Florida vs. The Mouse: Here’s What We Know About Disney Losing Its 27,000-Acre Self-Governing Status
UPDATE, APRIL 22, 4 P.M. ET: Florida Gov. Ron DeSantis has signed the bill dissolving the Reedy Creek Improvement District.
On Thursday, the Florida legislature passed a bill dissolving a handful of special districts established by the state decades ago — including the Reedy Creek Improvement District, which dates back to 1967.
Encompassing a significant chunk of Orlando, Reedy Creek's legal structure has for nearly 60 years allowed the Walt Disney Co. to operate a private government within the district.
Disney has been responsible for its own power supply, water resources, road maintenance and repair, and even fire protection and law enforcement. Disney also benefited from significant tax breaks, which include its vast real estate holdings that span the entire 27,000-acre theme park, its hotels, restaurants and more.
The bill winds down the existence of the district as of June 1, 2023, though it could, under the terms of the law, be re-established. The bill doesn't specify how Reedy Creek's governmental responsibilities will be undertaken by the existing counties in the area. Florida Gov. Ron DeSantis is expected to sign it.
Why Does Disney Have Its Own Government In Florida?
Back in the 1960s, when Disney began developing plans for the multi-park complex now known as Disneyworld, the company made a deal with the state of Florida to create the 27,000-acre district in what was then mostly undeveloped pastures and wetlands.
The district means that Disney takes care of most services associated with county or municipal governments, including fire and EMS, waste hauling, recycling, and maintaining roads and water quality. Disney argued that it needed such complete control to develop this part of Florida efficiently.
Reedy Creek is now home to Walt Disney World’s four theme parks in Florida, plus two water parks, a sports complex and a number of hotels, stores and restaurants. Part of the district is in Orange County, which includes Orlando, and another part is in the less populous Osceola County.
Why The Dissolution?
In late March, after a period of silence, Disney said it would suspend political donations in the state, along with supporting organizations working against Florida's newly passed "Parental Rights in Education" law — its formal name — but more commonly known as "Don't Say Gay."
DeSantis and other Republicans in the Florida legislature, where the party has a large majority, took umbrage at Disney's stance, and the governor floated the idea of ending the company's private government. The idea soon was taken up by DeSantis allies in the legislature, and the bill passed without much discussion during a special session also dealing with redistricting for the 2022 election.
The governor's animosity against Disney is not a secret, nor are his presidential ambitions.
"Disney and other woke corporations won’t get away with peddling their unchecked pressure campaigns any longer,” DeSantis wrote in a fundraising pitch Wednesday that was widely reported. “If we want to keep the Democrat machine and their corporate lapdogs accountable, we have to stand together now.”
What Is Disney's Economic Presence In Florida?
The Disneyworld complex is one of the nation's major tourist draws. A 2019 study, using Oxford Economic data, found that Disney is the linchpin of the Central Florida tourism industry, with $75.2B in annual economic impact for the region. Some 463,000 jobs are tied to Disney's presence (80,000 directly employed), which also provides $5.8B in additional state tax revenue.
The sales tax collected alone on the 58 million Disney World tickets sold in 2018 totaled $409M. That is serious money when it comes to public funding: more, for example, than the state will spend this year on school construction and maintenance, the Tallahassee Democrat reports.
Disney is no stranger to Florida politics. Before it turned off its donation spigot, the company gave $4.8M to Florida candidates in the 2020 election cycle, including $913K to the Republican Party of Florida, $313K to the Florida Democratic Party, and $50K directly to DeSantis' campaign, Politico reports.
For Disney, the operations of its parks are an important source of revenue, but not the most important companywide.
In Q1 2022, Disney's media and entertainment segment generated the largest share of revenue, about $14.6B — up from about $12.7B compared to the same quarter of the previous year. The company's other products put together (except for parks), such as direct-to-consumer sales and content licensing, brought in an aggregate of $14.7B during the quarter.
The company's parks and other in-person experiences brought in $7.2B during Q1 2022, representing a significant recovery from the first quarter of 2021 when revenue came in at $3.5B.
What Happens Now?
At least one official in Orange County, Florida, is wondering out loud how much absorbing the duties, and the debts, of Reedy Creek will cost county taxpayers, though other observers have raised the same question, even before the bill passed.
“If that district goes away, it is zero revenue, but they take on all the debt and all the obligation,” Orange County Tax Collector Scott Randolph told Click Orlando, adding that it takes about $105M a year to provide services in Reedy Creek and that the district has as much as $2B in bond debt.
So far Disney hasn't reacted to the legislature's action. Taking the state to court over the matter is a possibility for the company, and at least one part of existing Florida law seems to be in Disney's favor.
Florida House Rep. Carlos Smith, who opposed the Reedy Creek bill, and others have tweeted an image of a section of a Florida statute noting that dissolving an active special district would require the votes of landowners in the area.
There is no doubt that Disney would be able to control such a vote. As structured back in the 1960s, Reedy Creek is a public corporation administered by a five-member board elected by area landowners. Disney is the primary landowner in the area, and what the company doesn't own outright, it controls via contractual arrangements.