Latest on Reedy Creek, Tourism Board and Disney Developer Agreement

[DisDad2001]

Desantis will not be Governor by the time its settled.

It's safe to assume at this point Disney will be around long after the Governor and his cronies are just part of Florida's history.

 

[Douglas Dubh]

It's safe to assume at this point Disney will be around long after the Governor and his cronies are just part of Florida's history.

But the development agreement between Reedy Creek and Disney might not.

 

[john7994]

That was a fabulous statement by Iger, state the facts and your position, be positive and do not engage in careless back and forth.

Disney researches first, acts on it, then finally makes a statement about the actions. That is a huge contrast to the DeSantis approach to react first.... often in the "heat of the moment" then speak making promises (threats) .... then lastly do the research to attempt to (maybe) find a solution to your promise.
I feel like Disney knows very well the game they are playing, and are confident of the cards they hold.... they have multiple laws on their side, and you know that their full time dedicated legal team has been very, very busy looking at all the options over the last year or so since this happened. It is an advantage that they know their business client (Disney) so well, and they know the business laws, so they are very ready to fight. Unlike the teams retained by the new board, who while formidable, they need to start from zero, research options and they will bill the state of Florida taxpayers by the hour. Caching $$$, let the political coffers ring.

While yes a court can be sympathetic to one side or another, but at the end of the day, a court cannot ignore the law.

I was also thinking about the other side of the coin in dragging this out is all the continued misinformation that continues to get spread in the mean time - like accusations of drag shows at WDW, grooming etc... Although interestingly, those pushing to lower the threshold of slander / libel to sue journalists for unfavorable coverage may find themselves on the other side of the microscope - as pointed out in previous posts - definitely a case to be made about reputational harm ... goes to the point of be careful when allowing the legal system to be contorted for personal gain or supporting one's short-term point of view or "values" - because you might be next ...

 

[Suger Mag]

I was also thinking about the other side of the coin in dragging this out is all the continued misinformation that continues to get spread in the mean time - like accusations of drag shows at WDW, grooming etc... Although interestingly, those pushing to lower the threshold of slander / libel to sue journalists for unfavorable coverage may find themselves on the other side of the microscope - as pointed out in previous posts - definitely a case to be made about reputational harm ... goes to the point of be careful when allowing the legal system to be contorted for personal gain or supporting one's short-term point of view or "values" - because you might be next ...

there are many people from all political bends or ilks, who prefer to just take some tossed off rumor or sensationalized bit of utter fluff at its face value as truth without ever looking deeper to see if it is really true, especially if it helps support your particular agenda. Sometimes I do a double take... like whaaaaaat? that is what you really think is going on? The age of too much misinformation is here to stay for awhile

 

[john7994]

But the development agreement between Reedy Creek and Disney might not.

The law was passed, the new board members have been anointed and the board has been renamed - effectively the old agreement is already gone - the current "slap-fight" only determines to what degree the original agreement is actually altered. Even if the courts find no standing for Disney's recent action due to chicanery or other legal ju-jitsu put on by the state - the board's future actions and continued bullying / interference by the state into Disney's business practices could still be subject for future litigation.

 

[OSUZorba]

I wonder if Disney was so responsible, why is RCID saddled with so much debt?

They issue bonds to pay for infrastructure, just like every other city in the US. They guarantee those bonds with taxes. With the RCID model pretty much the only tax payer is Disney (and Disney's clients. If RCID didn't exist, they'd still need all the infrastructure from the counties, but they'd also negotiate for massive tax breaks, just like Universal has. So that would mean the infrastructure bonds would be getting paid for by everyone except Disney.

RCID is a benefit to all parties, people just hear "special tax district"and assume that means lower taxes, but Disney is actually taxed at a higher rate with this setup.

 

[Mr. Drauer]

Not how it works. No rubber stamps. Both parks go through the same exact process in the ways that matter. Universal had to go through a big process when they bought that land. And now every step they take, they must get county approval. Disney is developing land it owns.

Epic Universe just like Tron or Pandora were new builds. They had to disturb the land to build. This means first they go through a rigid approval process with tons of dirt, water etc testing. All of this which can be pages and pages long is submitted to the South Florida Water Management District. Because Orlando is the head of the Everglades land disturbance it taken very seriously. ALSO for Disney for every bit of land they disturb they must set aside land undisturbed. This is why Disney has a HUGE conversation property south of Kissimmee closer to the Everglades. It is called the Disney Wilderness Preserve.

Once SFWMD approves the project the application then goes to Orange County (Disney has a small bit in Osceola County) for their approval process. This is for both theme parks, no one has an advantage. Even when Disney changes signs they must get a permit from the County. Disney DOES NOT have carte blanche to do what they want they go through all the same processes.

