terraceiaproposal

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Request For Ecosystems Management Agreement

October 2011

With increasing urbanization, it is becoming more important thatresidents and visitors be able to drive a short distance down I-75 orI-275 and experience Tampa Bay in its natural state. For many,visiting the Terra Ceia area is like stepping back in time toexperience the natural beauty that attracted early settlers to theTampa Bay area. Such experiences create a public appreciation forthe natural functions of ecosystems that do so much to provideclean water, clean air and abundant seafood for people.

2009 Terra Ceia Aquatic Preserve Management Plan

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Introduction

Cayo Cascabel, LLC and Slip-Knott, LLC (Owners) own between them approximately1,064 acres of environmentally sensitive Manatee County islands and coastline. Known asRattlesnake Key and the Knott Cowen Tract, the lands are adjacent to the Bob Graham SunshineSkyway between the existing toll booth and the interchange that provides access to the Skyway

Fishing Pier State Park. The lands, consisting of the owned submerged lands and uplandsinclude:

Rattlesnake Key (663 acres including 1.8 miles of Gulf of Mexico/Tampa Bay frontage)

The Knott-Cowen Tract (346.5 acres)

The southwest tip of Terra Ceia Island (33.4 acres)

Sister Keys (8 acres)

Skeet Key (5.8 acres)

Guss Point (3.8 acres)

Paradise Island (1.6 acres)

The south tip of Eds Key (1.5 acres)

Centrally located within the Sarasota/Bradenton/St. Pete/Tampa region, the lands aresurrounded by the Terra Ceia Aquatic Preserve and represent a substantial portion of the

remaining undeveloped shoreline of one of Floridas most densely populated watersheds. They

consist of a mosaic of unique coastal native upland and wetland habitats and contain potentially

significant cultural resources. The State has targeted the lands for priority acquisition under the

Florida Forever Program.

The Owners are requesting an Ecosystem Management Agreement with the FDEP to

facilitate a land exchange pursuant to which: (i) the State of Florida would receive, at no cost,

nearly 1,000 acres of these environmentally sensitive lands; (ii) Rattlesnake Key would be

developed and operated as a marine wilderness park; and (iii) the Owners would receiveapproximately 77 acres of State-owned lands at the existing interchange with the ability to

develop the lands with a public/private mixed-use waterfront resort development to be known as

the Skyway Resort. The exchange will result in significant environmental, economic and public

benefit. Fully consummated, the transaction will: (i) accomplish Floridas priority goal of land

acquisition within the Terra Ceia Aquatic Preserve; (ii) generate nearly 1,500 temporary and 700

permanent jobs in the region; (iii) yield over $180 million in current and $60 million in annual

recurring economic activity; and (iv) establish and enhance public access and public recreational

and educational opportunities in an environmentally responsible and sustainable manner.

As described in greater detail hereafter, the proposed exchange, and the associatedpublic/private development and recreational activities fit nicely within the ecosystem

management concept embodied in section 403.075, Florida Statutes, and will result in a

significant net ecosystem benefit compared to activities conducted without such agreement.


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The Owners Lands

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Terra Ceia Aquatic Preserve

The lands are surrounded by, but notably are not within the 21,387 acre Terra CeiaAquatic Preserve. Established by the Florida Legislature in 1984, the Preserve contains someof the best quality, most diverse submerged hard bottom marine habitat in the Florida westcoast, abundant salt marsh, mangrove and hammock communities which are ecologically

important as wildlife habitat, storm protection and land stabilization; regionally significantbird nesting sites, together with a considerable portion of Tampa Bays remaining sea grassbeds. There is evidence of human use of the area dating back to around 8,000 BC.

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The Knott-Cowen Tract

Excluded from the Preserve, the Knott-Cowen Tract includes 234.5 acres of nearlypristine, privately owned submerged lands. The Tract was previously sold into private hands bythe State with the rights to bulkhead and fill nearly all of it and to dredge the fill fromsurrounding state-owned sovereignty submerged lands. This plan reflects the parties intent:

FDEP recognizes the continuing validity of these rights:

...it is clear that Cowen obtained title to certain submerged lands from theTrustees coupled with the right to fill such lands. In addition, Cowen paidfor and received the right to dredge fill material from certain adjacentsubmerged lands to fill the lands acquired.1

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1March 9, 1990 Memo From Eugene E. McClellan, Jr., Assistant General Counsel, to Percy W. Mallison,Director, Division of State Lands.


