BRADENTON, Fla. — The Florida Supreme Court is scheduled to hear oral arguments today in the long quest by South Florida water managers to validate $650 million of certificates of participation.
The justices do not have to rule at the conclusion of arguments and there is no deadline for them to act.
The South Florida Water Management District is seeking to validate the COPs it would use to finance the purchase of 72,500 acres of sugar cane farmland and orange groves owned by U.S. Sugar Corp.
The district believes the acquisition is one of the most important in the long history of delayed attempts to restore the famed Everglades, which have been choked by development and polluted by various kinds of agriculture.
But the deal has been opposed by the Miccosukee Tribe of Indians of Florida and New Hope Sugar Co., a competitor of U.S. Sugar.
The tribe and New Hope challenged the initial validation proceeding in Palm Beach County district court, but in that case Judge Donald Hafel ruled in August in favor of validating the COPs. The opponents appealed the ruling, which landed the case before the state’s high court.
Opponents have said that the purchase is nothing more than a bailout of an ailing company that serves no public purpose. And they said the purchase would leave little or no money for the Water Management District to do other conservation projects because of the toll the weakened economy has taken on the agency’s budget.
But supporters of the project, including the district, say that buying such a large tract provides an unprecedented opportunity to store and treat water that the Everglades needs to survive. In fact, restoration projects often begin with the purchase of land, they argue.
“To say this acquisition does not serve a public purpose is to say that restoring the Everglades ecosystem does not serve a public purpose,” said a brief filed on behalf of the nonprofit Florida Audubon Society Inc., the National Audubon Society, and environmentalist Nathaniel Reed, who intervened in the case.
The environmentalists’ attorney, Thom Rumberger of Rumberger, Kirk & Caldwell, will be participating with the water district in oral arguments today.
The entire project has been scaled back several times because of the recession. The financing, as currently envisioned, will purchase 72,500 acres as well as an option to buy the remaining U.S. Sugar property, consisting of 107,500 acres, within 10 years.
The district had hoped to meet a contractual deadline to have the COPs validated by March 31 but the Florida Supreme Court scheduled oral arguments after that date.
The district’s governing board last month voted to extend the date by which validation must occur by six months since there is no timeframe for justices to rule in the case.
If justices rule favorably for the district, the financing could move forward quickly. New contract deadlines will go into effect and there will be a tight time frame to present the deal to rating agencies and ultimately sell the COPs to purchase the land.
However, there are provisions in the purchase contract that enable the Water Management District to back out of the deal if the COPs cannot be sold at a price the agency can afford.
In late 2006, the water management district broke ground in the muni market when it became the first issuer to use COPs to finance environmental restoration projects. It sold $546 million of certificates for another Everglades restoration project.
