The battle surrounding Disney’s Reedy Creek District has only just begun.

The Reedy Creek Improvement District (now called the Central Florida Tourism Oversight District — “the District”) previously gave Disney a substantial amount of control over the land it sits on — it worked that way for 50+ years. But now things have changed. In the aftermath of the friction between Disney and Florida Governor Ron Desantis over Disney’s reaction to Florida’s Parental Rights in Education Bill, the Florida legislature and DeSantis signed a bill into law that was going to dissolve RCID in June of 2023. Plans later changed and while the District itself has continued, it now has a new Board appointed by the Governor (not voted in by Disney) and is subject to new rules. But that’s not the end of the story.

The NEW District

Earlier in 2023, the Florida House and Senate passed a bill to give the Reedy Creek District its new name  — The Central Florida Tourism Oversight District — as well as redistribute power to a Governor-appointed board. That bill was ultimately signed into law by DeSantis, which he marked as the “end” of the “Corporate Kingdom.”

Under this bill, the District can still do business under the Reedy Creek name for two years after the bill goes into effect so that they have time to make necessary changes to legal and financial documents, physical assets, and other locations where the district’s name is used.

Governor DeSantis has already appointed all 5 new members of the Board of Supervisors and those members have started to serve their terms. These new board members must be Florida residents, and they are not permitted to serve more than three consecutive terms.

To get a look at the “politically connected Republican allies” DeSantis has appointed to the board — click here.

The law does strip the District of some powers, like the power it has to potentially create a nuclear power plant (which has not been seriously considered, according to the Orlando Sentinel), and imposes new requirements on the District mostly relating to reporting.

An important thing to note is that the District technically did not get formally resolved, instead, it has been restructured and does still have many of the powers it previously held.

So what’s happening now?

A Disney “Win?”

The new board of supervisors initially discussed some key ways they could change the District, before discovering some agreements Disney entered into with the prior Board of Supervisors. The main agreements at issue are a Development Agreement and some Restrictive Covenants. These agreements gave Disney LOTS of power over decisions in the District for years to come, despite what the new board may say or do.

The agreements would let Disney build projects “at the highest density” (according to legal counsel to the new board), bar the District from using the Disney name without Disney’s approval, and stop the board from regulating the height of buildings, among other things. The Development Agreement states that it is valid until “21 years after the death of the last survivor of the descendants of King Charles III, king of England.”

The new board (or their counsel) have called these agreements unusual, suspect, and unlawful, saying they stripped the board of any powers and essentially make Disney the government. The board has threatened extensive litigation against Disney and hired outside law firms to review these matters.

Disney, however, has argued that all agreements were appropriate and discussed in open, noticed public forums.

But that’s not the end of the story.

What Has Disney Said?

As noted above, Disney has defended its agreements with the prior board as having been legally done. Disney CEO Bob Iger has also commented generally on the situation saying that DeSantis’ actions against Disney with regards to Reedy Creek are “anti-business” and “anti-Florida.”

When asked “Did you checkmate Ron DeSantis?” Iger said that Disney’s “sole goal” in Florida is to continue creating value for each of these constituencies. He continued, “All we want is a relationship with the state that enables us to continue to do that.”

Actions Taken Against Disney

Upon learning about these agreements, DeSantis threatened future action against Disney. At one point, DeSantis even alluded to the possibility of increasing tolls or taxes for Disney World visitors in response to the latest developments. And now DeSantis, Florida legislators, and the new Board of Supervisors have laid out a plan of attack against Disney.

The Legislature

First, two bill amendments have been introduced — one in the Florida House of Representatives and one in the Florida Senate — that could impact Disney’s previous agreements with the old board. The amendments would prevent independent special districts from complying with any development agreement if that development agreement was entered into within 3 months before the effective date of a law that changes how the governing body of that special district is selected (either from election to appointment, or from appointment to election).

Under these amendments, the new governing body of the special district will review (within 4 months of taking office) the development agreements and then will get to vote on whether to readopt the agreement or not.

Disney’s Developer’s Agreement was approved by the old board on February 8th, 2023, while the law approving the new name for the District and its new governor-appointed board was officially signed by DeSantis on February 27th, 2023. If the bills containing these amendments pass, the new board would be “precluded from complying” with the terms of the Development Agreement and would be able to decide whether they want to move forward with it or not.

The bills that contain these amendments have not yet been passed (as of April 24th, 2023). Some analysis of the Senate bill (prepared by The Professional Staff of the Committee on Rules) does warn of a potential constitutional issue with the amendment. Specifically, they warn that the Federal and Florida constitutional prohibit legislatures from passing laws that impair the obligation of existing contracts. They note that for the part of the bill addressing special districts, “To the extent this language affects previously recorded contracts, the bill may unconstitutionally impair contracts.”

We’ll be on the lookout for more details.

The Board

In addition to the legislative action, the Board has taken some actions against the Development Agreement and Restrictive Covenants. Legal counsel to the new board have argued that Disney allegedly failed to provide the proper notice to other property owners in the District, that Reedy Creek didn’t have appropriate procedures in place to adopt the Development Agreement, that a government can’t delegate powers to private parties, and more.

For those reasons, the counsel argued that the agreements are void and unlawful.

The Board of Supervisors is set to meet again on April 26th and their meeting agenda indicates that they may, at this meeting, declare “the Development Agreement and Declaration of Restrictive Covenants entered into by the Reedy Creek Improvement District and Walt Disney Parks and Resorts U.S. void ab initio” and direct their legal counsel regarding what to do next.

We’ll continue to watch for updates as to how Disney responds to any such action if taken.

The board has done some other things, not necessarily tied to the Development Agreement but just in relation to changes within the District in general. They are considering a resolution that would firmly declare the board as having “superior authority” within the District when it comes to development and planning decisions, have essentially done away with the planning board and given those powers to the Board of Supervisors directly, are set to discuss COVID-19 resolutions that would prohibit businesses in the District (including Disney) from requiring masks, and have discussed other actions too.

See more about the Board’s discussions here

DeSantis Threats

And finally, DeSantis himself has made some threats about future actions that could be taken (either by the board or otherwise) that could impact Disney. That includes changing how Disney World rides are inspected (giving governmental authorities more control), and using land that the District owns near Disney World’s theme parks to build a state prison.

Meanwhile, other political leaders have commented on DeSantis’ feud with Disney — you can read about that here.

Updates

This post was last updated on April 24th, 2023. The situation is constantly evolving so we’ll continue to update it with the latest news when possible.

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