Chevron acquires Kmart property in Moon for possible regional headquarters

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A discount superstore and a large vacant tract of land on a bluff overlooking the Parkway West could become the latest symbols of the region's growing energy identity.

Global energy giant Chevron has reached agreements to acquire 61 acres of land in Moon, including a Kmart targeted for closing in July, as a potential site for a regional headquarters.

The San Ramon, Calif.-based company made the announcement Wednesday, only days after Sears Holdings Corp. confirmed it would be closing the Kmart. It made no mention at the time that the store was closing to make room for the first major global driller to build a regional campus.

In its statement, Chevron said it expects to close on the acquisitions in the next few months. No terms were disclosed. It said a decision on the use of the properties would be made later this year.

PG graphic: Map of 61 acres purchased by Chevron
(Click image for larger version)

"Chevron is pleased to have been offered the opportunity to acquire this land, which provides us with a potential location as we continue to evaluate our options for a regional headquarters facility," said Bruce Niemeyer, Chevron's regional vice president. "We are committed to this community, to contributing to a vibrant regional economy, and to producing energy supplies that will fuel this region and our nation for generations."

The company has been scouring the region for a potential site for a regional headquarters for at least a year. It now leases space in two buildings in Moon, including one in the Cherrington office park.

In addition to the Kmart site, Chevron is acquiring a 43-acre parcel of land behind it known as Marketplace Landing, owned by Roy F. Johns Jr. Associates. Both sites sit on a bluff above the Parkway West and can be seen from the highway and the giant retail complexes nearby. Pittsburgh International Airport is about five miles away.

Chevron provided few details on the size of the development Wednesday, but one local real estate broker said he had heard the company was considering a campus as large as 350,000 square feet -- enough room to house 1,750 employees in a traditional office setting.

Nathan Calvert, a Chevron spokesman, said the firm could not confirm information on square footage, the number of buildings or how many employees it might hold. A timeline on groundbreaking and construction was not given.

The company has about 650 workers in the region and the new facility "is going to be developed to help us as we grow," Mr. Calvert said.

County Executive Rich Fitzgerald said Chevron's announcement marks another step in the region's development as "an energy hub of this country." He said Chevron has not sought any county assistance.

"I think they're committed to growing their business in the region. I think it's good for the economy and the continued growth of the region," he said.

The announcement makes Chevron the first major global driller to build a campus in the Pittsburgh region. It acquired its way to dominance in the Appalachian gas field with the $4.3 billion acquisition of Moon-based Atlas Energy in late 2010.

Chevron started drilling in Pennsylvania as peer competitors such as Exxon Mobil and Royal Dutch Shell also completed takeovers to secure space in the regional market. But Chevron's Moon campus will be the first facility built in the region by one of the three energy giants.

The Atlas takeover gave Chevron nearly 486,000 acres in the Marcellus region, and the company bought an additional 228,000 acres from Dallas-based Chief Oil & Gas LLC and Tug Hill Inc. of Fort Worth, Texas, in 2011.

In its latest annual report to investors, Chevron said it also held approximately 491,000 acres in the Utica Shale of Ohio and about 459,000 acres in the Antrim Shale of Michigan.

Net production in those areas averaged a daily output of 138 million cubic feet of natural gas last year, even as low gas prices slowed drilling at smaller operators.

In the most recent quarter, companywide production increased 2 percent from last year, and Chevron said ramped-up efforts in Western Pennsylvania helped contribute to the rise. The company posted a $6.2 billion net income for the first quarter of 2013.

Jason Stewart, executive vice president of the Jones Lang LaSalle real estate firm, said he was not surprised that Chevron chose the Parkway West corridor for its campus. He noted that Chevron-acquired Atlas was located in that corridor, adding that the Kmart site was one of the few in the region with enough contiguous land available for a large campus. The Kmart site includes an Outback Steakhouse, which will remain open.

Bernadette Puzzuole, interim CEO for the Pittsburgh Airport Area Chamber of Commerce, had mixed emotions about the Chevron announcement. While she expressed concern about the potential loss of 143 jobs at Kmart, she added that the "opportunity for the kind of growth Chevron offers is a good opportunity for the area."

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Mark Belko: mbelko@post-gazette.com or 412-263-1262. Erich Schwartzel: eschwartzel@post-gazette.com or 412-263-1455.


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