurial Oklahoma companies. Among the diverse enterprises that emerged from the competition are PreDent, which is developing a treatment to prevent periodontal disease in small animals, and Xplosafe of Stillwater, which produces a nanotechnology-based ink that changes color after detecting certain explosives. Fitness Fulfillment makes a mobile trainer employing digital technology to guide consumers through personalized exercise routines, and then tracks their workout history for them. Innovative Solutions proposes to commercialize a patent-pending intravenous IV and syringe to create a solution to a longstanding problem of systems that expose health care workers to bloodborne illnesses and patients to infection. In addition, Governor’s Cup alumni have gone on to take leadership positions in ongoing businesses such as Amethyst Research Inc. in Ardmore, Mintiva in Oklahoma City and Impact Technologies in Tulsa. This year’s competition includes more innovative ideas, including the use of human hair to strengthen concrete in areas such as Haiti that lack other strengthening materials; health care concepts that include both therapeutics and devices to assist both health care providers and patients; technology to reduce the time orthodontic patients must wear braces by speeding up the process of realigning teeth; a water-softening product that prevents the release of salt into groundwater; and energy proposals, some of which focus on aspects of wind energy while another proposes enhanced methods using nanotechnology to bring oil up from mature fields. The competition is underwritten by the Donald W. Reynolds Foundation, along with support from other local sources. It is managed by i2E, the not-for-profit corporation that mentors many of the state’s technology-based startup companies. Two new awards are being presented at this year’s competition. The OG&E Positive Energy Award is a $5,000 award to the team whose business plan proposes the best use of energy generation or energy storage, delivery or other innovative uses of energy. That team’s faculty adviser also will be awarded $2,000. The Al Tuttle Business Incubation Award provides one graduate-level team business incubation space and services free for

one year. This year’s winners will advance to the Tri-State competition in Las Vegas to compete against their counterparts in Arkansas and Nevada in mid-May. Oklahoma teams have brought home $90,000 from that event — half the prize money that has been awarded. i2E President and CEO Tom Walker said the competition is designed to recognize and advance Oklahoma’s next generation of entrepreneurs. “It’s an exciting time for technology-based economic development as we witness the emergence of future business leaders through this competition,” Walker said.

Bryan Gonterman, president of AT&T Oklahoma, texts his vote April 14, 2009, for the Innovation Awards at the Governor’s Cup awards at the Bricktown CocaCola Event Center in Oklahoma City. PHOTO BY SARAH PHIPPS. THE OKLAHOMAN

SUNDAY, APRIL 25, 2010

THE OKLAHOMAN | NEWSOK.COM

OUTLOOK | BUSINESS & TECHNOLOGY

THE OKLAHOMAN | NEWSOK.COM

SUNDAY, APRIL 25, 2010

OUTLOOK | BUSINESS & TECHNOLOGY

Downtown Renaissance

What’s ahead for downtown Oklahoma City? Project 180

Cost: $140 million Estimated completion: 2014 Project 180 is a makeover of downtown streets, sidewalks and parks. The project is funded through a tax increment financing district established with construction of a new $750 million Devon Energy headquarters. Plans call for the addition of public art, marked bike lanes, decorative street lighting, outdoor furniture and hundreds of new parking spaces.

Lincoln

NW 4

235 Deep Deuce

Myriad Gardens Cost: $30 million Estimated completion: 2014 Changes include the addition of a grand performance lawn and amphitheater, a children’s discovery garden and play area, water features, an ice skating rink, a restaurant and café, a dog release area and a new grand entrance to the Crystal Bridge. Devon headquarters

Robert S. Kerr

Cost: $750 million Estimated completion: 2012 Construction began in October 2009. The project, just north of the Myriad Gardens, includes a 50-story tower, a five-story “podium” building, a rotunda and an auditorium.

E.K. Gaylord

SandRidge Commons Park

Project 180

SandRidge Commons

AT&T Bricktown Ballpark

Byers

Mickey Mantle

Robinson

Hudson Reno

Cox Communications Center

Stiles

Sheridan

Devon headquarters

Reno

Myriad Gardens

Transit system Ford Center

Cost: $280 million Estimated completion: unknown City leaders say they have two leading sites for a new convention center that is part of MAPS 3: south of Lower Bricktown and south of Ford Center.

