What does $39,400 in campaign donations to Charlie Crist’s campaign for Florida’s open Senate seat buy? How about a $536 million, 72,800 acre land deal by the state of Florida to the U.S. Sugar Corporation, based on an appraisal value of the property taken at the height of the real estate bubble, and where the company would still be allowed to farm the land it “sold.”
Sounds like a sweet deal — for U.S. Sugar. That’s a 13,603 percent return on the investment, not to mention the profits that are taken in as a result of the continued land use. But for taxpayers, it’s nothing more than rotten-to-the core corporate welfare.
“We don’t want our property taxes raised, but the bottom line [is] even if the millage rate isn’t raised, we shouldn’t be paying for it anyway,” Mariann Moran, founder of Tea Party in Action, told Sunshine State News at a July 14th protest of the South Florida Water Management District, which is considering issuing a bond to pay for the land deal.
“It’s a bad deal,” Moran added. Moran’s group of local activists is calling attention to what it has dubbed “Charlie’s Bailout” and wants to kill the deal all together. Tea Party in Action has launched www.endcharliesbailout.com to promote the effort.
According to Gaston Cantens, Vice President of the Florida Crystals Corporation, a competitor of U.S. Sugar, the land grab by Florida will not even succeed in its stated purpose of restoring the Everglades and helping the water supply. “[T]he district’s executive director admitted in court none of these benefits will flow naturally from the purchase. All require construction, operation and maintenance of massive public projects the district has no ability to undertake,” Cantens wrote.
Which means the $536 million would only go to land acquisition, requiring more investment by taxpayers to the actual project of wetlands restoration. How much? Cantens writes, “according to the district’s chief engineer, cost between $14 billion to $17 billion to build and $387 million to $452 million annually to operate.”
That’s money Florida simply does not have. It used $2.6 billion alone in federal “stimulus” this year just to balance the 2011 budget, a third of which went to public school teachers.
Making matter worse, Florida did not even get a good deal on the land. According to a March 7th report by the New York Times, “Negotiations favored United States Sugar from the start, when the state accepted two outside firms’ appraisals of the company’s land that used figures from the height of the real estate market, according to documents.” This resulted in an initial $1.75 billion deal announced for the total 179,800-acre plot of land, which according to a “fairness opinion” commissioned by the state was overvalued by some $400 million.
So unpopular was the deal, and so bad the shape of Florida’s budget, that it has since been pared down to now 72,800 acres of the land, although Florida retains the option to buy the other 107,000 acres. Nonetheless, even with the $536 million deal, U.S. Sugar will be able to pay off nearly all of its debt.
But the icing on the cake, reports the Times, is who it turns out will still be using the land. “Under the terms of the new deal, United States Sugar will be able to keep farming some of the land for at least seven years,” according to the story.
So, U.S. Sugar will still be making money off the land it “sold” to Florida at inflated values, which the state will not even be able to “restore” because of its troubled budget picture and the downed economy. One does not need to be a tea party activist to recognize that this deal is dirtier than the swamp the state says it wants to clean.
Bill Wilson is the President of Americans for Limited Government.
