Florida Scales Back US Sugar Corp Buyout
Date: 12-Nov-08
Country: US
Author: Jim Loney
Under terms of the tentative deal unveiled on Tuesday, the state will pay $1.34 billion for 181,000 acres of US Sugar land, but the company will keep its sugar mill, refinery, citrus processing facilities, railroads, office buildings, equipment and more than 5,000 acres of land.
A preliminary deal struck in June called for Florida to buy all of US Sugar Corp, one of the nation's largest privately held agricultural firms.
It was not revealed why the deal was revamped. But Florida faces eroding sources of public financing because of the US credit crunch and a falloff in state tax revenues.
"I think it's a better deal. The government wouldn't have known what to do with all those plants," said Eric Draper of the environmental group Audubon of Florida. "Now Florida will own the land we all wanted for restoration."
US Sugar said its negotiations with the South Florida Water Management District had been "successfully concluded" with an agreement. But water district Executive-Director Carol Wehle said only a "framework" was in place and the two sides were still negotiating details.
Wehle said the district planned to sell $1.34 billion of certificates of participation, instruments similar to bonds, to fund the deal, but a timetable for the sale had not been set and would depend partly on the debt market.
She said she hoped to put a contract before the district's governing board for approval in December. US Sugar's board also must sign off on the pact.
The deal is expected to revive an effort to turn sugar cane fields back into marshes and waterways that would help cleanse polluted Everglades water and carry it from Lake Okeechobee to the southern reaches of the Everglades and Florida Bay.
Environmentalists have criticized the sugar industry for decades for dumping fertilizer-tainted water into Florida's famous "River of Grass," a slow-moving river as little as 6 inches deep and a vast sawgrass prairie with marshes, pine forests and mangrove islands.
It is the largest subtropical wilderness in the United States and home to rare and endangered species like the American crocodile and the Florida panther.
More than 35 percent of the original wetlands have been taken over by development or agriculture and the remainder has been starved of water because of the irrigation needs of sugar plantations, vegetable farms and citrus fields.
The deal will allow US Sugar to lease back the land for $50 per acre and keep its 1,700 workers for about six years. After that, the company "will either continue to operate the facilities or sell them based on the best interest of our shareholders," US Sugar Vice President Robert Coker said.
"Every employee we have today, we plan to keep on," he said.
Florida Gov. Charlie Crist had been expected to announce the deal at a news conference on Tuesday at the former Miami home of the late environmentalist Marjory Stoneman Douglas, a long time defender of the Everglades.
But Crist was delayed and the event was postponed until Wednesday, leaving environmentalists to wonder about the deal's fine print.
"We're excited that the land will be in state control. The critical thing is getting the land," said Jonathan Ullman of the Sierra Club. "But we'll just have to wait and see about the details."
(Editing by Walter Bagley)