Future Boulevard SW 4

Transit system

Proposed convention center sites

Cost: $130 million Estimated completion: unknown The MAPS 3 transit system calls for up to six miles of downtown streetcar lines and a downtown transit hub.

SW 5

Oklahoma River improvements

Lincoln

Shields

SW 6 Robinson

Harvey

Hudson

Central Park Cost: $130 million Estimated completion: unknown The 70-acre park is part of the MAPS 3 initiative passed by voters in December. Plans call for a great lawn, a large amphitheater for up to 15,000 people, a lake, model boat rentals, a children’s play area, a dog park and restaurant. Convention center

Central Park

Cost: $100 million Estimated completion: 2015 Plans include renovation of the former Kerr-McGee Tower, now known as the SandRidge Building, and a restoration of the former Braniff building. Six buildings will be demolished and replaced with plazas and a new six-story building.

Cost: $60 million Estimated completion: unknown About $25 million will go toward a whitewater kayaking venue. The rest of the money would go toward improvements on the east end of the river, including grandstands, lighting, parking, a floating stage, river beautification and other work on the rowing course.

Interstate 40 relocation

Oklahoma River improvements

I-40 relocation

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SUNDAY, APRIL 25, 2010

OUTLOOK I BUSINESS & TECHNOLOGY

THE OKLAHOMAN | NEWSOK.COM

Hope builds on downtown living AT A GLANCE COMPLETED DOWNTOWN-AREA HOUSING (SINCE 2000) 42 › Block Centennial › The Street Lofts › 2nd Avenue Villas › Central Harvey Lofts › The › Park Harvey Apartments

BY STEVE LACKMEYER Business Writer slackmeyer@opubco.com

Three years ago, JoeVan Bullard was anticipating the start of two housing projects and monitoring completion of two others as the director of the Oklahoma City Urban Renewal Authority. After the crash of the national economy, everything that wasn’t already completed came to a halt. Grant Humphreys, who had planned to launch a $20 million mixed-use complex dubbed the Flatiron at NE 6 and Harrison Avenue, was in the process of pursuing a building permit. The contractor was chosen and work was about to start. That project, Humphreys confirms, remains on hold. Construction was under way on The Hill — but also stopped. Chuck Wiggin, meanwhile, put a halt on his plans for a $61.3 million Overholser Greens condominium complex he pitched for the former Mercy Hospital site at NW 13 and Dewey Avenue. “People have gotten the facts slapping them in the face,” Bullard said. “The market for downtown housing currently and in the near future is something more in line with a young professional or a senior could rent or buy. Chuck Wiggin is smart enough to know that what he pitched won’t work for the next eight years out.”

Bullard notes anyone still thinking such a project is feasible in the near future experienced another slap in the face with a report last month by an expert panel convened by the Urban Land Institute. Their conclusion? Stop building high-end, expensive for-sale condominiums and pursue apartments and work force housing. “I think there is a greater supply than need for highend,” Bullard said. “I don’t think the market for downtown residential has been tapped out. There is still a very sizable market that, if we could get it geared to the prospective purchaser or tenant, there are a lot of those people who would love to live downtown if they could afford it.” “The market remains slow, but some small, positive signs have occurred in recent months,” said Michael Biddinger, sales consultant for The Hill. “We have seen more serious potential buyers, especially from the suburban areas where residents whose children have left for college want to be closer to their work and lead a lifestyle in the central business and entertainment district. “In addition, we are also seeing executives who have transferred to Oklahoma City take interest in The Hill. We are encouraged by their positive comments about the surroundings and the quality of the product.”

City developers envision more downtown housing Is anything new on the horizon? The answer is maybe. No developers were announcing downtown housing projects as of early April. But a survey of property owners and developers indicates interest in developing apartments — a segment that has continued to thrive despite the economic downturn. Work continues, meanwhile, on The Hill. A handful of upscale units are being built in the top floors of the City Place Building in the heart of the central business district. Developers Bob Howard and Mickey Clagg expect Hadden Hall and the Cline

Hotel, both along NW 10 in Midtown, to be converted into apartments this year. Even the Urban Renewal Authority, which has seen almost all of its redevelopment projects stall, is contemplating issuing a request for proposals for downtown housing. “I would like to put out a proposal for NW 4 and Shartel,” said Urban Renewal director JoeVan Bullard. “My board is willing to look at work force housing, not low-income or subsidized, but housing for young couples. That’s where we think demand is now for downtown.” STEVE LACKMEYER, BUSINESS WRITER

