Florida Water Managers OK Phased Buy of U.S. Sugar Land

The Board had sought ways to address current economic challenges while preserving the environmental vision of this historic purchase.

With these lands, the state agency is expected to re-establish a natural flow-way from Lake Okeechobee through the River of Grass to Florida Bay. Such a flow-way would preserve the St. Lucie and Caloosahatchee estuaries from destructive discharges, eliminate hundreds of tons of phosphorous fertilizer pollution and recharge groundwater systems.

The amended agreement, approved last week by U.S. Sugar's Board of Directors, provides for the initial purchase of 73,000 acres of land south of Lake Okeechobee, with options to purchase another 107,000 acres when economic and financial conditions improve.

"Benefits of this acquisition to the Everglades and Florida's coastal estuaries are immense, providing us the opportunity to restore a unique and treasured ecosystem in ways not previously envisioned," said SFWMD Governing Board Chairman Eric Buermann on Wednesday after the vote.

Eric Buermann (Photo courtesy SFWMD)

Under the approved agreement, which is subject to financing, the district district would take ownership of approximately 73,000 acres of land and its improvements for a purchase price of $536 million, including 33,000 acres of citrus lands and 40,000 acres of sugarcane lands.

At slightly less than appraised value, the revised purchase reduces the immediate public investment by 60 percent, or $800 million, and annual debt service payments by an estimated $65 million from an earlier agreement between the state and the company.

That original agreement, approved by the board on December 16, 2008, would have enabled the state to acquire more than 180,000 acres of land for $1.34 billion, contingent upon financing and affordability.

In view of the economic downturn, the two parties on April 1, 2009, agreed to work on a revised framework that would allow for the completion of the transaction in affordable steps.

Under the revised agreement, closing on the 73,000 acres would take place in 2010, within 90 days after court validation of the bonds to finance the acquisition.

A pair of great egrets on U.S. Sugar land. (Photo courtesy U.S. Sugar)

U.S. Sugar would lease back the 40,000 acres of sugarcane lands from the district at $150 per acre for seven years, with provisions to extend up to 20 years. The lease would generate a minimum of $40 million in revenue and avoid more than $11 million in land management costs during the first seven years.

U.S. Sugar would be required to pay all property taxes and assessments, control the land for exotic and invasive plants and implement Best Management Practices to prevent pollution.

The district may terminate portions of the lease and begin using the acreage for restoration under a "takedown" schedule, including all of the citrus lands with 12 months' notice, and 10,000 acres of sugarcane lands with two years' notice within the first 10 years.

Should the district exercise the purchase option, all property would be available for approved and funded restoration projects.

The amended agreements allow for the continued operation of the U.S. Sugar Corporation's mill and refinery, keeping 1,700 direct jobs for at least another decade and sustaining regional agriculture.

Florida Governor Charlie Crist was pleased with the outcome of the vote, saying, "I want to express my appreciation to the Governing Board for their courage in taking the historic step today to acquire land that is essential for the restoration and revival of the Everglades."

"By gaining access to hundreds of square miles of prime property," he said, "the River of Grass and the wildlife that depend on it face a brighter and more secure future."

Robert Coker, senior vice president, public affairs for U.S. Sugar commended the Governing Board of the South Florida Water Management District , saying, "We look forward to working in partnership with the State and the South Florida Water Management District in moving forward to close this transaction and implement Governor Crist’s bold vision for restoring the Everglades ecosystem."

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