In the News
Posted on February 08, 2024
This article was originally published by Jodi Schwan of SiouxFalls.Business
This paid piece is sponsored by Journey Group.
There was a lot of optimism at Sioux Falls-based Journey Group entering 2023 – and it turned out to be warranted.
“It ended up being our best year ever,” CEO Randy Knecht said. “It was a great year with strong revenue performance, operating performance and very diversified business activity.”
Much of the success was driven by infrastructure projects executed by Journey’s SFC Civil Constructors and Black-Top Paving divisions, which took on record amounts of bridge and road work.
“There was significant investment in infrastructure, especially in southeast South Dakota and around the Sioux Falls area with opportunities and projects, and we were able to take advantage of it,” Knecht said.
Major work for SFC Civil Constructors included finishing the West 41st Street bridge in Sioux Falls, making significant progress on the Sixth Street bridge in downtown and working on the overpass at Benson Road and Interstate 229, along with bridges in Elk Point and Union County.
“They virtually doubled their revenue from 2022 to 2023, and a big reason why was their ability to attract workers,” Knecht said.
“Our HR team did an incredible job recruiting quality people, and SFC Civil brought in our first H-2B visa workers from Guatemala who fortified our workforce, which was a big help. They were phenomenal workers.”
Black-Top Paving also supported the 41st Street and downtown bridge projects, in addition to asphalt paving at Cherapa Place, major overlay work on Cliff Avenue and East 26th Street, and the enlarged intersection at 85th Street and Cliff Avenue.
“They have more work on the books going into 2024 than they did coming into 2023,” Knecht said.
For Journey Construction, 2023 was a year of working through major multiphase projects, including finishing the 10-story Bancorp Building at Cherapa Place and the last phases of a renovation for the downtown headquarters of The First National Bank in Sioux Falls. The Cherapa development will wrap up the majority of its work, including two mass timber mixed-use buildings, by midyear.
“That project has been going really well for us,” Knecht said. “It’s great seeing the tenants moved in, enjoying their new spaces and seeing the satisfaction they have moving into their new facilities.”
Other major projects included the newly finished headquarters for Scherer Inc. at Foundation Park and a new high school in progress for the Tri-Valley School District.
“I think we’ll have as strong of a year in 2024 as we did in 2023,” Knecht said. “There’s talk of lowering interest rates, which has people optimistic they’ll be able to make their pro formas work. We continue to plan for some major investments in the Sioux Falls community and are hopeful we’ll have more to share in the coming months.”
Elsewhere within Journey Group, the company is seeing growth because of its diversified revenue. MBW Construction, which specializes in food processing, industrial manufacturing, cold storage and warehousing, “had a big year in 2023 fueled by large projects in Texas and Georgia,” Knecht said.
“They’re still a little bit like a startup, but they’re getting traction and building their team. As they grow and mature, we’re anticipating a steadier revenue flow, but 2023 was a great year, and they have opportunities to do very well in 2024.”
In western South Dakota, Ainsworth-Benning Construction had its best year since becoming part of Journey in 2016.
“They had a strong year operationally, with strong revenue and great efficiency. They have good opportunities and carryover work for 2024,” Knecht said. “We’re feeling very optimistic about their potential work both in vertical and horizontal construction.”
On the residential construction side, 1J Homes has a new leader in Journey Group’s Jamison Mutschelknaus, manager of virtual design and construction/president of 1J Homes, who “has a passion for the residential side, so we feel like we’re in a good spot with leadership. It’s just in Sioux Falls the market timing has been challenging,” Knecht said.
“We have some spec homes available and some lot inventory we’re working through, and despite mortgage rates, I think people are starting to adjust. Soon, we’ll be able to serve the mid-to-upper market, and we’d like to do more custom homes.”
Journey Group also wrapped up its own construction in 2023, finalizing an expansion to its office headquarters in southwest Sioux Falls that brought its growing team back under one roof.
“We definitely were ready for phase two at our own building,” Knecht said. “It was a seamless addition that reflects who we are and how we do business.”
Big picture, there continues to be new opportunities to expand Journey Group as a whole, he added.
“We see a lot of opportunity in water and wastewater in this part of the state, we’re excited about our team at Journey Structural to do more of that specialized work, and we think there’s potential to grow our presence in multiple markets,” Knecht said.
There are ramifications to growth, though, he acknowledged.
“The infrastructure of our team hadn’t evolved enough along with us as an organization,” he said. “We went from 160 employees when I became CEO more than a decade ago to more than 400 today, with three times revenue growth and now six divisions, but we really didn’t adjust much in terms of how we were organized.”
That changed in 2023, with a new leadership structure rolling out this year that will be detailed soon.
A key focus: enhanced attention on developing and training individuals at all career stages.
“We understand that as we work through our next three-year strategic plan and beyond, our people are the key to executing today and in the years to come,” Knecht said.
“We’re committed to putting a structure in place and making the investments necessary to support our teams. A year from now, we envision being able to share many more successes.”
SIOUX FALLS, S.D. (KELO) — The four Cherapa buildings have changed the Sioux Falls skyline. They are among the most modern in the city. But even new buildings can catch fire.
On Wednesday, construction workers inside Cherapa 4 left their tools behind and evacuated the building. They weren’t told what was going on but eventually realized it was a training exercise.
“We are simulating two people getting stuck in a fire, they are workers, they have no way of seeing to get out and they can’t figure out how to get out and so that how we are going to try and figure out is everyone accounted for, a couple of people are not accounted for and how we respond to that with the fire department,” said Dave Van Nieuwenhuyzen the Vice President of Business Development for Journey Group.
Nieuwenhuyzen says they conduct these quarterly crisis drills to increase preparedness, uncover potential problems, and to make sure the response is fast and coordinated in an emergency.
A drill like this is not only beneficial for the construction workers but for the fire department as well.
“When you start getting into those multiple levels, multiple floors, we have to start looking at what it’s going to take to stretch a line from the ground floor up or like this one under construction, more likely the standpipe systems aren’t in place, so there’s more things to think about, said Steve Fessler with Sioux Falls Fire Rescue.
The whole idea is to expect the unexpected and give workers a plan that could potentially save lives. Today’s simulation was based on a recent construction accident in another state.
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