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HomeMy WebLinkAboutCouncil Information Memorandum 03-22-2018CITY OF PLYMOUTH COUNCIL INFO MEMO March 22, 2018 EVENTS / MEETINGS Official City Meeting Calendars .................................................................... Page 2 Tentative List of Agenda Items ..................................................................... Page 5 CORRESPONDENCE Support from Bassett Creek Watershed Management Commission ............................ Page 6 City Offers Free 'Creating Resilient Yard' Workshop .......................................... Page 10 Rezoning and Preliminary Plat for McConn Property (2018014) ............................. Page 11 Reguiding and Sketch Plan for Greenway North (2018022) .................................. Page 13 REPORTS & OTHER ARTICLES OF INTEREST Why Mid-Rise Buildings Are the Future of Office Investment, National Real Estate Investor .......................................... Page 14 Economist: Commercial Real Estate Growth May Flatten After 2018, Finance & Commerce ............................................................. Page 18 Doran Pitches Apartments on Highway 55 in Plymouth, Finance & Commerce ........... Page 20 Huge Indoor Trampoline, Go-Kart Park Looks to Plymouth for Second Minnesota Location, Minneapolis/St. Paul Business Journal .............................. Page 22 Cargill Executive Calls Time on Traditional Supply Model, Minneapolis/St. Paul Business Journal ..................................... Page 23 SUN MON TUE WED THU FRI SAT 1 2 3 4 1:00 PM - 4:00 PM Healthy Living Fair Plymouth Creek Center 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 7:00 PM PLANNING COMMISSION MEETING Council Chambers 22 23 24 25 26 27 28 29 30 31 March 2018 3400 Plymouth Boulevard Plymouth, MN 55447 OFFICIAL CITY CALENDAR Phone: 763-509-5000 Fax: 763-509-5060 7:00 PM PLANNING COMMISSION MEETING Council Chambers 7:00 PM ENVIRONMENTAL QUALITY COMMITTEE MEETING Medicine Lake Room 7:00 PM HOUSING AND REDEVELOPMENT AUTHORITY MEETING Medicine Lake Room CANCELLED 5:30 PM SPECIAL COUNCIL MEETING Metro Cities Update and Allen property on Highway 55 Medicine Lake Room 7:00 PM REGULAR COUNCIL MEETING Council Chambers SUN TUES MON WED THUR FRI SAT 5:30 PM SPECIAL COUNCIL MEETING Industrial/ Redevelopment Study Medicine Lake Room 7:00 PM REGULAR COUNCIL MEETING Council Chambers Page 2 SUN MON TUE WED THU FRI SAT 1 2 3 4 7:00 PM PLANNING COMMISSION MEETING Council Chambers 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 April 2018 3400 Plymouth Boulevard Plymouth, MN 55447 OFFICIAL CITY CALENDAR Phone: 763-509-5000 Fax: 763-509-5060 7:00 PM ENVIRONMENTAL QUALITY COMMITTEE MEETING Medicine Lake Room 4:30 PM to 7:00 PM Hennepin County Open Book Meeting Medicine Lake Room 7:00 PM PLANNING COMMISSION MEETING Council Chambers SUN TUES MON WED THUR FRI SAT CHANGES ARE NOTED IN RED Primavera Plymouth Creek Center 5:30 PM COUNCIL/HRA/Planning Commission MEETING Housing Study/TIF District update/Senior Building Medicine Lake Room 7:00 PM REGULAR COUNCIL MEETING Council Chambers 7:00 PM HOUSING AND REDEVELOPMENT AUTHORITY MEETING Medicine Lake Room Primavera Plymouth Creek Center 5:30 PM SPECIAL COUNCIL MEETING Hotel Licensing Medicine Lake Room 7:00 PM REGULAR COUNCIL MEETING Council Chambers Page 3 SUN MON TUE WED THU FRI SAT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 May 2018 3400 Plymouth Boulevard Plymouth, MN 55447 OFFICIAL CITY CALENDAR Phone: 763-509-5000 Fax: 763-509-5060 7:00 PM PLANNING COMMISSION MEETING Council Chambers 7:00 PM ENVIRONMENTAL QUALITY COMMITTEE MEETING Medicine Lake Room 7:00 PM PARK & REC ADVISORY COMMISSION MEETING Council Chambers 7:00 PM PLANNING COMMISSION MEETING Council Chambers 7:00 PM HOUSING AND REDEVELOPMENT AUTHORITY MEETING Medicine Lake Room SUN TUES MON WED THUR FRI SAT MEMORIAL DAY CITY OFFICES CLOSED 5:30 PM COUNCIL/EQC MEETING Organics Recycling Medicine Lake Room 7:00 PM REGULAR COUNCIL MEETING Council Chambers 6:00 PM Walk with the Mayor Plymouth Creek Center 5:00 PM SPECIAL COUNCIL MEETING Fire Dept. Update Medicine Lake Room 7:00 PM REGULAR COUNCIL MEETING Council Chambers 10:00 AM Bark in the Park Hilde Performance Center 8:00 AM-12:30 PM Fire Department Waffle Breakfast Fire Station III Page 4 Tentative Schedule for City Council Agenda Items April 10, Special, 5:30 p.m. Medicine Lake Room •Hotel licensing April 10, Regular, 7:00 p.m. Council Chambers •Utility Rate Study •Consider Rezoning and Preliminary Plat for “The Woods at Taylor