The Fanjuls, The Miami Herald and the Everglades ... by gimleteye

The Miami Herald appears to have scooped the state's newspapers on this morning's report that Florida Crystals, owned by the Fanjul family, is a bidder for 180,000 acres of US Sugar lands pending land swap deals with the State of Florida.

As an educated guess, the story was slipped to the Herald by the Fanjul's long-time public relations consultant for South Florida; Wragg and Casas. Joanna Wragg is a former Miami Herald executive and, while at the Herald, the final word on the paper's coverage of the sugar industry and its pollution of the Everglades. It is Wragg's influence at the Herald that accounts for the slim record of critical, in-depth analyses of Big Sugar's influence on Florida's politics, water supply, and natural environment; lagging its competitors including the Palm Beach Post, the Sun-Sentinel, the Tampa Tribune, and the St. Pete Times. All have done a better job allocating coverage in the newspaper to environmental crimes.

Why? The aversion by Herald executives fit with the paper's long-time squeamishness assessing blame for the pollution of the Everglades. Over time, its fears grew into institutional policy; fearing offending advertisers tied to the development industry tied to Big Sugar. The original fault lines occurred in relations between Jorge Mas Canosa, founder of the Cuban American National Foundation, and the paper's publishers. For decades, Mas Canosa -- whose businesses included supplying farm equipment to the Everglades Agricultural Area-- was a nail in the foot of the Herald.

Over time-- and through the attrition of keen editorial observers like Martha Musgrove-- the Herald view of sugar dissolved into lazy eye syndrome. Whatever happened to the Everglades is all just part of the costs of growth. (Although it is hard to square that simple equation with the reasons why the paper failed to denounce the Miami International Film Festival for pulling, at the last minute from last year's schedule, a film documentary called 'Sugar Babies' because of its harshly critical view of Fanjul sugar plantations in the Dominican Republic. The Film Festival is partly funded by the Knight Foundation, whose own mission is to support free, independent journalism. That presumably would also extend to film documentaries. Alberto Ibarguen, former Herald publisher, is president of the $2 billion foundation.)

The Fanjuls, in other words, need a media outlet for its side of the story on what could be the most significant land purchase in modern Florida history. Indeed, the Fanjuls had been mentioned, recently, as a possible buyer of The Miami Herald from the dwindling resources of McClatchy. The only reason for the Fanjuls to buy the Herald would be if another buyer emerged who could not be counted on to print all the news that fits its business model. (click 'read more')


Posted on Sun, Feb. 22, 2009
Sugar shift: Rival seeks a cut in deal

BY CURTIS MORGAN AND MARY ELLEN KLAS
If you can't beat them, buy them.
That sums up the emerging dual strategy of Florida Crystals, the most formidable foe of Gov. Charlie Crist's controversial land deal with rival grower U.S. Sugar.

At the same time its lobbyists and lawyers are working to derail the $1.34 billion proposal, Florida Crystals is quietly stepping up negotiations to cut itself in.

Florida's two largest sugar growers acknowledged they met last week in Clewiston to explore a deal for U.S. Sugar's high-tech mill and other assests. Crystals executives and lobbyists also have discussed land swaps with the Crist administration and pressed for contract revisions if Crystals acquires the mill, possibly including land leases that could extend for decades.

The move surprised even Crystals' industry allies.

Barbara Miedema, vice president of the Sugar Cane Growers Cooperative of Florida, which co-owns refineries with Crystals, said the company disclosed its interests only in the past week.

''We don't know what they're doing yet,'' Miedema said. ``We don't know if it's good, bad or ugly.''

State negotiators and water managers declined to discuss details or gauge the seriousness of the overtures.

But Eric Eickenberg, Crist's chief of staff, said talks were progressing with ''multiple partners,'' including Florida Crystals, with the primary goal of securing the best swath of land for restoring linkage between Lake Okeechobee and the Everglades.

''The first order of business was negotiating with U.S. Sugar,'' Eickenberg told The Miami Herald. ``Now, this is the second phase.''

