The board of directors of U.S. Sugar voted Monday to approve a $1.3-billion deal to sell 181,000 acres to the state for Everglades restoration.
"After a lengthy day of discussions, the contract was signed, sealed and delivered unanimously by our board of directors," U.S. Sugar vice president Bob Coker said.
The company's vote sets the stage for the deal's final approval by officials of the South Florida Water Management District, scheduled for a meeting next week.
In approving the deal, the board of the sugar giant turned aside an offer from a Nashville company. The Lawrence Group sought to buy full control of U.S. Sugar by offering shareholders a bid of $300 per share — cash. That translates to about $588-million, far less than what the state was offering.
But in its appeal to the shareholders, the Lawrence Group contended its offer was better than the state's because it's in cash and it's immediate. The state buyout wouldn't happen for at least seven years and could be deferred longer.
Coker said the U.S. Sugar board did not regard that as a formal offer to be considered, only an expression of interest.
The Lawrence Group has tried before to buy U.S. Sugar. Headed by Gaylon Lawrence Sr. and son Gaylon Lawrence Jr., the company twice offered U.S. Sugar $293 a share. Both bids, in 2005 and again in 2007, were rejected by the company's board.
The 60-page contract that the sugar board approved calls for the water district to pay U.S. Sugar $1.34-billion at closing and, in exchange, get title to more than 180,000 acres of land — but not the company's mill, railroad, buildings or other facilities, which were supposed to be part of the buyout when Gov. Charlie Crist originally proposed it in June.
The water district will borrow the money and pay off the debt using a special property tax that applies only in its South Florida region.
In return, U.S. Sugar will lease that land back at $50 an acre and continue farming it until the state needs it for restoring the flow of water from Lake Okeechobee south to Everglades National Park. The lease is for seven years but could be renewed.
The leaseback is expected to bring in more than $50-million in revenue for the state and save it $40-million more in costs to hire someone else to manage the property, according to state Department of Environmental Protection Secretary Mike Sole.
U.S. Sugar has agreed to pay more than $21-million to clean up any pollution left behind on its property.
Sugar farming south of Lake Okeechobee has long been considered a major obstacle to the $10-billion plan for restoring the Everglades. Restoring the long-lost link between the lake and Everglades National Park seemed impossible as long as sugar cane grew there.
Then environmental groups sued to challenge the sugar companies' practice of back-pumping farm runoff containing phosphorus, 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.
U.S. Sugar dispatched lobbyists to ask Crist for help. Instead, he proposed the state buy all the company's assets: 187,000 acres of land, plus its sugar mill, citrus operation and railroad.
Craig Pittman can be reached at [email protected] or (727) 893-8530.