Creek” (David Hackenmueller and Tim Hidani – 2017110) April 24, Council/Planning Commission/HRA Meeting, 5:30 p.m. Medicine Lake Room •Draft Housing Study •Senior Building Cash Flow and Maintenance Schedule •Tax Increment District update April 24, Regular, 7:00 p.m. Council Chambers •Announce Fire Department Waffle Breakfast on May 6 at Fire Station III May 8, Special, 5:00 p.m. Medicine Lake Room •Fire Department update May 8, Regular, 7:00 p.m. Council Chambers •Project hearing on the Kilmer Park Street Reconstruction project (189001.001) May 22, Council/EQC Meeting, 5:30 p.m. Medicine Lake Room •Organics recycling May 22, Regular, 7:00 p.m. Council Chambers June 12, Regular, 7:00 p.m. Council Chambers June 26, Regular, 7:00 p.m. Council Chambers July 10, Regular, 7:00 p.m. Council Chambers July 24, Regular, 7:00 p.m. Council Chambers Page 5 Page 6 Page 7 Page 8 Page 9 City of Plymouth News Release For Immediate Release March 20, 2018 Contact: Ben Scharenbroich Senior Engineering Technician City of Plymouth 763-509-5527 bscharenbroich@plymouthmn.gov City of Plymouth offers free ‘Creating Resilient Yards’ workshop Plymouth, Minn. – The City of Plymouth will hold a “Creating Resilient Yards” Metro Blooms workshop 6-8:30 p.m. Tuesday, April 17 at St. Barnabas Church, 15600 Old Rockford Road. Participants may receive recommendations and options for installing rain gardens, establishing mowable, native alternatives to turf, and other practices. The workshop will provide a framework to understand the importance of resiliency and how it can be fostered in residents’ yards. Following the presentation, attendees may receive one-on-one design assistance from Blue Thumb Landscape Designers, Hennepin County Master Gardeners and Master Water Stewards to create plans for their yards. Workshops attendees may also receive information about installation cost-share programs and Blue Thumb resources to help complete applicable projects. Using native plants can help improve water quality and provide a habitat for butterflies, bees and other pollinators. The workshop is free for Plymouth residents. To register, call 651-699-2426 or visit metroblooms.org/workshops. -30- Page 10 Page 11 Page 12 Page 13 3/21/2018 Why Mid-Rise Buildings Are the Future of Office Investment http://www.nreionline.com/print/65409 2/5 OFFICE Why Mid-Rise Buildings Are the Future of Office Investment Mid-rise oce assets provide an increasingly cost-e ective option for investors and tenants in urban core areas. Tim Lee | Mar 15,2018 Page 14 3/21/2018 Why Mid-Rise Buildings Are the Future of Office Investment http://www.nreionline.com/print/65409 3/5 With office occupancy rates steadily rising and asset prices reaching new highs, investors are looking for the next best bet for office investment, especially in high-demand central business district (CBD) markets. However, according to a recent report by JLL , office vacancies rose to 14.9 percent by the end of 2017, and are expected to reach an even higher percentage by the end of 2019. Obviously, traditional investment in high-rise office product is no longer the strongest opportunity for investors. With high prices and vacancies on their minds, many investors are turning away from high-rise office investment and increasingly looking toward mid-rise properties as the future of office investment. As an office investor with over 20 years of experience, we have compiled the top drivers behind increased investor activity in the mid-rise office market. More cost-effective for both investors and tenants As office prices peak for investors, costs to tenants have also reached an all-time high. Rising costs are making it increasingly difficult to both invest in and rent office space. However, many investors and renters do not want to be priced out of CBD markets. Mid-rise office assets provide an increasingly cost-effective option for investors and tenants in urban core areas. For example, in 2016 Olive Hill Group purchased two five-story buildings in Culver City, Calif. for $317 per sq. ft., while high-rise counterparts were purchased for upwards of $1,000 a sq. ft. The more cost-effective pricing also means that the tenants that so desperately need office space in urban core markets have access to a more value-conscious option, increasing demand for mid-rise product. Lower prices mean potential for higher yields and investor returns. As more and more tenants are drawn to mid-size product and demand increases, the potential upside of these properties will also increase. Ultimately, Page 