New Reedy Creek Board Lawyers Up for Battle with Disney World
At their second meeting, Reedy Creek replacement board discussed its new business, including an agenda item for potential legal challenges aimed at Walt Disney World. This post covers moves they’ve made thus far to lawyer up for litigation, what Disney did that precipitated this, and our commentary about how it all might play out.
Let’s start with a quick recap of what’s happened since we last covered the Reedy Creek Improvement District (RCID) saga. State lawmakers passed a bill that renamed the Reedy Creek Improvement District, while maintaining the special district’s taxing benefits and most of its unique authorities (with some exceptions). The key change was that the Governor of Florida would appoint the district’s board.
Governor DeSantis thereafter signed the bill into law, and appointed members to the newly-dubbed Central Florida Tourism Oversight District (CFTOD). At a press conference, DeSantis announced his five appointees, all of whom are political donors or loyalists, while also proclaiming that there’s a “new sheriff in town” and promising “accountability” for Disney.
Among many other things, DeSantis claimed that the board members would ensure that Walt Disney World will be “what Walt envisioned,” and gave examples of limits his appointees could impose and how future Disney content could be shaped.
Since then, the Central Florida Tourism Oversight District held its first meeting. That mostly revolved around firefighting, COVID-19 policies, and various grievances during a public comments section. Somewhat like a scene in Parks & Rec, but sincere and wholly unentertaining. The actual substance of the meeting was largely uneventful, in equal parts because actual governance is uneventful and because the new board members were unsure of the mechanics for conducting new business.
Someone must’ve bought a copy of Robert’s Rules of Order since then, as the second meeting of the Central Florida Tourism Oversight District was far more eventful. The new Board of Supervisors agenda for their March 29, 2023 meeting contained a plan to obtain “Additional Special Legal Counsel” (Item 8.2 starting on page 61 of the Agenda).
That reveals that the new Board of Supervisors has engaged four different law firms for the following purposes:
Cooper & Kirk will represent the District regarding certain constitutional and contract matters and potential legal challenges for matters involving the District that occurred under the prior board of supervisors and that may involve the Walt Disney Parks and Resorts U.S., Inc. and its affiliates and subsidiary and related entities.
Lawson will represent the District regarding certain constitutional and contract matters and potential legal challenges for matters involving the District that occurred under the prior board of supervisors and that may involve the Walt Disney Parks and Resorts U.S., Inc. and its affiliates and subsidiary and related entities.
Nardella & Nardella will represent the District on those matters specifically assigned by the District and accepted by the firm. Waugh Grant PLLC will represent the District and provide litigation and dispute resolution counsel for the District for any matters designated by the District.
According to reporting from the Orlando Sentinel and WESH’s Bob Hazen, the new Board of Supervisors took issue with a 30-year development agreement made between the Reedy Creek Improvement District and the Walt Disney Company prior to the new Board of Supervisors taking over.
Those agreements consist of restrictive covenants, license agreement, and developer’s agreement that were discussed at a public hearing by RCID on February 8. (The relevant documents can be found here.)
Central Florida Tourism Oversight District asserts that this renders them powerless to offer any oversight over Walt Disney World’s tourist district in Central Florida, effectively undermining their very name! The CFTOD contends that clandestine covenants were made, tying the hands of future board members for decades, according to a legal presentation by CFTOD lawyers during the meeting.
The agreements approved by the prior Board of Supervisors contains language that allows the agreement to remain in effect in perpetuity (or “until twenty one (21) years after the death of the last survivor of the descendants of King Charles III, King of England”) without regard for future action by the new board.
Disney really covered their bases with the agreement, dictating general maintenance standards and including a section titled “Prohibition On Use Of Disney Name.” Among other things, this provides that RCID and its successors (that means CFTOD) cannot use the “Disney” name, nor can it use “any of the fanciful characters (such as Mickey Mouse), designs, symbols, representations, figures, drawings, ideas or other intellectual property owned, developed or created by” Disney in any manner whatsoever. So I guess a King Mickey Mouse meet & greet at the next CFTOD meeting is really out of the question!
Upon discovering these restrictions, the CFTOD’s new Board of Supervisors voted to bring in outside legal counsel to examine the agreement, with one lawyer in attendance presenting on behalf of CFTOD suggesting they should hire more law firms so CFTOD can challenge Disney on even footing, using firms with “deeper bench.”
