Could ‘other’ lease delay EAA reservoir project? FDEP lease on 1,200 acres does not expire until 2046

Posted 5/8/19

A 30-year lease on property within the footprint of the planned Everglades Agricultural Area (EAA) reservoir and Stormwater Treatment Area (STA) could potentially delay the project — and no one can …

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Could ‘other’ lease delay EAA reservoir project? FDEP lease on 1,200 acres does not expire until 2046


A 30-year lease on property within the footprint of the planned Everglades Agricultural Area (EAA) reservoir and Stormwater Treatment Area (STA) could potentially delay the project — and no one can blame the former governing board of the South Florida Water Management District this time.

The first lease controversy

First, let’s review the lease extension that got all of the attention in November.

In November 2018, the SFWMD board voted to extend a lease on about 16,000 acres of farmland in the EAA for 8 years, with a provision that the lease could be terminated after 20 months with four months notice. Former governing board chair Federico Fernandez said the lease change would accelerate EAA reservoir construction because it allowed SFWMD to immediately take back 560 acres to use as a staging area to stockpile rocks and materials, and to mine for additional material. Provisions within the lease extension also allowed SFWMD and the U.S. Army Corps of Engineers to conduct geological testing throughout the property, even on active sugar cane fields.

Although SFWMD officials at the time maintained the lease changes will expedite construction of the EAA reservoir while following the dictates of the 2017 Florida Senate Bill 10 to keep the land in active agricultural use until work starts on the reservoir (and work on the 560 acres started within a week), the agreement immediately drew criticism from the Everglades Foundation and Congressman Brian Mast.

At the November meeting, Rep. Mast asked the SFWMD board to delay voting on the lease extension, until he and the governor-elect could review it. The SFWMD voted anyway, noting they had no choice under SB-10 but to keep the land in agriculture until it was needed for reservoir construction, and that the extension allowed SFWMD to start some work immediately, taking advantage of the opportunity to start moving rocks and mining in the 2018-2019 dry season.

The lease extension was used as a rallying cry on social media to accuse sugar farmers and SFWMD governing board members of delaying the EAA reservoir construction, despite the fact that the lease can be terminated in two years while corps officials estimated design and engineering necessary before construction starts would take about three years. Urged on by the Everglades Foundation and Rep. Mast, when new Gov. Ron DeSantis took office in January, he demanded the entire SFWMD governing board resign (including governing board member Daniel O’Keefe who abstained from voting on the lease extension.)

Governing board members who did not immediately agree to step down were vilified and threatened on social media. Melanie Peterson, who had resigned in December (before the governor sent the letters), posted a video on YouTube about the abuse she had suffered over the past year, abuse that continued even after she resigned from the board.

“I’ve been threatened. I’ve been harassed. I’ve had to call law enforcement,” she related in the video.

“To be honest with you, I blame U.S. Congressman Brian Mast for his rhetoric, for his bullying and for perpetuating this kind of behavior. This isn’t how civilized human beings settle differences,” she stated in the December 2018 video.

After the video went viral, a spokesperson for the Congressman stated Rep. Mast does not condone threatening public officials.

Other SFWMD board members (all unpaid volunteers) also stated they had been threatened and harassed, including at least one “credible death threat.” One by one, the governing board agreed to step down so the new governor could stack the board with his own appointees.

At the February SFWMD meeting, the last hold out, Brandon Tucker, announced his resignation, alleging the “coup d’etat” of the SFWMD board had been planned long before November, and that the lease vote was an excuse to oust the board members appointed by Gov. Rick Scott. At that same meeting, board member James Moran shared rumors of a “secret agenda” of the Everglades Foundation to destroy agriculture in the EAA. Because there were so few governing board members still seated and the governor’s new appointees had not yet been approved by the Senate, the governing board could not vote on agenda items at the February meeting, including contracts for water storage projects to benefit the coastal estuaries.

Jump forward to the April 11, 2019 meeting, when discussion of the lease was back on the SFWMD agenda, this time before a governing board appointed by Gov. DeSantis.

To assure the new board that the lease agreement will not delay the EAA reservoir construction, on April 10, Alfonso Fanjul and J. Pepe Fanjul of Florida Crystals sent a letter to the SFWMD governing board, volunteering to allow SFWMD to terminate the lease early if the corps is ready to start construction before Dec. 1, 2020. At that same meeting Col. Andrew Kelly of the U.S. Army Corps of Engineers estimated it will take at least that long (19 months) to obtain the federal permits, so at the earliest the corps could be ready to “turn dirt” is December 2020. Also of note, federal permitting includes consideration of the impact of the project on Tribal lands. The Miccosukee Tribe has already warned SFWMD that they are ready to fight anything that will increase flooding of their lands south of the reservoir site. The Tribe wants the reservoir delayed until there is more water conveyance south under the Tamiami Trail.