15 3/21/2018 Why Mid-Rise Buildings Are the Future of Office Investment http://www.nreionline.com/print/65409 4/5 with high demand from tenants for this type of office building, mid-size product allows strong returns for office investors. Better suited for creative office and other amenities Because of the increasing demand for creative office and co-working space , today’s office owners and investors can charge premium rents for office spaces that offer the latest and greatest in creative office and co-working amenities. Many of these amenities are much better suited for low- to mid-size office product rather than high- rise office buildings. The office campus type feel that many companies and firms look for in their office space is essentially impossible at a high-rise building. Examples of such amenities include outdoor co-working spaces, bocce ball courts and barbeque areas. These outdoor amenities are often located on the ground floor. In a high-rise, these amenities become exponentially more difficult and less convenient to access for a tenant on the 25th floor. Renovations to turn a property into creative office space can become increasingly time-consuming and costly at a high-rise development. For example, we began a $1.5 million redevelopment project at the Culver City properties in the summer of 2017 and had completed these renovations by the end of the year. With such a quick turnaround on renovations, office owners and investors can quickly lease up the redeveloped property and charge premium rents. Community creation and inter-office connections Smaller office product is also simply easier to manage and to create a sense of community in. By fostering this feeling of a tight-knit office community between tenants, owners can foster loyalty to a property, which Page 16 3/21/2018 Why Mid-Rise Buildings Are the Future of Office Investment http://www.nreionline.com/print/65409 5/5 Source URL: http://www.nreionline.com/office/why-mid-rise-buildings-are-future-office-investment increases tenant retention and NOI. This interaction between multiple companies and firms leasing office space at the same property is virtually impossible to achieve at a high-rise development. As this demand for inter-office connections and for the community feel becomes increasingly popular, more and more office investors will turn to mid-rise properties as the best product for providing this environment. For example, at The Olive, a mid-rise property we own in Downtown Los Angeles’ Jewelry District, we have created a unique sense of community amongst the tenants due to the unique combination of tech and media tenants and jewelry tenants. We even made this property our corporate headquarters because of its amenities, location and strong sense of community. With less than 10 floors it is easy for tenants to get to know their neighbor. Ultimately, office investors are looking for the strongest and most stable investment opportunities as the cycle matures. With evolving tenant demands and expectations of office space, mid-rise truly offers investors attractive returns and higher yields. Tim Lee serves as the vice president of corporate development and legal affairs at Olive Hill Group, a privately-owned investor, operator and developer of commercial real estate properties with a portfolio of office, retail, hospitality and multifamily properties. Page 17 3/16/2018 Economist: Commercial real estate growth may flatten after 2018 – Finance & Commerce https://finance-commerce.com/2018/03/economist-commercial-real-estate-growth-may-flatten-after-2018/1/2 Kevin Depew Economist: Commercial real estate growth may atten after 2018 By: Matt M. Johnson March 15, 2018 3:02 pm 0 Flattening growth in Twin Cites office, retail and apartment property markets may be on the way despite expected gains for the economy this year. Those predictions from RSM deputy chief economist Kevin Depew come as the U.S. faces trade disputes over steel that could increase commercial construction costs. The nation is also dealing with a shortage of construction workers and increases in regulatory costs. All of it adds up to a cooling of the commercial real estate economy nationwide and in the Twin Cities, Depew told members of NAIOP Minnesota on Tuesday. Depew, who authors RSM’s Middle Market Business Index, said confidence among businesses on the index is still quite high, with companies planning more capital expenditures since the recent federal tax cuts. The index hit an all-time high of 132.2 in the fourth quarter of 