Adviser tells state land in U.S. Sugar deal worth less than Florida offered

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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."

Comments on this article

by John	Nov 20, 2008 5:00 PM
Lets just buy the land and save the Evergladsdes. We can spend billions rebuilding Iraq but we can't save oour our environment?

by jim	Nov 20, 2008 4:57 PM
U.S. Sugar got their money's worth by contributing to congressional campaigns resulting in years of protectionist tariffs. Now they'll recoup their payoffs to Florida politicians. Will we ever have any honesty and integrity from the elected?

by tim	Nov 20, 2008 2:11 PM
Wouldn't it have been easier to just stop these guys from pumping garbage into Lake Okeechobee? Why pay them anything?

by Paul	Nov 20, 2008 1:50 PM
8 makin $100/hr probably. One workin.

by Aquaserpent	Nov 19, 2008 8:08 PM
$1-million for 5 months of work? Even at 24/7 that is about $269.00/hr. at 8/hr days its $807/hr. Anyone ever meet an appraisor worth $800.00 an hour?

by Stephen	Nov 19, 2008 8:01 PM
"Although the opinion cost the water district more than $1-million" - So the State paid a million plus for an appraisal? Isn't it time someone paid for an appraisal of the mental competence of the officals who would something so ridiculous?

by Gene	Nov 19, 2008 6:21 PM
Let them keep the land and just pass laws making it illegal to dump waste in our swamp or burn off cane. I am sure a referendum would not allow $1.3b to be given for swamp land.

by David	Nov 19, 2008 5:41 PM
Good, now tell me what are we doing with that kind of money stashed away to blow when we don't have money for teachers, and the State pensions are in trouble.

by Cindy	Nov 19, 2008 4:48 PM
Did the state truly think that the ole US sugar corp was going to give them a deal after the govt. artifcially subsidized high prices for them compared to the rest of the world and they raped the land for years? Taxayer dollars = corporate $ in 2008.

by Tom	Nov 19, 2008 4:07 PM
Why are we giving our hard earned tax dollars to a sugar industry that would fail if it weren't subsidized by the government. They cannot compete with sugar suppliers from other countries. They should go out of business and return the land.

by Arnold	Nov 19, 2008 3:42 PM
Make U.S. Sugar pay for the pollution they've created already! Fire the Water Board for hiring D&P to do a $1 million opinion they pay no attention to. Make SURE the price is fair to taxpayers or don't do ANY deal, or face an angry, motivated public!

by Linda	Nov 19, 2008 3:27 PM
Better not use my tax dollars for that over inflated price. In these times they should be happy they get any offer. Tried to pull a fast one. Good thing we have others checking deals for the Gov. Charlie Crist

by Brad	Nov 19, 2008 3:27 PM
and this surprises who? remember this is the same man (gov. crist) that told us that nothing will change if we vote to reduce our taxes. we vote, and everything changed. do not trust him.

by ctb	Nov 19, 2008 3:24 PM
Florida SHOULD acquire this land, but the ad hominem by Coker certainly raises suspicions that the price was inflated.Never rule out greed as a motivator.I sincerely hope the State isn't bullied into paying more than it should.

by Kay	Nov 19, 2008 1:21 PM
one million for a fairness opinion? So the water district has not one expert on their staff? Amazing. The thing about appraisals is that their objective is to support the sales price.

by Ted	Nov 19, 2008 1:21 PM
I thought most of the land is unbuildible and a cleanup nightmare.

by Hank	Nov 19, 2008 1:21 PM
This is the scam of the year and Fla. needs to back out as soon as possible. If the land is worth what Mac the Knife says sell it to someone else.

by LL	Nov 19, 2008 1:21 PM
I wonder if we can have the water district appraised to find out if they are doing the public a good service or themselves.

by Mr. Smithers	Nov 19, 2008 1:21 PM
I see nothing wrong in letting the State pay millions more than it is worth for anything. this is the free market at work. what, are all you people socialists? this is how the rich are made. then we trickle on the rest of you, economically speaking.