Florida Files New Bill to Replace Disney World’s Reedy Creek Improvement District
Florida lawmakers kicked off a two-week special legislative session today (February 6, 2023) aimed at introducing a variety of bills, including one that details how Governor Ron DeSantis and the State of Florida plan to take control of Reedy Creek Improvement District (RCID), which gives Walt Disney World its own government.
Today’s bill is simply the latest development in an ongoing saga. If you want to be quickly brought up to speed on the saga from this spring, please read our prior post: Florida Passes Bills to Dissolve Reedy Creek Improvement District. That covers what led to this bill, when the dissolution would take effect, and how it would impact Walt Disney World guests.
Since then, there have been more developments with the firing of former CEO Bob Chapek, who instigated the RCID dissolution in the first place. The return of CEO Bob Iger led some, including lawmakers who had introduced the original dissolution bill, to assert that it was unlikely the Reedy Creek Improvement District would actually go away. As before, I’ll attempt to break this down in a straightforward manner, free of hyperbole and sensationalism…
For starters, you can read House Bill 9B – Reedy Creek Improvement District, Orange and Osceola Counties for yourself. Fair warning: the full text of HB 9B is 189 pages long; like many pieces of legislation, it uses many words to say very little.
The official purpose of this legislation is stated as reenacting, amending & repealing chapter 67-764, Laws of Florida, relating to district; provides for continuation of authority for revenue collection & powers to meet outstanding obligations; renames district; provides boundaries; revises manner of selection of board of supervisors; provides term limits; revises board member compensation; revises powers of board; revises powers of district; provides for transition; provides for continued effect of stipulation between district & Orange County; provides exception to general law.
I’m not going to parse every sentence in the entire 189 page bill for a number of reasons, one of the biggest being that this is not the final resolution. The Reedy Creek Improvement District saga will remain ongoing, with the most likely outcome still being a negotiated compromise between Disney and the State of Florida.
As far as this bill goes, one of the most pertinent parts is the last sentence: “…the Reedy Creek Improvement District is not dissolved as of June 1, 2023, but continues in full force and effect under its new name.” That new name is the Central Florida Tourism Oversight District.
One of the reasons for renaming rather than dissolving and replacing RCID is likely to avoid invalidating the current district’s debts. Tax officials and lawmakers have warned that dissolving the Reedy Creek Improvement District threatens to shift an enormous financial burden to taxpayers and potentially transfer a $1 billion debt load to the state.
The bill also states that it’s the intent of the Legislature to “preserve the authority necessary to generate revenue and pay outstanding indebtedness…No bond or other instrument of indebtedness previously issued by the district or any district project financed by bonds or other instruments of indebtedness shall be affected by this act.”
The bill also addresses another point of contention: control over the Reedy Creek Improvement District’s board. Pursuant to this legislation, the Board of Supervisors of the Central Florida Tourism Oversight District shall consist of five members appointed by Florida’s Governor and confirmed by the Senate.
Each member shall hold office for a term of 4 years and are required to be Florida residents, from a range of different fields and backgrounds. However, anyone who has had a direct or indirect relationship to a theme park or entertainment business (including subcontractors and subsidiaries) in the last 3 years is ineligible. It’s not just Disney employees–it’s more broadly written to encompass a larger swath of Floridian’s population. Under this, the secretary of a lighting company that did work for Chuck E. Cheese would be ineligible.
Currently, the Reedy Creek Improvement District’s landowners elect its board. Because Walt Disney World owns almost all of the land in the district, it has been able to hand select board members for RCID. Which is the whole point. Reedy Creek removes red tape, as Disney is not subject to seeking (outside) local planning commissions for approval to build new structures. Walt Disney World can build parks, attractions, hotels, and other projects within Reedy Creek with little-to-no (outside) governmental oversight. That means Walt Disney World can avoid the logistical hurdles of local government. That’s a double-edged sword, and one that also means Florida taxpayers are not footing the bill for infrastructure at Walt Disney World.
Another area of contention has been the expansive powers of the Reedy Creek Improvement District. As best I can tell, this is more or less left intact by the bill (see Section 8); the Central Florida Tourism Oversight District retains most, if not all, of the same authority to own or improve property; construct or alter water management and flood control; build parking, roads, or recreation facilities; operate fire control facilities; operate, build, and maintain transportation networks; and much more.
