February 14, 2014
Article by Jim Harris
HDC Development Cos. LLC’s owners and superintendents
are not afraid of leaving their home base in St. Joseph, Minn.,
in pursuit of a project. “Other companies might travel within
about a 100-mile radius or so; we go out 800 miles or even
further,” co-owner Jim Lemke says.
The construction management/general contracting company’s willingness to travel has led it to communities in North Dakota and Montana in the Bakken Shale oilfields, where it has completed 1,100 apartment units in the last five years. “As the oil industry has grown, one of the greatest needs in North Dakota is for market-rate apartments for oil industry workers, so that’s what we’ve been doing a lot of lately,” Lemke says.
Oilfield-adjacent projects make up a significant number of the more than $100 million in projects HDC is currently building. “Our work in the Bakken Shale alone has doubled our sales,” Lemke adds. “We just moved into a larger facility in May 2012 and are hiring new people; if we continue at this pace, we’re going to outgrow this facility.”
The company’s current projects in the Bakken Shale region include a 150-unit development in Minot, N.D.; 93 units in Williston, N.D.; 66 units in Sidney, Mont.; 93 units in Watford City, N.D.; and 36 units in both Tioga, N.D., and Stanley, N.D. Lemke explains the units in Tioga and Stanley will be located on the top floors of buildings with commercial spaces on their ground floors.
HDC develops and builds a variety of apartment sizes, ranging from one-bedroom to three-bedroom units. Although the single-bedroom units are typically the first to be rented, larger units are becoming more popular as oilfield workers are beginning to move their families to the region, Lemke says.
In addition to its work in the Bakken Shale, HDC Development is experienced in building senior-living and assisted-living facilities. “Our being involved in the oilfield on one hand and healthcare projects on the other has really carried us through the last years,” he adds. “We’ve never had down years, everything has been growth.”
The company’s most recent senior-related project is a combination assisted-living, skilled-nursing and senior-living development in Bixby, Okla. This is HDC’s first project in Oklahoma, which is now the 12th state in which it is licensed. HDC also is working on projects in Minnesota, Iowa and Missouri.
Many of HDC’s subcontractors and suppliers make the trip to its projects right alongside the company. “We have many contractors that follow us to our projects and like doing our work, and also have suppliers I can count on to be there for us,” Lemke says. “These relationships come from having a good reputation; people know we will watch out for them and pay them on time and in full.”
The company’s positive reputation also extends to its clients and the communities in which it works. “We’ve been around for a long time, so there’s a lot of people who come right to us,” he adds. “I haven’t needed to bid on a project in a year-and-a-half because of our repeat business.”
The community of Minot, N.D., in particular has been a regular source of work for HDC. In addition to its current project, the company last year completed a 150-unit development there. “We don’t like to go into a community and leave on a bad note,” Lemke says. “We believe the best advertisement we can have is word of mouth.”
HDC Development typically becomes involved in a project at its very start. The company will often hire subcontractors, civil designers and architects on the behalf of its developer clients.
HDC’s early involvement in projects helps it maintain project quality and keep costs low. “We have experienced superintendents who make sure we purchase the best materials at the best prices,” Lemke explains. “We run a tight schedule that we set ourselves, so we get our projects done earlier than many other companies, and that’s because we have good subcontractors and suppliers. We believe in jumping on to a project early and keeping positive momentum throughout.”
Although the company attempts to hire subcontractors from within the communities in which it works, the lack of available manpower in the Bakken region requires it to travel with its own tradespeople. This includes drywall, mechanical, electrical, concrete and framing crews, Lemke says.
Fast and Accurate
HDC Development builds its projects quickly to achieve cost savings. To do this, Lemke develops a schedule for a project and meets with the subcontractors. “The subcontractors are made aware of it, and if everybody does what they’re supposed to, everybody works together at that point and looks out for each other,” Lemke explains. “They know where they need to be.”
One way HDC Development keeps those time frames on construction projects short is to rely on panelized walls as well as factory-made trusses. Factories will produce the wall panels according to the computerized plans for the building and even cut in spaces for the windows. Then sheeting is applied to the panels and the nailing pattern is specified automatically.
“Everything is 100 percent accurate and square, so I get a better building out of it,” Lemke stresses. “It does speed up the construction end. It’s more expensive to do it that way, but there’s an offset, because if you have a good framing contractor who has worked with panels, you get a cheaper price for labor. So if you put that together and the shortening up of the project, you can save time, and that pays for your panels.
“I know there are people out there who don’t like panels,” he continues. “That’s because they don’t know enough about them. When I buy panels, I ask the panel company to supply the framing crew. If they have an issue with a panel, it’s not my issue – it’s their issue. My responsibility is to make sure the building foundation is adequate.”
HDC Development works with several different sources of panels near many of its jobs. Lemke says he has worked with three or four panel producers in North Dakota and others near jobs in Kansas City, Mo., and other locations.
Trusses are produced according to the computerized plans for a building. The dead and live loads are entered into the program and other information, and it specifies the type of truss that is needed along with the plate that will hold the pieces together. Panel and truss suppliers Lemke works with do not have trouble providing them when HDC’s projects need them. “If they’ve got a start date for us, they’ve always been on time,” he maintains.
Years of Hard Work
Since its inception in 1970, HDC has completed more than 4,000 senior housing units and numerous other development and housing projects.
"It’s this vast experience that allows us to help provide our clients with expertise in development, market analysis, architect and site selection, construction supervision and so much more," the company says.
Lemke and co-owner Roger Holtberg took over the company in 2001, and remain deeply involved in its day-to-day operations. “We’ve worked a lot of hours including weekends to get where we are today,” Lemke says of his and Holtberg’s work ethic.
Lemke, who turned 62 in December 2013, says he’s entertained the thought of retiring, but his partner and the company’s continued growth have ensured he’ll stick around for at least the next few years. “When you work this hard to build a company to this size, you can’t just walk away,” he says.