(Bloomberg) – Florida lawmakers are proposing to give Ron DeSantis full control of the board overseeing the Walt Disney Co. special district as the Republican governor escalates his battle with the entertainment giant.
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A new bill that will be tabled Monday would give the governor the power to appoint the five-member board of directors that will oversee what is now known as the Reedy Creek Improvement District, a special government agency that has provided wide-ranging benefits to Disney for half a century . These appointments must then be confirmed by state senators. The new rules bar anyone who has had ties to a theme park in the past three years from serving on the board.
“Florida is dissolving the corporate empire and entering a new era of accountability and transparency,” DeSantis spokesman Bryan Griffin said in an emailed statement. The former rules “gave exceptional special privileges to an individual company”.
Reedy Creek is currently governed by a five-person board of directors elected by local property owners under its charter. Because most of the land within the District is owned by Disney and its affiliates, the company has outsized decision-making authority.
The proposed legislation maintains Reedy Creek’s commitment to nearly $1 billion in outstanding debt and maintains its current revenue streams. The text of the law stated that “no bonds or other debt instruments” previously issued by the district would be affected.
In a statement, Jeff Vahle, president of Walt Disney World Resorts, said the company is monitoring the progress of the legislation.
“Disney operates under a number of different models and jurisdictions around the world, and regardless of the outcome, we remain committed to providing the highest quality experience for the millions of guests who visit us each year,” he said.
New name
Under the current proposal, Reedy Creek would be renamed the Central Florida Tourism Oversight District.
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The changes are the culmination of a clash between Florida’s governor and one of the state’s largest employers. Last year, DeSantis signed legislation that would have dissolved Reedy Creek, which provides municipal functions like water, infrastructure, and emergency services to the Walt Disney World Resort. The move was in response to what DeSantis saw as Disney’s criticism of a law he signed that restricts elementary school teaching about gender identity. He said the county gave the company powers that other companies didn’t have.
“We didn’t want anybody doing business in Florida, which is a privilege and has an unfair advantage,” said Rep. Fred Hawkins, a Republican who supported the legislation, in an interview.
The bill will be discussed in a hearing of the Florida House State Committee on Wednesday and is expected to be debated by the entire Legislature later this week. Eventually, a version will be submitted to DeSantis for signature. Republicans have large majorities in both legislative houses, likely meaning accelerated approval. Hawkins said he has not spoken to bondholders but has met with Disney officials on several occasions.
Established in 1967, the Reedy Creek District was instrumental in turning 38.5 square miles of mostly swampy land into a theme park complex that draws millions of visitors each year. Their board of directors typically deals with issues such as infrastructure financing, growth management, and development regulations, and also appoints a county commissioner.
The new law would also eliminate some of the more obscure powers the district had but never used. For example, their current statute mentions the possibility of building public utilities for the “transmission of energy by nuclear fission,” which is not included in the proposed legislation. In addition, the new board must submit a report within a year to remove further district powers.
The bill would allow Florida to impose taxes on Disney for potential road projects outside of the district’s boundaries, Griffin said.
It would also “create a way to force Disney to contribute to local infrastructure,” he said, and “remove Disney’s self-governing status.”
–Assisted by Thomas Buckley.
(Added company comment in sixth paragraph.)
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