The tanking economy could force Florida to scale back its $1.34 billion deal to purchase land from U.S. Sugar Corp. to help restore the Everglades, a person close to the negotiations said Thursday.
The state had been working to secure financing so it can buy the 180,000 acres of land in the Everglades from the nation's largest producer of cane sugar. But the state may now scale back the purchase to less than half the acreage at less than half the cost, said the person, who was not authorized to release details and requested anonymity.
Gov. Charlie Crist has been basking in praise from environmentalists for the historic deal, which was announced last June as he stood on the edge of the Everglades. But since then, the deal has slowly started to unravel, and if it is changed again, could ultimately be viewed as a far lesser accomplishment.
Crist's office did not return calls seeking comment Thursday, but indicated this week the deal could be altered.
"It may be," the governor said Wednesday. "The facts have changed. The economy is what it is, and I think that we all need to be cognizant of those factors whether it relates to the Everglades preservation deal or any other fact."
The deal apparently became too expensive in light of the state's budget shortfalls and crashing property taxes, which the South Florida Water Management District hoped would help cover the cost of the estimated $100 million of annual debt payments. It plans to finance the deal through bonds.
In November, faced with mounting criticism that the proposal was too expensive, Crist announced a revised deal that would cut the original price tag from $1.75 billion to $1.34 billion, made possible because the state said it would not buy U.S. Sugar's assets, including its mill, railroad and citrus processing plant.
The deal still was considered too expensive by opponents, and has been challenged by sugar competitors in the region.
Florida Crystals, the state's second largest sugar producer and part owner of such well-known brands as Domino Sugar, has fought the deal at every turn. The company claims an element in the proposal to lease back land to U.S. Sugar to continue farming for $50 an acre gives an unfair business advantage to its competitor.
"We're not aware of what the new details what might be," Florida Crystals Vice President Gaston Cantens said Thursday, noting the proposal has changed so much, "we're in the third version now."
Meanwhile, U.S. Sugar continues to take bids from other companies interested in buying it. If it sells, the entire deal with the state could crumble.
"We don't have any comment on the details other than we have been continuing to work with the governor's office and the district to try to find a way to make this work in a manner that is good for the state and the environment and our shareholders," said U.S. Sugar spokeswoman Judy Sanchez.
Kirk Fordham, CEO of the Everglades Foundation, a staunch supporter of the governor's proposal, had previously predicted dire consequences if the deal caved.
"If a third party buys U.S. Sugar and undercuts the state, in all likelihood, the opportunity to restore the Everglades as we've envisioned here might be forever lost," Fordham said recently.