Water managers need informations from U.S. Sugar on land deal bonuses

Issue is who gets bonuses if U.S. Sugar sells land

Gathering in the self-described sweetest town in the country failed to soothe sour feelings over the proposed $1.34 billion land deal between the state and U.S. Sugar Corp.

South Florida water managers met in Clewiston, U.S. Sugar's home base, Wednesday and Thursday to try to deal with the financial hurdles in the way of plans to use 180,000 acres to restore water flows from Lake Okeechobee to the Everglades.

But meeting within view of U.S. Sugar's mill failed to bring the district and the sugar giant any closer to overcoming cost concerns threatening the deal Gov. Charlie Crist proposed in June.

The district's board raised more concerns Thursday about its ability to afford the deal.

The board also called for U.S. Sugar to provide more information about how company executives, consultants, lobbyists and lawyers could benefit financially from potential bonuses attached to the deal getting approved. Next month, board members plan to discuss whether they can afford to proceed with the deal, which is set to close in September.

"We don't have the money for what's on the table," board member Michael Collins said.

Crist also arrived in Clewiston on Thursday afternoon, flying in about the time board members were raising concerns about the price of the deal and discussing being left out of some of the governor's negotiating.

The timing was coincidental, Crist spokeswoman Erin Isaac said. She said the governor was on a personal trip and had no official meetings planned in Clewiston.

"He's showing the first lady the Everglades," Isaac said.

U.S. Sugar and water management district officials said Thursday they didn't know the governor was coming to town.

U.S. Sugar Senior Vice President Robert Coker said he was "frustrated" by more delays for the deal, as well as the suggestion that the company hadn't provided enough information about who would benefit from the sale.

"It is frustrating that people of professional backgrounds ... would continue to chase rumors," Coker said about the district board.

U.S. Sugar already submitted a list of potential beneficiaries of the deal, but the district board wants more details.

The concern is that beyond the usual fees paid for legal or consulting services, tax dollars could end up paying for steep bonuses contingent on the deal going through.

"This information will come out in the future if we don't ask [for it] today," board member Jerry Montgomery said.

The district wants to avoid a situation like its $217 million deal with Palm Beach Aggregates to turn rock pits west of Royal Palm Beach into reservoirs. After the deal was approved, federal investigators determined a $2.4 million "secret success fee" was paid to an engineering consultant who pushed the deal to the district without disclosing his financial relationship with the mining company. No criminal charges were filed, but Palm Beach Aggregates agreed to reimburse the district $2.4 million.

U.S. Sugar spokeswoman Judy Sanchez said no one stands to gain a "success fee" from the deal. Senior management officials at the company have long-term compensation packages that can result in bonuses given by the company's board of directors, Sanchez said. More information about those bonuses or other compensation would be disclosed in the deal's closing documents, Sanchez said.

Whether the U.S. Sugar deal ever gets to closing was even more in doubt Thursday.

With gloomy economic forecasts projecting the district could end up with $97 million less in tax revenue and state funding, board members acknowledged the current agreement may not end up as the final deal.

U.S. Sugar has been negotiating with rival bidders, including competing sugar producer Florida Crystals. Florida Crystals has proposed the district buy part of U.S. Sugar land needed for Everglades restoration and Florida Crystals would buy remaining farmland and U.S. Sugar's mill to keep it in agricultural production.

"We are looking at creative options," Coker said. "We are continuing to pursue a transaction with the state."

source: sun-sentinel