Disney’s Lawsuit Against Governor DeSantis & Obscure Reedy Creek District Explained

The Walt Disney Company and Florida Governor Ron DeSantis have been in disagreement since summer 2022 when Disney paused all political contributions to Florida and spoke out against the legislation HB 1557 titled the “Parental Rights in Education” bill which is more widely known as the “Don't Say Gay Bill” by critics. This move began a cascade of political back and forth focused on the Walt Disney World controlled Reedy Creek Improvement District.

This back and forth has resulted in a lawsuit the Walt Disney Company is bringing against the Florida governor where they allege DeSantis has waged a “relentless campaign to weaponize government power” against the company since Disney spoke out against this legislation.

Let's breakdown the allegations from the Walt Disney Company, what exactly the Reedy Creek Improvement District is, and how this may or may not impact guests visiting Walt Disney World. This is the explainer on Walt Disney World vs Florida governor Ron DeSantis for anyone who has not been following everything up to this moment.

If you want to skip the general overview, click here to read about how the Disney v DeSantis lawsuit and Florida law might impact your Walt Disney World trip.

Walt Disney Company Sues Gov. DeSantis

The feud between the Walt Disney Company and Florida Governor Ron DeSantis reached new heights when Disney filed a federal lawsuit against Gov. DeSantis on April 26th 2023. The lawsuit filed by Disney alleges that DeSantis has run a “targeted campaign of government retaliation” to act as “punishment for Disney's protected speech.” The lawsuit alleges that the action by Florida “threatens Disney's business operations, jeopardizes its economic future in the region, and violates its constitutional rights.” You can read the full copy of the compliant from Disney to see more of the language surrounding this claim. Further quotes from Disney in this article are directly cited from this file.

Disney breaks down their argument in the legal complaint alleging that the company has been”forced to defend itself against a State weaponizing its power to inflict political punishment.” Disney is citing the voiding of previously approved development contracts by the new district's board of supervisors in the Reedy Creek District (the local government overseeing the land Walt Disney World resides in) appointed by DeSantis. This new board of supervisors appointed by DeSantis voted to declare these development contracts “void and unenforceable.”

According to Disney's complaint, this move is the latest in a sequence of “government action [that] was patently retaliatory, patently anti-business, and patently unconstitutional.” The complaint also made note that these development contracts would provide billions of investment dollars and thousands of jobs for the state of Florida.

The complaint ends by stating, “Disney regrets that it has come to this. But having exhausted efforts to seek a resolution, the Company is left with no choice but to file this lawsuit to protect its cast members, guests, and local development partners from a relentless campaign to weaponize government power.”

Ultimately, the outcome the Walt Disney Company is seeking is for the federal court to rule that this latest legislative step by the DeSantis-appointed board was unlawful and unenforceable.

Gov. DeSantis Response to Lawsuit

The office of the Florida governor responded immediately to Disney's lawsuit by denying Disney's claims of “retaliation for protected freedom of speech.” In a statement to CNBC, the governor's communications director said they are “unaware of any legal right that a company has to operate its own government or maintain special privileges not held by other businesses in the state.”

The statement continued by accusing the Walt Disney Company of operating outside the law, “This lawsuit is yet another unfortunate example of their hope to undermine the will of the Florida voters and operate outside the bounds of the law.”

However, Disney's lawsuit alleges that by expressing their opinion on state legislation they were punished by the State of Florida. The lawsuit alleges that Gov. DeSantis had no issue with the Reedy Creek Improvement District until they voiced their opinion on this controversial legislation.

Disney Speaks Out Against HB 1557

Disney is accusing Gov. DeSantis of “retaliation for protected freedom of speech” in their lawsuit. The Walt Disney Company is referring to a statement they made on March 28th 2022 when Disney spoke out in opposition against the HB 1557 bill.

