Earlier this year, The Walt Disney Company and Florida Governor Ron DeSantis got into a heated battle over the passing of Florida’s “Parental Rights in Education” bill. The bill prohibits kindergarten through 3rd-grade educators from talking about things like gender identity and sexual orientation. Disney and its CEO Bob Chapek spoke out against the bill and said the company would work with legislators to overturn it. In turn, Governor DeSantis and Florida Republicans voted to dissolve the Reedy Creek Improvement Act, essentially stripping Disney of its self-governing status.
There were — and still are — a lot of questions surrounding the legality of dissolving Reedy Creek, along with all the things that need to happen in terms of the debt and bonds that Reedy Creek has. However, things are still moving along as planned and Reedy Creek is set to be dissolved in June 2023.
Even though Reedy Creek may no longer exist in under a year, the district is still making deals to help ease fears of the consequences that will come from its dissolution. On October 3, Reedy Creek entered into a reimbursement agreement with Duke Energy Florida, LLC — one of the top power providers for Reedy Creek.
That credit line will ensure that Reedy Creek will be able to pay its May 2023 bill should it be dissolved on June 1, 2023, per the legislation, district officials told Orlando Business Journal.
“From Duke’s perspective, they want to make sure there’s a guarantee they get paid for May’s charges in June if we are not here — it’s a safety net [for Duke],” John Classe, district administrator of Reedy Creek told OBJ. “It makes smart sense for Duke to make sure they are covered from a business perspective.”
Ana Gibbs, spokeswoman with Duke, told OBJ: “A letter of credit is a standard contractual mechanism to secure obligations between parties. Duke Energy requests letters of credit in a number of different transactions as it deems appropriate. Duke Energy does not typically disclose the details surrounding negotiations for commercial transactions such as this.”
Most of Reedy Creek’s electrical power — roughly 90% of the output — comes from utility providers like Duke Energy and others. The remaining 10% comes from solar power. That power then is distributed to the district’s customers including the Walt Disney World properties, third-party hotel and retailers and residents in the cities of Bay Lake and Lake Buena Vista.
It still remains to be seen what will happen once June 2023 actually rolls around. Ron DeSantis has not outlined a clear plan, but has said that he is considering a special district — like Reedy Creek — to oversee the area that Reedy Creek once oversaw. DeSantis has also shared that the debt Reedy Creek has accumulated will not be passed along to Florida taxpayers, although he has not said how that will happen.
Disney has not commented on the dissolution of Reedy Creek, which has been around since 1966.
A Miami attorney has refiled a suit against Florida Governor Ron DeSantis regarding potential tax liabilities resulting from the pending dissolution of Disney’s World’s Reedy Creek Improvement District.
The suit was filed by William J. Sanchez of Miami-based William J. Sanchez & Associates P.A., on May 16 with the Eleventh Judicial Circuit Court in Miami-Dade County on behalf of Osceola County residents Michael, Leslie, and Eduardo Foronda and Orange County resident Vivian Gonzales. The suit alleges that taxpayers’ rights will be violated by Gov. DeSantis’s new law aimed at dissolving Florida special districts created before 1968, which includes Disney’s Reedy Creek Improvement District.
The lawsuit names Gov. DeSantis, as well as Jim Zingale, Executive Director of the Florida Department of Revenue and Laurel M. Lee, former Florida Secretary of State.
Sanchez refiled the case in state court after a judge dismissed a similar case on May 10. That suit alleged similar damage for the plaintiffs if the special districts are dissolved.
The suit concerns a bill Governor DeSantis signed into law on April 22, 2022, which will effectively dissolve Disney’s Reedy Creek District, as well as a handful of other special districts in Florida that had original inception dates before 1968. The passing of the law has led to speculation about the potential tax liability that could fall on residents of Orange and Osceola Counties, regardless of the fact that DeSantis has said that such a predicament will not take place.
According to the Orlando Business Journal, Disney’s special district encompasses 39 square miles. The entire area is governed by the Reedy Creek Improvement District, which acts “with the same authority and responsibility as a county government.” It includes the cities of Lake Buena Vista and Bay Lake and boasts its own fire department and staff. It also contracts law enforcement from local counties.
The Orlando Business Journal states that the lawsuit comes with a complaint:
The complaint filed with the lawsuit alleges a Taxpayer’s Bill of Right violation and that the state infringed on the plaintiffs’ constitutional rights for due process — or the ability to be involved in proceedings that could have an effect on them.
“Plaintiffs ask for the opportunity to be heard since their rights are clearly being violated, and ask for the court to issue a declaratory judgment,” the complaint reads in part.
Governor DeSantis has had a lot to say about the dissolution of Reedy Creek.