2017. Any score above 100 indicates market optimism. RSM is an audit, tax and consulting firm focused on middle-market companies with annual revenues between $10 million and $1 billion. RSM has its U.S. headquarters in Chicago and an office in the RSM Plaza building at 801 Nicollet Mall in downtown Minneapolis. Most, but not all, sectors of the commercial real estate market will slow after 2018, Depew said in his presentation. The office space development market will be on an upward track through this year, he said, but the retail market will start to fall off. The national apartment market peaked in 2017, he said, but he believes that developers on track to deliver a record 6,000-plus units this year in the Twin Cities will still find renters. “There’s still strong demand for multifamily housing,” he said. Page 18 3/16/2018 Economist: Commercial real estate growth may flatten after 2018 – Finance & Commerce https://finance-commerce.com/2018/03/economist-commercial-real-estate-growth-may-flatten-after-2018/2/2 Some of that demand will come from a “gap” in the housing supply. In the U.S., builders and developers need to deliver 1.6 million housing units of all types annually to keep up with demand, Depew said. This year, they’re coming up 350,000 units short. A lack of building lots and skilled labor are contributing to the shortage. Depew also predicted that capitalization rates would start falling after 2018, even though they are likely to rise over the next few quarters. “On a quarterly basis, the trends are still in place for cap rates increasing,” he said. Mark Reiling, a principal with Minneapolis-based Schafer Richardson and NAIOP member, asked Depew why he thought cap rates would eventually start declining. A coming oversupply of commercial space and the expected decline of the U.S. economy will be the likely culprits, Depew said. “There’s been some overbuild, no question about it,” he said. Capitalization rates show the potential rate of return on a real estate investment. The higher the capitalization rate, the better it is for an investor. According to RSM data, the U.S. will see peak economic performance in 2018, with growth in the gross domestic product expected to hit 3 percent — above a recent average of 2.5 percent. Minnesota will show all the hallmarks of a bustling economy, as well, Depew said. Employment is expected to exceed 3 million people for the first time in the state’s history this year, he noted. Minnesota also has the second- highest labor participation rate in the nation at 71.2 percent, according to RSM data. But GDP growth will fall back to 2 percent in the long term, Depew said. Negative factors working against the economy include annual increases in the federal budget deficit, and President Donald Trump’s recent threat to place tariffs on steel and aluminum imports. “It doesn’t make economic or logical sense,” he said of the tariffs. Copyright © 2018 Finance and Commerce | Suite 2300, Campbell Mithun Tower, 222 South Ninth Street,Minneapolis, MN 55402 | (612) 333-4244  Page 19 3/19/2018 Doran pitches apartments on Highway 55 in Plymouth – Finance & Commerce https://finance-commerce.com/2018/03/doran-pitches-apartments-on-highway-55-in-plymouth/1/2 Bloomington-based Doran Cos. is considering an apartment project on a 12.88-acre site along Highway 55 in Plymou was once slated for office development by John Allen, CEO of Industrial Equities. (Photo: Craig Lassig/Special to F Commerce) Doran pitches apartments on Highway 55 in Plymouth By: Matt M. Johnson March 15, 2018 4:05 pm 0 Bloomington-based Doran Cos. might build about 350 apartments on high-visibility acreage in Plymouth th failed to attract office development, if the developer can convince the city that it’s a good idea. The apartments, if built, would rise on 12.88 acres of vacant land in the northeast quadrant of Highway 5 Avenue North, about a quarter-mile west of Highway 169. The Plymouth City Council considered the pote project in a special meeting Tuesday. The land abuts otherwise fully developed properties that are home to a Holiday gas station, several restau office building, townhouses and a senior rental housing building. The property is a block west of a shoppin anchored by a Cub Foods and a Bachman’s plant nursery, and is zoned for office development, said Steve Plymouth’s community development director. Doran brought the apartment idea to the city after working with the land owner, John Allen, CEO of Minne based development company Industrial Equities, Juetten said. Allen