“We’re going to have to deal with it and correct it,” board member Brian Aungst Jr. said. “It’s a subversion of the will of the voters and the Legislature and the governor. It completely circumvents the authority of this board to govern.”
Board member Ron Peri added: “This essentially makes Disney the government. This board loses, for practical purposes, the majority of its ability to do anything beyond maintaining the roads and maintaining basic infrastructure.”
CFTOD board chair Martin Garcia argued that because of how rich and powerful Disney is, the Board of Supervisors may have to take an “adversarial position” against the company. Garcia further suggested that they might have to go all the way to United States Supreme Court in “protracted litigation” against the Walt Disney Company.
After the meeting was over, Disney released the following statement: “All agreements signed between Disney and the district were appropriate and were discussed and approved in open, noticed public forums in compliance with Florida’s Government in the Sunshine law.”
In terms of commentary, I don’t really know what to say. Throughout the Reedy Creek battle, every effort to predict specific outcomes based on legal analysis has proven futile. In our most recent article that touched upon the RCID takeover, I conceded that this was not how I expected the saga to play out.
With that said, there’s one way I’ve been right on the money all along: that this is not about the law, passing meaningful legislation, or the tough and thankless work of local governance. It’s about political theater; scoring a “win” in today’s era of ‘politics as team sports’ and the ongoing culture wars. The goal isn’t to govern; it’s to grab headlines and dominate the news cycle.
Serious analysis isn’t appropriate here because these aren’t serious people with sincere motivations. That’s likely why Disney opted against fighting this previously and instead put out deferential and conciliatory statements. The company’s calculus was that it’s not as easy to “fight” a one-sided culture war. The satisfaction was in the struggle.
For Disney, it was a matter of choosing the least-bad option and hoping they picked wisely, both in the short and long-term. As we pointed out previously, Disney would be correct assuming that it was dealing with rational actors. The interests of the Central Florida Tourism Oversight District and Walt Disney World would be aligned, as both would want to promote tourism and grow the local economy. However, that’s a fairly bold assumption in the actual current environment.
It’s difficult to say what’s happening here. Did Walt Disney World and Reedy Creek Improvement District execute agreements they otherwise wouldn’t have as an “insurance policy” to give them certainty during an uncertain time? Probably.
Were these agreements “unlawful,” “unusual,” or “suspect” as the new Board of Supervisors claims? Those words are not even remotely synonymous. Not a lot of precedent exists for a corporation to have its own special district that allows said company to act as its own government, so technically, anything that district does is “unusual.” That doesn’t make it unlawful or suspect, especially if those moves are made with transparency and in compliance with Florida law.
Moreover, I wouldn’t trust the assertions of board members who, as recently as this month, did not know how to accomplish the most basic component of the job that they were appointed to do. These individuals not knowing about the existence of an agreement does not make it unlawful, unusual, or suspect. I’ve never visited Massachusetts, but that doesn’t mean it doesn’t exist.
Based on the public record, the agreement between RCID and Disney was made out in the open, following proper notice and hearing requirements. It’s openly available for viewing online. Current CFTOD board members could’ve attended that meeting if they so desired, just as I could board a flight to Boston or wherever.
It’s also entirely possible that the new Board of Supervisors doesn’t believe what they’re saying, and that this is more grandstanding. They needed to find a way to remain relevant and in the spotlight, and not burdened by the unpleasantness of local governance or administrative law. (Ew.) Since Walt Disney World wasn’t helping them out by sticking with the fight, they found a new and exciting way to revitalize it. Beats doing actual work!
In fairness, it also doesn’t mean that the new Board of Supervisors is wrong. It’s entirely possible that these agreements are all of the things that the new-look CFTOD claims. Maybe Walt Disney World wanted to cease the public fight, but give themselves an insurance policy. That could be precisely why the company has released the conciliatory statements–because they knew it didn’t really matter and the new board would have its hands tied.
Perhaps the Walt Disney Company is playing 4D chess, and their calculus is that this new board challenging agreements in court is the better course of action than Disney suing the state. This route definitely does seem more boring and dull, and less likely to garner headlines and captivate the attention of more mainstream audiences. The thing is, we don’t know and won’t know until this is dragged out for more months and/or years, or until the parties tire of it and move on.
