U.S. Sugar board approves changes in sale of land
May 14, 2009
by FoodBusinessNews.net Staff
CLEWISTON, FLA. — The board of directors of U.S. Sugar Corp. in early May approved amended contract terms for the South Florida Water Management District’s purchase of the company’s land in two phases that enables U.S. Sugar to continue operations.
"Our board approved the revised acquisition approach implementing Governor Crist’s bold vision for our property," said Robert Coker, senior vice-president of public affairs at U.S. Sugar. "While the vision and goal remain unchanged, the economy dictated this more affordable approach."
Under the amended terms, the water district initially would acquire 72,500 acres of U.S. Sugar’s land for about $536 million with a 10-year option to acquire the remaining 107,500 acres. U.S. Sugar would continue to farm the property through a seven-year lease that may be extended under certain circumstances. The water district is in the bond validation process in Florida Circuit Court. The sale is expected to close within 90 days of bond validation. The district’s board was expected to approve the amended purchase terms this month.
U.S. Sugar will lease back the sugar cane land for $150 per gross acre, three times the original lease amount, for the initial seven-year period, under the amended agreement. The water district may take nearly 33,000 acres of citrus land with one year’s notice and may take up to 10,000 acres of sugar cane land at any time in the first 10 years with a two-year notice for approved and funded projects.
An initial agreement, including the purchase of nearly all of U.S. Sugar’s land and facilities for $1.75 billion, was reached in June 2008. Terms were changed in December to sell only the land for about $1.34 billion with U.S. Sugar retaining the facilities.
The water district is seeking the U.S. Sugar property as part of an Everglades restoration project. The 72,500 acres are critical for reestablishing the natural water flow in the Everglades.
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.