had sought to develop office space on about 10 years ago, Juetten said, going so far as to mitigate asbestos pollution in the soil with grant mon the Minnesota Department of Employment and Economic Development. But at this point the property might be better suited for apartments because demand for offices in that ar not grow for “years and years and years,” he said. The city is looking at other ideas to bring more life to t “With some additional residential units, what will it do to invigorate the area?” Juetten said Thursday in an interview. “What can we do to provide more people for those businesses?” Allen did not respond immediately to a request to comment on the future of his property. Hennepin Count the land at $1.38 million. Page 20 3/19/2018 Doran pitches apartments on Highway 55 in Plymouth – Finance & Commerce https://finance-commerce.com/2018/03/doran-pitches-apartments-on-highway-55-in-plymouth/2/2 Tony Kuechle, Doran’s senior vice president of development, brought his company’s idea for the apartmen Tuesday’s meeting. He said it’s a concept that can work on the property, but Doran has yet to develop a s “We don’t know if it’s actually going to happen or not,” Kuechle said in an interview Thursday. Doran will decide in the next two to three months whether it will submit a formal development application apartments, he said. The concept — which the city’s Juetten described as just an “idea” — doesn’t have many specifics beyond general size. The likely upscale market-rate apartments would be built in one or two buildings, Juetten sa ground parking levels built into the base of the apartments could be screened with townhouse-style units. To bring the apartments to the vacant land, the property has to be rezoned for multifamily housing from o development, which will require the city to amend its comprehensive plan, Juetten said. Still, apartments wouldn’t be an unusual use in the area. A number of new apartment complexes have be up nearby along Highway 55. The year-old, 157-unit Axis apartments are right across Highway 55 from th property at 350 Nathan Lane. A mile to the east, Wayzata-based Continental Property Group completed th Hello Apartments at 9130-9220 Olson Memorial Highway in Golden Valley in early 2017. Council members did not take formal action at the special meeting Tuesday. They did, however, encourag continue to develop the project idea. Council members may soon become more familiar with Doran’s work said. He said he is planning to arrange tours of some of the company’s finished apartment projects for the Related: New team to revive Plymouth apartment plan Copyright © 2018 Finance and Commerce | Suite 2300, Campbell Mithun Tower, 222 South Ninth Street,Minneapolis, MN 55402 | (612) 333-4244 Page 21 3/19/2018 Urban Air Trampoline & Adventure Parks looks to Plymouth for second Minnesota location - Minneapolis / St. Paul Business Journal https://www.bizjournals.com/twincities/news/2018/03/19/huge-indoor-trampoline-go-kart-park-looks-to.html?s=print 1/2 URBAN AIR TRAMPOLINE & ADVENTURE PARK The activities at Urban Air Trampoline and Adventure Parks are target for children aged one to 14. From the Minneapolis / St. Paul Business Journal: https://www.bizjournals.com/twincities/news/2018/03/19/huge-indoor-trampoline-go-kart-park-looks- to.html Retail Watch Huge indoor trampoline, go-kart park looks to Plymouth for second Minnesota location Mar 19, 2018, 2:03pm CDT Updated: Mar 19, 2018, 3:38pm CDT Urban Air Trampoline & Adventure Parks — a national chain of indoor parks featuring trampolines, go-karts and climbing walls — is targeting Plymouth for a 68,200 square foot facility. The Dallas, Texas-based company is planning to open an Urban Air Adventure facility in an industrial business park — Plymouth Ponds III — at 3580 Holly Lane, Plymouth Planning Commission documents said. The facility will have trampoline activities, foam pits, rope courses, rock climbing walls and dodgeball courts. Over 26,000 square feet of the facility would also be dedicated to an electric go-kart track with 12 karts. Kids under 14 (and their parents) are Urban Air's core demographic group. Its facilities have spaces for events like birthday parties and school field trips. The company projects 120,000 customers annually at the Plymouth location. Wesley Harold is the Plymouth Urban Air franchisee, he said the tentative plan is to open in October. Out of the 40 Urban Air locations in the country, this will be the third park to offer go-kart racing, Harold said. Urban Air also has a 