That next phase will prove critical to the fate of Crist's landmark bid to buy 180,000 acres of sugar fields and citrus groves that environmentalists say are key to resolving the Everglades' water supply and pollution problems.

IMPROVING THE ODDS?

Cutting in Florida Crystals, second to U.S. Sugar in size but equal in political clout, could improve the dicey odds of closing a deal under attack from lawmakers, the Miccosukee Tribe and other Glades farmers and businesses. Critics contend the land sale is designed more to bail out debt-ridden U.S. Sugar than to save the Everglades.

Executives from both companies confirmed Crystals entered formal bidding in the waning weeks of a 60-day ''go shop'' period ending Monday. During that 60-day window, U.S. Sugar was required under corporate law to solicit offers.

Citing a confidentially agreement, executives would not say how much of U.S. Sugar's sprawling agricultural empire might be on the table. In addition to its lands and mill, the company owns a citrus-processing plant, 200 miles of railway and 12,000-plus pieces of equipment.

Robert Coker, a U.S. Sugar vice president, called the interest from the company's rival ''ironic'' given the ''aggressive opposition'' Crystals lobbyists have expressed to lawmakers.

''At some point,'' he said, ''they need to figure out what road they want to go down.''

Gaston Cantens, a vice president for Florida Crystals, said the company remains opposed to the purchase but is planning for contingencies.

''The current deal as it stands, where U.S. Sugar cashes out and continues farming, it's not something we can live with,'' he said. ``It's not just us. Every other farmer in this region is at risk.''

Other growers argue that a provision allowing U.S. Sugar to lease back its fields for seven years or more at $50 an acre -- a quarter of market rates -- will hurt their businesses.

DOUBLE-DEALING

Crystals has gone to court to challenge plans by the South Florida Water Management District to bankroll the deal with bonds and to Tallahassee to make its case to lawmakers. But it also has simultaneously been working on Plan B. In November, it hired the Tallahassee lobbying firm Southern Strategy Group with specific marching orders, Cantens said.

''The reason we hired them was to help us make a deal, not to kill a deal,'' he said.

The cooperative's Miedema called it ''smart business'' for a company to cover its options, though smaller growers had been kept out of the loop. The cooperative, which includes 48 growers farming 60,000 acres, intended to meet with Crystals to discuss plans, she said.

''God is not making any more land,'' she said. ''If there is going to be some sort of shakeout of land, you would want to put yourself in the best position.''

Making a deal could serve the purposes of both Crystals, controlled by the influential Fanjul family, and the governor.

With U.S. Sugar's mill and adequate acreage to feed it, Crystals would dominate the regional market. And as owner of prime tracts for Everglades restoration, it could make profitable swaps for a sizable chunk of its rival's fertile fields.

For the Crist administration, struggling to protect a landmark deal that would cement the governor's ''green'' image, giving Crystals a vested interest could help ease job concerns in the Glades and quiet the deal's most powerful critic.

U.S. Sugar's Coker said several parties had signed confidentiality agreements to explore purchases of parts or all of the company during the go-shop period.

NOTHING IN STONE

Though the window closes Monday, Coker said, ''there won't be any letting go of doves and angels blowing horns.'' Any decision, he said, will take weeks and the company retains the option of accepting offers deemed superior to the state's up until water managers receive court approval to seek bonds.

Though Florida Crystals is now formally in the mix, another potentially pivotal player apparently isn't -- The Lawrence Group, a Tennessee-based concern that has twice made unsuccessful runs at U.S. Sugar. Coker said the Lawrence Group had submitted only nonbinding offers and rejected several drafts of confidentiality agreements.

Ron Book, a Miami-based lobbyist hired by the Lawrence Group, said U.S. Sugar has frustrated efforts by insisting on clauses forbidding the company from making a bid directly to shareholders, rather than its board.

Book said he was skeptical about the extent of Florida Crystal's interest and insisted The Lawrence Group could make a better, cheaper deal with the state.

Despite being shut out of the ''go shop,'' Book said, ``I'm very confident we are going to own the company.''