Florida Governor Ron DeSantis plans to rid Walt Disney World of its special tax district privileges

Dissolving the Swamp

Florida Governor Ron DeSantis plans to rid Walt Disney World of its special tax district privileges

Mickey Mouse atop Spaceship Earth at EPCOT in 1993 at Walt Disney World Resort in Lake Buena Vista, Florida. (Courtesy Disney)

Walt Disney World® Resort’s aura of childhood wonder and joy is widely adored by Americans young and old. Ensconced in a web of highways in swampy Central Florida, Disney World’s sprawling network of theme parks, water parks, hotels, golf courses, shopping districts and entertainment complexes make up a world unto itself. It is the self-reported “Most Magical Place on Earth.”

And yet, in April 2022, even the cherished Disney brand found itself entangled in the sordid knot of Florida’s culture wars. In March, a repressive law banned the discussion of gender or sexual orientation in elementary schools up to third grade. Under pressure from workers and fans, Disney spoke up against the policy, saying it “should never have passed.” Governor Ron DeSantis quickly went on the attack, surprising many with his hostility toward a big corporation that had previously been considered untouchable.

As a big-government conservative, DeSantis has not shied away from using the powers of government to discipline his enemies—even business leaders and corporations. In this fight, he chose a peculiar weapon: the abolition of the special tax district that has been the foundation of Disney World’s growth, Reedy Creek Improvement District (RCID). RCID is a powerful tool that combines Disney’s corporate powers with a jurisdiction that resembles a city-state—what historian Richard Foglesong, in his 2001 book Married to the Mouse, calls “a kind of Vatican with mouse ears.” It has independent powers to tax, spend, issue bonds, and develop, unshackled by state and county regulations. It can also distribute alcohol under its own authority, police itself with a private security force that is shielded from public records laws, and has the authority, thus far unused, to build its own airport and nuclear power plant. This merger of public powers with the corporate profit motive is a natural enemy of the socialist left, but instead it is under fire from one of the rising stars of the Republican party.

On April 21, DeSantis signed a bill to dissolve RCID. To some, the move seems half-baked. It quickly came to light that close to $1 billion in debt would get passed onto Orange and Osceola counties if RCID was taken apart, likely increasing county taxes to unbearable levels. Had DeSantis botched the attack? Experts opined that he might settle for some trophy wins, perhaps stripping Disney’s nuclear powers while leaving the fundamental operations of RCID intact. But he might well be hungry for more—and if so, this tussle is far from over. DeSantis is a smart man, and it’s likely he knows the history of Disney’s relationship to Florida. And this history reveals Disney’s weaknesses.

Building Disneyworld

When Disney came to Orlando in the mid-1960s, the central Florida economy still felt the pain when an orange crop froze. Walt Disney was looking for an East Coast market for his Disneyland concept. Orlando, situated at an intersection of two major interstate highways and with no competing views of the ocean, had potential. Disney himself was well-read in urban planning literature and was preoccupied with the urban crisis of the time. He envisioned how his theme park could become a city unto itself, a fully self-sustained and immersive environment for visitors, but was frustrated by how the conditions back in Anaheim hampered that vision when making the original Disneyland: The local streets were a jumble of crass and uncoordinated tourist traps that detracted from the aura of his park, and local government regulations were a nuisance too. Southwest of Orlando, agents of Disney quietly bought up about 27,000 acres—twice the land area of Manhattan—of swampy, undeveloped land at bargain prices. Disney could implement a buffer zone around the park—a variation on the “Green Belt” concept Walt had read about—to provide insulation from whatever might develop outside it.

Cinderella Castle under construction at Magic Kingdom Park in 1971 at Walt Disney World Resort in Lake Buena Vista, Florida. (Courtesy Disney)

Besides a physical buffer, he also needed a regulatory landscape which would allow his company scope of action unfettered by representatives of the public—or the public itself. Disney’s lawyers adopted the existing idea of a special tax district, a quasi-state institution which had been used broadly by states since the Depression to evade debt ceilings and to insulate major infrastructure projects from public pressure. Disney already planned to incorporate a drainage district to clear the swamp that would be Disney World. Its governing power was distributed by acreage, not by population. But only an incorporated city with a popularly elected government could regulate buildings and land use, so the lawyers recommended a two-tier governance structure, with one or more traditional municipalities bounded by, and subordinated to, Reedy Creek. RCID was implemented in 1967.

The extents of the Reedy Creek Improvement District (Courtesy RCID)

Why did local legislators go along with Disney’s plans? Why go beyond bond issuance and regulatory control? And where did the airport and nuclear plant come from?

Those required Walt’s famed imagination and an American credulity for the power of big business. In the weeks before his untimely death in 1966, Walt filmed a video outlining his plans for a futuristic city called EPCOT, or Experimental Prototype Community of Tomorrow. EPCOT would be an urban laboratory for new technologies, production techniques, and living arrangements, that “will never be completed, but will always be introducing and testing and demonstrating new materials and systems.” It was to be “a showcase to the world for the ingenuity and imagination of American free enterprise.”