40,000-square-foot location in Coon Rapids, which opened last summer. Urban Air is in the midst of a nationwide expansion with plans to open over 60 more parks in the United States this year, city documents said. Brent Masica and Jason Meyer with Cushman & Wakefield Minneapolis-St. Paul handle leasing for Plymouth Ponds III, according to a leasing brochure. Urban Air didn't immediately respond to messages seeking comment. The project will go to the Plymouth Planning Commission on Wednesday night. Dan DeBaun Staff reporter/Digital producer Minneapolis / St. Paul Business Journal FOR THE EXCLUSIVE USE OF BLANDHAUSER@PLYMOUTHMN.GOV MENU  Account  Page 22 3/21/2018 Cargill executive calls time on traditional supply model - Minneapolis / St. Paul Business Journal https://www.bizjournals.com/twincities/news/2018/03/21/cargill-executive-calls-time-on-traditional.html?s=print 1/3 KELLEN JENKINS/ WBJ Cargill, with more than $100bn in revenue, handles and processes tens of millions of tonnes of crops and meats annually. From the Minneapolis / St. Paul Business Journal: https://www.bizjournals.com/twincities/news/2018/03/21/cargill-executive-calls-time-on-traditional.html Cargill executive calls time on traditional supply model Mar 21, 2018, 7:04am CDT Subscriber-Only Article Preview |   For full site access: Subscribe Now Editor's note : This story is available as a result of a content partner ship with the Financial Times. Subscribers will see stories like this every day on our website (and in our daily emails) as an added value to your subscription. Long-established methods of making money through grain sales are “over”, a senior executive at Cargill has said, declaring a lasting shift has taken place in agricultural commodities markets. Cargill, with more than $100bn in revenue, handles and processes tens of millions of tonnes of crops and meats annually. The US-based company has for decades relied on a far-reaching network of silos and ports to maintain its edge as a grain and oilseeds trader. “The traditional business model in the ag supply chain is over,” Gert-Jan van den Akker, president of Cargill’s agricultural supply chain division, told the FT Commodities Global Summit on Tuesday. Mr van den Akker said Cargill and its rivals historically financed farmers and agreed to buy their crops during the growing season. At harvest they would purchase the crops, store them in company silos and trade around the inventory. FOR THE EXCLUSIVE USE OF BLANDHAUSER@PLYMOUTHMN.GOV MENU  Account  Page 23 3/21/2018 Cargill executive calls time on traditional supply model - Minneapolis / St. Paul Business Journal https://www.bizjournals.com/twincities/news/2018/03/21/cargill-executive-calls-time-on-traditional.html?s=print 2/3 “You’d wait for markets to appreciate and then you would sell it. And that’s what created margins. That’s over. That doesn’t exist any more,” he added. His comments may help settle a debate on whether financial pressures facing the world’s big agricultural traders are a symptom of a temporarily slack grain market or reflect more structural changes. Gary McGuigan, president of global trade at Archer Daniels Midland, a Cargill competitor, said traditional ways of buying crops at one origin and dropping it off at a port were becoming outmoded. “I just don’t see how that sort of thing will survive,” Mr McGuigan told the conference. In the past decade farms have grown bigger. Farmers from Ukraine to the US have invested in storage assets in the form of mammoth plastic bags or corrugated metal silos, allowing them to decide when to sell supplies to merchants. Data on commodity prices, weather, crop yields and trade flows have also become affordable for farmers and consumers, diminishing the value of grain traders’ inside knowledge. “There are no secrets today in the world of agriculture,” Mr van den Akker said in an interview. Big grain merchants continue to buy crops from farmers but have adapted to the changes. ADM, for example, has built up “destination marketing”, or bringing grain supplies closer to customers. Cargill has been offering more services to farmers, such as digital tools to guide cultivation. The executives spoke as volatility returns to grain markets because of a drought in Argentina. Mr van den Akker said that, after initial expectations for a 57m-tonne Argentine soyabean crop, he now expected a crop of 40m-45m tonnes, or below 40m in the worst case. Soyabean prices have rallied back above $10 per bushel. “Things have bottomed,” Mr van den Akker said. Page 24