BRADENTON, Fla. - Florida Gov. Charlie Crist yesterday announced that a deal has been reached to scale back the purchase of U.S. Sugar Corp. to $1.34 billion from the previous purchase price of $1.75 billion in order to buy only the land and not the assets of the company.
The land purchase, now proposed at 180,000 acres compared to 187,000 originally, will be financed with certificates of participation to conduct major restoration projects in the nationally acclaimed south Florida Everglades.
The deal is being called the "River of Grass Project," after a term author Marjory Stoneman Douglas used to describe the Everglades.
"A land purchase creates unprecedented possibilities for the River of Grass and for our environment," Crist said during a press conference. "Many people, including the late Mrs. Douglas, have looked forward to this day."
Final terms of the purchase are subject to approval by the South Florida Water Management District, which will sell 30-year COPs to buy the land. The agency has been negotiating terms of the purchase contract since Crist first announced it in June.
Since then, the district's Board of Governors has expressed concern about purchasing U.S. Sugar's assets in addition to the land. Those assets include a sugar mill and citrus plant, which eventually would have been sold.
Board members weighed the added cost of financing those assets, the liability of owning and maintaining them and concerns about the district's ability to recoup its costs - all of which resulted in yesterday's announcement to purchase the land only.
"With the land only contract, the district would face reduced cost for the acquisition, reduced financing would be required, and reduced debt service payments," district chief financial officer Paul Dumars told the board yesterday. "We're currently running the numbers and looking at what difference that makes" in the district's debt service to revenue ratios.
The district board is holding a workshop Dec. 2 to review the proposed purchase contract and determine when they expect to vote on it.
Bryant Miller Olive PA, the district's bond counsel, filed a complaint Oct. 13 in Palm Beach County Circuit Court to validate $2.2 billion of COPs. A hearing date has not been set.
After yesterday's district board meeting concluded, Dumars said while the district is now working with a lower purchase price for the U.S. Sugar deal the extra COP capacity would give the district flexibility in case it needs to finance other projects.
Dumars also said no determination has been made as to whether the district would add new underwriters to its team since several have gone out of business or merged with other firms, including UBS Securities LLC, which no longer underwrites negotiated sales, and Lehman Brothers, which filed for bankruptcy.
Public Financial Management Inc. is the district's financial adviser.
The district covers 16 counties in South Florida, where property taxes will secure the COPs. The district manages and protects water resources in the region, with focus on water quality, flood control, natural systems, and drinking water supply.
The district also is a partner in the state-federal comprehensive environmental restoration program for the Florida Everglades.