U.S. Sugar-Everglades deal looks less sweet as tax revenues drop in Florida
March 10, 2009 at 10:03 am by Wayne Garcia
There are two big problems with the landmark deal being pushed by Charlie Crist to buy out U.S. Sugar’s acreage in the Everglades Agricultural Area: he wants to pay too much for the property, even at the premium it should demand as a trade-off for going out of the business of growing sugar and polluting the Everglades with fertilizer; and it isn’t enough land or a quick enough timetable for the sugar shutdown.
But Crist pushed ahead with the historic deal. The recession and the Legislature, however, may scuttle it.
The St. Petersburg Times/Miami Herald Tallahassee bureau reports:
South Florida’s steep drop in property values threatens to claim another victim: the governor’s $1.34 billion plan to buy U.S. Sugar Corp. for Everglades restoration.
Property values are expected to drop 12 percent statewide in the 2009-10 budget year, but in the 16 counties that make up the South Florida Water Management District, property values will drop at least 14 percent, early state estimates show.
It raises the question of whether the state can “afford this deal,” said Sen. J.D. Alexander, the Lake Wales Republican who is the Senate budget chief and a vocal opponent of the proposal.
The South Florida Water Management District is actually the government that is on the hook, drawing property taxes from 16 counties to pay the $100 million a year in debt it would incur in the U.S. Sugar deal. But the three richest counties in its district (Miami-Dade, Broward and Palm Beach) have seen precipitous property value decreases, changing the finances of the deal and making it tough for SFWMD to make those payments.
The deal is even less money than originally proposed, which was $1.75 billion, and has the same flaws that prompted my cover story back in August 2008 :
Why are so few questioning the sale price, which amounts to a high premium of $350 a share for the privately held giant that produces 10 percent of the nation’s raw sugar? The proposed price is much higher than the share value the company itself uses, the $180-$204 it pays its own employee shareholders when they cash out.
And why do few question the propriety of rewarding one of the Everglades’ biggest polluters? In 1996, voters approved a referendum requiring those responsible for polluting the Everglades to clean up the mess. That includes U.S. Sugar.
And what about the state’s second-biggest sugar baron, Flo-Sun, which owns 30,000 acres just south of U.S. Sugar? For the Everglades restoration to work, some or all of their land is needed, too.
Literally a voice in the wilderness on this issue, Republican Hendry County Commissioner Darrell Harris told the Broward-Palm Beach New Times weekly newspaper: “People can’t afford to drive down the road to get something to eat. Teachers are getting laid off, state workers are getting laid off. And [Crist is] spending $1.75 billion on this?”
