South Florida water managers have roughly a year to change the flawed deal to buy U.S. Sugar's land for Everglades restoration, and they need to get to work. The terms agreed to last week skew too far to the sugar company's benefit. The price is too high. The state would subsidize the company's farming operations. There is no plan for making the project work. The list goes on and on.
Members of the 4-3 majority on the South Florida Water Management District board that approved the deal hailed it as a historic opportunity to replumb the South Florida ecosystem. But the contract, originally hatched in secret by Gov. Charlie Crist to much initial praise, is a big gamble. While the 181,000 acres would provide a critical link in reconnecting the Okeechobee basin to the Everglades, the land itself would be for the water restoration projects. It makes little sense to move ahead if the district cannot afford to use the land for its purpose. Fortunately, the agency can opt out of the deal before closing in September if the numbers don't work. Among the issues to resolve before then:
• What are the long-term costs and the district's ability to repay? The $1.34-billion purchase price does not include the costs of financing or the capital projects for preservation, which could go well beyond $4-billion. In this down economy, with property values not expected to recover for years, how would the district finance the purchase and the capital projects for restoration and also meet the other water needs in its 16-county area?
• What happens to the land if restoration stalls? The contract calls for leasing the land back to U.S. Sugar for at least seven years at about one-fourth the market rate. Should restoration falter for lack of money, how long is the district prepared to be in the position of having bought the land only to lease it back on the cheap for agriculture, a practice the deal is supposed to end?
• What role will the water board take in the run-up to the closing in September? The plan calls for taxpayers in the district to cover the costs for the purchase. Yet state officials have been the lead negotiators and cheerleaders. That is an obvious conflict. The board needs to exert authority. It cannot allow state officials to determine whether the costs are prohibitive.
The board inserted tougher language in the contract Tuesday, enabling it to withdraw from the deal if the revenue picture sours. The wording is meant to ensure the board can reverse course if the deal threatens to interfere with its regular obligations to protect and preserve the water supply in South Florida. That is an escape clause the board should use to bring U.S. Sugar back to the table. This would be a long-term relationship, and both sides need to start it on good terms and in good faith.