Highlands Today

Sugar deal going sour

Lack of state money has left restoration project in limbo

MARGARET MENGE

Central Florida’s Agri-Leader

October 12, 2011

http://www2.highlandstoday.com/content/2011/oct/12/sugar-deal-going-sour/

In June 2008, Gov. Charlie Crist announced that the state of Florida was buying out the U.S. Sugar Corporation for $1.75 billion with the intention to use the land for Everglades restoration.

The chief executive officer of U.S. Sugar, Bob Buker, said the state would get everything the company owned: the land, the mill, two refineries, the railroad, the headquarters in Clewiston… everything, right down to "the half-eaten pastrami sandwich in the refrigerator."

But it didn't.

After twice amending the deal over two years, the South Florida Water Management District ended up buying just 26,791 acres of U.S. Sugar for $197 million, not the full 187,000 acres, not the mill, not the railroad, not its headquarters in Clewiston and not any part of any pastrami sandwich.

What happened?

Eric Buermann, who was chairman of the district's board when the deal was made, said it's simple: The economy took a downward turn and the state didn't have the money to buy all of the land.

"It ultimately had to be scaled back to a more affordable version," he said, before correcting himself, saying the 2008 deal was not really scaled back but "phased," the way the developer of a shopping center does a project in phases, pointing to the state's 10-year option to purchase another 153,209 acres.

But Gov. Rick Scott has indicated he's not interested in acquiring any more land for Everglades restoration and the South Florida Water Management District's budget has been cut in half - from $1.07 billion to $576 million for 2012 - with the biggest cuts from the money available for land acquisition and restoration projects. So it's unclear when another phase might get under way.

And no one is talking about what might be done and when with the U.S. Sugar land that was acquired in October of last year - the 26,791 acres in Hendry and Palm Beach counties.

Staff at the South Florida Water Management District did not return calls requesting information and comment, and the district's website only has a vague mention of "construction opportunities for environmental and water quality improvements" on a map showing the River of Grass land acquisition.

"As for where it is now, we've been asking the same question," said Jane Graham, who works on Everglades policy for the Florida Audubon Society.

She said Audubon is hopeful that the water district will be able to use the land for water treatment. Eventually.

U.S. Sugar is still farming the land, having leased it back from the state as part of the agreement with the South Florida Water Management District.

So, there are no plans to use the land for Everglades restoration, and no money to execute any plan that might be devised. But this, said former water district board member Mike Collins, is the least of it.

Collins, a fishing guide in the Florida Keys who was appointed to the board by former Gov. Jeb Bush, was the only member of the water district's board to vote against the U.S. Sugar deal in 2008.

"They didn't need that land. We own 300 million acres of the Everglades. When do you own enough?" he asked last week at his office in the Upper Keys.

"They just sold out the whole Everglades restoration," he said, pointing to a number of Everglades restoration projects the water district stopped working on to fund the purchase of U.S. Sugar land.

The New York Times reported in March 2010, in an article headlined "A Deal to Save the Everglades May Help U.S. Sugar Firm," that more than $280 million had been spent on the reservoir in Palm Beach County that was to be the largest man-made reservoir in the world.

Work on the reservoir, the paper reported, was stopped so that the state could buy the U.S. Sugar land. The penalty paid to the contractor for stopping work: $25 million a month.

But to some, the money isn't the main thing.

Buermann, a real estate lawyer by trade, said the state had to take the opportunity to acquire the land.

"Property in that bulk has never been available in this century," he said of the Everglades. "It just has never come on the market."

He said all of the board members of the South Florida Water Management District knew when they approved the deal that U.S. Sugar was more than $500 million in debt. Buermann said he doesn't think the company would have been willing to sell otherwise.

But instead of getting the land at bargain basement prices, the state agreed to pay more than $7,000 per acre, a price that U.S. Sugar is not likely to agree to renegotiate as the price of sugar is up and the company's position improved.

"It really was a rip-off," said Barbara Miedema, the spokesperson for the Sugar Cane Growers Cooperative. The cooperative was staunchly opposed to the state's purchase of U.S. Sugar, calling it a "bailout" and complaining the land was never worth what the state agreed to pay for it.

And three years after reports of its demise, U.S. Sugar is alive and well. Buker gave an interview to the Palm Beach Post on the occasion of the company's 80th anniversary in April, saying that he expects the company to be around another 80 years.