Second lease has not been terminated

While the 16,000-acre lease garnered plenty of attention in the news and on social media, even though it will not impact the reservoir and STA project timeline, another lease on land within the project footprint has been largely ignored.

This map, which was included in the South Florida Water Management District lease discussed at the November 2018 governing board meeting as Exhibit B, shows the area designated for the Everglades Agricultural Area (EAA) reservoir. The land owned by SFWMD is in light blue. The 560 acres that SFWMD took back as part of the lease extension are in purple (parcel 1) and bright green (parcel 2). The Trustees of the Internal Improvement Trust Fund (TIITF) lands - 1,251 acres under the control of Florida Department of Environmental Regulation – are shown in light orange. Special to the Lake Okeechobee News/SFWMD.

At the November 2018 SFWMD meeting in Miami, then SFWMD general counsel Brian Accardo explained that two smaller parcels within the project footprint are subject to a lease controlled by the Florida Department of Environmental Protection (FDEP). He said when Senate Bill 10 passed in 2017, SFWMD notified FDEP of plans to expedite construction of the EAA reservoir, but that no action had been taken yet by FDEP in regard to terminating that lease. He opined that FDEP might have been waiting to see what SFWMD did with the lease on the larger portion of the property.

According to FDEP, as of May 1, 2019, that lease had not yet been terminated.

The lease with New Hope Sugar Company, signed March 28, 2014 by Katy Fenton, Deputy Secretary for Land and Recreation, State of Florida, Department of Environmental Protection, expires in 2046, but can be terminated with “three years notice prior to May 1 of the year in which the lessor (FDEP) intends termination be effective.” (The previous lease would have expired in 2016, so the 30-year lease extends to 2046.)

So while the lease on the larger portion of the EAA reservoir project can be terminated on Dec. 1, 2020 (or sooner, according to the letter from the Fanjuls), the lease on the smaller parcels cannot be terminated until May 1, 2023.

The 1,251 acres involved in the FDEP lease are in the area planned for the STA, so the FDEP lease won’t delay construction of the massive dike around the reservoir, but completion of the STA is necessary before the reservoir is operational. The corps estimates that once construction starts, it will take about five years to build the 37 ft. dike that will surround the 10,000 acre reservoir. In theory, FDEP could wait until the dike construction receives a federal funding allocation to terminate the lease on the 1,251 acres; SFWMD and the corps would still have time to complete the STA work by the time the dike is complete. Such a delay might even be the wisest choice, since CERP projects have a history of delays and funding shortfalls, and there are many reasons (see related story) to keep the land in agricultural production until the corps is ready to “turn dirt” on the project.

Multi-year leases common for agriculture

In November 2018, when the South Florida Water Management District Governing Board approved an eight-year lease on about 16,000 acres of state land in the Everglades Agriculture Area (EAA), some representatives from environmental groups questioned why the state-owned land was being leased for farming and expressed outrage at the length of the lease.

Those familiar with agriculture wondered what all the fuss was about.

Why lease out the state land?

The site of the future EAA reservoir has been in state ownership for more than 20 years. It was purchased in anticipation of the future need for the land for the Comprehensive Everglades Restoration Plan (CERP). There are many reasons for leasing out the land until the corps is ready to start construction of the reservoir:

• The lease generates about than $1.6 million a year ($100 an acre) in lease payments. The per acre lease value was determined as market value by an appraiser chosen by SFWMD.

• Leasing the land for agriculture means it stays on the county tax rolls. When the state takes over the land, the county (in this case Palm Beach County) will lose that annual tax revenue. When the county loses that tax base, other property owners in the county will have to pay more to maintain the level of county services.

• Keeping the land in agriculture is required by state law. Florida Senate Bill 10, which authorizes moving the EAA reservoir up on the CERP Integrated Delivery Schedule (IDS) requires the land be kept in agricultural use until the corps is ready to start construction.

• If the land were not leased, SFWMD would be responsible for managing the land, which includes removing any invasive plants. Under the terms of the lease, this responsibility falls on the farmers. In South Florida, land left fallow quickly becomes overrun with invasives such as tropical soda apples, Brazilian peppers, Melaleuca trees and other non-native plants. Agencies involved establishing the Florida Wildlife Corridor discovered that any land allowed to “return to nature” was soon so overrun with invasives that not only were native plants forced out, but the invasives grew so dense that Florida native wildlife was also forced out. If the lease were terminated before construction starts, SFWMD would have the added expense of land management. SFWMD staff are well aware of the effort needed to control invasive plants. They use the millions generated from the leased EAA land to control invasive plants on other state-owned property.

