Florida approves, amends $1.34 billion U.S. Sugar deal

MIAMI (Reuters) - A Florida regional water board on Tuesday approved a $1.34 billion agreement to buy more than 180,000 acres of land from U.S. Sugar Corp, a deal meant to help restore Florida's fragile Everglades wetland.

But the South Florida Water Management District's 4-3 vote did not mean the landmark deal was done. The board of directors added an amendment to include "one more financial safeguard for the district," district spokesman Randy Smith said.

"That puts it back in U.S. Sugar Corporation's court," he said.

The state of Florida first announced in June that it had struck a $1.75 billion deal to buy all of U.S. Sugar Corp, one of the nation's largest privately held agriculture firms.

But in November state officials said they had scaled back the agreement and would buy only 181,000 acres of land which are considered critical to the restoration of the Everglades.

The deal would allow U.S. Sugar to keep its sugar mill, refinery, citrus processing facilities, railroads, office buildings, equipment and more than 5,000 acres of land.

The company would lease back the land for $50 an acre and continue to grow sugar on it for about six years.

U.S. Sugar's board approved the contract on December 8 but the water board's amendment meant the company would have to re-approve the deal.

There was no immediate comment from the company.

Some officials and groups have criticized the deal, saying the state was paying too much for the land and not getting enough in rent payments.

A rival bidder also came forward. The Lawrence Group, a Tennessee-based farming company, said it wanted to buy U.S. Sugar outright for $300 per share.

The water district has said it would sell $1.34 billion of certificates of participation, instruments similar to bonds, to finance the deal.

Florida's sugar industry has been under fire from environmentalists for decades for dumping fertilizer-tainted water into the Everglades, a slow-moving river as little as six inches deep and a vast sawgrass prairie studded with marshes, pine forests and mangrove islands.

The Everglades Foundation applauded Tuesday's vote to approve the deal.

"We remain optimistic that U.S. Sugar will favorably receive the South Florida Water Management District Governing Board's counteroffer to acquire critical acreage for comprehensive Everglades restoration," foundation chief executive Kirk Fordham said.

Also known as the "River of Grass," the Everglades is the largest subtropical wilderness in the United States and home to rare and endangered species like the American crocodile and the Florida panther.

The purchase of the land was expected to revive a multibillion-dollar plan to turn farm fields back into marshes and waterways that would help cleanse polluted Everglades water and carry it from Lake Okeechobee to the southern coast and Florida Bay.