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The Hill, a development at NE 2 and Russell Perry in Oklahoma City, is shown. PHOTO BY PAUL HELLSTERN, OKLAHOMAN ARCHIVE

BACKGROUND BECOMING A CITY THAT NEVER SLEEPS Downtown Oklahoma City spent the late 1990s building up steam and then entered into a fullfledged run throughout the first decade of the new millennium. During the past dozen years, a growth spurt fueled by the 1993 passage of the Metropolitan Area Projects resulted in the addition of hundreds of new apartments, dozens of new condominiums, six new hotels, dozens of new restaurants and shops, and of course, the arrival of the NBA. The run has slowed to a crawl, not so much because of the local economy but because of the crash of the national economy in 2008. But the transformation started in 1993 may be difficult to reverse. Downtown is alive after 5 p.m. Mondays through Fridays. People can be seen jogging, walking their dogs, playing Frisbee or “urban football” on weekends. The transformation isn’t complete, but downtown is coming closer to the goal of becoming a place to live, work and play. STEVE LACKMEYER, BUSINESS WRITER

Montgomery › The at Arts Quarter › Legacy Deuce Apartments › Deep Sieber › The Hill › The › The Brownstones at Maywood Park

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OUTLOOK I BUSINESS & TECHNOLOGY

Retail uncertainty may be lifting BY RICHARD MIZE Real Estate Editor richardmize@opubco.com

Come summertime, the living still won’t be easy for retail store owners and developers, but some economic clouds could be lifting enough to see the way out of a national recession that finally dragged Oklahoma City into it last year. That’s the gist of the most recent retail property market summary from Price Edwards & Co., published at the first of the year. The basics of the report haven’t changed since then, said Jim Parrack, senior vice president and retail specialist. Price Edwards saw political uncertainty as a key to the lack of consumer confidence at the start of 2010, so the passage of national health insurance reform could have a calming effect simply because the issue seems resolved for now. On the other hand, other issues, such as efforts to implement a cap-and-trade system for controlling carbon emissions to curb global warming, which critics argue would raise energy prices and cost jobs, remain unsettled. In the long term, however, “the best economists in the world can’t agree on the ... effect of these huge changes on our economy much less the average shopper,” the firm said. “The public craves certainty, they crave the positive. Both are in short supply.” With consumer spending accounting for some 70 percent of U.S. economic activity, “a fragile consumer equals a frugal consumer,” said Ryan McNeill, a retail property investment specialist with Sperry Van Ness/William T. Strange & Associates in Oklahoma City. What it means for retail development is the last ones in will be the last ones in for awhile although individual restaurants and stores and small strip centers almost always find their market niches here and there.

Drawing crowds In the Oklahoma City area, these were the last ones in from early 2009 to now, according to Price Edwards. That means built or substantially started and firmly committed to finish, not necessarily full of tenants and drawing crowds of shoppers: Classen Curve, Classen and Grand boulevards. Highland Park, NW 178 and Western Avenue. The Shoppes on Broadway, 33rd Street and Broadway Avenue in Edmond. Target store and small shop space, Garth Brooks Boulevard in Yukon. The Shops at Moore on I-35 at SW 19. University North Park on I-35 at Robinson in Norman.

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The Shoppes on Broadway at Broadway and 33rd Street in Edmond.

ALSO ... STALLED PROJECTS Price Edwards listed 17 retail developments that were either stalled, on hold, in the pre-leasing stage or moving forward at a snail’s pace in light of the economic slowdown. “It is anticipated that a majority of these will be built but it will take an improved market and an extended lease-up period,” the firm said. “Modest extensions of existing successful projects are about the only developments that make sense at this point.”

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Bridges at Springcreek, 15th Street and Bryant Avenue, Edmond: “No activity.” Fox Lake Plaza, 15th Street and I-35, Edmond: “No activity.” The Falls, Second Street, Edmond: “No activity. Project on hold.” Central Park, Second Street and Kelly Avenue, Edmond: “No activity.” Quail Springs Ranch, Western Avenue and Memorial Road: “Project on hold.” Tuscan Village, NW 150 and May Avenue: “No activity.” Project at May and Memorial: “Pad site activity.” MacArthur Crossing, MacArthur and Memorial: “Preleasing.” Deercrest, Rockwell and Memorial: “No activity.”