Honestly, even as someone who enjoys the Walt Disney Company’s inner-workings, palace intrigue and political machinations, I’m exhausted by all of this. Some of the verbiage in the Developer’s Agreement from February 8 is mildly humorous, but I know that amusement will quickly give way to more unpleasantness. Even as I wasn’t wild about the overall outcome of the Reedy Creek replacement, I was more than ready to put this whole saga in the rearview mirror, hoping that CFTOD just go about its mundane day-to-day business. The characters are one-dimensional and cliche, and the writing in this season has gotten tedious and lazy. If I want dumb drama masquerading as something more, I’ll just watch Succession.
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YOUR THOUGHTS
What is your reaction to the latest season of the Reedy Creek Improvement District drama? Keep the comments civil, and avoid personal attacks or perpetuating pointless culture wars. Respectfully debating the change is totally fine, but don’t attack others or troll for controversy. That’s why Facebook was invented.
Does anyone know who pays the legal bills for the board? My understanding is that the board is funded by taxes that disney pays. Is that an unlimited pot of gold because they have several different firms so the legal bills will rack up quickly. Are they able to spend on legal bills to the exculsion of other responsibilities (roads, firefighters, etc)?
I’d imagine that this agreement is part of a multi-pronged insurance policy – and that Disney has had backup plans of some sort in place ever since the beginning of WDW. There’s a reason why the cities of Bay Lake and Lake Buena Vista exist – those cities (which are still controlled by Disney) delegate their authority to the district, and could theoretically reclaim it at least in part.
With any luck, this political theater escalates through the summer and culminates in widespread calls to boycott WDW by the CFTOD. I’d like to propose the boycott be held, the week of Sept 18th (when we’ll be there!).
Clearly, the best thing we can do to help the new CFTOD is boycott and don’t go to WDW in September! Spread the word! 😀
I think Disney is inviting the new board to sue them. Possibly begging them to do so. The board may win in court (maybe), but they’ll lose in public opinion by suing beloved children’s characters. How can you sue Mickey Mouse?
I keep hearing the mouse godfather in Zootopia saying “You don’t sue the Mouse.” Or maybe it’s Don Corleone. Either way, someone is waking up with a horse’s head next to them.
The question I have is how (or does it?) affect Universal? Don’t these rules apply to them, too, based on the way the legislation was passed and the board set up? Or did the legislature manage to write a law that doesn’t have some unintended consequences somewhere?
It’ll be interesting to see where Disney stands on this year’s brand polls. They took a big hit last year, but I suspect they’ll strongly rebound this year. Still, there’s definitely a cultural divide on Disney right now–public opinion on the company is pretty far from unanimously positive.
None of this impacts Universal in any way, shape, or form. This district only encompasses Walt Disney World–the area within the archways, plus a little bit outside of it.
Thanks for this summary Tom. A few thoughts:
*I wonder whether the new board can just pass a rule invalidating the old board’s perpetual agreement (also, shout out to that sweet sweet Rule Against Perpetuities action). Laws get passed and later repealed all the time. I know this is a somewhat special case since the agreement, as I understand it, is something akin to a cross between a building permit and administrative diplomatic immunity. If it’s repealed though I don’t know what cause of action Disney could bring about to recover damages or force compliance…I don’t think you can sue for speculative future benefits as part of a takings claim.
*The ‘the agreement was signed in full compliance with Florida law’ stuff is disingenuous by Disney and, I think, disingenuous here too. Just as the new board reflects the will of DeSantis’ political cronies the old board reflected the will of Disney corporate cronies. The ‘sunshine law’ stuff is just a smokescreen for what was previously crony capitalism via regulatory capture. What they did prior to the handover was a bit funny and perhaps it helps ‘our side’ if one is pro-Disney here, but it’s still terrible governance if we support any real level of popular determination.
