Judge to Hear New Plan for Everglades Land Purchase

BRADENTON, Fla. — A Florida judge today will be informed about a new plan approved this week by the South Florida Water Management District to purchase U.S. Sugar Corp. land valued at $536 million instead of more land at a cost of $1.34 billion.

The district’s board of governors Wednesday approved the revised purchase plan, which depends on whether it can sell certificates of participation for the financing.

The scaled-back plan represents an initial purchase of 73,000 acres of farmland, as opposed to the 180,000 acres originally planned. But the agreement approved by the board includes options to purchase the remaining 107,000 acres for up to 10 years.

The historic land purchase is designed to help restore the famed Florida Everglades. But the original transaction was scaled back because of the recession and declining property values in the water management district, which covers all or portions of 16 counties in South Florida.

Under the new purchase plan, district officials have said they won’t have to raise taxes to sell the initial debt.

“This strategy allows us to take hold of an unprecedented opportunity for restoring America’s Everglades with a fiscally responsible hand,” said district executive director Carol Ann Wehle. “We took a very conservative financial approach during negotiations, which ultimately allowed us to present an affordable purchase plan to the governing board — one that preserves the environmental vision, sustains agriculture, and maintains the regional economy in these challenging economic times.”

Palm Beach County District Judge Donald Hafele today is expected to go over the new purchase plan in a call with attorneys seeking validation of the COPs, as well as any challengers. The district initially asked the court to validate $2.2 billion of debt and officials have said they do not expect to reduce that figure so that debt-issuing capacity is available in future years for related land purchases.

The validation is being challenged by five interveners, two of whom are competitors of U.S. Sugar that largely claim the purchase is nothing more than a bailout for a declining company.

The judge is expected to schedule a two-day hearing by July 24. He has already said his final ruling will be based on the district’s legal authority to issue the debt, the legal public purpose of the borrowing, and whether the debt issuance is in compliance with Florida law.

Water district officials have said in the past that they anticipate the judge’s ruling — one way or another — would be appealed to the Florida Supreme Court. Validation would insure that the legality of the COPs could not be challenged after they are sold.

Closing on the sale of the property is to occur 90 days after bond validation. District finance officials believe validation could occur between October and March. However, the sale is dependent on whether the district gets the financing.

The district has budgeted for the sale of 30-year COPs at an interest rate not to exceed 7.5%. However, the purchase agreement that has been approved by U.S. Sugar’s board of directors includes a clause that enables the district to back out of the sale if it cannot obtain “affordable” financing.

In addition to being confronted with bond validation challenges, the deal also is being disputed administratively by New Hope Sugar, a competitor of U.S. Sugar, and the Miccosukee Tribe. Both have filed complaints with appellate courts.

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