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The area encumbered by the bulkhead/fill/dredge rights totals 512.8 acres of State and privatelyowned uplands and submerged lands mostly consisting of mangroves and sea grass beds.

Area Of Bulkhead/Fill/Dredge Rights

Sea Grass Beds/Mangroves Within Areaof Bulkhead/Fill/Dredge Rights

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The Knott-Cowen Tract is bisected by and abuts the Sunshine Skyway right-of-way ontwo sides. It enjoys an abutters easement of access to the Skyway interchange across the areaencumbered by the dredge rights.

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The Florida Forever Terra Ceia Project

In recent years, the State and local government have been buying up the coastline in andaround the Terra Ceia area. The FDEP has designated the Owners lands as essential parcelstargeted for priority full fee acquisition under the Florida Forever Terra Ceia Project. ManateeCounty has previously expressed its support for State acquisition of the Knott-Cowen Tract.

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Owners Proposed Ecosystem Management Concept

The Owners proposed ecosystem management concept is the result of bold vision, creativeland assembly and over five years of careful and thoughtful site planning and design. TheOwners focused on preserving the bulk of the lands, creating the opportunity for development ofan easily accessible, environmentally sustainable world class marine park and waterfront

development while avoiding, minimizing and mitigating impacts to the public and theenvironment.

The Owners propose to donate 95% of their lands (almost 1,000 acres) to the State at no costto the State, and to disclaim virtually all the rights to bulkhead, fill and dredge. The donatedlands would be preserved in their natural state in perpetuity. Additionally, Rattlesnake Key isproposed for development and use as a State park.

In exchange, the Owners seek title to approximately 77 acres of State-owned landsimmediately adjacent to and on either side of the existing interchange together with the ability todevelop these lands, and the westernmost 65 acres of the Knott-Cowen Tract with a

public/private mixed use waterfront development to be known as the Skyway Resort.

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North Skyway Plan

Specific uses on the north side of the interchange would include a public boat ramp,private marina and boat storage facility, public picnic and parking areas, a park ranger stationand ancillary support commercial uses. Additionally, the Owners are partnering with theEmbassy Blue Institute, a nonprofit organization dedicated to advancing and promoting global

ocean conservation through marine life research, wildlife rescue and education. The EmbassyBlue Institute seeks to develop the north side with the National Marine Mammal Life Center, oneof the most ambitious marine life conservation projects of our time.

The goal of National Marine Mammal Life Center is to establish a comprehensive marine

conservation center strategically located in the heart of the Southeastern Stranding Networkterritory. Once completed, the National Marine Mammal Life Center will be unequalled in itsability to: (i) address stranded animal rescue and rehabilitation capacity deficiencies within theSoutheast Stranding Network; (ii) provide the largest permanent care facility for dolphins,whales, manatees and sea turtles within the network; (iii) provide the most advanced center foreducation about marine mammals and their ecosystems; (iv) create the worlds first marinemammal teaching hospital; and (v) help achieve the long-term goals of the U.S. Marine MammalProtection Act through economically sustainable operations.

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The South Skyway Plan

The proposed south side development was located and designed to avoid surrounding seagrasses wherever possible and to utilize previously dredged areas. Specific uses on the south sideof the interchange would include

A resort hotel

Ancillary commercial/office and recreational uses Single and multiple family residences

Tahiti-style overwater bungalows on the already privately owned submergedlands

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Rattlesnake Key State ParkRattlesnake Key, most of the Knott-Cowen Tract, the southwest tip of Terra Ceia Island,

Sister Keys and Guss Point will be preserved in their entirety and become a state park to beoperated as an ecological and archeological preserve featuring:

