State Revises U.S. Sugar Purchase/Leaseback

Proposal Gives US Sugar $7310 Per Acre and Lease Back At $150 An Acre

CLEWISTON, FL. -- After gathering key input from the public, legislators and South Florida's communities and in recognition of the nation's current economic climate, Governor Charlie Crist today shared details of a revised strategy to acquire Hendry and Palm Beach county land for Everglades restoration from Clewiston's United States Sugar Corporation at what some say is an exorbitant price for ag land.

The proposed terms, which are subject to financing and approval by both the South Florida Water Management District Governing Board and the United States Sugar Corporation Board of Directors, would allow the district to fulfill the Governor's vision to acquire huge parcels of agricultural land for Everglades restoration by purchasing 112 square miles of property immediately, with an option to purchase the remaining acreage when economic and financial conditions improve.

Under the proposal, the district would initially invest approximately $530 million for 72,500 acres of property south of Lake Okeechobee, a cost of $7,310 per acre. Approximately 32,000 acres of that land, currently in citrus production, would be available to the district within a year after closing. 

The United States Sugar Corporation would lease back the other approximately 40,500 acres of sugar cane land for only $150 per acre per year for at least seven years, a heck of a cost saving deal for US Sugar.  The district would have an option to purchase the remaining 107,500 acres of United States Sugar Corporation property for restoration within the first 10 years after closing. The Governor did not say what that "option price" might be.

"Restoring Florida's Everglades depends on acquiring the land needed to clean and protect water flowing through the ecosystem," said Manley Fuller, president of the Florida Wildlife Federation at the annoucement. "The purchase of this land is a milestone for all who cherish the Everglades and its unique habitat for endangered species."

Governor Crist was joined for the announcement by Lt. Governor Jeff Kottkamp, Secretary Mike Sole of the Florida Department of Environmental Protection as well as environmental leaders:  Charles Pattison, 1000 Friends of Florida; Thom Rumberger, Everglades Trust & Foundation; Janet Bowman, The Nature Conservancy; Eric Draper, Audubon of Florida; and Curt Kiser, Florida Wildlife Federation.

 

The negotiations to buy the land began June 24, 2008, when Governor Crist announced that the South Florida Water Management District would begin talking with the United States Sugar Corporation to acquire vast tracts of land south of Lake Okeechobee for Everglades restoration. After extensive deliberation, due diligence and public input, the district's Governing Board voted to accept a proposal to acquire more than 180,000 acres of agricultural land for $1.34 billion at that time, although the funding was not fully worked out, as the taxpayers would probably have to look forward to increases in their property taxes since the money to be spent was not fully funded.

In light of changing economic conditions, the district's Governing Board added a clause to the contract to allow for the review of the most current financial conditions – including interest rates and revenue streams – before closing to verify the district's capacity to finance the purchase and accomplish its existing statutory and legal obligations.  Since December, revenue projections have changed dramatically with economic forecasts indicating continued financial uncertainty over the coming months.

The details of the revised acquisition terms are still under discussion. The final proposed terms will be reviewed and considered by the South Florida Water Management District Governing Board at its public meetings. 

Environmental goals of the acquisition include:

 ·         Increasing the availability of water storage, significantly reducing the potential for harmful discharges from Lake Okeechobee to the St. Lucie and Caloosahatchee rivers and estuaries when lake levels are high.

·         Delivering cleaner water to the Everglades during dry times and greater water storage to protect the natural system during wet years.

·         Preventing tons of phosphorus from entering the Everglades every year.

·         Significantly reducing the need for "back-pumping" water into Lake Okeechobee from the Everglades Agricultural Area.

·         Relieving some pressures on the Herbert Hoover Dike while the federal government undertakes repairs by providing alternative water storage alternatives.

·         Improved flexibility in managing Lake Okeechobee levels in a more environmentally friendly way.

For more information about the acquisition, visit www.sfwmd.gov/riverofgrass.