Florida approves $1.34 billion U.S. Sugar deal

MIAMI (Reuters) - A Florida regional water board on Tuesday approved a $1.34 billion agreement to buy 180,000 acres of land from U.S. Sugar Corp, a deal regarded as critical to the restoration of Florida’s fragile Everglades wetland.

The South Florida Water Management District board of directors voted 4-3 to accept the landmark deal but amended it with an extra financial safeguard that put the contract “back in U.S. Sugar Corporation’s court,” district spokesman Randy Smith said.

However, in a statement issued late on Tuesday, U.S. Sugar hailed the vote and called the amendment “non-material.”

“This is a monumental opportunity to save the Everglades, and after many months of negotiations, we can now move forward,” Senior Vice President Robert Coker said.

The state of Florida first announced in June that it had struck a $1.75 billion deal to buy all of U.S. Sugar Corp, one of the nation’s largest privately held agriculture firms.

But in November state officials said they had scaled back the agreement and would buy only 181,000 acres of land which are considered critical to the restoration of the Everglades.

The deal would allow U.S. Sugar to keep its sugar mill, refinery, citrus processing facilities, railroads, office buildings, equipment and more than 5,000 acres of land.

The company would lease back the land for $50 an acre and continue to grow sugar on it for about six years.

Some officials and groups have criticized the deal, saying the state was paying too much for the land and not getting enough in rent payments.

A rival bidder also came forward. The Lawrence Group, a Tennessee-based farming company, said it wanted to buy U.S. Sugar outright for $300 per share.

With the Florida deal in place, U.S. Sugar said it would now “shop” itself to allow interested parties to make a better offer.

“During the next 60 days, we will seek and consider any legitimate, bona fide offers and make sure that we have the best deal for our stockholders,” Coker said.

Florida Gov. Charlie Crist applauded the water district for approving the deal, which he helped engineer.

“This land acquisition is the most important step in the history of true Everglades restoration,” Crist said.

The water district still needs financing. It has said it would sell $1.34 billion of certificates of participation, instruments similar to bonds, to finance the deal.

Florida’s sugar industry has been under fire from environmentalists for decades for dumping fertilizer-tainted water into the Everglades, a slow-moving river as little as six inches deep and a vast sawgrass prairie studded with marshes, pine forests and mangrove islands.

Also known as the “River of Grass,” the Everglades is the largest subtropical wilderness in the United States and home to rare and endangered species like the American crocodile and the Florida panther.

The purchase of the land was expected to revive a multibillion-dollar plan to turn farm fields back into marshes and waterways that would help cleanse polluted Everglades water and carry it from Lake Okeechobee to Florida Bay.

Key environmental groups have been solidly behind the U.S. Sugar land acquisition.

“The Governing Board’s vote to purchase more than 180,000 acres marks one of the most significant milestones in the nearly 20-year effort toward restoring America’s Everglades to a more natural state,” Everglades Foundation chief Kirk Fordham said.

Editing by Christian Wiessner