Wilderness-style camping

Hiking Fishing/canoeing/kayaking/bird watching

Ecological/archeological research

Restoration/Enhancement/Mitigation Banking Creation of hiking trails using existing mosquito ditch spoil banks Enhancement of mosquito ditches to create canoe/kayak trails Removal of invasive exotic species Restoration of salt barrens through surface water management Wildlife habitat enhancement (e.g., Osprey nest stands)

Development and operation of the park would be funded using $505,000 in federal grant

monies previously received by State for acquisition of Rattlesnake Key, and by sale of mitigationcredits. Additional funding would be provided by enabling future ERP and sovereigntysubmerged land authorization applicants to contribute funds to endow operations as a means ofestablishing that their projects are in public interest.

A detailed proposal and budget to develop, operate and manage the park has been receivedfrom a local, Terra Ceia-based ecotourism venture.

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Ecological Justification

The Owners preliminary ecological assessment paid by Cardno-Entrix of the area(attached hereto as Exhibit 1) establishes that the proposed land exchange results insignificant net environmental benefit/lift and makes a compelling case in support of theproposal based on the great net environmental benefit to the State.

State would receive 998.6 acres while giving up only 77 acres

98.5% of the lands the State would receive consists of ecologically significant nativehabitats including: 753 acres of mangroves 100.4 acres of sea grass beds 57.9 acres of salt marsh 40.6 acres of bay and estuary

The ecological quality of the lands the State would receive is far superior to those itwould be giving up.

Plus, the Owners would disclaim nearly all of the bulkhead/fill/dredge rights, includingthe dredge rights encumbering 184.4 acres of state-owned sovereignty submerged lands

thereby enabling liquidation of these substantial rights in a fair, environmentallyresponsible fashion.

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Ecological Justification (cont.) The Owners ecological assessment establishes that most of the 77 acres the State would

give up are highly disturbed and of minimal ecological significance 81.5% on these lands consist of either the previously filled in man-made Skyway

interchange/causeway/beach, or unvegetated, highly disturbed intertidal areas adjacent to

the interchange/causeway, including: 33.0 acres of unvegetated intertidal area 22.4 acres of bay and estuary 11.8 acres of sea grass 7.0 acres of man-made lands 2.4 acres of mangroves .4 acres of beach

The overall net gain to the State lands would be 921.6 acres, including: 750.6 acres of mangroves

113.9 acres of submerged lands, including 88.6 acres of seagrass beds Additionally, the vast majority of the bulkhead/fill/dredge rights, which currently

encumber 528 acres of publically and privately owned submerged lands anduplands, would be disclaimed.

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Land Use Justification

Unique, once-in-a-lifetime opportunity to create a world-class, environmentallysustainable, public/private marine preserve and destination waterfront resort/recreationaldevelopment

The resort/recreational development would be surrounded by thousands of acres ofpermanently protected publically-owned submerged lands, mangroves and upland Creates opportunity to establish Rattlesnake Key State Park and first of its kind marine

mammal rescue, rehabilitation and research/education facility which will serve as crownjewels of the Terra Ceia Aquatic Preserve

Enables creation of a spectacular, highly visible public/private gateway from the Skywayto Manatee County

Easily accessible by both boat and automobile from major population centers within theTampa Bay Region.

Enables good land use planning by avoiding and minimizing impacts of development onthe public and the environment

Focuses development away from the much more environmentally sensitive surrounding area away from existing established neighborhoods within Terra Ceia Island on man-made lands in an area already heavily disturbed by past filling, dredging and construction that

occurred during the initial construction, widening and reconstruction of theSkyway Bridge

at an existing interchange allowing controlled, direct, safe and convenient accessto/from the Skyway via the interstate highway system

where public facilities and services already exist or are available

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Ecological Benefits

Acquisition and preservation by State at no cost to the State of two of the three largestkey parcels remaining to be acquired under the Florida Forever Programs Terra CeiaProject