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Horizon Outlet Mall, I-40 and Council: “Back on track for 2010.” May Avenue Square, NW 39 and May: “No activity.” 240 Penn Park II, I-240 and S Pennsylvania Avenue: “No activity.” Target, SW 19 at Telephone Road, Moore: “No activity.” Royal Rock, SW 19 at Telephone Road: “Outparcel activity.” University North Park II, I-35 and Robinson, Norman: “Lifestyle portion on hold.” East Park, SE 12 and Alameda, Norman: “No activity.” Shoppes at Del City, I-40 and Sooner Road, Del City: “Preleasing.”

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Home trends change with economy BY RICHARD MIZE Real Estate Editor richardmize@opubco.com

Smaller is big, outdoors is in and green is hot. Home design remains a topsy-turvy prospect as the country continues to work through a housingboom-turned-bust and builders in Oklahoma City deal with their own boom, which finally wheezed into the history books. Home sizes are shrinking. The national average for a new single-family home dropped to just over 2,400 square feet in 2009 and was flat in 2008 after several years of increases. The national median size of new homes ran well over 2,200 square feet during the boom years 2005-2007, then went into decline and was down to about 2,100 square feet in 2009, the Census Bureau reports. For the first time since 1992, the percentage of new homes with three or more bathrooms declined last year, according to the National Association of Home Builders. Further, the association said, the number of homes with four or more bedrooms has been in decline since 2007; the number of homes with two or more stories peaked in 2006; and the number of homes with three-plus-car garages peaked in 2005. Home builders in the Oklahoma City area reined in sizes as the economy sputtered and demand for sheer size slackened. Two other factors also contributed. The $8,000 federal tax credit for first-time buyers, in place in 2009 and the first third of this year, worked, creating demand for smaller starter homes. The credit crunch almost lopped off the top of

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the market, as higher-risk “jumbo” loans, those too large to be considered “conventional” and “conforming” — which here means over $417,000 — the kind that Fannie Mae and Freddie Mac like to buy, bundle and sell to investors, dried up. And tastes changed, said Oklahoma City builder Jeff Click, who has debuted the Urbana series of smaller homes, priced from $150,000 to $180,000. “My experience is that the past decade led to homebuyers looking for the maximum house for their maximum payment. People bought decked-out homes with surplus square footage just because they could, without considering the cost to heat, cool, power, and maintain what in many cases was sheer indulgence,” he said.

Above: This conceptual rendering shows the front elevation of the Trinity, one in the Urbana series of smaller homes by Jeff Click. PROVIDED BY JEFF CLICK HOMES

Left: Shown is a view of a model home in Arbor Creek. The neighborhood of smalller homes by Caleb McCaleb is located north of Second Street and east of Interstate 35 in Edmond. PHOTO BY JOHN CLANTON, OKLAHOMAN ARCHIVE

Smaller homes The recession shocked people regardless of whether they were touched by it, Click said. “Now what we’re seeing is thoughtful consideration to true cost of ownership, which is the sum of the mortgage payment, the cost of utilities, and all of the ancillary expenses of home ownership like furnishings, accessories and such,” he said. “This is really the intelligent way to buy a home, and it’s certainly leading many to seek smaller, more energyefficient, more amenitydense homes.” Demand for smaller houses is tied to the second major trend, the green movement, said Edmond builder Caleb McCaleb. “People are more environmentally conscious, and it is greener to own a smaller carbon footprint home that is designed with the latest in energy-efficient

products. “And by the way, that translates into very low monthly energy bills for the owners,” said McCaleb, who responded to the demand for smaller houses by starting Arbor Creek, an addition of bungalows. McCaleb said demand for smaller houses also is working to maintain demand for outdoor living space, which might seem a contradiction in an economic environment where certain kinds of amenities are seen as frivolous, if not ostentatious. “Livability is the key,” he said, and with living space inside on the decline, outdoor living space is even more desirable. Rather than a full kitchen/bar/living area under a huge patio, a buyer might opt for a more traditional grill and patio arrangement, McCaleb said.

