For over 50 years, Disney World’s land has all been subject to the control of a special district called the Reedy Creek Improvement District (RCID).

This district has essentially allowed Disney to act as its own county in many ways, giving it huge amounts of control over decisions regarding the land on which it operates in Florida. It also provided taxing authority and other powers to Disney. But, in 2022, a law was passed by the Florida legislature (and signed by the Florida governor) that will DISSOLVE the RCID by June of 2023, unless a new agreement is reached. The clock is ticking and 2023 is rapidly approaching, so what’s the status of the RCID right now? Here’s what we know.

Getting Caught Up

Just to get you up to speed, here’s a look at the background of this situation. If you’re not familiar with the RCID, it was a special district established way back in the 1960s. It has allowed Disney to operate essentially as its own county government all these years. The district has its own fire department, special taxing laws, and more power over the land it controls.

After Disney spoke out against Florida’s Parental Rights in Education Bill (what critics call the “Don’t Say Gay” bill), a bill was introduced and quickly signed into law that will dissolve the RCID in June of 2023 if another arrangement is not reached.

Lawsuits have been filed regarding the dissolution of the RCID and concerns about what will happen if the district is dissolved. Specifically, there have been concerns about the tax burden (including almost $1 billion in bond debt) that could fall on local county residents.

One lawsuit was dismissed, but was later refiled and is still pending.

What could the future hold for Reedy Creek? Thus far, Florida Governor Ron DeSantis has said that the state government would likely control the Reedy Creek District, and we’ve shared news indicating that a successor district will likely follow the dissolution of the RCID.

Not much has been shared in terms of what that successor district will look like, but Rep. Daniel Perez (R-Miami) has said that we may get an update soon. According to Representative Perez, “the conversations of Reedy Creek have always been there, and they’re still continuing today. We’ll try to put a bow to that conversation in the near future…There is some progress to be made, but we will definitely, I think, we’ll reach a solution sometime soon.”

So what’s going on now? Here’s what we know.

Reedy Creek Replacement Details & Disney’s Unique Power

WFTV 9 shared a video with a bit more of that conversation from Representative Perez about the discussions that are happening regarding Reedy Creek. In that video, Perez noted, “I think since we left session, it’s safe to say that the conversations between the Governor’s office and the interested parties of Reedy Creek have continued, and Disney’s included in that obviously.”

While we knew that conversations regarding the RCID had been going on, it is interesting that he pointed out how Disney specifically has a seat at the table. It’s not unusual or unexpected that this is the case, but still interesting to note.

According to WFTV 9, some lawmakers have indicated that these conversations have been ongoing since as early as May.

Dr. Aubrey Jewett, a political science professor at the University of Central Florida, shared that if Reedy Creek just goes away without any replacement, local taxpayers would be “on the hook.” This is in reference to the $1 BILLION in bonds that are expected to fall on local taxpayers if a new arrangement is not put in place by 2023.

Jewett shared that his “gut” tells him a new special district will likely be created with a different name.

But it’s not as though the Florida government has unlimited power over the situation. Jewett has pointed out that Disney has unique leverage here. Because Disney is the sole landowner in the district, they’d have to agree to any new terms. That gives them at least some power over what the future could look like.

The Florida Governor’s office has indicated that an update could be coming, but no timeline for that has yet been shared.

Reedy Creek Is NOT Stopping

Despite a feeling of uncertainty over the future, Reedy Creek hasn’t stopped moving forward when it comes to activities in the district. According to the Orlando Business Journal, the RCID has filed for and completed various permitted projects from January 2022 through September 2022.

These projects include dewatering for the 7-Eleven coming to the Flamingo Crossings shopping area, World Drive Phase Two dewatering, redevelopment dewatering for the Magnolia Golf Course, and dewatering at Typhoon Lagoon for a repair project.

And the work continues. According to the Orlando Business Journal, as of September 12th, the RCID has filed 25 notices of commencement with Orange County, FL for different projects. 

The projects include things like some replacement activity on EPCOT Center Drive, a replacement of a central energy plant roof and exhaust fan in Disney’s Hollywood Studios, cable repairs, and fiber optic expansion. They’re also working on road improvements and design service contracts to streamline traffic.

In fact, RCID’s notice of commencement activity for 2022 is UP 127% compared to the same timeframe in 2021! So basically, the RCID has not allowed an impending dissolution, continued talks about a replacement district, and uncertainty about the future to slow it down at all.

The RCID may have a bit more certainty about what the future could hold since Disney appears to be involved in discussions about a replacement plan. And, of course, projects continue to pop up and issues need to be taken care of, so it’s not as though the RCID can simply sit back until 2023 and not do anything until a resolution has been reached.

