Disney’s self-governing district, Reedy Creek, says Florida cannot dissolve it without paying debts

Website Home Pages of Reedy Creek Improvement District — Courtesy: Shutterstock — Tada Images

Disney’s self-governing special district, the Reedy Creek Improvement District, says that the Sunshine State’s choice to dissolve the district in 2023 is not legal unless Florida pays off Reedy Creek’s extensive debt.

Reedy Creek is a special purpose district established by state law in May 1967 to provide The Walt Disney Company broad governmental authority over the property surrounding its central Florida theme parks. Reedy Creek presently has around $1 billion in outstanding bond debt as a result of this electricity, according to credit rating agency Fitch Ratings.

The 1967 statute also includes a pledge from Florida to its bondholders, according to Reedy Creek.

The law states that Florida “will not in any way impair the rights or remedies of the holders… until all such bonds together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged.”

Reedy Creek expects to keep operating as usual as a result of the pledge.

“In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties,” Reedy Creek said in a statement posted to the Municipal Securities Rulemaking Board.

The statement is the first from the Disney-run district since Florida Republicans passed legislation on June 1, 2023, that will disband the special-purpose district. On Friday, Gov. Ron DeSantis signed the bill into law.

As a sort of revenge for Disney’s criticism of a law prohibiting discussion of LGBTQ issues in schools, state officials seized on the company’s self-governing status.

The new law dissolving Reedy Creek has elicited no direct public responses from Disney. The law is only two pages long and avoids any discussion of how to unwind a half-century of infrastructure transactions, as well as laying out the next steps in the complicated process. Lawmakers in neighboring Osceola and Orange counties voiced their concerns that they may be forced to pay Reedy Creek’s financial obligations and that citizens will face hefty increases in property taxes.

“If we had to take over the first response — the public safety components for Reedy Creek — with no new revenue, that would be catastrophic for our budget here within Orange County,” Orange County Mayor Jerry L. Demings told reporters on April 21, before the official legislature vote that day. “It would put an undue burden on the rest of the taxpayers in Orange County to fill that gap.”

DeSantis has said Floridians will not see any additional tax increases due to the law and heavily repeated that Disney will pay its “fair share” of taxes. He stated that dissolving Reedy Creek would be “the first step in what’s going to be a process to make sure that Disney should not run its own government.”

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