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Big cut seen in Florida's US Sugar Corp land deal

MIAMI, March 26 (Reuters) - Florida is cutting back its land purchase deal with U.S. Sugar Corp as budget shortfalls force it to downsize efforts deemed vital by environmentalists to restore the endangered Everglades wetland, local media reported Thursday.

A preliminary deal struck in June called for the state to spend $1.75 billion to buy up all of U.S. Sugar’s land, one of the nation’s largest privately held agricultural firms.

Under a revised deal, unveiled in November, state officials said the price tag had been cut to $1.34 billion but still involved buying 181,000 acres of land considered critical to the Everglades revival.

The South Florida Water Management District board had been expected to sell certificates of participation, instruments similar to bonds, to finance the deal.

The Miami Herald said Governor Charlie Crist, stymied by plummeting tax revenues and soaring unemployment, was now slashing the deal in a state on the front lines of the U.S. housing and mortgage default crisis, however.

Citing sources close to the negotiations, the newspaper said the state would now purchase no more than about 75,000 acres of U.S. Sugar’s land for a total price of roughly $500 million.

A spokeswoman for Crist declined to comment and U.S. Sugar spokeswoman Judy Sanchez said the company had no immediate announcement to make about any revised deal with the state.

“There’s discussions, and discussions have been continuing,” said Sanchez.

Eric Buermann, chairman of the South Florida Water Management District’s governing board, could not be immediately reached for comment.

But he told the Herald the land deal, which Crist heralded in December as “the most important step in the history of true Everglades restoration,” was overly ambitious in the face of a failing economy.

“I think everyone has looked at the numbers and realized the affordability is a problem in the current economy,” Buermann said.

The purchase of the land had been expected to jump-start long-stalled efforts 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 had been solidly behind the land acquisition, and have blamed Florida’s sugar industry for decades for dumping fertilizer-tainted water into the Everglades.

The wetlands, a shallow sawgrass prairie dotted with pine forests and and mangrove islands, comprise the largest subtropical wilderness in the United States and are home to endangered species including the Florida panther and American crocodile. (Reporting by Tom Brown; Editing by Jim Loney)