“There’s a whole bunch of different things that we will be able to do,” he said from the podium at Seminole State College on May 16. “I’d much rather have the state leading that effort than potentially having local governments” lead the effort.”
“Say the state is in charge and has appointees of the governor that would be in charge of the tax rates for Disney; that seems over the top,” said Aubrey Jewett, associate professor and assistant school director at the University of Central Florida’s School of Politics, Security and International Affairs. “Politically, it would look like the state is exacting their last pound of flesh from Disney. Especially if the governor has a say on the new board members to determine the tax rates, roads, and utilities, and Disney had no say.”
For months, Florida Republicans have been in a heated battle over Florida’s passing of the Parental Rights in Education bill. The Walt Disney Company denounced the bill before its passing and after. Florida Republicans retaliated, passing a bill that will end the Reedy Creek Improvement Act of 1967. The dissolution of Reedy Creek will put an end to Disney’s autonomy and make them beholden to the state for things like building permits. Many are questioning the legality of the bill. And now, another group is getting in on the action — Florida taxpayers.
On May 4, taxpayers who live in the counties surrounding the Walt Disney World Resort — mainly Osceola County and Orange County — filed a lawsuit against Florida Governor Ron DeSantis. The taxpayers are claiming that Governor DeSantis violated their rights when he signed the law that would dissolve Reedy Creek.
In a complaint filed on Tuesday in Florida federal court, residents who live near Disney World argue they and other taxpayers will be burdened with at least $1 billion in Disney’s bond debt if the state follows through with its plan to dissolve the Reedy Creek Improvement District. They seek to block the law. “It is without question that Defendant Governor DeSantis intended to punish Disney for a 1st Amendment protected ground of free speech,” reads the lawsuit. “Defendant’s violation of Disney’s 1st Amendment rights directly resulted in a violation of Plaintiffs’ 14th Amendment rights to due process of law.”
“Stripping Disney of this special district designation will move these major regulatory burdens unto the county, thereby increasing the Plaintiff’s taxes, and will cause significant injury to plaintiffs,” the complaint states.
Right now, Reedy Creek is able to essentially function as its own government. It pays the state hundreds of millions of dollars in taxes, but does not have to get permission from the state for things like construction permits. Since Reedy Creek functions independently, it is also responsible for all the fees incurred for things like police, fire, and medical. It is also financially responsible for all of the repairs that the Walt Disney World Resort needs, whether it is at a hotel, Disney Springs, or anywhere around Disney’s 25,000 acres.
If Reedy Creek is dissolved, all of that financial burden falls on the taxpayers. While residents across the state may see a small increase in their taxes, most of the money will come from Osceola and Orange Counties because that is where Walt Disney World is located. Not only will those counties be responsible for a majority of Disney’s future debt, but they are also responsible for Reedy Creek’s past debt.
Reedy Creek operates at a loss every year and currently has about $1 billion in bond debt. Since those bonds can’t be redeemed until 2029, should DeSantis want to dissolve Reedy Creek early, the state would be legally required to pay off those bonds. DeSantis has said that the state will dissolve Reedy Creek, but will not pay the bonds — he has yet to say how the state will get around the law.
The lawsuit also states that the Florida Supreme Court has created a statute when it comes to people who are not part of a contract suing over that contract. The Florida Supreme Court has allowed taxpayers to sue if a breach of a certain contract will injure them. The taxpayers are also suing over the potential loss of thousands of jobs.
The taxpayers in the lawsuit believe that Governor DeSantis is violating the law — and their rights — because it wants to punish Disney for exercising its First Amendment Rights. Neither Disney nor the office of the Governor has responded to the lawsuit at this time.
It has been almost two weeks since Florida Governor Ron DeSantis signed a bill that will officially dissolve the Reedy Creek Improvement District in June 2023. The bill was the culmination of the weeks-long battle between DeSantis and the House of Mouse over Florida’s controversial Parental Rights in Education bill. The bill has been dubbed the “Don’t Say Gay” bill, and critics believe it unfairly targets the LGBTQ+ community. Disney CEO Bob Chapek has said that Disney will work to see the bill struck down in the courts.
While DeSantis has signed the Reedy Creek bill and said that it will go through, he faces an intense and steep, uphill legal battle to actually made that happen. There are a number of Florida laws standing in his way, and he knows that. Disney also knows that. Disney sent a note to shareholders not long after the bill was signed, saying that it plans to continue with current operations while exploring all the legal options it has available.
