From spectacular vistas to world-class skiing, the Rocky Mountains and neighboring Wasatch Range in Utah often draw comparisons with the European Alps. So it’s appropriate that the region also is home to a host of specialty contractors with Swiss Army knife capabilities, including Denver-based RK.
Selected as ENR Mountain States Specialty Contractor of the Year, the firm, formally known as RK Mechanical, was founded in Nebraska in 1963 by the father of current president and CEO Rick Kinning. Since relocating to Denver in the mid-1980s, RK has gradually expanded its construction-related capabilities into seven separate business units.
The most recent addition, RK Mission Critical, aims to apply RK’s extensive prefabrication expertise in steel components and mechanical and electrical systems to providing modular construction services for data centers and other key industries.
Kinning, who has led RK since becoming majority owner in 1985, says that diversity, coupled with deep resources and expertise, leaves few projects beyond RK’s capabilities. “We also value creativity and nimbleness,” he adds. “If there’s a new market or new opportunity, we’re able to jump into it.”
This approach has helped fuel RK’s growth and geographic reach as well. With nearly 1,400 employees and growing, RK has expanded to five locations, including Salt Lake City, where the firm recently served as mechanical and plumbing contractor for the $4.1-billion SLC Airport redevelopment program, which includes a new terminal, south concourse, central utility plant and parking garage.
Closer to home, RK is involved in the additions and renovations at Denver International Airport (DIA) and has completed design, fabrication and installation of complex plumbing, piping and HVAC systems for the 1.9-million-sq-ft Rocky Mountain Regional Veterans Administration Medical Center in Aurora, Colo.
Another differentiator for RK is its quarter-century-long investment in prefabrication technology, allowing the company to maintain high levels of productivity in safer, more controlled environments. Operating more than 340,000 sq ft of fabrication space across its five locations, RK’s custom manufacturing capabilities help customers manage their bottom-line pressures and concerns, particularly when it comes to scheduling.
“It’s one of the ways we try to de-risk projects, and a reason why we have never had a bond claim,” says Jon Kinning, executive vice president and COO, who co-owns RK with his brother Rick.
Coping With Change
Still, RK is not committed to growth for growth’s sake. The company’s 2019 revenue of $302.6 million marked a 20% decline from the previous year, a change the firm’s leadership attributes to a more disciplined approach to project selection in order to “properly staff current projects and pending backlog.” Similarly, adjustments to specific business unit goals were implemented during the year to enhance quality and performance and allow the company to focus on training efforts to improve staffing strategies for future projects.
And while the 2020 numbers have yet to be tallied, Jon Kinning says that COVID-19 safety protocols on several jobs have added to the company’s costs. “We didn’t bid those projects that way, so it’s a bit painful,” he says. “But that’s the new normal.”
Helping RK’s customers navigate the challenges of pandemic-era construction has been the responsibility of Marc Paolicelli, senior vice president, who, as RK’s chief customer officer, serves as “the eyes and ears of what customers are asking back from RK,” he says.
With the pandemic limiting face-to-face interaction, Paolicelli says RK’s teams are communicating virtually with general contractors and project partners, providing a silver lining to what has been a universally trying situation. “It’s easier to share information digitally, particularly since we can link to existing data rather than having to reproduce it,” he says. “At the same time, the increased communication drives better quality and accountability of what we do.”
Even under normal circumstances, the project communications conduit offered by RK is valuable, according to longtime RK client Matt Joblon, CEO of Denver real estate developer BMC Investments.
“We have a great relationship with RK, but we’re all smart enough to know that each new project brings new challenges,” says Joblon, who’s worked with the company on several hospitality and high-end residential projects in Denver’s popular Cherry Creek neighborhood as well as on the new 140-key Hyatt House Hotel at the Anschutz Medical Campus in Aurora.
Joblon adds that having a direct connection through Paolicelli means he doesn’t have to track down one of the Kinnings, who have other leadership responsibilities.
“We can be completely transparent with Marc and know he’ll respond immediately to any concerns because that’s his job,” he says.
Similarly, Aaron Wiebelhaus, north central region vice president for Turner Construction Co., considers RK’s leadership to be more than just business colleagues. “Our industry can be tough to navigate sometimes, so it’s always nice to work with trade partners such as RK who are vested both personally and professionally,” says Wiebelhaus, who has worked with RK on DIA projects as well as on a 240,000-sq-ft data center for Aligned Energy in Salt Lake City. “Their culture is one of continuous improvement and lean principles.”
Rick Kinning is quick to add that RK’s culture is employee-centric. “We may be a relatively big company, but we still try to convey a family feel.”
That begins with creating a safe and healthy workplace. Along with an OSHA recordable rate of 1.0, RK holds the distinction of earning OSHA Voluntary Protection Program Star accreditations for both its worksite and mobile workforce. RK also is committed to caring for its employees as people. A physical wellness program with full-time coaches instituted in 2004 was augmented with mental health awareness in 2014 after an employee took his own life.
During National Suicide Awareness and Prevention Month in September 2019, RK’s efforts to remove the stigma around mental health in the workplace was covered by national and local news outlets, including National Public Radio’s Morning Edition. These and other programs have earned RK a Best Wellness Employer Certification from Harvard Medical School. This year, the Denver Business Journal ranked RK No. 14 among Colorado’s healthiest places to work.
RK also invests heavily in training and development, including a multidisciplinary apprenticeship program that combines on-the-job, classroom and lab skills training to provide multiple pathways into an industry desperate for new craftworkers. Last year, the apprenticeship program welcomed its largest-ever class of women trainees.
“Our philosophy is that you have to grow your own,” Jon Kinning says, “especially since our region is a ‘talent desert’ with almost negative unemployment in some trades.”
The company also is heavily involved in volunteer and community enrichment activities. Proceeds from recycled scrap metal provide a steady revenue stream for the RK Foundation, which contributed more than $90,000 in grants in 2019, with a special focus on education and veterans aid charities. With the coronavirus outbreak straining community aid services, the RK Foundation donated emergency funding for the Denver childhood hunger program Food for Thought and the Salt Lake City Education Foundation.
Rick Kinning says he is hopeful that 2021 brings a restored sense of normalcy to the region’s construction market, but nevertheless, he expects to see more changes and challenges ahead.
“Developers still have a lot of ambition, but their ability to get money for projects will be strained for some time,” he says, adding that while as much as 15% of the country’s workforce is expected to continue working from home, workplace building codes may require more square footage per worker. “That calculus is still being worked out,” he says.
Whatever the post-pandemic market brings, Rick Kinning is optimistic that all of RK’s business units can regain their respective growth paths. That includes potential expansion to markets as close as New Mexico and as far away as Florida.
“We’re ambitious people, but we’re not hyper-growth,” he says. “Wherever our customers want to go, we’ll follow.”