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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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. 😉