Where I think Disney made a mistake was over the years they expanded and allowed RCID to act like their "planning" department. All permits went to RCID first to be looked at, make sure the i's were dotted and everything was in order and it was the exit point to the state or county. More like a procurement office. It worked for Disney to have an extra set of eyes on the paperwork, keeping it organized. Disney should have kept that part within the company with it's own approval department. RCID was not set up for that and doesn't need to be handling that. RCID is INFRASTRUCTURE that the local government would normally do, nothing more.

A couple of points to add: Orange County does not have a say over the development process here but they do issue permits related to building and construction. That is one of the things RCID was originally set up for as you mention.

The SFWMD process is a little more simplified for WDW projects than others as Disney has a Master Permit that is amended/modified with each new project. The wetland mitigation established at the DWP covers all past and future projects over the entirety of WDW property within the RCID boundaries.

WDW still also has to abide by CWA and get 404b permits to satisfy federal criteria for wetlands. Again, they have a Master Permit, but still have to meet all of the pertinent criteria under 404b - and the federal process still takes an extended time.

One of the unique features / benefits that RCID has is that it controls the stormwater and drainage as a master system for the entire district. Any project that occurs within the boundaries that has an effect on the stormwater system (think FDOT road projects on I-4, County projects on the local roads, new hotels like JW Marriott, etc (A lot of the roads within the District are not controlled by DIsney.)) has to pay RCID to take their stormwater run-off. the $ value of this can be pretty excessive - a recent ramp project between SR 192 and Osceola Parkway on I-4 had a fee of $178,000 to RCID to handle the new treatment.

But the main point the @HopperFan makes is what is lost in most of the arguments RCIID is just an infrastructre oversight unit. IT basically has the powers of one of the state water managment districts with some of the oversight of a county to handle the things that the county was not able to when Disney was being established.

 

[tjkraz]

But does it really matter? It is a fact Disney has special powers and privileges that the competition does not have. And it is now the will of the legislature, for whatever reasons, to remove those privileges. Disney is a corporation that must operate under Florida laws, and it is not entitled to competitive advantages.

If people want to argue that Disney should not have "special powers and privileges", that's fine. But then they should be treated like any other taxpayer. RCID should be dissolved and all of those city services rolled into Orange and Osceola counties. That's the way it works everywhere else. Several years ago, $125 million in Orange County taxpayer dollars were used to fund road improvements around Universal. Disney doesn't receive such funding because RCID operates independently.

A year ago I wrote about how dissolving RCID would potentially impact Disney and taxpayers. The article is focused on DVC members, but the general concepts apply to WDW as a whole.

RCID is formally referred to as a "Special taxing district." It's not named that because it serves as some sort of tax shelter. Rather the name signifies that the district has the power to levy its own taxes upon residents. In this case, "Disney" is effectively the only resident. For 50 years RCID has existed to tax Disney, using those tax dollars to fund upkeep on the property.

On the link above, look at the chart which illustrates how the 2021 taxes were broken out. The two most relevant numbers are the 4.4347 millages paid to Orange County and the 13.5741 mills paid to Reedy Creek. If you remove the special tax district, the RCID revenue goes away entirely. Disney's property gets rolled into the respective counties and is taxed the same as other residents.

No special taxing district--no special tax. Instead, the Reedy Creek property--and the $163 million annual budget that auditor Scott Randolph cited--become the shared responsibility of Orange and Osceola county taxpayers. Disney would BE one of those taxpayers. But since their millage rate effectively falls from 13.5741 to just the 4.4347, Disney would save money. Tens of millions per year.

In the end, the millage rate would have to be raised to fund the $163M in former RCID operating costs. But instead of Disney paying 100%, it would be spread among all taxpayers. There is no mechanism in place which allows Orange County to tax Disney at a higher millage than other taxpayers. Disney's property is valued higher, which results in higher taxes than someone who owns a $200k home. But the millages must be the same. The article cites estimates that every OC taxpayer would see their tax bill go up about 25% without RCID, ostensibly to cover the funding that Disney would no longer be obligated to pay itself.

(If you want higher millages for certain entities, that's the purpose of a special taxing district!)

If we want to compare Disney to Universal or any other taxpayer, here's the bottom line: Orange County has oversight of Universal Orlando. Universal's property is taxed at the same rate as any other resident. City services are provided by the county. Universal can lobby for--and receive--public funds for certain projects.

Disney operates independently. The counties have limited-to-no oversight on their infrastructure decisions. But also Disney is not using any public funds to support their roadways, utilities and city services. They pay all of their operating costs, at a rate which is effectively 3x what Orange County residents are paying for their own road maintenance, trash collection, rescue services, etc.

