Florida set to dissolve Disney’s Reedy Creek special district
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Cinderella Castle in Walt Disney World.
Roberto Machado Noa | Lightrocket | Getty Images
Florida Gov. Ron DeSantis is pointing his gun at Disney World.
The Florida legislature approved a bill Thursday to disband a special district. This allows for the Walt Disney Companyto be its own government in the Orange and Osceola outer boundaries. With a vote of 23-16, the bill was passed by the state Senate on Wednesday. It then passed through the House of Representatives with 70 votes to 38.
Republican state Senator Jennifer Bradley presented the idea for the first time on Tuesday. However, opponents argue that it was driven by DeSantis. DeSantis is currently in a heated public battle with DeSantis over DeSantis’s denial of Florida’s HB1557 law. The bill, HB1557 (or “Don’t Say Gay”), restricts early education teachings about sexual orientation and gender identity.
There had not been a major public debate about Disney’s 55-year-old special district. This led to senators opposing the bill and others criticizing it questioning its timing and speed.
Randy Fine, State Representative, told CNBC’s “Squawk box” Thursday that although the bill is not retaliatory he said, “When Disney kicked hornet’s nest, I looked at special district.”
He said, “People have wanted to work with this special district for many decades.” Disney had decades of political power to stop it. Florida values were brought to Florida by California. Floridians said, “You’re a guest.” Perhaps you aren’t worthy of the privileges.
Fine stated that the bill was being introduced in Florida to level the playing field for operators of theme parks. He pointed out that Disney was not the only competitor. Universal, SeaWorldLegoland is not permitted to have its own special districts.
The Democrats of the state senator, although outnumbered, appeared to be in support of the theme park on Wednesday at a special session.
“The Disney Corporation is being attacked because it expressed support for its LGBTQ employees, customers,” state senator Tina Polsky said during the special session. Tina Polsky is a democrat and represents the 19th congressional district in Florida. “Are these really taking this huge decision on the basis of spite?”
It is a huge decision.
This district is known as the Reedy Creek Improvement District. It was created in 1967. It was established by the Florida State legislature so Disney could develop the infrastructure for Walt Disney World at no cost to Florida taxpayers.
This is absurd. The Reedy Creek District was dissolved because they tried to eat too much.
Linda Stewart
Florida 13th District Senator
This arrangement allowed Disney to create theme parks, hotels, and other tourist attractions in the Reedy Creek area with minimal oversight. In Florida, the company was the number one employer and has helped make Orlando one the top tourist destinations in the country.
Loranne Ausley (democrat representing the 3rd Senate District of Texas) said Wednesday that she didn’t get what they were doing. We are adding insult to injury, voting today on something that was originally proposed yesterday. It will go after a private company that literally has made the state what it is. All because they took a position with which governor does not agree.
It was also established that the only owners of land within the District, such as Walt Disney World and the Walt Disney Company, would have to pay for municipal services, like roads, power, or fire protection.
Residents of Orange and Osceola have been exempted from maintenance costs for Disney parks services for decades.
Disney currently pays tax to both Reedy Creek and the counties. The bill will be put to a vote by the Florida House of Representatives on Thursday if it passes. DeSantis would sign Reedy Creek and five other special district established before November 1968 into law. They will be dissolution effective June 1, 20,23.
Reedy Creek as a special District is not represented in the State Legislature.
Absorbing debt
In order to dissolve the district, Reedy Creek workers and infrastructure would have to be accepted by the county. The local counties would take over all services. While the counties would be able to collect Disney’s tax revenue, they would have to also take on the district’s liabilities. Namely, its debt.
Reedy Creek was once a losing operation with a turnover of approximately $70 million. $5 million to $10 million each yearIts financial reports show that it has. However, Disney is able to subsidize its operations through theme park revenues so that its debt does not have a significant impact on its bottom line.
Legislators estimate that there is approximately $1 billion of debt in the balance sheet. If the special district gets absorbed, taxpayers will be responsible, leading to higher taxes.
Linda Stewart, a democratic who is Florida’s 13th Senate district representative, said that no one would want to pay such a large amount. This is absurd. The Reedy Creek District was dissolved by them. They have just eaten too much. It is an important, significant issue and I doubt it will succeed in the end.
The taxpayers will also have to pay for all municipal improvements, which Disney pays for.
For example, in 2019, Disney’s Orlando neighbor Universal joined with Orange County to construct a 1.7 mile extension to Kirkman Road. It runs between Carrier Drive (Universal Boulevard) and Kirkman Road. This was to allow the new park Epic Universe to be built.
Universal paid more than half the cost of this project, which was estimated at $300 million. Orange County was left with $125m and Orange County $125M, while $160m went to the company. $16 Million went to the state.
It is easy to accumulate bills for Disney-related projects.
“Nothing is going be done”
Disney refused to comment on efforts of the legislature. However, David Ramba from the Florida Association of Special Districts, said that the dispute could end up in court.
Ramba stated that he had dissolved several special districts but not any that did not want them to be dissolved. He also noted that many lawyers would get paid as parties try to figure out the operation implications of the bill.
Florida law stipulates that special districts, whether created by legislature or not, can only be dismantled with the majority vote of its landowners. Reedy Creek’s example is The Walt Disney Company.
At Wednesday’s special session, Jason Pizzo (a democrat representing the 38th Senate District in the state) stated that “nothing is going to occur.” Everyone in the room is aware that this will not happen. It’s just too much to miss my child’s games of baseball for something we know will never happen.
Pizzo was one of many state senators to speak out against Wednesday’s vote in the Senate. During the discussion on the legislative floor, many expressed their frustration calling the bill a “revenge law” or “political play.”
“[The governor]Stewart stated, “He wants to prove something.” He wants to prove that he’s stronger than Disney, Stewart stated.
Disclosure: CNBC is owned by NBCUniversal.
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