Improved public land management through:

acquisition, development and use of Rattlesnake Key as State park expansion of the Terra Ceia Aquatic Preserve to include nearly 1,000 acres ofprivately owned submerged lands and uplands currently excluded from thePreserve

provision of public access to Rattlesnake Key, Tampa Bay, Sarasota Bay and theGulf of Mexico

Avoidance, minimization and mitigation of environmental impacts from developmentthat might otherwise occur

Removal of exotic, nuisance and invasive species and habitat restoration Maintenance and protection of water quality Protection of wildlife and their habitat, including threatened species and species of

special concern

The Benefits To the Terra Ceia Aquatic Preserve

Addition of almost 1,000 acres currently excluded from the geographic heart of thePreserve

Establishment of Rattlesnake Key State Park Establishment of the marine mammal rescue, rehabilitation and research facility

Improvement of public access to the Preserve Enhancement of public marine recreational, research and educational opportunities Significant advancement of the goals and objectives of the Terra Ceia Aquatic Preserve

Management Plan, including:

Improved public access Preservation of Rattlesnake Key and the Knott-Cowen Tract Disclaimer/liquidation of dredge/fill/bulkhead rights Protection of water quality

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Consistency With Terra Ceia Aquatic Preserve Management Plan

The Terra Ceia Aquatic Preserve Management Plan recognizes the Preserve as anoutstanding area for canoeing/kayaking, snorkeling and bird watching.

Limited public access and conservation of sites are major concerns. The Plans overall goals are to:

address environmental resource protection issues by forming public/privatepartnerships

maintain water quality trends minimize disturbances to habitats and wildlife provide environmentally sound public access to the Preserve

The Plan emphasizes the importance of human use of the Preserve, and identifies aspriorities: the need for an interpretive center/research lab improvement of the currently limited public boat and vehicle access for

recreational opportunities minimization of impacts on habitat and wildlife from development activities by

means of preservation, restoration, removal of exotic vegetation and creation ofbuffer zones The Plan further recommends avoiding impacts to Rattlesnake Key and the Knott-Cowen

Tract because of their potential ecological/historical/cultural resource value. The proposed land swap/development promotes the Plans overall goals while addressing

many of the concerns, challenges and priorities set forth in the Plan.

Public Access, Recreational, Research And Educational Benefits Public use and benefit of an existing, underutilized public waterfront highway

interchange and surrounding marine environment is maximized by: Provision of needed convenient, direct, centrally located boat access to Tampa

Bay and the Sarasota Bay, Gulf of Mexico Provision of needed wet slip and dry storage marina facilities Establishment of a world-class marine mammal rescue, rehabilitation and research

facility Creation and enhancement of opportunities for:

o bathing, fishing, boating and other primary and secondary waterdependent and other related uses

o hiking, camping, canoeing, kayaking, snorkeling and bird watchingo marine science and archeological research and educationo environmental restoration/enhancement, including creation of miles of

canoe/kayak trails into the interior of Rattlesnake Key using existing man-made canals

Cultural Resource Benefits

The Owners preliminary archeological assessment of the lands prepared by B.W. Burger(attached as Exhibit 2) indicates that the lands have potentially significant cultural resourcevalue and contain relics of archeological and scientific interest. The lands will be preserved forboth present and future scientific research and public education and enjoyment.


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The Benefits of Wise, Sustainable Environmental And Land Use Planning Impacts to the public and environment are avoided, minimized and mitigated A public/private gateway to Manatee County from Skyway will be created consisting of

unique, highly visible, centrally located, high-quality waterfront resorthotel/residential mixed use development

world-class ecotourism, and marine mammal rescue, research and educationcenter will be created

surrounded by thousands of acres of permanently protected publically-ownedsubmerged lands and uplands

enhanced public access and recreational, research and educational opportunities easily accessible by both boat and automobile from major population centers

within the Tampa Bay Region

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Economic Benefits A fiscal and economic impact study prepared by Fishkind and Associates (attached as

Exhibit 3) establishes that the proposed Skyway Resort will have a major positiveeconomic and fiscal impact on Manatee County and the State. Specifically: operation of the development of the Resort will generate an annual economic

impact of $63.1 million while generating 677 new jobs the construction of the Resort will generate $181 million in temporaryconstruction related activity and support 1,490 temporary jobs.

