Judge OKs Florida's Financing Plan for Everglades Restoration Land Purchase

WEST PALM BEACH, Florida, August 27, 2009 (ENS) - The financing plan for Florida's land deal with U.S. Sugar was approved by a circuit court judge on Wednesday, but only for a portion of the land the state wishes to acquire.

Palm Beach County Circuit Judge Donald Hafele ruled that water managers can use bonds to finance the $536 million purchase of 73,000 acres of land now planted with sugar cane and citrus orchards that will be used for Everglades water restoration projects.

The South Florida Water Management District, SFWMD, may issue the bonds, called Certificates of Participation, without the approval of the electorate in a bond referendum, Judge Hafele ruled.

The authority granted by the court now allows Florida to move forward with the land acquisition.

Governor Charlie Crist, who has suppported the acquisition from the start, applauded the judge's decision, saying, "Acquiring the 73,000 acres within the Everglades Agricultural Area provides restoration opportunities in the Everglades that once seemed out of reach."

A view of U.S. Sugar lands to be acquired by the State of Florida (Photo courtesy U.S. Sugar)

"As the district moves forward in the acquisition process, I am confident that they will do so in a financially responsible manner," the governor said. "The court's decision recognizes the monumental outcome the transaction will have on the restoration of America's Everglades, and the benefits it will provide the environment, the economy and the people of South Florida."

The district has a 10 year option to acquire the remaining 107,500 acres of U.S. Sugar land and had originally sought the court's approval to issue up to $2.2 billion in bonds, which would have covered the entire purchase.

Under the original deal between the state and the sugar company agreed early in 2008, Florida was to have purchased all of the U.S. Sugar land at once. But the state backed away from that agreement last fall when the recession reduced state revenues. An amended deal agreed on April 1, 2009, set up the two-step process - buy 73,000 acres first and the remaining 107,500 acres later.

The Miccosukee Tribe and unnamed taxpayers had challenged the financing plan, arguing that the water management district's financial plan was economically impossible and that the district does not have the power to issue bonds. The judge rejected these arguments.

Judge Hafele decision turned on the issue of whether the district has a "valid public purpose" for acquiring the sugar land warranting validation of $2.2 billion in bonds.

The district argued that the acquisition of approximately 180,000 acres of land for enhanced water treatment and storage serves a valid public purpose.

Opponents argued that the acquisition of land cannot constitute a project with a valid public purpose, especially when the district has no plans for the use and development of that land.

Judge Hafele found that the district has demonstrated a valid public purpose with respect to the initial purchase of 73,000 acres of land, but that the district has failed to show any purpose with respect to the acquisition of the remaining 107,000 acres, that is, the "option land."

So, the judge capped the bond issue at $650 million, "comprised of the $536 million cost of land and transaction costs (issuance costs and debt rerve)."

The judge found that, "Among the benefits to be achieved with the 73,000 acres are storage and treatment of water before it is pumped into Lake Okeechobee, additional storage and treatment facilities that will work in conjunction with Comprehensive Everglades Restoration Projects basins, and land that will be valuable for future land swaps."

Michael Sole, who heads the state Department of Environmental Protection said, "The acquisition will be an extraordinary complement to the Comprehensive Everglades Restoration Plan, allowing us to improve the supply and quality of water for South Florida, restore a more natural flow of water to the ecosystem, provide flood control and protect the habitats of the ecosystem's wildlife."

SFWMD Governing Board Chairman Eric Buermann said, "We are gratified to receive court validation of a financing strategy that allows the South Florida Water Management District to move forward with this once-in-a-lifetime opportunity to purchase these strategic lands to restore the Everglades on a scale never before envisioned."

"The court's action affirms that the District's financing plan and public purpose of this historic land acquisition are prudent, sound and meet the requirements of Florida law," Buermann said. "Future generations will look back on this landmark acquisition as a defining moment for America's Everglades and a lasting commitment to protecting South Florida's environment."

The National Audubon Society and Audubon of Florida intervened in court proceedings in support of the district's efforts to validate the Certificates of Participation. The judge agreed with Audubon's position that the purchase serves a public purpose.

Audubon of Florida said today in a statement, "The River of Grass acquisition can help achieve ecological benefits of Everglades restoration decades earlier than previously planned. The River of Grass purchase is a bold step toward getting the necessary water from Lake Okeechobee through the Everglades to Florida Bay, reconnecting the river of grass and truly restoring the Everglades."

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