This is really the intelligent way to buy a home. ... ” JEFF CLICK OKLAHOMA CITY BUILDER

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Automakers charge ahead with electric, hybrid cars BY JENNIFER PALMER Business Writer jpalmer@opubco.com

The company logo shines off the grille of an F-350 pickup truck at a Ford dealership. AP PHOTO

Ford makes features easier BY JENNIFER PALMER Business Writer jpalmer@opubco.com

Some of the latest auto technologies add convenience to driving. From hands-free parallel parking to a key that limits a teen’s speed and radio volume, Ford Motor Corp. breaks down some of the top convenience features in its latest models.

› SYNC:

Ford SYNC, developed by Microsoft, lets drivers operate their Bluetooth-enabled cell phone and digital music players with voice commands or using radio controls on the steering wheel. The software platform offers hands-free convenience so drivers can stay in touch while on the road. Drivers simply press the “push to talk” button on the steering wheel and say the name of the person they wish to call. SYNC does the rest. The feature also can read aloud text messages in English, French or Spanish, call 911 if the vehicle’s air bags deploy and provide traffic information and driving directions. Active park assist: Drivers with this feature need not fear parallel parking. At the press of a button, the car uses sensors on the front and rear of the vehicle to measure the parking space, prompts the driver to accept parking assistance then takes over and steers the car into the space. Drivers continue to shift the transmission and operate the gasoline and brake pedals. Adaptive cruise control: This feature automatically adjusts vehicle speeds to prevent a collision when cruise control is on. The radar system monitors a vehicle up to 600 feet in front and keeps a set distance between cars, even in most fog and rain conditions. Drivers can set the distance, speed and time gap between vehicles and are warned when there is risk of collision. Smart gauge with EcoGuide. Hybrid drivers like maximizing their fuel efficiency, and this feature rewards smart driving. LCD screens on either side of the speedometer can be configured to display information such as fuel and battery power levels and average/instant miles per gallon. A vine of leaves “grows” as the driver optimizes fuel efficiency — rewarding the driver for their efforts. MyKey. Parents with teens behind the wheel can set limits with this innovation, which is designed to encourage safer driving. With MyKey, vehicle owners can program a key to limit the car’s top speed and audio volume. The feature also encourages seat belt use by muting the stereo until the driver buckles up, provides earlier low-fuel warnings and can be set to sound chimes when the car reaches 45, 55 and 65 miles per hour.

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SOURCE: FORD MOTOR CORP.

Building on the popularity of gasoline-electric hybrid vehicles, many automakers now are pushing to have a fully electric plug-in model on the road this year or next. Though Tesla Motors already has its electric Roadster sports car on the road, the Nissan LEAF is said to be an affordable, midsize vehicle that also is emissions-free. The LEAF will hit showrooms as early as December, according to Nissan. Tours with preproduction models have generated excitement for the vehicle, especially in cities with the heaviest traffic and air pollution, such as Los Angeles. But Oklahomans have started to show interest as well, said Charlie Staton, a salesman at Bob Moore Nissan in Oklahoma City. The dealership is accepting deposits from drivers who want to be among the first to own or lease one. Staton, who hasn’t seen a LEAF but has undergone company training on it, said the car is about the same size as the Nissan Versa and seats five. The sticker price is expected to be about $32,700, but qualifies for a federal tax credit of $7,500.

Zero emissions According to Nissan, the LEAF will have no tailpipe and emit zero emissions. The car will have a

range of 100 miles when fully charged. Charging the battery will take 4 to 8 hours on a 220-volt home charging station, but can charge to 80 percent in about 26 minutes at a quick-charge station. The popularity of electric vehicles depends in part on whether there is infrastructure to support them. Essentially: Can drivers recharge on the go? Companies such as Car Charging Group in Miami Beach, Fla., are working to set up public electric car chargers. Right now, the company will put in stations free of charge in public areas such as parking garages and shopping centers. They

will charge a fee for drivers to use it and split the revenue with the host. President Andy Kinard said the focus now is installing the chargers in states such as Florida, California and New York. The first one will be on the ground soon, and the company plans to install 600 by year’s end. Hybrid vehicles also will be able to use the public car chargers, he said. “Once people start getting used to the concept, more people will start buying the (electric) vehicles,” Kinard said. He estimates that by 2015, drivers will have 40 electric car models to choose from.

The Nissan LEAF is due in showrooms in December. PHOTO PROVIDED BY NISSAN

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