*This whole situation is wild politically, and while it’s a little fun it’s also plenty depressing. I don’t know if DeSantis has made his points as elegantly as he might, but I do think there’s an increasing disconnect between the cultural positions held by government, business, and NGO elites versus those of the median voter, and I’m personally uncomfortable with the degree of glee which follows the cultural disenfranchisement of citizens who can’t keep up with a corporate cultural zeitgeist that’s racing ahead of them. But I also find the fairly naked political retaliation by DeSantis unbecoming. DeSantis would probably answer that the same sort of political pressure is exerted on firms in the other direction all the time, and he might be right. But it still feels icky to my. Most of all though it’s wild how the political tribalism here has made sides flip 180-degrees from their stereotypical positions. I’m a libertarian who happily voted for DeSantis in 2022. But I LOVED the old Reedy Creek district. To me it’s like letting Vegas casinos handle their own security versus uniformed cops – it just functioned so much better than the default government-administered option. Like Tom said, there are lots of reasons a growing, successful Disney is good for Florida, and the original board, despite being lousy on good-governance standards, was the ideal way to align (quasi-)government interests with the corporation in a way that ultimately benefitted most Floridians. Put another way, I don’t necessarily want Walmart deciding the building codes for my house, but I certainly trust them to design better codes for WALMARTS than I do my local government, with all its associated knowledge limitations and petty corruptions. Yet in this fight between DeSantis and Disney the republicans are rooting for more powerful state bureaucrats while the democrats are essentially rooting for corporate deregulation. Again that would be an amusing realignment of political beliefs if it was in any way sticky, but sadly I don’t think most Floridians following this are thinking any deeper than DeSantis/Disney = good/bad. 🙁
Really good points, all around.
I don’t want to wade in too deep of political waters with your last point, but I’ve been wondering for a while how long DeSantis would keep this battle going. It seems like he’s going to keep “playing the hits” from the last 2 years through 2024. I understand that he’s pandering to the base right now as he needs to appeal to primary voters before pivoting to the general, but at what point does this not only stop working–but start being counterproductive? I truly don’t know. I feel like there were some ‘lessons’ learned from Youngkin’s win in Virginia that probably were not the correct takeaways, and are now being taken to extremes that are very much disconnected from the median voter. But I’ll stop there.
From my limited understanding, this is very different than repealing a law. It was a development agreement signed by BOTH Reedy Creek and Disney. Two parties. I would be surprised if only one party could nix that. That would be like…if I sold you a house, and a year after you moved in I decided I wanted it back and just made the declaration expecting you to hand over the deed.
Was that agreement made in good faith ethically? Ehhhh. I mean, it’s at least as ethical as what DeSantis did. Sounds like these two dogs are going to roll around in the mud fighting each other for awhile to no one’s real benefit (while wasting tons of tax dollars no less…)
ok, so if the new board can still impact infrastructure, what can’t they do? that’s most of what RCID did! did anyone think they could dictate what Disney did on its property, besides requiring to meet certain building codes?
How upset the new board is by this agreement tells me DeSantis always had more in mind than managing infrastructure and the fire department. If they said what the agreement specifically stops the board from doing, I missed it.
I think that the board members thought they would be able to impact more than just infrastructure, and that’s why they are so irate now.
To be fair, lawyers are far from the only analysts who will say when seeing a bottomless pot of money that what you need are more analysis! (I usually try and come up with something better than reviewing a recommendation to revise the color of the book that the report is in.)
“Somewhat like a scene in Parks & Rec, but sincere and wholly unentertaining.”
NEVER EVER watch (or re-watch) the second episode of P&R’s first season. It’s probably best to start with the last episode of Season 1 or go right to Season 2. Possibly the best turn-around of a show ever, which admittedly takes it out of consideration for best show ever.
Best summary so far tom!
“DeSantis announced his five appointees, all of whom are political donors or loyalists, while also proclaiming that there’s a “new sheriff in town” and promising “accountability” for Disney”
The fact that the Supreme Court fight is bandied about and that a “Moms of Liberty” founder is on the new board tells you all you need to know about the direction the board is willing to go. Unfortunatly, with all the performative bs that comes along with it.
All of this. Ron Peri said he thinks tap water turns you gay. These are imbeciles and whackos. Idk if I’ve been watching the same Disney movies as everyone else my whole life but these people are *clearly* the villains.
You nailed it.
If the new board can somehow force Walt Disney World to make annual passes available for sale again, I’ll be on their side.
It is time for Disney to pay for years of bad choices and pushing woke agenda over customer satisfaction. They are in the hole due to Igor bad choices like fox and agenda movies that suck. look at how well all the latest ones did.
What exactly is “woke agenda”?
Tell me you’ve watched The Wire?
Definitely the best pop culture reference I can think of that includes a reference to Robert’s Rules of Order…
Whether or not that line was a subtle nod, it made me laugh.
The Wire is the best television show of all time. Probably not my favorite, but in the running and what I would consider the best from an objective perspective. I loved it so much that I watched (and enjoyed, for what it was) Bosch due to all of the Wire alums. It was heartbreaking to lose both Lance Reddick and Michael Williams so young.
