Disney could be headed toward some MAJOR changes in 2023.
Bob Iger is back as CEO, a proxy battle is underway related to seats on Disney’s Board of Directors, and NEW attractions will be opening soon. But, for today we’re focusing on another situation that is plagued with uncertainty and could significantly impact Disney’s way of operating.
We’re talking, of course, about the latest on Disney World’s Reedy Creek Improvement District (RCID or the “District”). For those unfamiliar with it, the District was created over 50 years ago and essentially functions as its own county government in Florida. The arrangement has allowed the majority landowner in the District — Disney — to have a tremendous amount of control over the land on which it operates in Orlando.
But in 2022 Florida legislators passed a bill that was signed into law by Florida Governor Ron DeSantis that will dissolve the RCID effective June 1st, 2023. The end date is quickly approaching, so just what’s happening with this situation now? Here’s what you need to know.
Reedy Creek Lawsuit
We’re still waiting for updates on the lawsuit filed by Central Florida residents against Governor DeSantis related to Reedy Creek (EDUARDO FORONDA ET AL VS RON DESANTIS ET AL, 2022-009114-CA-01, filed in Miami-Dade County, Florida).
The last update on this lawsuit was that an unopposed motion for a change of venue was filed in December 2022. Thus far, the court’s online docket does not reflect that an order on this motion has been entered and the case is still marked as “open.” We’ll be on the lookout for more details.
Potential Replacement District
Many possibilities have been suggested when it comes to what will ultimately happen with the RCID and what could replace it. Initially, some seemed to suggest that the RCID would be recreated in the form of a new district that would essentially allow Disney to have many of the same powers while removing some of the more “extreme” powers from the RCID (like the ability to create a nuclear power plant) to give DeSantis the appearance of a “win.”
Some also suggested that Iger’s return and Chapek’s exit could help smooth over the situation. But DeSantis’ office has insisted that they will not be doing any “u-turns” when it comes to the Reedy Creek dissolution. So…what now?
Well, we got a much clearer image of what DeSantis has in mind thanks to a public notice filing made on the Osceola County website. The filing, which came from Governor DeSantis and his office, notified individuals in the county that they have an intent to “seek legislation before the Florida Legislature…of an act relating to the Reedy Creek Improvement District, Orange and Osceola Counties.”
The notice details some of what DeSantis would change. The primary goal is to increase “state oversight, accountability, and transparency of the District.”
The notice also mentions that the Governor, through this legislation, would seek to:
- Revise “the selection process, membership qualifications, and compensation for the governing body of the District“
- Ensure “debts and bond obligations held by the District remain with the District and are not transferred to other governments by retaining the District’s authority related to indebtedness and taxation”
- Revise authority when it comes to local permitting and regulation
- Revise the regulatory framework and structure
- Review the district’s remaining powers and revise “exceptions to general law and certain special acts”
- Describe the district boundaries and name
- Set a date on which these policies will go into effect
In other words, there could be some significant changes in store.
According to the Orlando Business Journal, DeSantis’ Communications Director Taryn Fenske issued a prepared statement that said “The corporate kingdom has come to an end.” The statement continued, “Under the proposed legislation, Disney will no longer control its own government, will live under the same laws as everyone else, will be responsible for their outstanding debts, and will pay their fair share of taxes. Imposing a state-controlled board will also ensure that Orange County cannot use this issue as a pretext to raise taxes on Orange County residents.”
The key here seems to be the fact that Disney would no longer control its own government, as it is already responsible for its outstanding debts (so there would be no change there) and they do in fact pay taxes. As WFTV notes, “Disney still pays the same property taxes levied by the government and the school district that every other landowner pays. Orange County, for example, collected $40 million from the House of Mouse in 2021.”
Who will propose this legislation supporting the goals of DeSantis when it comes to Reedy Creek and when exactly when it will be introduced has yet to be shared.
Others Have Weighed In
So what do others have to say about the dissolution of the RCID? According to the Orlando Business Journal, Orange County Mayor Jerry Demings has shared that any of the state’s claims about Orange County raising taxes on its residents is false. Demings shared, “We look forward to working with the Reedy Creek Improvement District for many years to come. Any statements made by state officials to suggest that Orange County would use the dissolution of the Reedy Creek Improvement District as a pretext to raise taxes on its residents is reprehensive and baseless.”
