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Financial Crises impede u.s. sugar land deal

 

BY Eric Staats

Naples Daily News

Wednesday, September 24, 2008

NAPLES — “It’s like handling a Rubik’s Cube on steroids with all the parts moving on it,” said Charles Dauray, South Florida Water Management District Governing Board member.

It’s too early to say how turmoil in the U.S. financial markets might affect a proposed deal to buy out U.S. Sugar for Everglades restoration, a South Florida Water Management District Governing Board member said Wednesday.

An army of experts is neck-deep in negotiating the estimated $1.75 billion deal that could provide a missing link in restoring water flows from Lake Okeechobee to the River of Grass and change sugar farming towns on the lake’s edge forever.

Putting the massive deal together already is hugely complicated but the credit market crunch is adding another level of uncertainty, Governing Board member Charles Dauray told a Chamber of Southwest Florida meeting Wednesday at Hodges University in Fort Myers.

“It’s like handling a Rubik’s Cube on steroids with all the parts moving on it,” said Dauray, who represents Southwest Florida on the Governing Board.

Officials are working to bring a contract and financing documents to the Government Board for review later this fall, but an exact date has not been set.

Talk of a buyout comes as Congress weighs a $700 billion bailout to rescue financial institutions awash in bad debt.

Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke are on Capitol Hill this week warning that failing to pass the rescue plan will strangle the credit markets with calamitous consequences for the economy.

The water management district is proposing to borrow money to finance the U.S. Sugar buyout by issuing Certificates of Participation, a type of revenue bond.

Even before the bailout proposal, the water management district hired New York-based Duff & Phelps to scrutinize the financial aspects of the deal.

Dauray, chairman of the Governing Board’s audit and finance committee, said he doesn’t think the credit market’s problems will doom the U.S. Sugar buyout.

“The people of South Florida are being presented with what may very well be a once-in-a-lifetime opportunity,” Dauray said.

Among the 80 people who attended the Chamber meeting on Everglades restoration, fishing captain Bob Pascale said he hoped the water management district could pull off the buyout.

The U.S. Sugar land will provide water managers with vast water storage areas that will help reduce damaging discharges from Lake Okeechobee down the Caloosahatchee River and to the Gulf of Mexico.

The region’s economy depends on clean water, said Pascale, director of the nonprofit People United to Restore Our Rivers and Estuaries, or PURRE.

“It’s the only chance we have,” Pascale said.

Former Chamber chairman Joe Wheeler agreed there is a link between a healthy environment and a healthy economy.

Wheeler, Fort Myers market president for CNLBank, said he’s leery of the U.S. Sugar buyout until the water management district can get more specific about how the land will help Everglades restoration.

“I don’t think that’s been fully explained,” Wheeler said.

END

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"We must build a peace in South Florida - a peace between the people and their place, between the natural environment and man-made settlement, between the works of man and the life of mankind itself. "
~ Florida Gov. Reubin Askew ~