Love it!
I’m from just outside of Baltimore so that show hits extra hard. Agree with you on it being the greatest of all time from an objective perspective.
The descendants of King Charles rule against perpetuities clause has me convinced that Disney has been pretty quiet in this fight because they built in their insurance policy. If I were the new Reedy Creek board, I would not have wanted to admit I didn’t know about all this. How embarrassing.
Very bold to assume they’re capable of embarrassment. 😉
You’re a lawyer, does an agreement made by a now defunct and dissolved agency (not purchased through an agreement) hold any merit in the court of law? It’s like buying assets out of bankruptcy. It’s how GM got out of their pension payments in 2009, therefore bankrupting thousands of retirees. I too think it’s headline grabbing, but to throw around the Supreme Court threat surely means they’re optimistic Disney will lose in the end and that is what they’re putting out?
The short of it all is Disney is weak and vulnerable, like an elderly injured animal in the wild and the buzzards are circling. They should have focused on CMs and guests/fans long ago instead of stockholders wealth and Iger’s yacht and private jet reimbursements.
I’m no longer an attorney, but even when I was, this was not my area of expertise. With that said, my assumption is that the new board would be bound to the agreement as a successor, but that they’d have other recourse for providing meaningful checks and balances on the company, if that were what this was about, without ever entering a courtroom.
I think the reason they’d throw around the Supreme Court is because it makes for a more bombastic headline. People assume they’re serious or have a strong case, because why else would they mention that?
In the end, I don’t think Disney is weak as it relates to the parks & resorts business in Florida. Even against this backdrop, there’s tremendous potential for growth in the state–and I think all parties are aware of that.
Wonder if Disney has a say in how much money the new district board can spend on lawyers? Looks like the ball is back in DeSantis’ court.
I live in MA too, and Florida is more interesting….
Bill: I’m also from MA, and agree that this is even more grandstanding than Elizabeth Warren going after the Fed:)
Quite honestly, the way the new Board is approaching this by “over lawyering” shows that they don’t know what to do, and the only one that will win are the lawyers. For goodness sake, let’s find common ground and move forward. Each side did their Princess Dance, now let’s look at the families who would like to visit and don’t have to supplement legal costs to do so!~
Alyse, you’ve hit upon the real solution here, which is Disney having Jerome Powell be its representative in future questioning by this board! 😉
I think this move by The Walt Disney Company is hilarious. I was very surprised they didn’t fight it harder, but now we know why. I think it’s going to be hard to overturn something that was done legally and out in the open.
The one thing I’ve never understood is what the FL governor thought he would control by taking over the district in the first place. Was he trying to save the purple signs before they are all switched to blue?
Your second paragraph assumes there was an actual, substantive reason for doing this in the first place. The fight itself was the purpose.
I’m glad I’m not the only one who doesn’t get the appeal of Succession 😉
I’ve watched 2.5 seasons of that show at the behest of friends who have encouraged me to be patient and give it time because it (supposedly) gets better.
It’s right up there with ‘White Lotus’ for me as shows that think they have a lot more to say than they actually do. At least White Lotus was fun–Succession is just tedious.
…You lost me at the end there. I *loved* White Lotus, although mostly as a character study as opposed to social commentary. And like you said, it at least as a sense of fun about it. If the entire series was reverse engineered as a way to get Jennifer Coolidge on that yacht in season 2 it would be fine with me.
I think it’s very possible and maybe likely that Disney just decided to wait it out knowing full well this agreement meant they were safe for now at least and they could hold out until rational people were in charge of Florida. Granted, that isn’t happening anytime soon, but all they have to do is draw the case out as long as possible
“It’s also entirely possible that the new Board of Supervisors doesn’t believe what they’re saying, and that this is more grandstanding.” That’s almost certainly true, and when someone says they are going to “go all the way to United States Supreme Court” that’s usually an indication that they are just saying words with no meaning. The fact that culture wars exist because demonizing other people is an effective route to power makes me sad..
Yep.
And the reality is that if this case does go that far, it’ll take a long time to get there. By that point, its value as culture war fodder will be fully exhausted.
I lived in MA for 45 years. it exists
…when was the last time you were there?
(That probably works much better as a Monsters Laugh Floor joke.)
So you claim. How do I know you exist?
The Boston Bruins exist. Don’t know about the rest of MA, though 🙂