Lawmakers in Florida are working diligently to take over special-tax district in Disney

Disney Logo — Courtesy: Shutterstock — woaiss

It’s possible that the Walt Disney Co.’s DIS 0.76 percent decrease in dominion over its Florida parks is coming to an end.

Monday saw the filing of a bill by Republicans in the Florida House of Representatives that would significantly alter the administration and even change the name of the Reedy Creek Improvement District, a special tax district close to Orlando that has for more than 50 years allowed Disney to self-govern the land that houses its Walt Disney World Resort. The action is the result of GOP efforts made last year to limit Disney’s special tax status, while it does not completely eliminate it.

Reedy Creek would be renamed the Central Florida Tourism Oversight District, and Gov. Ron DeSantis would have the power to designate members to its five-member board of supervisors under the legislation, which is sponsored by Orlando Representative Fred Hawkins. Any such nominations would require approval from the Florida state Senate.

The board of Reedy Creek is largely chosen by Disney, who owns practically all of the property and assets in the district, in accordance with the current state statute. The district has broad discretion to authorize new real estate developments at Walt Disney World without being required to obtain local authority approval for environmental impact, drainage, and other requirements as other landowners are required to do.

The Walt Disney World Resort’s president, Jeff Vahle, stated in a statement that the organization is keeping an eye on the legislation. Regardless of the outcome, the company remains “committed to providing the highest quality experience for the millions of guests who visit each year,” he said. The corporation operates under a number of different models and jurisdictions around the world.

Requests for comment from a Reedy Creek spokesperson went unanswered.

If the bill passes, Disney would lose control of the district to Governor DeSantis, who has openly fought with Disney over the past year after the company voiced its opposition to Florida’s Parental Rights in Education statute. This law, which was enacted last year, forbids teaching about gender and sexuality in the classroom for elementary school kids up through the third grade.

Last year, Disney employees staged walkouts in opposition to the law, dubbed “Don’t Say Gay” by its opponents. Former CEO Bob Chapek originally resisted commenting on the legislation until finally stating that Disney opposed it on the grounds that it might hurt LGBT children.

Shortly after, DeSantis referred to Disney as a “woke business” that was attempting to undermine Florida parents. Last year, he commanded a special session of the state Legislature to completely abolish the district. The district would continue to go by the new name under Monday’s plan, which will be discussed this week during a fresh special legislative session. Before the session ends the next week, the GOP-controlled legislature is expected to pass the law.

The law would prevent Disney from moving the cost of the approximately $1 billion in municipal debt issued by the district to pay for roads, sewers, and other infrastructure to the local taxpayers in Orange and Osceola counties.

Although it is unknown exactly how much money the district saves Disney every year, a former employee of the company claimed to The Journal last year that thanks to Reedy Creek’s self-governing system, Disney avoids construction delays and administrative costs worth tens of millions of dollars every year.

In Florida, there are hundreds of comparable special tax districts, many of which were established to assist farmers and other landowners in managing infrastructure upgrades and services like drainage and water on their own. The largest, though, is Reedy Creek, which Walt Disney himself founded in 1967 and which is special in that it is home to one of the most significant tourist destinations in the state.

Legislators have complained that it is unfair for Disney to be able to develop its theme parks and hotels without having to ask for local government permission while rivals must wade through a maze of bureaucracy. The district has its own fire and EMS services, maintains its own roads and sewers, and pays tens of millions of dollars in property taxes to the neighboring counties, according to Disney.

According to Richard Foglesong, a political science professor at Rollins College in Winter Park, Florida, who wrote a book about Disney’s relationship with the state of Florida, one crucial area where Disney may have escaped harm is the debate over “impact fees.” According to Foglesong, such fees—which can occasionally amount to 30 percent of a project’s cost—are assessed against real estate developers to cover costs related to anticipated environmental effects, increased demand for public services, and the need for wider roads, more parking spaces, and other issues.

“Disney doesn’t have to do that,” he said, but other theme park operators in Florida do.

Even while the law does not immediately remove all of Disney’s carve-outs, he said that it would still come as a shock to Disney. The proposed legislation would forbid anyone who had worked for a theme park corporation in the three years prior from holding a position on the district’s board, including Disney personnel.

“Disney is not going to be happy about this bill,” Mr. Foglesong said. “Disney has long been a company that, when they needed water, they went out and dug their own well.”

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