Aside from clarifying or pushing back on certain issues, some have indicated their support for the Governor’s plan. The Reedy Creek firefighters actually back this plan. In fact, Tim Stromsnes, the communications director of the Reedy Creek Professional Firefighters Local 2217, has said, “Anything has got to be better than what we currently have.”
According to the Orlando Business Journal, Florida Representative Carolina Amesty (R-Orlando) also supports DeSantis’ efforts. Amesty shared, “The entire Disney complex has played a critical role in our state’s economic success, but size and success should never be used as an excuse to provide any company with special exemptions from rules and regulations that all other Florida corporations are obligated to follow.”
Amesty continued, “I believe that all Florida corporations should be treated equally, and I support Gov. DeSantis’ latest initiative to bring the Reedy Creek special governing district under state jurisdiction.”
What will the future hold for the RCID? Much remains to be seen and a few moving pieces could result in some changes. Interestingly, the representative who sponsored the bill to dissolve the RCID — Randy Fine — has announced that he is running for state senate next year. (Orlando Sentinel) Fine, however, was also the one that indicated that the removal of Chapek as CEO made it more likely ‘that something will get sorted out’ over the district. He previously said, “Chapek screwed up, but Bob Iger doesn’t have to own that screw-up.”
With Bob Iger back as CEO, we’ll have to see just how things play out and whether he can change Disney’s relationship with DeSantis and Florida politicians.
The next “regular” session for the Florida legislature starts on March 7th, 2023, but a special session before that could potentially give us some news. We’ll be on the lookout for updates.
Click here to see our full post about how important Disney’s relationship is with Ron DeSantis for the future of the parks
What Reedy Creek Is Doing to “Prepare”
Disney isn’t sitting back as it waits for updates on what may happen with Reedy Creek. Instead, it is taking steps to set plans in place that could promote more growth in the parks.
In January 2023, a meeting was held by the two cities that make up the RCID — Lake Buena Vista and Bay Lake, FL. During the meeting, the officials from those cities “approved a resolution to consider changing land-use regulations to accommodate the district’s comprehensive plan,” according to the Wall Street Journal.
The RCID has a comprehensive plan that serves as its 10-year guideline for future developments. It was adopted some time ago. According to the Orlando Business Journal, the 2032 Comprehensive Plan allows for the following maximum allowed uses over the next decade:
- “One major theme park and two minor theme parks
- 14,000 guest rooms mixed-use/hotel/resort/commercial entertainment
- 1,515 hotel/resort guest rooms
- 150,000 square feet of office space
- 1 million square feet of retail/restaurant space”
By approving certain resolutions to consider changing land-use regulations, the cities are taking another step forward in allowing this future development to potentially take place, should Disney decide to go forward with it at one point.
Essentially, while Disney has mostly friendly faces on the boards from which it must seek approval, it seems to be tackling certain issues to set itself up for success later. Better to get approval from those you know are more open to your plans than leave it all up to an uncertain future.
According to the Orlando Business Journal, one meeting of the RCID served as the “first reading of modifications to the land development regulations made last year.” Eryka Washington Perry, a spokeswoman for Reedy Creek Improvement District, shared, “There were minor administrative amendments made to be in compliance with the 2032 Comprehensive plan.”
While there are “no plans under review” to actually make some of the major things discussed in the 2032 Comprehensive Plan (in terms of building a new major theme park, etc.), taking these steps now could place Disney in a more secure position in the future.
The Comprehensive Plan notes that there are more than 13,500 acres of undeveloped land within the District, but some of the areas most suitable for development include areas “west of Disney’s Animal Kingdom, between World Drive and Interstate 4 between Osceola Parkway and U.S. Highway 192, east of the Magic Kingdom parking lot, [and] west of Disney’s Hollywood Studios,” among others.
There’s a lot up in the air when it comes to the RCID. What a replacement district could or ultimately will look like has yet to be fully determined. But we should get more answers soon as the June 2023 dissolution date approaches.
We’ll continue to look for more updates and let you know what we find, so stay tuned for the latest news.
Click here to see one celebrity’s comments on Bob Iger’s fight for the “future of Disney” with regard to the proxy battle
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What do you think will happen with the RCID? Tell us in the comments.