EPCOT under construction in 1982 at Walt Disney World Resort in Lake Buena Vista, Florida. (Courtesy Disney)

Like Ebenezer Howard’s Garden City, EPCOT would be built on a radial plan with a business center surrounded by apartments and a green belt, all connected by a monorail and a system of underground tunnels. Still, a good portion of its evolution couldn’t be planned for. That’s why it needed the benign guidance of a single corporation. Florida legislators liked the idea of what an experimental corporate city could do for its residents. But whatever Walt was planning before he died, it wouldn’t be a city with residents with voting power—it would be a city of tourists. In a memo from his legal team quoted by Foglesong, Walt crossed out every use of “permanent resident” and replaced it with “temporary resident/tourist.” Democracy would be no impediment to corporate power.

While it may have come into being under false pretenses and though local Florida officials—especially planners—came to rue the wide range of its powers, there is no denying that by most standards RCID was a success: Disney World transformed the economy of central Florida, jumpstarting what is now a thriving ecosystem of tourist destinations. It also had a profound effect on urban planners. James Rouse, innovator of the American shopping mall, had already called Disneyland “the greatest piece of urban design in the United States.” He went on to design Boston’s Faneuil Hall and other “festival marketplaces” that provide the template for the reinvention of postindustrial urban centers as eye-catching paradises of consumption for tourists. Disney World also gained accolades from architect Peter Blake, who gushed in a 1972 New York Magazine article about Disney’s “staggeringly successful” theme parks, calling them “the only New Towns of any significance built in this country since World War II.” He even ventured the semi-joking suggestion that the “time has come to lease Manhattan (and selected portions of the other boroughs) to Walt Disney Productions.” As he speculated about what Disney could do to make Times Square “fun-oriented,” he in part sowed the seeds of what was to come decades later.

Cinderella Castle under construction at Magic Kingdom Park in 1971 at Walt Disney World Resort in Lake Buena Vista, Florida. (Courtesy Disney)

Broken Magic?

Despite its influence on the future of cities and importance in Florida, Disney was not invincible. By the mid-1980s, Florida’s political tenor had shifted from growth boosterism toward managed growth. Disney’s expansion had contributed its share of externalized social problems. Traffic headed to and from Disney World choked nearby roads, and a low-wage workforce had high welfare needs out of scale with the sleepy nearby counties. When Florida passed development impact fees and a growth management plan in 1985, RCID was protected by a strong grandfather clause and continued to grow without needing to adhere to these rules. Nonetheless, government antagonists found ways to chip away at Disney’s regulatory fortress through exploiting Disney’s major weakness: sensitivity to public opinion. Just like Mickey and Goofy are never seen with their “heads off,” Disney’s power plays needed to stay out of the public eye.

Mickey and pals at EPCOT in 1989 at Walt Disney World Resort in Lake Buena Vista, Florida. (Courtesy Disney)

In 1989, Florida officials got Disney to avoid a protracted public battle by agreeing to $13 million in traffic relief fees. This was a fraction of what they would have owed sans RCID, but it demonstrated that with the right pressure Disney was willing to negotiate away some of their privileges. Notably, that agreement also included a seven-year commitment by Orange County not to challenge the constitutionality of RCID’s charter. Lawyers had started to take a closer look at “infirmities” in the charter and wondered if the difference between Disney (the corporation) and RCID (the public entity) had not been maintained carefully enough to withstand a legal challenge.

Expedition: Everest – Legend of the Forbidden Mountain under construction at Disney’s Animal Kingdom Theme Park in 2004 at Walt Disney World Resort in Lake Buena Vista, Florida. (Courtesy Disney)

If the RCID has not been challenged since the end of that moratorium, it is likely because Disney and the surrounding localities are deeply interdependent. Central Florida’s economy would be profoundly damaged if Disney World faltered; Disney’s corporate image would likewise suffer immensely if Disney World faced sustained local hostility or tried to move across state lines. Disney World, like any urban environment, represents a massive, decades-long capital investment fixed in place. In order to continue its banner contributions to Disney’s corporate profit margin, it needs to find solid footing for its relations with the State of Florida.

“Wishes” nighttime spectacular at Magic Kingdom Park in 2003 at Walt Disney World Resort in Lake Buena Vista, Florida. (Courtesy Disney)

Fighting Ahead

Ron DeSantis and his lawyers surely understand Disney’s history and have taken the time to consider their options. The legislation that stands to dissolve RCID is set to take effect on July 1, 2023, offering a six-month window for negotiations. DeSantis has options on the table, if he chooses to continue the battle. By forcing Disney to seek re-establishment of RCID, he has effectively erased the advantages of the district’s seniority, which had allowed it to evade Florida’s recent review processes and growth management regulations. If Disney wants its privileges to be reinstated, they will have to bargain. DeSantis could easily demand more substantial contributions to the state coffers or greater state oversight over development and operations at Disney World. (If he had different politics, he could even require significant affordable housing contributions.) He likely won’t want to play so tough that Disney World’s future will be imperiled, but he will want to send a message: To run a profitable company in Florida, you play by his rules. With an eye toward 2024, it makes one wonder if he’d bring this same attitude to his campaign and, possibly, the White House.

Avi Garelick is an urban researcher and writer living in New York.