Here is the full statement released by Disney on March 28th 2022:

“Florida’s HB 1557, also known as the ‘Don’t Say Gay’ bill, should never have passed and should never have been signed into law,” a Disney spokesperson said. “Our goal as a company is for this law to be repealed by the legislature or struck down in the courts, and we remain committed to supporting the national and state organizations working to achieve that. We are dedicated to standing up for the rights and safety of LGBTQ+ members of the Disney family, as well as the LGBTQ+ community in Florida and across the country.”

On April 19th, 2022 DeSantis began the process of asking the state Legislature to revoke Disney's Reedy Creek District's self-governing status. Disney is alleging in their lawsuit this short timeline of events from the company speaking out against the DeSantis-approved legislation followed just a few weeks later by the attempt to dissolve Reedy Creek is evidence of this “retaliation for protected freedom of speech.”

What is the Reedy Creek Improvement District?

The Reedy Creek Improvement District was created in 1967 to give Disney control over public services in the 25,000 acre area surrounding the Walt Disney World resort. Reedy Creek is a local government entity created to support economic development and tourism within the boundaries of the District. The boundaries of Reedy Creek include: the Walt Disney World theme parks, water parks, sports complex, 179 lane miles of roadway, 67 miles of waterway, the cities of Bay Lake and Lake Buena Vista, an environmental science laboratory where the continuity of water quality is monitored, an electric power-generating & distribution facility, a natural gas distribution system, a chilled water distribution system, water and wastewater collection & treatment facilities, a solid waste and recyclables collection & transfer system, plus over 40,000 hotel rooms and 100’s of restaurants and retail stores.

All of Walt Disney World is considered part of the Reedy Creek Improvement District. Disney owns two-thirds of the land in the district and the other third is owned by a small number of local residents and affiliates hand-picked by Disney to reside in the district.

Reedy Creek's purpose is to oversee land use, environmental protections and provide essential public services. Among those public services include fire protection, emergency medical services, potable water production, treatment, storage, pumping & distribution, reclaimed water distribution, chilled water systems, wastewater services, drainage and flood control, electric power generation & distribution, and solid waste and recyclables collection & disposal. Reedy Creek also operates and maintains all the public roadways and bridges.

Reedy Creek is largely funded by assessing taxes and fees to the landowners within the district. Disney has paid millions of annual tax dollars through Reedy Creek to fund these public services over the years. Reedy Creek essentially allows Disney to control how the land is managed within the resort and also removes that burden from the state.

The Reedy Creek Improvement District has been the focus of this ongoing feud between Disney and Florida Governor Ron DeSantis. On March 28th, 2022, Disney released a statement opposing HB 1557. Then on April 19th, 2022 DeSantis began the process of asking the state Legislature to look into revoking Disney's Reedy Creek District's self-governing status. This back and forth has continued since this initial first move from DeSantis towards Reedy Creek.

Taxpayer Concerns 

While the rhetoric around this back and forth has often focused solely on DeSantis and the Walt Disney Company, taxpayers in the two surrounding counties (Osceola and Orange Counties) immediately raised concerns about being burdened with the taxes to run the public services in the Reedy Creek District if it was dissolved. The financial obligation to operate the services in Reedy Creek is an estimated $105 million a year. This would have had the potential to raise property taxes in Orange County around 15 to 20% a year. Disney is one of the largest taxpayers in the region and has paid a combined $1.146B in state and local taxes.

There is a common misconception that the Reedy Creek District gives Disney a tax exemption status which is not true. Walt Disney World pays the same real estate tax rate in Orange and Osceola County as any other business including the other theme parks. In addition to those taxes, Disney pays a separate real estate tax to the special district which results in Disney paying a higher real estate tax than is assessed against other Florida theme parks. In some cases, this tax rate comes out at least 50% higher.

In response to concerns from taxpayers and officials in Orange and Osceola County about this potential tax burden, the state passed different legislation to keep Reedy Creek intact but instead allow DeSantis to appoint the board members rather than Disney. Previously, the board was elected by landowners in the district which is largely the Walt Disney Company.

