Palm Beach Post

Slow down $1.34 billion sugar deal, critics urge as clock ticks toward deadline

December 02, 2008

www.palmbeachpost.com/localnews/content/local_news/epaper/2008/12/02/1202sugar.html

Gov. Charlie Crist's blockbuster plan to repair the Everglades by buying U.S. Sugar Corp.'s farmlands for $1.34 billion ran into a litany of sharp questions and criticism today - threatening to send all parties back to the negotiating table.

South Florida water managers raised numerous concerns about the price and the terms of a contract that carries an approval deadline of Dec. 16.

"We run the risk right now of bailing out a private corporation instead of doing Everglades restoration," said South Florida Water Management District board member Michael Collins, an Islamorada fishing guide and the deal's fiercest critic at the agency.

The first public review of the proposed contract for the sweeping land purchase was marked by both fierce resistance and impassioned support of the landmark land deal - a more than seven-hour debate that included appeals from the likes of veteran Hobe Sound environmentalist Nat Reed and U.S. Sugar's powerful competitor, Florida Crystals Corp.

"The Everglades cannot be restored without a major land acquisition," said Reed, a former district board member who served as assistant secretary of the interior under Presidents Nixon and Ford. "Get the land."

But a throng of Glades-area farmers and leaders packed the district's meeting chambers in suburban West Palm Beach to warn that the deal threatens to destroy their local economy.

"It's a train to nowhere, and the devil's driving the train," said Melanie McGahee, a Clewiston attorney.

Earlier in the day, a smaller sugar company warned that the deal would turn U.S. Sugar into a "super competitor" that would imperil its rivals.

Terms that would allow U.S. Sugar to lease back much of its 180,000 acres from the state at $50 per acre annually, while remaining in business for the next seven years, amount to "government intervention" that would create "unfair competition," George Wedgworth said in a letter to state officials. He is president and CEO of the Sugar Cane Growers Cooperative of Florida, based in Belle Glade.

Wedgworth notes that the state's own appraiser valued such a lease at $220 per acre annually.

"The people we represent should not become the unintended consequence of a lofty environmental goal executed by a bad business deal," Wedgworth wrote.

Formed in 1960, the 47-member co-op represents the third-largest sugar producer in the state after U.S. Sugar and Florida Crystals Corp.

Wedgworth asked the state to allow open bidding on both the leases and any surplus land that the state eventually hopes to resell. He also offered to begin negotiating for the same lease at three times the proposed rate, $150 per acre annually.

U.S. Sugar has warned that the proposed contract, the result of five months of closed-door negotiations, will be scrapped unless the district's board votes to approve it by Dec. 16. U.S. Sugar's board is expected to vote on the contract Monday.

In June, Crist proposed buying out U.S. Sugar entirely for $1.75 billion and using its land to restore the Everglades. In November, Crist announced the state would buy only the company's land for $1.34 billion, which would allow U.S. Sugar to keep its manufacturing works and remain in business indefinitely.