Hold on tight folks, this is about to be a bumpy ride. Things are getting increasingly more complex at the former Reedy Creek Improvement District (now called the Central Florida Tourism Oversight District).

Florida Governor Ron DeSantis signed a bill into law that made some significant changes to the District, namely putting in an entirely new board appointed by the Governor. The new board later discovered some agreements entered into by Disney and the old board that give Disney a lot of control over certain decisions for a long period of time. The Board has suggested they’d challenge those agreements, DeSantis has outlined a plan to combat the agreements, and Disney all the while has defended their agreements. So what’s going on now? Well, some important things you need to know about.

On April 19th, 2023, the new board of supervisors of the District met to discuss some matters and they had a LONG meeting. Here are the key takeaways:

The Board Met With Disney Before These Agreements Came to Light

One interesting thing that came out of the meeting had to do with the new board’s interactions with Disney prior to its agreements with the old board coming to light. Martin Garcia, the new chair of the board, indicated that years ago when Reedy Creek was created, it seemed like a good deal. But he said that nobody, except perhaps Disney, believed it would continue in perpetuity.

He said that it is “shameful” Disney took “adversarial actions” prior to the new board taking power. He also indicated that before they were officially appointed, the new board actually met with a Disney vice president to launch what they hoped would be a mutually beneficial relationship, but they were NOT told about Disney’s agreements with the old board at this point. Garcia said that in his view, it appears Disney didn’t want to work with the new board in the way the board wanted to work with them.

Legal Issues with Disney’s Agreements with the Old Board

At one point, the Board heard from legal counsel about issues with Disney’s agreements with the old board of supervisors. David H. Thompson from the Cooper & Kirk law firm indicated that Disney and the old board made a blatant effort to attempt to subvert the will of the people of Florida in what he called “backroom deals.”

He argued that Disney’s actions were illegal and unconstitutional. Why? Well, from a notice perspective, he alleged that Disney failed to mail notice to the other property owners in the district about the Development Agreement that they entered into with the old board (and that such notice is required under Florida law). In his view, this failure “dooms their entire effort.”

Thompson also argued that a Development Agreement can only be adopted if a district has put in place procedures to adopt such an agreement. According to Thompson, Reedy Creek did not have any such procedures.

Thompson argued that the agreements are also unconstitutional. He said that the government can’t delegate powers to private parties, yet Disney reportedly attempted to seize numerous governmental functions. He also argued that the Development Agreement and Restrictive Covenant don’t comply with the law of contracts and that the contracts are inconsistent with public policy.

Plus, he said the contracts violate doctrines surrounding unconscionability because Disney reportedly took governmental power for itself but offered the District nothing in return.

Justice Alan Lawson, a former Florida supreme court justice, also spoke on the issue and described some of Disney and the prior board’s actions as brash, breathtaking, and unlawful. He said that because that notice was not mailed to affected property owners, the action is null and void.

He also showed emails reportedly uncovered between Disney and the old board that seem to indicate the development agreement was drafted by Disney’s own lawyer but they felt from an “optics perspective” it may be better to have someone else’s name on it as the drafter.

Lawson argued that the old board approved the agreement based on Disney’s representations of the agreement.

Chair of the new board, Garcia, later said: “It really is shameful what Disney tried to do.”

Removal of the Planning Board

One key proposal up for discussion was Resolution No. 639 — this amends parts of the Land Development Regulations that govern the District.

After a hearing on the matter at the April 19th meeting, this Resolution was approved by the new District’s Board of Supervisors (which is made of those appointed by Governor DeSantis), and April 26th was set as the date for the second reading and public hearing on the resolution. (According to WESH 2 News)

As part of this Resolution, the District’s Planning Board will essentially be done away with and it’ll give the Board of Supervisors all of those planning board powers. Plus, for these planning matters it makes the Board of Supervisors the “final decision-making authority for the District and no further administrative appeal is available.”

“Superior Authority”

The Resolution also functions as an assertion of the Board’s control over development and planning decisions for both of the cities within the District (the City of Lake Buena Vista and the City of Bay Lake).

One individual (Chad Emerson the writer behind “Project Future: The Inside Story Behind the Creation of Disney World”) previously indicated that these two cities could be a sort of loophole for Disney, allowing them to keep some self-governing powers despite the changes that took place with Reedy Creek. These cities are essentially controlled by Disney and made of residents that vote in people friendly to Disney.

