May 13, 2009 / 10:19 PM / 8 years ago

Florida approves downsized U.S. Sugar land deal

MIAMI, May 13 (Reuters) - Florida water managers approved on Wednesday a scaled-back, $536 million deal to buy nearly 73,000 acres (29,542 hectares) of land from U.S. Sugar Corp to help restore the Everglades wetland.

The agreement, approved by the directors of the South Florida Water Management District (SFWMD), represents a cheaper version of a deal that originally would have seen Florida pay $1.75 billion for all of U.S. Sugar Corp, one of the nation's largest privately held agriculture firms.

The initial deal, announced with great fanfare last June, called for the state to buy 187,000 acres (75,676 hectares) of U.S. Sugar's land, its mill and refinery, citrus orchards and processing plant. The agreement was downsized twice when Florida's economy went into a tailspin following the collapse of the property market.

"This strategy allows us to take hold of an unprecedented opportunity for restoring America's Everglades with a fiscally responsible hand," SFWMD executive director Carol Ann Wehle said in a statement.

U.S. Sugar's board approved the deal last week.

The state wants the land for a massive restoration of the Everglades, a shallow, slow-moving river that covers much of south Florida's interior. Environmentalists have complained for decades that sugar growers starve the wetland of water and poison it with fertilizer.

Under the amended deal, the state has an option to buy another 107,000 acres of U.S. Sugar land when economic conditions improve. The water management district intends to sell debt to finance the deal.

U.S. Sugar would lease back 40,000 acres at $150 per acre for seven years with a provision to extend the lease up to 20 years, the water management district said.

The lease would generate $40 million in revenue and avoid more than $11 million in land management costs during the first seven years, the district said. (Reporting by Jim Loney, editing by Matthew Lewis)

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