Notable on this front is subsection 15, regarding public utilities. The district shall have the authority “to own, acquire, construct, reconstruct, equip, operate, maintain, extend, and improve electric power plants, solar energy generating systems, transmission lines and related facilities, gas mains and facilities of any nature…”
The verbiage here is probably aimed at obtaining a political win in preventing Walt Disney World from building a nuclear power plant, a right granted to the Reedy Creek Improvement District by Florida in 1967 that it is unlikely to use. It also appears that the new district would not have the authority to build an airport.
Other than that, there’s not much here that’s materially different from the current incarnation of the Reedy Creek Improvement District. If this comes as a surprise, you haven’t been paying attention.
From my perspective, the biggest deal about this bill is that the Governor of Florida appoints all 5 members of the Board of Supervisors. There were rumors of a compromise late last year in which the governor would appoint 2 members of the board, which seemed a lot more plausible–and probably palatable to Disney. It’s unlikely that the same will be true if that’s all members. Either a compromise is still to be reached, or this could be challenged in court once passed.
One thing to keep in mind here is that Governor DeSantis almost certainly has presidential aspirations, meaning that he probably will not be the person making those appointments. So, an assessment of whether the governor controlling the Board of Supervisors is “good” or “bad” should have absolutely nothing to do with partisan politics.
Beyond that, my commentary is largely unchanged on topic of RCID’s potential dissolution. For those wondering how this will impact Walt Disney World, I’ll point to a section from our original post discussing the dissolution of Reedy Creek Improvement District: “In short, I don’t think this will have any material impact on the guest experience at Walt Disney World. That’s because I don’t think Reedy Creek Improvement District will actually be dissolved when all is said and done.”
A lot more commentary follows, and then this: “One could argue that this is because no legislator on either side of the aisle actually believes Reedy Creek Improvement District is going to be dissolved. Perhaps they’re cynical, thinking that it’s more about theater, a way to score a quick ‘win’ in today’s era of ‘politics as team sports’ and the ongoing culture wars. Maybe it’s a means of grabbing headlines, dominating the news cycle, and fundraising for midterms before moving on to the next outrage du jour that fuels each side’s base long before next summer.”
With that said, it’ll be interesting to see how CEO Bob Iger reacts. My guess–and hope–is that he does not take the bait and make a public comment. He should understand the political landscape in Florida for the next couple of years, and be cognizant of the consequences of being embroiled in this and other controversies.
Already, Walt Disney World President Jeff Vahle has issued a statement. Or rather, non-statement: “We are monitoring the progression of the draft legislation, which is complex given the long history of the Reedy Creek Improvement District. Disney works under a number of different models and jurisdictions around the world, and regardless of the outcome, we remain committed to providing the highest quality experience for the millions of guests who visit each year.”
This is perfect. It suggests cooperation and deference, while committing to absolutely nothing. Part of Chapek’s miscalculation was approaching this with a conventional understanding of politics and power dynamics, as informed by decades of doing business in Florida. Chapek’s whole approach to the controversy was comedy of errors, remedying mistakes with even more mistakes, and managing to alienate literally everyone on the political spectrum in the process.
Chapek’s dragging out of the controversy worked to Disney’s detriment, and to the benefit of politicians and commentators who have turned culture wars into their whole brand. Iger has much better political instincts and a defter touch, so this shouldn’t be a problem. If there is going to be litigation, Iger does not need to comment–and Disney does not need to be a party to it. (Just as the word “Disney” does not appear once in this 189 page bill.)
Ultimately, my expectation remains that the Walt Disney Company and State of Florida reach a compromise that enables everyone to “win” in before the clock strikes midnight on June 1, 2023. It’ll be an outcome that allows state legislators and Governor DeSantis to claim victory, both in the ouster of Chapek and in modifying the RCID to reduce its power and increase oversight of the district.
The current bill is one step closer to that, but it’s probably not quite there from Disney’s perspective. The governor having the authority to make all appointments–and excluding those with even indirect relationships to theme parks–probably won’t be well-received by the company. It’s also possible that Disney does not care and will not fight further, cognizant of the fact that the state’s interests in promoting the tourism industry and development is aligned with the companies interests. Everything else is more or less what was expected: Reedy Creek Improvement District by a new name, with most of the same powers, minus a few limitations that were viewed as red flags (but that don’t much matter, anyway).