Over a twenty year period, the Resort will result in:o a net fiscal benefit to Manatee County of $63.9 milliono $4.1 million in sales taxes to Manatee Countyo $49.7 million in sales taxes to the Stateo $59.7 million in new property taxes to Manatee Countyo $65.5 million in new property taxes to the Manatee County School Boardo $15.8 million in tourist taxes to Manatee County.

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Public Interest Test Met The Trustees manage state-owned lands under Chapters 253 and 258, Florida Statutes,

and Chapter 18, Florida Administrative Code, to ensure maximum benefit and use and toencourage use of sovereign submerged lands primarily for water dependent uses and

public access. The Trustees are authorized to exchange lands and to fix the terms and conditions of any

such exchange In addition to water dependent uses and public access, the Trustees may approve other

types of activities when not contrary to the public interest. Examples include: compatible secondary purposes other uses which do not detract from the primary purposes.

The Trustees have reserved the right to approve any proposal and are authorized to makeexceptions to the restrictions that otherwise apply to use of state-owned submerged landsbased on case-by-case evaluation

In considering a proposed land exchange within an aquatic preserve, the Trustees must

determine whether it is in the public interest based on balancing the social, economicand/or environmental benefits2 and costs.3 The Trustees have very broad discretion to approve private use and development of

submerged lands on a case-by-case basis when in the public interest and where necessaryto avoid infringing upon existing riparian and other property rights.

The Owners have significant pre-existing rights of access and to bulkhead, fill anddredge, the vast majority of which would be disclaimed

The land swap and proposed development and use: is clearly in the public interest is compatible with maximizing the benefit and use of state-owned lands encourages public access and water dependent and water related uses

results in enormous social, economic and environmental benefits

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Benefits include: (i) public access (public boat ramps and boat slips); (ii) provision of boating and marine services;(iii) improvement/enhancement of public health, safety welfare and law enforcement; (iv) improvement of publicland management; (v) improvement/enhancement of public navigation; (vi) improvement/enhancement of waterquality; (vii) enhancement/restoration of natural habitat and functions; and (viii) improvement/protection ofendangered/threatened/unique species

3 Costs include: (i) reduced/degraded water quality; (ii) reduced/degraded natural habitat and function; (iii)destruction, harm or harassment of endangered or threatened species and habitat.


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Proposed Terms and Conditions Of Ecosystem Management

AgreementProprietary Land Exchange

Owners propose to exchange with the State the following lands and other rights inaccordance with the following terms and conditions. The exchange would be, subject to approvalby the Trustees of the Internal Improvement Trust Fund.

Owners Obligations. Owners convey to the State:

Rattlesnake Key Sisters Keys The south tip of Eds Key The south tip of Terra Ceia Island Guss Point All of the Knott-Cowen Tract except for the westernmost 64 acres consisting of

Skeet Key, Paradise Island and the surrounding privately owned submerged lands Owners disclaim all rights to bulkhead and fill and dredge except to extent necessary to

develop and operate the Skyway Resort.

State of Floridas Obligations. The State: Conveys to Owners the 77 acres MOL on the north and south sides of the interchange

necessary to the development proposed thereon under the Site Plans Conveys to Owners such additional lands and rights as are necessary to the facilitate

adequate vehicular access to and from the development and I-275 via the interchange Grants to Owners such additional rights, easements, leases or consents necessary for

construction and maintenance on surrounding state-owned submerged lands of suchnavigation, shore protection, breakwaters or similar installations required in connection

with the development. Accepts reservation by Owners of right to receive wetland mitigation credits, and to

apply for and perfect, market and sell or use credits generated from the lands conveyed tothe State from both the preservation and restoration of the lands

Agrees to the following plan of future development and use of Rattlesnake Key as a StatePark: Grants a 99-year lease to a non-for-profit entity established for the sole purpose of

planning, developing, maintaining and operating the Park in accordance with asite, enhancement and restoration plan and operating budget to be attached to theAgreement.

