Terms adjusted in sale of U.S. Sugar land to Florida
November 12, 2008
by Ron Sterk
CLEWISTON, FLA. — Negotiations in the massive land deal between U.S. Sugar Corp. and the state of Florida have been concluded but several terms have changed significantly since the agreement was first announced in June.
Final terms of the pending contract include the sale of U.S. Sugar’s real estate properties of about 181,000 acres "in environmentally strategic areas" for $1.34 billion and a lease-back of the land for $50 an acre for seven crop cycles, the company said. The sugar mill, refinery and citrus processing facilities, railroads, office buildings, equipment and Gilchrist County citrus nursery will remain the property of U.S. Sugar.
Terms of the transaction initially announced June 24, when negotiations still were under way, called for a sales price of $1.75 billion and basically included all of the U.S. Sugar facilities.
"After months of negotiations it became clear that the best transaction was for the state to buy the land and for U.S. Sugar to keep the assets," said Robert Coker, U.S. Sugar senior vice-president of public affairs. "At the end of seven crops, we will either continue to operate the facilities or sell them based on the best interests of our shareholders."
The final contract still must be approved by the U.S. Sugar board and by the South Florida Water Management District (S.F.W.M.D.) governing board. If approved the transaction could be signed in early December, the company said.
"The S.F.W.M.D. is able to purchase all of the land necessary to proceed with Everglades restoration at a cost less than originally anticipated since additional company assets are not included in the agreement," Mr. Coker said. "The company is able to continue farming and ensure that jobs are safeguarded for the next seven years."
The land purchase by S.F.W.M.D. will help resolve restoration issues for Lake Okeechobee, the Caloosahatchee and St. Lucie estuaries and the Everglades, make land available for critical water storage and treatment and allow remaining Everglades Agricultural Area farmers and the Everglades to be sustainable well into the future, the company said.
U.S. Sugar is the nation’s largest producer of sugar cane and refined cane sugar, producing about 10% of the total U.S. sugar supply, and one of Florida’s major orange and orange products producers, with over three million trees and output of more than 120 million gallons of orange juice annually.