• If the land were not leased, and an endangered species moved in before construction started, the federal government could halt the project. According to former SFWMD Director of Everglades Policy Eva Velez, this has actually happened on other projects, and the federal requirements to move the animals or change the project plans to accommodate the endangered species resulted in delays.

• The lease helps preserve jobs — union jobs — in the sugar mill for as long as possible until the reservoir construction starts. Less cane to harvest will mean less work at the mill. Jobs that pay more than minimum wage are already scarce in rural areas south of the big lake, and the jobs at the mill provide attractive pay and benefits. (A vo-tech program to train future sugar mill workers in welding, electric and machine work references journeyman pay of $25 an hour.)

• Keeping the fields in sugar cane helps clean the water. According to a University of Florida Institute of Agricultural Sciences (UF/IFAS) sugar cane is a “nutrient sink.” Sugar cane is a grass. The water from the lake enters the cane fields higher in phosphorus than water leaves the fields. Every time an acre of sugar cane is harvested, about 20 pounds of phosphorus is removed from the watershed. Runoff from cane fields is also lower in phosphorus than run off from fallow fields, according to the IFAS study.

• Sugar cane planting is rotated with rice. Flooded rice fields act like stormwater treatment areas (STAs), filtering the water from the lake.

• The EAA farmers provide food for America. The rich muck soil, called the “black gold” of the EAA, is highly productive. In addition to the sugar cane grown in the EAA, farmers rotate cane with rice. In the past five years, 31 million pounds of rice was harvested in the 16,000 acre property leased to Florida Cyrstals.

• There’s an additional risk if the state takes the land back before construction starts. If the property were left fallow for five years, it could be declared a wetland by the federal government, and result in additional bureaucratic paperwork for federal permits to start construction of the reservoir … or even of the accompanying Stormwater Treatment Area (STA). (You need a federal permit to turn an area designated as wetland into a project that is also essentially a wetland.)

Two-year termination clause

The eight-year lease with the Florida Crystals subsidiary can be terminated after 20 months with four months notice. Two years may seem a long time to some people, but sugar farmers know it might not even be long enough to recoup the investment of planting a crop.

Typically leases are for much longer than eight years, said Gaston Cantens, vice president of Florida Crystals. The previous lease on the property was signed in 1998 and would have expired in March 2019 had it not been extended. The four-month termination clause is also unusual. Leases with sugar cane growers usually have a three-year termination clause.

Sugar cane is not a “one year” crop. In the EAA, cane may be harvested two, three or even four times after the initial planting, depending on the condition of the soil and the type of sugar cane grown, he explained.

For the property leased from SFWMD, Mr. Cantens explained that some cane fields are planted once and then harvested three times before they are planted with rice and flooded for a year, for a four-year rotation. Fields used for Florida Crystal’s organic sugarcane products are on a three-year cycle with two harvests of cane before the fields are planted with rice and then flooded.

Rice has a growing cycle of 120 days. After the rice germinates, the farmers flood the fields, and they stay flooded for about 80 days. Flooding naturally kills weeds and pests and conserves soil by keeping it out of contact with air. Rice fields function as STAs, removing nutrients from the water. Rice is also a low-input crop; the majority of Florida Crystal’s rice is grown without the use of fertilizer. The fields are kept for a year in rice and then planted again in sugar cane.

Agreeing to a the two-year termination clause was a risk, said Mr. Cantens. He said the farmers make an investment planting the fields, and they may not get that third harvest. All farming involves risk, he added; farmers are at the mercy of Mother Nature and don’t know when they might have to deal with a flood, a drought or a freeze. Based on the history of other CERP projects, Florida Crystals gambled that they will be able to harvest enough cane to make a profit.

However, he noted, even if the corps is ready to start construction Dec. 1, 2020 (or earlier), they won’t have to stop farming all of the fields at once. The lease allows SFWMD to terminate the lease on a field-by-field basis, taking back just the parts of the property needed immediately, while sugar cane production can continue on other parts of the property. Sugar cane production can continue in the shadow of the dike construction as it is built to encircle the 10,000 acre footprint.

A 37-foot-high dike is a significant undertaking. It will take the corps years to build it, and while it is under construction, farming can continue on some parts of the land, he explained. During that time, SFWMD will continue to collect the annual lease payments on the acreage still farmed.