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YOUR THOUGHTS
Any thoughts on the replacement of Reedy Creek Improvement District with the Central Florida Tourism Oversight District? What about changes to appointments or the powers of the district? Keep the comments civil, as this is not the place for politically-charged arguing, antagonism, personal attacks, or perpetuating pointless culture wars. While this topic is inherently political, we will be heavy-handed in deleting comments that amount to little more than vapid political cheerleading. Respectfully debating the pros & cons and implications of RCID being dissolved (or whether it’ll actually happen) is totally fine, but don’t step outside the bounds of this narrow topic. If you wish to shout your opinions about Ron DeSantis, The Bobs, or other politicians/executives into the internet abyss, that’s why Facebook was invented. 😉
The article is well written and considered. From an outsider’s opinion, mine, it appears this whole tempest in a teapot has achieved exactly what the perpetrator, the governor, wanted and that his name being mentioned ad nauseam. I do hope the good people of Florida do not have to pick up the tab for the feud.
This is not a “both sides” political game. This is an over-reach by an over-zealous governor who is playing the culture wars game to score political points. Disney is a private company and its First Amendment rights are being infringed upon. Anxious to see how this plays out in the courts. I hope Disney does NOT blink. If they compromise, even just a bit, DeSantis wins. He is a stain on on the state of Florida and our democracy.
Other than that, Tom.. You do a great job reporting and informing about all things Disney! Love every issue! Thank you…
1. The State of Florida cannot infringe on the right of free speech. Everyone is allowed to disagree with the government in the United States of America as it says in the 1st Amendment of our constitution without fear of retribution from the government!
2. Disney has an iron clad agreement with the State of Florida. Walt was not only a nice guy he was very smart and had very smart lawyers.
3.The government is not allowed to take over a company public, private or otherwise.
4. Disney charges itself more taxes than any entity in this state. They pay more than their fair share of taxes.
5. They have paid for all of the roads infrastructure and utilities for all of their land as well as their surrounding neighbors.
6. Disney pays the Police, Fire and Emergency services.
7. The State of Florida and DeSantis are acting like a Dictatorship by retaliating against people who don’t agree with them. They are doing it to Disney as well as Dade and Broward Counties.
8.Disney has a right to govern themselves because of their agreement and because they own most of the land they sit on. Only land holders in RCD have the right to dissolve the Distric per State law that was put into affect at the time of agreement.
9. Since Disney pays for all services for themselves, Orange County and Osceola County they and only they have the right to get rid of it.
10. The agreement also says that if they somehow lose control of their Distric it can’t be until after the bonds and debt are paid off. that means the taxpayers surrounding them will have to pay all of the money owed and provide for their own services.
So with all of this to unpack it is no wonder why the people don’t want it to go away. I am sure Disney World will not give up its autonomy.
Walt Disney would not want them to!
Well, state and federal governments seem to have no problems trampling all over the Second, Fourth, and Fifth Amendments all the time with little repercussions. Just turn the news on… That being true, I do not agree with the practice. The Bill of Rights is the law of the land. However, corporations aren’t the same as you or me expressing an opinion and this isn’t about one single item. As a lifelong Disney fan, former CM at WDW, and stockholder, Chapek was a fool to do many things he did and he put the company in this position.
You noted many things I’ve been saying, that the state and counties simply cannot afford to dissolve RCID. The taxpayers cannot adsorb the multiple billions in assets they’d have to pay Disney for.
Sooooo, the Governor wants to appoint all 5 members of the Board that would oversee the “new” District, which encompasses the theme park & entertainment business but anyone who has WORKED in said business types or even done work (say, fixing a leaky toilet) FOR said business type would be ineligible to oversee the business that ENCOMPASSES THEME PARK & ENTERTAINMENT. Maybe i’m missing something but that sounds like, “okay, we are opening a new restaurant but we are not allowed to bring in anyone who has owned, operated or worked IN a restaurant, nor anyone who has ever delivered a product to a restaurant. I can see them wanting to put “their” people on the board, 2 would be acceptable, 3 might be a concession but that caveat of who can be put on the board is just downright asinine!!!
It smacks of a particular former president appointing a new Postmaster General who not only had no experience within the USPS, but had also invested in direct competitors to the tune of millions of dollars. They don’t care about qualifications. This is a power grabbing retaliation for Disney having the courage to speak up against the actions of a wannabe dictator.
@Tee Fry that’s almost funny, but sad instead. Sorry, but you’re way off base.
I do know that the Reedy Creek fire and emergency are hoping that the state takes control. WDW has increased the area that they are supposed to service by over 20% and added the skyliner, but have failed to add staff or equipment. The chief has constantly asked for both for years now.
So the party of pro-business wants to run said business? This is a takeover in all but name. I’ve never heard of another company that is wholly controlled by a hostile state government. This is definitely going to the courts.