Commits the $505,000 in existing Federal grant monies earmarked for purchase

of Rattlesnake Key to fund the initial development and future operation of thePark in accordance with the plan and budget.

Not-for-profit develops, operates and maintains the Park pursuant to operatingplan and budget


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Possibility of Reverter. The deeds of conveyance and lease would be subject to a possibility ofreverter in the event the following contingencies are not satisfied within 5 years from the date ofexchange of deeds:

Approval by Manatee County of land use entitlements for north/south side development Confirmation of the availability and adequacy of the public facilities and services

Approval by the State of any proprietary leases, disclaimers or releases necessary to theconstruction and operation of the proposed development Issuance of permits and other approvals and authorizations from the State, the Southwest

Florida Water Management District, the U.S. Army Corps of Engineers and otheragencies having jurisdiction necessary to the construction and operation of thedevelopment. Such permits or authorizations must accept as adequate mitigation for thepermitted activities the conveyance to the State of the lands and disclaimer of rightshereunder

Florida Department of Transportation approvals, including issuance of a State drivewayconnection permit enabling direct access via the interchange to and from I-275 and theproposed development on the north and south sides of the interchange

Uses And Activities Authorized Pursuant To Agreement

The Agreement would authorize the following activities, wetland and water impacts and uses.The scope of authorization will be determined based on the information and materials submittedor to be submitted by Owners based on the agreement of the parties.

Rattlesnake Key: The following activities necessary to the construction, operation andmaintenance of a State Park on Rattlesnake Key as set forth in the site, enhancement, andrestoration plan to be attached as an exhibit to the Agreement. Construction. operation and maintenance of nature trials, boardwalks, boardwalk

crossing, bridge and bridge crossings, camp sites, gathering shelters, signage, boatdocks, restroom and related sanitary facilities and other similar passiverecreational improvements and activities that result in minimal impacts

Removal of exotic vegetation. Pruning of mangroves and maintenance dredging of the existing mosquito ditch

system sufficient to make them passable to canoeists and kayakers and to enableaccess for park operation and maintenance purposes.

Construction of minimal surface water management facilities for restoration,enhancement and trail and campsite construction and maintenance purposes.

Grading/removal and relocation of exiting spoil banks for use in creating trails,campsites and minimal surface water management systems

Wetland mitigation in accordance with the criteria to be set forth in theAgreement.

Skyway North and South Parcels: The following activities necessary to the creation,protection, stabilization and specific uses of the submerged lands, wetlands and uplandsas contemplated and depicted in an exhibit to be attached to the Agreement.


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Bulkheading, filling and dredging of areas as depicted on and in accordance withthe plans and specifications to be attached as an exhibit to Agreement

Construction of the shore protection and stabilization depicted on and inaccordance with the plans and specifications to be attached to the Agreement.

Dredging and maintenance of the basins and channels depicted on and in

accordance with the plans and specifications to be attached as an exhibit to theAgreement. Construction and maintenance of boardwalks and over-water bungalows as

depicted on and in accordance with the plans and specifications to be attached asan exhibit to the Agreement.

Vehicular access to and from the Skyway North and South Parcels and I-275 viathe existing interchange as depicted on and in accordance with an exhibit to beattached to the Agreement.

Wetland Mitigation:

The impacts to waters of the State by activities described herein on Rattlesnake

Key, the Skyway North Parcel and the Skyway South Parcel and the portion ofthe Knott-Cowen Tract being retained by Owners are deemed adequatelymitigated by receipt by the State of the lands which the Owners are obligated toconvey the State under the proposed land/exchange

The land exchange and disclaimer of rights described hereunder results inadditional credits which are available for sale to third parties for impacting watersof the State. The number and type of additional credits will be determined andshown in an exhibit to be attached to the Agreement.

The restoration/enhancement activities proposed for Rattlesnake Key State Parkdescribed in the site, restoration and enhancement plan result in additional creditswhich are available for sale to third parties for impacting waters of the State. Thenumber and type of credits for the activities authorized will be determined andshown on an exhibit to be attached to the Agreement.

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