An even sweeter deal for United States Sugar

Big Sugar, in the guise of United States Sugar, is featured in a New York Times investigative article today that exposes the shenanigans of the company and the state of Florida in a U.S. Sugar sale of land abutting the Everglades.  First announced almost two years ago, the deal was for Florida to pay the company $1.75 billion and the state to take over the company’s  assets and land for expansion and protection of the vast watershed.

When the sale was announced in June 2008, CEI asked in a blog posting, “Another sweet deal for Big Sugar?” And indeed it does appear to be even sweeter, according to the NYT article. It turns out that the state doesn’t have enough funds for the original deal and has downsized the offer.  Instead, the company will stay in business and sell some land, not necessarily contiguous, to the state.  But the land was valued at the height of the real estate boom and has significantly dropped in value, which would mean a boon for the sugar company, but a bane for Florida taxpayers.  As the article notes:

“In its current form, the deal’s only clear, immediate beneficiaries would be United States Sugar, a privately held company based in Clewiston, Fla., and its law firm, Gunster, which is expected to collect tens of millions of dollars in fees for its work on the sale, according to current and former United States Sugar executives.

The sale, scheduled to close March 31, amounts to a lifeline for the company, which entered negotiations at a time of profound weakness; it was facing a costly shareholder lawsuit, sinking profit margins and increased foreign competition. The deal would enable it to wipe nearly all the debt from its books. “

The article also raises questions about the appraisers of the land, connections between some of the politicians and the firm brokering the deal, political contributions, and the shutting out of a competitor from the deal.