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Budget Forces Florida Everglades Deal to Shrink

posted on April 3, 2009


TALLAHASSEE, Fla. (AP) -- Gov. Charlie Crist's celebrated $1.34 billion deal to buy 180,000 acres of U.S. Sugar Corp. land to help restore the Everglades is being scaled back by more than half because the state can't afford the original deal, the governor announced Wednesday.

The reduction means the state will now buy 72,500 acres of land for $533 million, and hold a 10-year option to buy the remaining land. The decision means the original deal - hailed by environmentalists - will be far less ambitious than planned.

"The economy has been what it has been and we have to deal with the parameters that we are given," Crist said.

U.S. Sugar, the nation's largest cane sugar producer, owns a vast amount of land between Lake Okeechobee and the Everglades. Environmentalists have long criticized the sugar industry for cutting off the natural flow to the River of Grass and contaminating it with fertilizer.

The goal of the land purchase is to convert farm land into conservation land, allowing water managers to create a system to clean and store water before sending it south into the Everglades.

In June, Crist announced a $1.75 billion deal which included U.S. Sugar's assets, such as its mill, railroad and citrus processing plant. In November, the revised $1.34 billion deal was announced that didn't include those assets.

The South Florida Water Management District plans to borrow money through bonds for the deal and pay off the debt with property taxes from its 16 county region stretching from Orlando to the Keys. But property values dropped 12 percent last year. In addition, Florida is facing about a $6 billion budget gap between anticipated revenues and expenses.

Federal stimulus money is expected to fill about half the budget hole, and the Senate is hoping to raise more money with a cigarette tax, gambling revenue and increased user fees, including those on driver's licenses, but the Legislature is still looking to cut spending throughout government.

Kirk Fordham, CEO of the Everglades Foundation, said given the economy, it would have been easy for the governor to abandon the project.

"We're frankly overjoyed that he hasn't," Fordham said. "The circumstances that we're facing dictate flexibility, creativity and perseverance ... The governor and the management of U.S. Sugar have exhibited all of those traits to keep this extraordinary project moving forward."

The Everglades is essentially an enormous river slowly moving through a vast marsh that historically covered 11,000 square miles with headwaters south of Orlando flowing to the Florida Bay. It is now less than half its original size.

The water management district and U.S. Sugar boards of directors still have to approve the deal. Besides the downsizing, it also has changed in other ways. U.S. Sugar will lease back the land for $150 an acre for seven years, triple the previous agreed upon price, which critics said was below market value.

U.S. Sugar will also freeze for three years any attempts to sell some of the land most critical to the project to ensure a competing buyer doesn't outbid the state before the sale is finalized.

The company remained positive that the new deal would go through.

"This will forever change the footprint and the land use of South Florida, and it will ensure that not only will you have an adequate supply of clean water for the environment, but you will have an adequate supply of clean water for the millions of people that live in South Florida and our company and our board are very proud to be a part of that," said U.S. Sugar Vice President Robert Coker, who joined Crist for the announcement.

After the announcement, Audubon of Florida lobbyist Eric Draper said scaling back the purchase makes sense given the economy, and that the original deal included more land than the state needed for the restoration project.

"I don't think anybody ever thought that 180,000 acres was the right amount of land, that was just what U.S. Sugar was willing to sell," Draper said.

The U.S. Sugar deal was not part of a 30-year partnership between federal and state officials to restore the Everglades, so environmentalists see it as a bonus. It's still unknown how or if the scaled back U.S. Sugar deal will affect the state's goals when it first announced the proposal.

"Everglades restoration was always intended to be conducted in stages and even if they had acquired all of the land tomorrow, the couldn't possibly begin constructing projects on all of that land," Fordham said, explaining that U.S. Sugar will still be farming the land for several years and the state still has an opportunity to purchase more when the economy improves.

Crist also tried to keep a positive outlook, treating the announcement as a celebration and issuing a reminder the deal was still historic.

"It is a large and an important tract of land. This represents the largest single purchase of land in Florida's history by Florida," Crist said. "Even though it's scaled down, it's still the biggest ever."


Tags: ecology economy Florida news wetlands