Disney and Florida trade lawsuits as DeSantis seeks to reassert state control over the company’s special economic area


Disney and Florida trade lawsuits as DeSantis seeks to reassert state control over the company’s special economic area

Disney World’s Main Street Train Station. (Benjamin D. Esham/Wikimedia Commons/CC BY-SA 4.0)

Florida governor Ron DeSantis’ feud with Disney went a step further last week when the Central Florida Tourism Oversight Board voted to sue the entertainment and theme park company, which had previously sued the state in federal court. As AN has previously reported, the origins of the dispute go back to January 2022 when HB 1557, Florida’s “Don’t Say Gay” bill, was introduced in the Florida House of Representatives. Disney, under public pressure, spoke out against the legislation, leading DeSantis to threaten Disney’s high level of independent governance. While legal resolve will not be immediate, the company’s Central Florida economic miracle is in jeopardy. 

When Disney World was established, along with it came the Reedy Creek Improvement District (RCID). Passed in part to accommodate plans for the Experimental Prototype Community of Tomorrow (EPCOT)—a city-scale area that would function as an urban experiment in new modes of production, living, and transportation—the RCID performs the functions of a municipal and county government. It holds property qualification-based elections on the basis of one acre one vote. Given that Disney owns nearly all land within the RCID, it controls nearly all of the votes, and can, in effect, select the district’s governance.

The RCID champions corporate governance and tax haven status in an acceleration of what classical liberals wanted Hong Kong and Singapore to produce. However, the RCID is not a special economic zone (SEZ) in the sense that SEZs championing often infrastructure-oriented, tax easing economic growth like Shenzhen are—which are still subject to city-governed planning and zoning regulations—but allows Disney near complete freedom over its land management without competition from other companies (lest we forget Splendid China Florida, now the site of Margaritaville). The RCID can tax, issue bonds, and pursue development projects outside of the purview of the state. Disney has its own private police force, and the jurisdiction to build an airport and nuclear power plant, which it has not to date. 

On February 6, Republican Representatives introduced HB 9-B in the State House, and it was approved by DeSantis on February 27. The bill outlines a state-led takeover rather than the district’s abolition, which was considered last year. This would have meant a significant increase in the tax burdens of Orange and Osceola counties, which would have undoubtedly been unpopular even if the culture-war style retaliation would’ve been popular among DeSantis supporters. 

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

The bill legally renames the RCID to the Central Florida Tourism Oversight District (CFTOD), and introduces a series of significant overhauls, including the introduction of a gubernatorially-appointed board. It further removes board member eligibility from anyone who has been employed by, owned, or entered into contractual work with a theme park or entertainment complex within the three years prior to their appointment. 

The board will oversee all of the district’s “powers and duties,” which would not be a significant deviation from prior practice were they not potentially antagonistic toward Disney. As outlined in HB 9-B, the board has the power to acquire property within the district, including through eminent domain. Under the bill’s eminent domain provisions, the board can acquire both privately- and publicly-owned land, including from two of the district’s constituent municipalities: the City of Bay Lake or the City of Lake Buena Vista. The board will exercise management of many functions of a standard municipal government including water management, waste collection and disposal, recreation facilities, parking facilities, fire departments, transportation, and public utilities. 

The bill retains the district’s county-level zoning exemptions, and awards the board power to introduce zoning and building code plans within the district as it sees fit. This includes the ability to establish a Planning and Zoning Commission, which is to be appointed by the board. The board retains the ability to decide on any appeals to the potential commission. The bill further permits the board to issue bonds and levy ad valorem taxes, which includes private property. 

On February 8, between the introduction of HB 9-B and its signing into law, the RCID supervisors signed an agreement with Disney which passed most of its power to the company itself, hollowing out the district’s authority as a quasi-government body. Disney claims that it adhered to public notice requirements in regards to the meeting in which this took place, though the plans were only briefly discussed before passing through a unanimous vote. The DeSantis-appointed board was left with little power aside from the maintenance of basic infrastructure in what they characterized as an illegal deal. On April 26, the CFTOD board nullified the prior board’s agreement with Disney, prompting a same-day lawsuit from Disney, alleging free speech violations through the state’s “retaliations” against the company’s criticism of Florida legislation. On May 1, the CFTOD board sued Disney in state court over its move to strip the board of its powers. 

The second lawsuit more narrowly addressed the future of Disney’s land use rights. With the board seeking to declare the prior agreement as lacking legal standing, power would return to the board under control of DeSantis-supporting appointees. This would reduce Disney’s autonomy and introduce the ability for other companies to develop in areas around Disney—against Walt Disney’s original intentions to be buffered by a green belt—and ultimately return power to the state over private enterprise.