Legislature submit bills to remove Walt Disney World’s special government exemptions

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Senate and House bills aimed at putting an end to Walt Disney World’s special government have been submitted for the Legislature’s Special Session this week — sending notice that Gov. Ron DeSantis is serious in his ire toward the company’s political disloyalty.

With DeSantis announcing the issue would be offered for the Special Session, Republican Sen. Jennifer Bradley and Republican Rep. Randy Fine have introduced bills that would sunset authorizing statutes for the Reedy Creek Improvement District by the summer of 2023.

By Florida statute, that district provides utilities and other services to the more than 25,000 acres of southwestern Orange County that make up the Walt Disney World resort property.

Reedy Creek also provides many municipal services, including fire and rescue and various municipal functions.But many of those services are provided via contracts with two cities that compose most of Walt Disney World: Lake Buena Vista and Bay Lake.

Bradley’s SB 4-C and Fine’s HB 3C do not pose any immediate threat to the status of those two cities.

As introduced Tuesday, the legislation refers to “any independent special district established by a special act prior to the date of ratification of the Florida Constitution on Nov. 5, 1968.”

“It does not affect the two municipalities,” Fine said in a text to Florida Politics.

Reedy Creek, Lake Buena Vista and Bay Lake all were founded on May 12, 1967, when Gov. Claude Kirk signed the authorizing legislation, a precursor to the development of Walt Disney World, which opened Oct 1, 1971.

“The real powers were given to Bay Lake and Lake Buena Vista,” said Florida historian and political scientist Rick Foglesong, author of a seminal book on Disney and Florida politics, “Married to the Mouse: Walt Disney World and Orlando.”

Foglesong wondered if the Legislature might amend the bills to address Bay Lake and Lake Buena Vista’s ultimate authority over land use, planning and inspections.

If they don’t contract with Reedy Creek to provide services, those two cities would have to contract with someone else, presumably Orange County (and Osceola County for a small portion of the property), he said. That would still leave Disney in charge of much of its own destiny.

Such a new arrangement would require Orange County in particular to expand its operations in order to provide direct services to Disney. The Orange County Sheriff’s Office already provides law enforcement. Orange County also provides county services to SeaWorld, though on a much smaller scale.

There was no immediate response Thursday from Disney or Reedy Creek about the proposed legislation.

There also is significant potential impact on Reedy Creek’s bonding.

Michael Rinaldi, head of U.S. local government ratings for Fitch Ratings, raised that concern in a statement Tuesday.

“It is difficult to estimate what a dissolution of the RCID would cost Disney over time. RCID’s general fund and utility budgets are approximately $120 million and $125 million, respectively. The bulk of the district’s operating budget is driven by services provided to the various Disney-owned properties. Outstanding governmental debt totals approximately $719 million and utility debt stands at roughly $200 million,” Rinaldi said in the statement.

“At this juncture, it is not clear how the debt would be treated if RCID is dissolved (would the debt be assumed by another governmental or private entities). Dissolution of the district would eliminate access to tax-exempt issuance via RCID, potentially costing Disney and other landowners within the district more to finance various projects.”

In a statement released Tuesday afternoon, Orange county Mayor Jerry Demings said, “Orange County Government is monitoring the Special Session in Tallahassee, particularly when it comes to unfunded cost shifts to local governments. We will await any final legislative actions before offering further comments.”

While the bills do call for sunsetting Reedy Creek’s authority, they hold off until an effective date of June 1, 2023. That means there is a full 2023 Legislative Session ahead first, presumably a chance to sort out disputes. There also is a General Election in November that includes the Governor.

Disney, Reedy Creek, the two Disney cities, Orange County and the state of Florida have mostly coexisted in harmony for 65 years, until the California-based Walt Disney Company crossed DeSantis this spring when leaders criticized Florida’s parental rights bill. Disney denounced the bill and called for its veto.

The Governor expressed his ire early and often about Disney’s position and threatened to revisit its special status in Florida’s laws. On Tuesday he carried through, expanding the call for the Legislature’s Special Session starting Tuesday at noon.

“I am announcing today that we are expanding the call of what they are going to be considering this week. And so yes, they will be considering the congressional map, but they also will be considering termination of all special districts that were enacted in Florida prior to 1968,” DeSantis said in a news conference in the Villages Tuesday.

“And that includes the Reedy Creek Improvement District,” DeSantis added, thanking Senate President Wilton Simpson and House Speaker Chris Sprowls for “stepping up and making sure we make the sunset or the termination of these special districts happen.”

Democratic Sen. Linda Stewart of Orlando called the legislation “strictly political” and said that Disney officials have told her they do not think it is possible to dissolve Reedy Creek Improvement District.

“They don’t think that the Reedy Creek can be dissolved. Okay, so … they’re gonna have to go to court,” Stewart said. “I did say that I’m glad that you’re not giving contributions to anyone, because you’re going to need it for your own lawyers.”

“Gov. DeSantis is very angry and he works to approve ways in which he can influence his desire to have them walk the line,” Stewart added.

The cities of Bay Lake and Lake Buena Vista encompass nearly all of the 38-square-mile Walt Disney World within their municipal boundaries. Both cities have very small communities of residents — 20 to 40 people each, who mostly are Walt Disney World employees and their families — living in two small residential neighborhoods within Disney World. Among themselves, those residents elect Mayors and Commissioners, who run the cities.

They contract virtually all services to Reedy Creek, which provides all utilities, fire and rescue emergency services, as well as street maintenance, planning, zoning, building inspections and other municipal operations.

The Reedy Creek Board of Supervisors eligibility is based on ownership of land within the district. Disney owns most of the land. A sparse few acres have been deeded over to others, loyal to Disney, who then are able to serve on the Reedy Creek Board.

Former Orange County Mayor Linda Chapin said there have been tussles between Disney and Reedy Creek and Orange County government many times, notably a battle over Reedy Creek’s use of municipal bonds while she was Mayor in the 1990s.

But, she added, “In the long run, it has worked out pretty well.”

Scott Powers is an Orlando-based political journalist with 30+ years’ experience, mostly at newspapers such as the Orlando Sentinel and the Columbus Dispatch. He covers local, state and federal politics and space news across much of Central Florida. His career earned numerous journalism awards for stories ranging from the Space Shuttle Columbia disaster to presidential elections to misplaced nuclear waste. He and his wife Connie have three grown children. Besides them, he’s into mystery and suspense books and movies, rock, blues, basketball, baseball, writing unpublished novels, and being amused. Email him at scott@floridapolitics.com.

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