Under this Resolution, the Board has claimed it has “Superior Authority” over planning, zoning, land development regulations, and more, even within those 2 cities. It also forbids the cities from adopting “land development regulations that are less stringent than or in conflict with the District’s Land Development Regulations.”

Again, according to WESH, this was approved and April 26th will serve as the second reading and public hearing on the resolution.

Will this resolution make a difference though? The Orlando Business Journal spoke with some experts who reviewed this resolution before it was approved and they seemed to indicate that it won’t really do anything to take back the powers Disney obtained through its agreements with the old board.

Jacob Schumer, a government law expert and attorney, warned “If the resolution or any subsequent regulations or other actions violate the agreements, then they violate the agreements, and Disney would have a cause to stop them.” But since the Board seems determined to declare Disney’s agreements with the old board as null and void, and a bill is being introduced into the Florida legislature that would essentially do the same, that could change the situation.

COVID-19 Resolutions

The board also discussed COVID-19 regulations briefly and mentioned that they will go into more detail at their next meeting. They have already brought up a resolution that addresses COVID-19 restrictions in the District, but they’ll bring updates to a future meeting.

COVID-19 restrictions within the District and limiting Disney’s ability to require its guests or employees to wear masks is something one of the new board members seemed eager to tackle and something Governor DeSantis previously mentioned as well.

More Oversight

During the meeting, the board also discussed or heard reports from other people about how there could be or would be more oversight in the District, and how that’ll impact Disney. 

One person talked about how the monorail is one of the few systems not reviewed or inspected by outside sources, so that could change under new rules and regulations. At another point, restaurant and hotel inspections were discussed, and it was noted how over the last 15 months, inspections have yielded various violations.

A representative from the Department of Health talked about how through Reedy Creek, Disney has been solely responsible for reporting and management of any incidents for its water parks and pools. Over 200 pools had been delegated to Reedy Creek for inspection, and there had been over 7,000 violations on Disney property since 1996.

According to the representative, the Department of Health has now resumed inspection duties in the District.

More to Come

And that’s just the start. The new board (particularly the new Chair, Mr. Garcia) discussed a number of other things that could be addressed/analyzed soon including:

• creating new zoning to develop affordable and workforce housing
• creating voting rights for future residents in that housing
• developing better traffic solutions for the surrounding county (including transit)
• reducing the carbon footprint in the district
• increasing the Distrct’s revenues
• evaluating how to monetize some of the assets of the district
• providing the Florida Governor and the legislature with a report so they can make more long-term changes to the legislation of the District

Along with that, the District authorized one of the law firms representing it to more aggressively defend lawsuits filed by Disney about ad valorem taxes and the valuation of Disney’s property. Special Counsel Daniel Langley discussed that Disney has filed lawsuits against the Orange County Property Appraiser saying that the Property Appraiser valued Disney’s property too high.

But the taxes for those years have already been paid, so if a judgment is entered in Disney’s favor, the District would have to refund 7 years of rebates to Disney. They’ve estimated that this could amount to $11.4 million. And the Orange County Public School System has reportedly been reserving funds for this purpose too.

Previously, the District’s law firm had reportedly been told to just “monitor” those cases, but now the board has authorized the firm to start fighting back more.

In terms of other changes, the District discussed a utility agreement entered into by Disney and the old board which it characterized as another “11th-hour” agreement. This reportedly allows Disney to set its own utility rates, so the new board will be analyzing potential issues with legality there.

They also discussed:

• addressing the fire code, developing new regulations with the fire department, and ensuring that the code can be enforced
• looking into the District’s powers of eminent domain in case it needs to go beyond the land it currently owns
• cooperating with the inspector general’s investigation into Disney and the prior board’s actions
• working on more rules and regulations for how the board operates
• and addressing first responder pay

According to Garcia, “this is just the tip of the iceberg,” when it comes to certain changes (particularly in terms of regulations for how the Board governs its meetings). We expect there will be many more updates in the coming weeks.

The board’s next meeting will take place on April 26th. We’ll continue to keep an eye out for updates, so check back with us. And click the link below to see what Iger has had to say about this whole situation.

Did Disney “checkmate” Gov DeSantis? See what CEO Bob Iger has to say