One of the biggest issues that DeSantis faces in dissolving Reedy Creek is the bonds that were issued by Reedy Creek just 4 years ago. Those bonds cannot be redeemed until at least 2029, so if Florida wants to dissolve Reedy Creek it would be responsible for paying out those bonds — which are more than $1 billion. Florida law dictates that the cost would be passed on to taxpayers, but DeSantis has said he will not do that and that Reedy Creek will pay.
In a new report from The Washington Post, insiders are saying that DeSantis knows that he cannot promise taxpayers that they won’t be stuck with the bond debt bill. They claim that DeSantis is working with Reedy Creek, so he can save face with his fellow Republicans and claim victory without that actually happening. Per The Washington Post:
That’s what worries local government officials, who fear that $1 billion in Disney bond debt will be dumped on them. Some analysts say the new law could mean a 20 to 25 percent property tax hike in nearby Orange and Osceola counties, which local government officials said would be “catastrophic.”
Disney has otherwise remained publicly silent about the feud and did not respond to requests for comment for this article. Sources familiar with the negotiations, who requested anonymity to discuss private negotiations, say the company’s lobbyists and lawyers have been working behind the scenes to find a solution that would allow DeSantis “to save face” and continue to claim a victory over “woke culture,” while in reality doing very little to impede the company’s massive operations in Florida…
DeSantis has brushed aside what local officials say could be calamitous consequences if Reedy Creek, which operates as its own county government, is eliminated. A statement from his office says “it is not the understanding or expectation” that the action will increase taxes. But DeSantis and his Republican allies in the legislature have not explained who will pay Reedy Creek’s $1 billion debt, or cover the $163 million in taxes it collects every year to pay for many of its theme park functions.
At this time, Governor DeSantis has not said how he plans to get around current Florida law when it comes to Reedy Creek’s debt and its bond obligations. However, his spokesperson has said that a plan will be released in the next few weeks. It has also been shared that DeSantis is considering creating a special district headed by his own appointees to oversee Walt Disney World.
Experts are also saying that, even if the taxpayers in Orange and Osceola Counties — where Walt Disney World is located — don’t have to pay the bond debt, their taxes will most likely go up because of the attorney’s fees incurred by the state while they fight Disney.
This is an opinion piece that was posted on DisDining.com recently and I would echo these sentiments.
Disney has lost its conglomerate, corporate mind lately, and public, “official” responses voiced by C-level Walt Disney Company executives rather than the voices behind those responses can be likened to preschool tantrums that ensue when playtime is over, the cookie jar is empty, and everybody is called on to help clean up so we can all go home.
Burbank, California-based Disney has about as much business sticking its head up over the fence around Florida’s backyard and telling Floridians what they should be doing as that neighbor three doors down has in ringing your doorbell to offer unsolicited parenting suggestions while her own children blaze down the street barefoot, half-dressed, yelling obscenities at the top of their lungs.
It’s just not her call. And it’s not Disney’s.
Disney’s brazenness in crossing the line into Florida politics is, in a word, obnoxious. A different scenario would manifest itself if the legislation in question had to do with business practices or taxation. After all, some of Disney’s most lucrative business ventures make their home in the Sunshine State.
At that point, Disney would be bound to take a stand and to take productive measures for or against such legislation, much like your neighbor has every right to show up on your front porch and see that you get your kids off her lawn, as they are spray-painting her rose bushes and mudding up her walkways.
But the fact that The Walt Disney Company has danced into Florida’s educational legislation waters makes Disney look even more like the fools in the whole culture war/cancel culture Disney-DeSantis Debacle.
Florida’s Parental Rights in Education law is (shocker) an education law, and Disney’s boldness in digging its heels in the ground on a law related to parents’ rights as they pertain to certain aspects of their children’s education and the curriculum upon which classroom instruction is based is nauseating, embarrassing, and irritating.
Disney very obviously has little to no experience in staying in its proverbial lane. No other out-of-state corporate conglomerate would even consider showing up at another state’s front door and handing down edicts about how things should be run and done–not when they have NOTHING to do with business practices or taxation that would clearly affect the aforementioned conglomerate.
And no other out-of-state corporate conglomerate would be permitted to do so. They’d never even be afforded the limelight with which Disney has been drenched since Disney CEO Bob Chapek made his SECOND “official” statement on behalf of The Walt Disney Company in response to Florida’s education curriculum legislation.
Yes, that was his second statement.
Consider that Chapek did make a response in the very beginning, though he was accused of remaining silent. The embattled Walt Disney Company CEO Bob Chapek made a statement when Florida’s House Bill 1557 wasn’t yet law, but mainstream media didn’t report on that fully.
In what may have been his most sound business decision since taking the helm at The Walt Disney Company from veteran Bob Iger in February 2020, as Florida’s bill began to gain traction in the Florida legislature, Bob Chapek told Walt Disney Company employees that Disney would not take a stance as a company one way or the other.