This move feels like a leash. Sure they walk side-by-side now, but Florida wants a way to bring Disney to heel if it heads in a direction it doesn’t like. Threats have never worked. They know this. BUT a majority board selected by whatever governor is in charge….. that is actually something that will work to force Disney’s hand once in a while. Bold Prediction (and I hope I am wrong) – this goes to the Supreme Court. Regardless of political beliefs, Reedy Creek should never have been under attack in the first place. Disney has been nothing but a fantastic lure for tourism and the revenue it generates for a state. Don’t bite the hand that feeds you.
Which is exactly the same for Disney foolishly getting involved in political nonsense!
@MrNico Uh. I think you read my post through the lens of your own opinion. Disney is a private company. Florida is a State Government. Disney has binding contractual agreements and the Right to Freedom of Speech without retaliation. Florida is circumventing those to obstruct what is legally Disney’s. Disney does great things for Florida. NOT the other way around. Maybe they will take Texas up on their offer to move everything there. 😉 I wish somewhere with less crazy heat certainly would…..
No, I am looking at it from decades of working in design and construction on government contracts and projects across the nation and in Europe and knowing just how much overreach we have at the state level and even more so federal level. This is not a freedom of speech issue because corporations do not have such like individuals do. Especially not publicly-traded companies.
I agree with you that the state has gone towards the extreme here, but it’s not just RCID affected by this legislation. From what I know having worked at WDW and in government, many of the other special improvement districts were not set up nearly as well as RCID, creating issues for the taxpayers. Like how many of these gated communities are built as private roads and utilities but then 20 years later when the residents don’t want to pay to repave the roads or replace a water main, they expect the city to take them over and the taxpayers to adopt the costs to do so. Sure, Disney is the biggest target and generates the most headlines. Yes, Disney’s development in FL is the ONLY reason the state is much of a tourist destination at all, aside from what the best beaches in the country and the Keys would bring in (not insignificant except as compared to WDW). You also have those who do not necessarily like WDW or don’t care but hate the traffic and the additional offsite infrastructure needed to handle the traffic going to and from WDW (never mind that much of it is Disney employees and support companies who pay taxes and spend a lot of money in the area too). I wouldn’t be surprised at all if part of this is trying to get Disney to help offset the expansion and maintenance costs for these roadways, which are a huge burden on the state in spite of federal funding for parts of the interstate sections.
In short, this is s lot more complicated than most people consider and the ridiculous single issue is simply an easy target. And while it is fun to dream, Disney is NOT going to relocate anything to TX. I think our gov would be perceived as hostile much like ole Ron is.
@MrNico You said that “This is not a freedom of speech issue because corporations do not have such like individuals do.” This is clearly wrong. In the Citizen’s United case, the Supreme Court stated that “There is simply no support for the view that the First Amendment, as originally understood, would permit the suppression of political speech by media corporations.” You can certainly disagree with the Court’s opinion in this matter, but that doesn’t make you right. You might also note that the First Amendment is in the US Constitution and that Florida is not the US government. However, in Gitlow v. New York (268 U.S. 652 (1925)), it was clearly established that the prohibition against governmental suppression of speech applies to the states (including Florida, obviously) as equally as it does to the federal government. There is also no distinction between whether the corporation is privately-owned or “publicly traded.” Simply put, the government of the state of Florida is precluded under established US Supreme Court caselaw from infringing on a corporation’s right to freedom of speech.
Hey Dolph, that’s an interesting (but not cool) aspect of the Citizens United ruling you don’t hear about. I wondered if there was more than just the campaign contributions aspect (which needs to be reversed). Corporations, unions, churches, etc are not people. Still doesn’t change the fact that this is not a freedom of speech issue. That may be considered one aspect of it, but it’s far more complex than the oft-maligned education bill.
Would setting parameters on board member appointees and taking the power of appointment set a precedent for this type of district from a US state government? I personally have felt like the entire issue has been a show, but I do not see how Disney wouldn’t fight back against this. What is the point of carrying the responsibility of the debt and infrastructure if they don’t get to have any say in who oversees the big picture operation? Also, why would you not want anyone with experience in theme parks on a board that oversees infrastructure that solely exists to support a massive theme park destination? That’s like taking the experts out of the expert panel. I know that seems to be a trend with certain leadership, but I still don’t understand the logic. I personally don’t think they should have a single say in the matter if appointments if the state is unwilling to take on any responsibility of the debt.