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Historic sugar land buy gets OK

Palm Beach Post - 12/16/2008 12:00:00 AM
by Paul Quinlan

Congratulations, South Florida taxpayers: You are buying a swath of canefields south of Lake Okeechobee nearly the size of New York City.

Supporting Gov. Charlie Crist's ambitious but costly plan for Everglades restoration, water managers agreed in a 4-3 vote Tuesday to buy nearly all of U.S. Sugar Corp.'s farmland for $1.34 billion in what amounts to the priciest conservation land purchase in Florida history.

But they did it with a caveat: Water managers added a clause they said would let them back out if the state's dire financial climate threatens to cripple their ability to fulfill their obligations of water management and flood control.

U.S. Sugar applauded the vote and said it welcomes the change, calling it "non-material" to the contract that the company's board signed off on earlier this month.

In a statement, Crist called the vote by the board of the South Florida Water Management District "the most important step in the history of true Everglades restoration." "Today's action is a result of the courage and tenacity of so many, and I thank God for the vision and leadership of those who brought us to this moment," Crist said.

The purchase is a step toward the long-sought dream of Everglades advocates: restoring the Everglades' historic, flowing connection to Lake Okeechobee.

The bad news for taxpayers: Nearly all board members agreed that the state is overpaying the struggling sugar company -- by some estimates, as much as $400 million. U.S. Sugar also had reason to celebrate a provision that allows it to lease back land from the state at a fraction of the market rate and keep farming for seven years, a clause that competitors derided as an unfair government subsidy.

What's more, construction of the reservoirs and filter marshes that will make up the actual restoration likely will cost billions more and may be a decade or more on the horizon.

But proponents and the board's majority agreed that the risks of passing up the historic land deal on Tuesday, the contract's deadline for approval, were too great.

The long-term benefits, they say, will be priceless: a healthy Everglades, abundant drinking water and an end to the algae blooms and fish kills that result from having to empty Lake O down estuaries running to the coasts.

During two days of debate, an eclectic parade of speakers -- including a pastor, two busloads of Clewiston High School students, environmentalists and competitors of U.S. Sugar -- addressed the board with everything from tears to threats to demands.

Waving a 2-foot, taxidermied snook in the air Tuesday, Karl Wickstrom of the Rivers Coalition said undoing the "huge damage" wreaked on marine life in the estuaries demands restoration.

"Scientists agree: There's a critical need to flow the water south," said Wickstrom, founder of Florida Sportsman magazine. Some state lawmakers had urged the board to reject or postpone the deal, hinting at the consequences if the water managers went forward.

The deal's leading critic on the board, Islamorada fishing guide Mike Collins, said it's misleading to promise so many ecological benefits from buying U.S. Sugar's land.

"This land acquisition in and of itself does none of the these," said Collins, the only board member whom Crist did not appoint. "It gives us the opportunity somewhere down the line, if all the other things line up, to accomplish these goals. But it's going to require a whole bunch of other things to line up."

Tuesday's vote came nearly six months after Crist announced the deal, calling the proposed purchase as "monumental as the creation of our nation's first national park."

But numerous obstacles threatened to scuttle the purchase and added high drama to Tuesday's all-day debate. They include a global financial crisis that has hit Florida especially hard, a looming $2.3 billion state budget deficit and projections that the purchase could lead to a 2010 budget deficit for the district of as much as $88 million -- about a fifth of its "core" expenditures.

Critics said the district would max out its credit card to pay a bill that could tally $2.9 billion to $3.4 billion, including interest payments, over the next three decades.

But district board Chairman Eric Buermann likened the U.S. Sugar contract, for all its flaws, to previous monumental land deals such as the Louisiana Purchase and the U.S. acquisition of Alaska.

"This is the one opportunity, maybe, that we have," said Buermann, a Miami lawyer. "This is our moment in time and our moment in history. ... Do we want to acquire the land or not?" "Vote with your courage," he told his colleagues. "We may only know from history whether we're right or wrong." Board member Shannon Estenoz, a steady advocate for the deal, moved to insert the financial opt-out clause as she called for the final vote.

"I think over the next four months, we need to be able to slowly and carefully and with the input of the legislature decide whether this is affordable," she said.

Estenoz joined Buermann in voting yes, along with Stuart environmental consultant Melissa Meeker and Walt Disney executive Jerry Montgomery.

Collins, Patrick Rooney Jr. of West Palm Beach and Charles Dauray of Lee County voted no. Paul Huck, a Coral Gables lawyer, had recused himself and did not attend Tuesday's meeting.

Adding to critics' concerns were fears from Glades residents that their agricultural economy would collapse as one of the region's largest employers divests itself of its farmland.

Deborah Van Sickle, senior vice president of First Bank in Clewiston, choked back tears as she warned of the "economic Hiroshima" that would result from the loss of U.S. Sugar's 1,700 jobs and resulting ripple effects.

She repeated a question from her customers: "How can the government tax us and use these same tax dollars to destroy our lives?" The deal must still clear several hurdles before the money changes hands.

The district must obtain financing, despite shuddering credit markets and a court challenge from rival sugar grower Florida Crystals Corp.

"We think all you're going to accomplish with this is to buy this land for $1.34 billion and lease it back to U.S. Sugar to farm forever, because you don't have the financial capability to do anything with it," Florida Crystals attorney Gabriel Nieto told the board.

Meanwhile, U.S. Sugar has a 60-day window to entertain other offers. It must still defend itself against a buyout attempt by The Lawrence Group, a Nashville-based father-son team that is aggressively courting shareholders with a $300-per-share bid.