But still, it is interesting to note that they are going strong (even stronger than before) when it comes to filing notices of commencement. With all of the potential projects in Disney’s future, we expect this activity will only continue.

A Surprising Bond Situation

With the high level of uncertainty, you might think that tax bond purchases would be low for the RCID, but it’s been quite the opposite. The Orlando Business Journal reports that Reedy Creek’s bond purchases have nearly DOUBLED, despite uncertainty about the future.

There was actually a surge in ad valorem tax bond activity for the RCID when you look at the period between January 1st and September 13th, 2022. During that period, 614 RCID ad valorem bonds were bought. That’s an increase of 91.3%(!) compared to the 321 bonds bought during the same period in 2021.

During two months, in particular, there were high numbers of bond purchases — April (118 sales) and May (103 sales). Interestingly enough, those were 2 months when a lot of uncertainty surrounding the bonds arose, given the conflict between Disney and Florida Governor DeSantis. That ultimately led to the passage of the bill that will dissolve the RCID in 2023 — that bill was passed in April 2022 and was signed into law just a few days later in April 2022.

So what’s going on there? According to Jacob Schumer, a government law expert, the legal change in the situation with the RCID actually “means the value of the bonds is subject to speculation in a way that’s atypical for such bonds. With such speculation comes attention from investors who take a more negative view of the bonds, and also speculators who believe they can obtain good bonds at a discount.”

Schumer shared, “It would not surprise me if Reedy Creek bonds continue to trade at an abnormally high volume until the legal matter is settled, with spikes in activity when there is major news on the legal front.” Keep in mind, however, that back in April, Fitch Ratings placed the RCID’s credit rating under a “negative watch,” indicating that there could be a possible downgrade in rating.

Still, while uncertainty continues, the RCID plows forward with construction project work and is getting the advantage of increased bond activity too.

The Reedy Creek Lawsuit

What about the lawsuit that was refiled in May? That case (EDUARDO FORONDA ET AL VS RON DESANTIS ET AL — Case No. 2022-009114-CA-01) is still pending in Miami-Dade County. The most recent activity that took place was that a motion to withdraw was filed, with one attorney submitting a letter of notice of resignation as Deputy General Counsel for Governor DeSantis.

The main activity before that was all surrounding a motion to dismiss. Governor DeSantis and 2 other state departments named in the lawsuit filed a motion for the case to be dismissed in August of 2022. They argued that the complaint should be dismissed completely or transferred to Tallahassee’s Leon County.

Following this, the Plaintiffs filed a motion and response to the Defendants’ motion to dismiss. In it, the Plaintiffs agree to transfer their complaint to Leon County. That response was filed on August 25th.

Thus far, it does not appear that a hearing has been set for this motion (at least according to the court docket) and further documents on the motion have not been filed. As of right now, the case status shows as “open” in Miami-Dade, but we expect that an update on that could be coming soon.

Creating “Just in Case” Plans

Disney World’s Reedy Creek is also taking action to prepare for the future, just in case the district truly gets dissolved in 2023. According to the Orlando Business Journal, during a recent meeting, the RCID approved a plan to enter into a “reimbursement agreement with Truist Bank for a $3 million letter of credit in favor of Duke Energy Florida LLC.”

What’s happening here? Well, the RCID is preparing for the future and trying to ease some of Duke Energy’s concerns in case the RCID truly gets dissolved. That credit line will make sure that the RCID is able to pay its Duke Energy bill from May 2023, just in case it is dissolved on June 1st, 2023.

John Classe, the district administrator for RCID shared, “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]…It makes smart sense for Duke to make sure they are covered from a business perspective.”

A spokesperson from Duke, Ana Gibbs, noted, “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.”

According to the Orlando Business Journal, around 90% of the RCID’s electrical power comes from utility providers, like Duke Energy and others. Around 10% comes from solar power.

No resolution for the RCID dissolution has been publically shared, so it seems that companies that do business with the RCID are looking to get a greater sense of certainty for the future. It wouldn’t be surprising if other business partners take similar steps in the future.

Upcoming Activity to Be on the Lookout For

So, what’s next? Well, as we indicated, the RCID continues to move forward with its work. The next meeting of the district’s Board of Supervisors will be held on October 26th, 2022, with more meetings in November and December. 

Beyond that, we’re still pending updates from the Florida Governor’s office regarding what could replace the RCID. But, if Representative Perez’s statements are any indication, we could get some BIG updates soon.

We’ll continue to look for more news about the Reedy Creek District dissolution and let you know what we find.

In the meantime, click here to learn about a NEW restaurant coming to Disney World, nighttime shows that are coming back, and other big Disney news.

Does the public prefer Disney or Governor DeSantis? Click here to find out

 What do you think will be next for Reedy Creek? Tell us in the comments.