“As we have seen time and again, corporate statements do very little to change outcomes or minds,” Chapek wrote to employees. “Instead, they are often weaponized by one side or the other to further divide and inflame. Simply put, they can be counterproductive and undermine more effective ways to achieve change.”
Chapek knew that taking a public stance as a company would only create division, rather than creating positive change. Perhaps he also realized Disney had no business creating a campaign against legislation that affects parents of school-aged children and their school-aged children.
Again, it was perhaps the most sound decision Chapek has made during his entire tenure as the head of Walt’s company.
But what’s reported is that Chapek was silent on the bill. The truth is that the University of Michigan MBA grad made a statement to his employees about the frivolity of taking a stance against the bill, as he clearly felt there were better ways to pursue change. He wasn’t aloof, and he never asked his employees to be aloof. It is his job to make decisions that afford the company the best outcomes. (Don’t get us started on all the price increases in the parks.)
But his decision wasn’t met with approval from some who then proceeded to put the pressure on Chapek to not only make a statement but to make the statement they wanted to be made. According to a Cast Member with Disney who is currently running for office, the majority of Disney employees weren’t inflamed by the Parental Rights in Education law, but the company caved to the demands of some while ignoring the majority completely.
Days later, the same Disney CEO who said it was unwise for the company to take a stance, as it would prove divisive and hinder positive change, took a stance against the bill, suddenly calling Florida’s Parental Rights in Education law “a challenge to basic human rights.”
And sadly, that’s just the tip of the iceberg.
The embarrassment only grows in those rare moments when the dust settles briefly, the monotonous sounds of the hum-drum and the riff-raff fade intermittently, and the truth about Florida’s new law becomes glaringly real: the “Don’t Say Gay” bill doesn’t mention the word “gay” in its language even once, nor does the bill have anything under the sun to do with “not saying the word ‘gay’”.
But because corporate America, big business, and the federal government are awarded the role of content manager for almost every single news outlet in the country, many would never know that. Some have even taken things so far as to that the “Don’t Say Gay” bill is a legislative measure aimed at making the use of LGBTQ terminology a punishable offense.
The very idea of such a measure is preposterous. It’s idiotic.
And it’s irritating to the point of inflammation: an inflammation that only grows and spreads as the realization takes hold that the majority of those preaching opposition to Florida’s law to protect the rights of parents of school-aged children have never read a single line of the seven-page bill.
According to Poynter.org, claims about Florida’s Parental Rights in Education law that falsify points about the law can be attributed to its nickname, the “Don’t Say Gay” law, which was coined by a group called Equality Florida, a group that calls itself “the largest civil rights organization dedicated to securing full equality for Florida’s lesbian, gay, bisexual, transgender, and queer (LGBTQ) community” on its Facebook page.
But the moniker is a misnomer.
Florida’s new legislation does not prohibit the use of the word “gay” in any way. It prohibits classroom instruction about sexual orientation and gender identity which, by the way, also encompasses classroom instruction about heterosexuality. And it applies to Kindergartners, first graders, second graders, and third graders. (That means we’re talking about children between the ages of 5 and 9 years old.)
I would be infuriated if my 6-year-old were being taught ANYTHING related to sex. First, that’s far too young. And second, that’s my role as a parent. Period.
But there’s another piece to the whole Disney-DeSantis debacle that’s equally as ridiculous as Disney’s sense of entitlement, and that is Governor DeSantis‘s attempts to retaliate against Disney for its stance. While it’s true that Disney has no place in Florida’s education legislation, it’s also true that the company is entitled to its opinions and its statements.
But the moment DeSantis met with Disney’s disapproval, plans for retaliation began. The proposal to dissolve the Reedy Creek Improvement District magically manifested almost instantly, and from that moment on, it was full steam ahead.
Governor DeSantis is right. Corporations and companies do not run the state of Florida. But neither should government officials who have the thought of using their positions to impose retaliatory measures against those who oppose their decisions, let alone those who push forward (and with great haste) in bringing about those measures.
Then again, some now believe that DeSantis’s decision to retaliate against Disney had little to do with his stance against corporations trying to dictate to states how they should conduct business and more to do with a 2024 Presidential bid for DeSantis. Taking on Disney, some ascertain, allegedly allows Governor DeSantis to prove his prowess, his abilities, and his willingness in taking on big business.
If so, it only adds to the despicable nature of the entire Disney-DeSantis debacle dumpster fire, the flames from which can only be put out by true leaders on both sides who are unafraid to stand up and work together to find a commonality that will make their partnerships much stronger and much more effective than their differences.
