An independent financial adviser hired by the state says the land U.S. Sugar wants to sell for Everglades restoration is worth $930-million — not the $1.3-billion the state announced last week it is willing to pay.
Only if all of U.S. Sugar's holdings are included — 187,000 acres of land, plus a sugar mill, railroad and citrus operation — would the value reach $1.3-billion, according to a Nov. 13 letter from Duff & Phelps, the state's New York financial adviser.
The letter is dated the day after Gov. Charlie Crist unveiled a deal in which the state buys 181,000 acres of U.S. Sugar's land, and nothing else, for $1.34-billion.
The letter from the firm's managing director, Andrew Capitman, was posted Tuesday on the Web site of the South Florida Water Management District, the state agency in charge of the buyout.
Sugar officials scoffed at the Duff & Phelps opinion, which cost the water district more than $1-million. U.S. Sugar vice president Bob Coker dismissed the financial adviser as "Huey, Dewey & Louie" — Donald Duck's cartoon nephews — and said the firm "probably shouldn't be licensed to work in Florida."
He contended the land is so valuable that "some people think the state is getting the Hope Diamond at cubic zirconia prices."
He and sugar lobbyist J.M. "Mac" Stipanovich, who helped negotiate the deal with the state, contended that the letter had been posted on the district's Web site to fuel opposition to the price.
"I suspect it was requested by someone who intends to oppose the buyout," Stipanovich said.
Sugar farming south of Lake Okeechobee has long been considered a major obstacle to the $10-billion plan for restoring the Everglades. Environmental groups sued to challenge the practice of backpumping farm runoff containing phosphorous, pesticides and other chemicals into the lake. After a judge ruled for the environmental groups, the water district board voted in August 2007 to end the practice.
The sugar company dispatched Stipanovich and another lobbyist to ask Crist for relief. Instead, in that November 2007 meeting, he proposed the state buy out the company and all its facilities. Eight months later, in June, Crist unveiled the result: a tentative deal for a complete buyout that would allow turning the sugar land into a network of marsh treatment areas and reservoirs to clean and store water before sending it south into Everglades National Park.
But in succeeding months, as the Wall Street meltdown jeopardized borrowing that much money, state officials decided they didn't want the sugar mill, railroad or citrus operation.
So Crist announced last week that the state would buy 181,000 acres of the company's land for $1.34-billion. The revised deal is supposed to be voted on by the Water Management District's governing board next month.
The water board has hired three appraisers to review the price of the land. In September, district officials also hired Duff & Phelps to review the buyout and provide them with a "fairness opinion" as to whether the sale represents a fair deal for the taxpayers. Although the opinion cost the water district more than $1-million, Coker considers it worthless.
"That valuation was done for a business deal that's not currently on the table," he said.
The Duff & Phelps letter addresses the original deal, not the new one. Two appraisals, done Oct. 25 and Nov. 1 by experts hired by the water district, said the land would be worth $1.3-billion.
Water district spokesman Gabe Margasak said the Duff & Phelps opinion "is not an appraisal and does not provide a conclusion about the value of the acquisition relative to its public purpose." He said the agency "remains committed to achieving an acquisition that provides the best possible returns for our taxpayers, our communities and America's Everglades."