U.S. Sugar land not worth cost, adviser reports OR City staff omits appraisals that favor local developer

When you read this item from the Palm Beach Post along with Petticoat Injunction and "What does it all mean?", think about the "fairness opinion" described below.

By the way, staff found two appraisals not previously reported in this deal. Both were higher than the previously reported high amount. One was $7 million and the other was $7.1 million. If resignations are not forthcoming, the City Manager should consider his options for terminating two of his subordinates that crafted this deal.

As it is, the City is facing a lawsuit for unfair practices.

Palm Beach Post, 11/19/2008

The state's proposal to buy U.S. Sugar's farming empire was supposed to contain a safeguard: An outside expert would issue a "fairness opinion" to tell taxpayers if they were getting a square deal.

The suggestion that came back Tuesday: They're not.

In fact, Florida may be poised to pay more than $400 million too much in its proposed $1.34 billion deal for U.S. Sugar Corp.'s farmlands, based on a letter from a state-hired financial adviser.

The findings from the New York-based firm Duff & Phelps showed no signs of derailing the deal, which Gov. Charlie Crist has called essential to rescuing the Everglades.

State water managers have said they could vote on a land-only contract with U.S. Sugar by December, based on appraisals that largely agree with the proposed price.

Andrew Capitman, Duff & Phelps' managing director, estimated in the letter that a "fair" price would be at or below $1.3 billion, but only if the deal included the entirety of U.S. Sugar's assets: mill, railroad, land and all.

For U.S. Sugar's land alone, Capitman said he had a "comfort level" with a price around $930 million.

Under the state's proposed deal, taxpayers would shell out $1.34 billion just for U.S. Sugar's farmland: about 181,000 acres. An earlier proposal for a total buyout of the company, including buildings and equipment, would have come to $1.75 billion.

Capitman lists more than 35 years of experience in corporate finance in the U.S. and abroad. His firm was hired by the South Florida Water Management District, which made his letter public Tuesday.