Timeline of Disney vs DeSantis Fight

Disney vs DeSantis Timeline

• Disney speaks out against Florida’s HB 1557 HB 1557 bill on March 28th 2022.
• On April 19th, 2022 DeSantis asks the Florida Legislature to look into revoking Disney's Reedy Creek District's self-governing status.
• State legislature abandoned its plans to dissolve Reedy Creek once the state realized it would have to pay off an estimated 1 billion dollars in debt and after tax payers in Osceola and Orange Counties raised concerns about absorbing the financial cost to run Reedy Creek.
• Reedy Creek's Disney-appointed board decides to leave in place agreements that favor Disney for the next 30 years and limit incoming board members' control over the property. These agreements are also wrapped up in the developmental contract approval. Though these agreements were all conducted and finalized during public meetings, DeSantis and the new board do not react.
• The Florida Legislature finalizes approval to shift control of Reedy Creek from Disney to DeSantis.
• The newly DeSantis-appointed board discovers the development agreements (these are the same ones Disney is referencing in the lawsuit) and restrictive covenants which limit its power over Disney's property.
• CEO Bob Iger says Governor DeSantis's “retaliation against the biggest taxpayer in the state is anti-business and anti-Florida” in the Walt Disney Company's annual shareholder meeting.
• DeSantis during this time mentions in a public speech that he is considering taxes on hotels and tolls in the Reedy Creek District and the state will take control of the development of property around Disney.
• On April 17th, 2023 DeSantis announces a plan to revoke the development agreements put in place by Disney's board before they were replaced and that he plans to impose “new regulations on Disney operations.”
• In addition to the vote to undo the development contract Disney passed, the new board also voted to “effectively ban” Walt Disney World's theme parks from imposing any future COVID-19 restrictions.
• DeSantis comments on how the new board can utilize the land around Walt Disney World and mentions the possibility of creating a state prison.
• Walt Disney World announces their plan on April 19th 2023 to dedicate 80 acres of land for affordable and attainable housing with an anticipated opening date of 2026.
• On April 25th 2023, a proposed amendment is added to a Florida transportation bill that includes language to specifically target Disney's monorail and Skyliner system. DeSantis spoke at a news conference stating this amendment would impose state inspections over the Disney monorail.
• On April 26th 2023, the Walt Disney Company files a lawsuit against the Florida Governor Ron DeSantis.

The Reedy Creek Improvement District is governed by a five-member Board of Supervisors. According to the Reedy Creek website, the goal of the Board is to “support the economic viability of all venues and businesses within the District, while never sacrificing Central Florida’s remarkable wildlife and ecological environment.”

So in the context of where we are now: the Reedy Creek Improvement District was not dissolved but rather the leadership was changed by legislation from the state of Florida. Instead of the board being elected by landowners in the district (Disney) they were replaced by new members appointed by Governor DeSantis. The board is now called the Central Florida Tourism Oversight District. The previous Disney elected board made legal changes to the authority of the board before being replaced which DeSantis claimed was a move “to strip them of many of their powers on the way out the door.” These changes also include the approval of the development plans Disney is referencing in the lawsuit. But we also have to make note of the proposed amendment to the Florida transportation bill that would give the state of Florida further control over Disney's monorail and Skyliner systems.

The legal battle we are about to witness between Gov. DeSantis and Disney is focusing on the new board's decision to undo the development deal Disney swiftly passed before their appointment but also brings into question the actions of the state regarding the Reedy Creek Improvement District.

Impact to Guests Visiting Walt Disney World

Guests looking to travel to Walt Disney World won't see any immediate impacts from this legal battle. You could visit the theme parks easily without knowing a single thing about this legal turmoil between the Walt Disney Company and Florida Governor DeSantis. And some might prefer it that way!

You can read about all the potential impacts of the law and lawsuit on your a Walt Disney World vacation.

The entire debate has become increasingly political especially as DeSantis is rumored to announce a 2024 presidential bid. Some have even speculated that these moves from DeSantis against Disney is merely a way of testing the political waters before his proposed presidential bid.

Comment any thoughts and questions below.

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