BRADENTON, Fla. — A Palm Beach County, Fla., judge Wednesday validated $650 million of the $2.2 billion of certificates of participation requested by the South Florida Water Management District to purchase land that will help restore the Everglades.
While SFWMD officials hailed the partial validation as a significant win for South Florida’s fragile and declining ecosystem, the controversial financing plan still can be appealed within 30 days to the Florida Supreme Court, said Randy Hanna, managing shareholder at Bryant Miller Olive LLP, the district’s bond counsel.
The district plans to use COP financing to purchase land owned by U.S. Sugar Corp., whose use of pesticides and other agricultural practices — along with those of other large-scale farmers in the region — has long been considered a major factor contributing to the pollution of the Everglades and the Florida Bay.
SFWMD officials have long said they anticipated the validation to be appealed one way or another. However, the two most vocal opponents of the validation — the Miccosukee Tribe of Florida and Florida Crystals Corp. — have not announced if they will appeal.
Although Wednesday’s ruling by Palm Beach County District Judge Donald Hafele represents only a portion of what the SFWMD needs to complete the entire purchase of U.S. Sugar’s land, Hanna said the district can seek to validate additional debt in the future.
If no appeal is forthcoming and Hafele’s ruling becomes final, SFWMD executive director Carol Wehle said the agency would “mobilize to get the financing done and wrap” up the purchase of land that will allow for restoring fresh-water flows to the Everglades and Florida Bay and stop polluting discharges, such stormwater runoff throughout South Florida.
Validations in Florida usually are low-key and uncontested, but the SFWMD’s plan to purchase 180,000 acres for $1.34 billion from U.S. Sugar drew opposition from the moment it was announced in late 2008 by Gov. Charlie Crist. As the recession took a foothold in Florida, the purchase plan was restructured early this year to enable the district to initially purchase 72,500 acres for $536 million, with an option to purchase another 107,500 acres within 10 years.
In his ruling, Hafele said he arrived at the $650 million figure based on the testimony of Thomas Olliff, the district’s assistant executive director, who said that $650 million of COPs would be needed for the initial purchase, which includes issuance costs and a year of debt service payments.
Although it is the intention of the SFWMD to eventually purchase all of U.S. Sugar’s land for the same purpose, Hafele contended that the court record was “essentially devoid of any information discussing how the remaining 107,000 acres (if acquired) would be utilized.”
“While detailed, specific plans are unnecessary, this is not to say that the district may seek bond validation with ideas so nebulous that the court cannot determine their legality,” Hafele said in justifying his reduction of the amount validated. Some attorneys expressed surprise at the partial validation amount, which is rare in Florida.
Crist applauded the court’s ruling, saying: “As the district moves forward in the acquisition process, I am confident that they will do so in a financially responsible manner. The court’s decision recognizes the monumental outcome the transaction will have on the restoration of America’s Everglades and the benefits it will provide the environment, the economy, and the people of South Florida.”