DeSantis to Take Control of Disney’s Florida District Without Dissolving It

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In Florida Gov. Ron DeSantis’ latest swing at The Walt Disney Company in retaliation for criticizing his legislation, state lawmakers unveiled a bill this week to strip the entertainment company of its unfettered control over Walt Disney World Resort and the surrounding area near Orlando, Fla., while still keeping the storied company on the hook for its existing debt.  

Since the 1960s, Disney has self-governed the area that houses the resort, a 25,000-acre site with special tax status called the Reedy Creek Improvement District. The distinction allows the company to essentially function as a municipal government and unilaterally manage the area’s sewage system, transportation, zoning and security. 

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The new legislation, sponsored by Republican Rep. Fred Hawkins, would grant Gov. DeSantis the power to appoint all five members of the district’s governing board. Until now, Disney has chosen who sits on the board.

The 189-page bill marks the latest escalation in a feud that ignited last year after former Disney CEO Bob Chapek criticized legislation that Gov. DeSantis championed. The proposal, which bars teachers from discussing gender and sexuality through the third grade, dubbed the Don’t Say Gay bill by its critics, was signed into law last year. 

In retaliation for Disney’s opposition, Gov. DeSantis, a Republican, ordered a special session of the state legislature to look into ways to eliminate Disney’s special tax status. 

The new bill does not eliminate Disney’s special status, a move likely designed as a workaround to wrest control of the district away from Disney and transfer it to Gov. DeSantis, while still keeping the company liable for its outstanding debt. 

Disney’s Reedy Creek district has about $1 billion in outstanding municipal bonds. If dissolved, the debt would transfer over to the “local general purpose government,” according to Florida’s Uniform Special District Accountability Act.

Thanks to its status as an independent special tax district, Disney pays taxes to itself to manage the area and to the two neighboring counties. Between 2015 and 2020, the company paid an average of $45 million in property taxes to Orange and Osceola counties, and in 2021 it paid itself $105 million, according to Scott Randolph, tax collector in Orange County. 

If Reedy Creek were disbanded, Disney would no longer be obliged to fork over the property taxes it pays itself, leaving the counties on the hook to run the municipal services. 

Given Republicans’ control of both legislative houses, the proposed law is likely to pass, though it’s unclear what Disney will do in response. 

In a statement to CNN, Jeff Vahle, the president of Walt Disney World Resort, said the company is “monitoring the progression of the draft legislation, which is complex given the long history of the Reedy Creek Improvement District.”

Julia Echikson can be reached at jechikson@commercialobserver.com