Disney Unwillingly Re-Themes Reedy Creek
Presuming that everything goes as planned, The Walt Disney Company will no longer operate the Reedy Creek Improvement District.
Instead, Florida’s government, in its infinite wisdom, has changed the name of the special district and…well, that’s mostly it.
Yes, after a year of public squabbling, Disney and Florida’s government have decided to declare a tie.
Here’s what you need to know about the theoretical changes, most of which are cosmetic, although one could prove chaotic in future years.
What’s in a Name?
A decade from now, if you reflexively refer to Reedy Creek Improvement District (RCID), people will look at you funny.
That’s because the name of this district will change as soon as Florida votes in favor of the bill and then the governor signs it.
Since Florida’s governor has a book coming out at the end of the month, the change should happen in a matter of days.
That way, he can perform lots of interviews about the book wherein he’ll claim that he was hard on Disney for the good of the state of Florida and its residents.
Should anyone push the governor on exactly how the new version is better, an awkward pause will occur.
That’s because very little is actually changing. The headline here is that the new name for the former RCID is Central Florida Tourism Oversight District (CFTOD). Rolls off the tongue, doesn’t it?
Think of this as a power play. Let’s say there’s someone in your office you don’t like named Steve.
All those various corporate books like The 48 Laws of Power suggest that you should call the person Randy just to let them know how little you care about them.
Florida’s government is taking that approach with Reedy Creek.
The Real Changes under the Hood
Not much will differ at Central Florida Tourism Oversight District compared to Reedy Creek Improvement District.
In fact, I read 189 pages of legalese earlier today. Then, when I got to the last page, I did a quadruple take.
Line 4717 out of 4721 is the one that matters most. Think of it as the fine print at the end.
This part of the legislation states that the former RCID won’t dissolve on June 1st, 2023. That’s a record-scratch moment right there.
Effectively, we just wasted a year of our lives talking about this. Nothing’s changing significantly.
That’s happening because Reedy Creek has existed for too long. Disney’s connections throughout Florida and other parts of the country make a dramatic change impossible.
As Florida officials quickly discovered, terminating Reedy Creek would have stuck the state with more than $1 billion in outstanding loans plus additional administrative overhead.
Instead, the new paperwork for CFTOD explicitly states that Disney will continue to pay the bills that it owes.
So, Florida’s elected officials can keep their promise that Disney doesn’t make $1 billion in the process of Reedy Creek’s dissolution.
However, to ensure that’s the case, Florida cannot dissolve Reedy Creek, something I’ve previously pointed out. There are legal issues involving bond writing.
Ben Watkins, who has worked as the Director of Bond Finance in Florida, previously indicated that Florida wouldn’t violate the terms of its existing bond contracts no matter what.
This bill puts that declaration in writing, thereby reassuring bondholders and potential lenders.
The New Board
Since the inception of RCID, a board of panelists has voted on various bureaucratic decisions.
Mostly, these votes have been formalities because Disney has meticulously controlled its board.
I can demonstrate this with a simple fact. Do you know how many people live in Reedy Creek?
As of the 2020 U.S. Census, the answer was…29. I may have more cousins than Reedy Creek has residents.
Reedy Creek also encompasses Lake Buena Vista, a town with 24 residents. Yes, the sum total of potential RCID panelists is 53.
Disney carefully selects who lives within the confines of these two places. The unspoken rule is that if Disney chooses you for RCID, you’d better vote the right way.
Anybody who didn’t – which is theoretical rather than something that has happened – wouldn’t just get voted out. They’d probably be forced to relocate out of Reedy Creek as well.
Disney’s current control over RCID’s voting mechanic is total.
The new legislation gives Florida’s government a stronger voice in the operations of the Walt Disney World campus, though.
Specifically, the governor and state representatives will choose the five panelists for the modified district.
Theoretically, Disney could go from controlling all five votes to zero. I say theoretically because the proposed legislation comes with a flaw.
Disney has shiftily negotiated some of what’s happening through the media. Management established that it could shift voting to other places.
Those pointed comments proved accurate enough that the proposed legislation has proven largely toothless.
The Other Sticking Point
This draft of the proposed Reedy Creek conversion to CFTOD does include what I’m calling a poison pill, though.
Florida’s government wants to ensure…someone (voters?) that Disney won’t stack the new panel the way that it has RCID.
So, the litigation bans Disney from adding its own people to the new posts.
The pertinent language is:
“The following persons are ineligible to serve on the board:
- Any person who, within the past 3 years, has been an officer, owner, director, employee, agent, contractor, or subcontractor of, or has had a contractual relationship with a business entity that owns or operates a theme park or entertainment complex as defined in s. 509.013(9), Florida Statutes, or a parent company, subsidiary, or sibling organization under common ownership or control with a business entity that owns or operates a theme park or entertainment complex.
- Any relative as defined in s. 112.3143, Florida Statutes, of a person ineligible under subparagraph 1.”
In other words, if you work with Disney or have worked at Disney within the past three years, you cannot sit on the board.
I can skip to the end of the page right now and tell you the future.
Florida will inevitably add someone to this new board who turns out to be ineligible.
Disney employs roughly 77,000 people in Florida alone. And that’s just Disney.
The phrasing means that anyone else who has worked at SeaWorld Orlando, Universal Orlando Resort, or Busch Gardens Tampa Bay cannot serve, either.
In fact, the wording here means that many people reading this are ineligible if they’ve ever signed a contract with Disney!
That’s a legitimately ill-considered parameter that needs tweaking.
Disney’s Callous Reaction
Disney has evaluated its rights in this situation, understanding all too well that Florida has overstepped from a legal perspective.
The company has ways to defend itself, but it might not choose to do so. For all we know, Disney officials could be relieved that RCID is ending.
The entire concept may have outlived its usefulness. Many legal experts I’ve asked believe that Disney would win in court.
These experts, two of whom have worked on similar cases, believe Disney held a strong argument already. The new wording solidifies Disney’s position.
Residents of Reedy Creek could now argue on Disney’s behalf by rightfully claiming that Florida plans to tax them without representation under the new rules. After all, Reedy Creek will lack representatives but continue paying taxes.
You’ll notice that Disney hasn’t filed anything, though. That tells me the company isn’t upset with this turn of events.
Disney Says wHATEver
We spoke early about power moves. Disney’s is more direct. It’s “we don’t really care.” In fact, here’s the official response:
“We are monitoring the progression of the draft legislation, which is complex given the long history of the Reedy Creek Improvement District.
Disney works 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 each year.”
This bit of casual indifference comes from Jeff Vahle, the President of Walt Disney World.
I’ll point out that Vahle’s precise wording indicates that Disney isn’t sure that this is the final version of the bill.
Technically, anything can change until Florida’s state representatives vote.
So, that’s where we stand today. The new legislation, presuming that it’s passed as indicated, will kick the can down the road for another two years by renaming Reedy Creek against its residents’ wills.
Disney can still refer to its entity as Reedy Creek Improvement District until 2025. Meanwhile, Florida’s legislators have chosen not to dissolve it.
Instead, RCID will operate under a new name and with a new panel chosen by Florida’s government. This was all much about ado about…not nothing but very little.
We will update you once the final legislation passes, though. Something strange still might occur.
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