In effect, Universal is billed at the same rate as any other OC taxpayer while being subject to state and local oversight. Desantis wants Disney to continue to pay significantly higher tax bills than other area businesses and residents, while also having his own hand-picked committee in place to tell them how and where to spend it.

 

[dioxide45]

They issue bonds to pay for infrastructure, just like every other city in the US. They guarantee those bonds with taxes. With the RCID model pretty much the only tax payer is Disney (and Disney's clients. If RCID didn't exist, they'd still need all the infrastructure from the counties, but they'd also negotiate for massive tax breaks, just like Universal has. So that would mean the infrastructure bonds would be getting paid for by everyone except Disney.

RCID is a benefit to all parties, people just hear "special tax district"and assume that means lower taxes, but Disney is actually taxed at a higher rate with this setup.

Or they'd issue corporate bonds.

 

[dioxide45]

A couple of points to add: Orange County does not have a say over the development process here but they do issue permits related to building and construction. That is one of the things RCID was originally set up for as you mention.

As I understand, those permits that are filed with Orange and Osceola counties are just notices of commencement. It is much different than how other businesses operate. Disney isn't going before the county boards or city council in Orange or Osceola for every change they make or building they want to construct.

 

[HopperFan]

A couple of points to add: Orange County does not have a say over the development process here but they do issue permits related to building and construction. That is one of the things RCID was originally set up for as you mention.

The SFWMD process is a little more simplified for WDW projects than others as Disney has a Master Permit that is amended/modified with each new project. The wetland mitigation established at the DWP covers all past and future projects over the entirety of WDW property within the RCID boundaries.

WDW still also has to abide by CWA and get 404b permits to satisfy federal criteria for wetlands. Again, they have a Master Permit, but still have to meet all of the pertinent criteria under 404b - and the federal process still takes an extended time.

One of the unique features / benefits that RCID has is that it controls the stormwater and drainage as a master system for the entire district. Any project that occurs within the boundaries that has an effect on the stormwater system (think FDOT road projects on I-4, County projects on the local roads, new hotels like JW Marriott, etc (A lot of the roads within the District are not controlled by DIsney.)) has to pay RCID to take their stormwater run-off. the $ value of this can be pretty excessive - a recent ramp project between SR 192 and Osceola Parkway on I-4 had a fee of $178,000 to RCID to handle the new treatment.

But the main point the @HopperFan makes is what is lost in most of the arguments RCIID is just an infrastructre oversight unit. IT basically has the powers of one of the state water managment districts with some of the oversight of a county to handle the things that the county was not able to when Disney was being established.

I agree that there are standards in place and Reedy Creek has built in process for infrastructure including the canal system. Every action that impacts those canals goes through the approval process with SFWMD.

But I think we can not diminish the massive amount of testing, design and application work that is done to get SFWMD approval for new projects and anything that substantially impacts runoff. Anyone has access to the paperwork process and the amount of paperwork it takes for the process is huge. It can be very interesting to look at these applications and all attached files. It brings a new appreciation to the approval process that so many keep proclaiming does not exist.

 

[glamdring269]

If people want to argue that Disney should not have "special powers and privileges", that's fine. But then they should be treated like any other taxpayer. RCID should be dissolved and all of those city services rolled into Orange and Osceola counties. That's the way it works everywhere else. Several years ago, $125 million in Orange County taxpayer dollars were used to fund road improvements around Universal. Disney doesn't receive such funding because RCID operates independently.

A year ago I wrote about how dissolving RCID would potentially impact Disney and taxpayers. The article is focused on DVC members, but the general concepts apply to WDW as a whole.

I’m not going to quote the entire thing but wanted to thank you for laying this out so clearly. Seems pretty interesting that for all of the ‘Disney has a sweetheart deal!’ mumbo jumbo the only thing they even changed was giving themselves the ability to run the board itself. Disney still has the same ‘sweetheart deal’ they had before.

DeSantis screwed up and ran his mouth on something that he didn’t really understand. At this point Florida either has to dissolve this board and take their medicine or back out slowly in my opinion. Otherwise this just looks like an attempted corporate takeover based on scoring political points leading up to a presidential bid. I think we all know what’s really going on here.

 

[bcla]

They issue bonds to pay for infrastructure, just like every other city in the US. They guarantee those bonds with taxes. With the RCID model pretty much the only tax payer is Disney (and Disney's clients. If RCID didn't exist, they'd still need all the infrastructure from the counties, but they'd also negotiate for massive tax breaks, just like Universal has. So that would mean the infrastructure bonds would be getting paid for by everyone except Disney.

RCID is a benefit to all parties, people just hear "special tax district"and assume that means lower taxes, but Disney is actually taxed at a higher rate with this setup.

A lot of the infrastructure was the roads though. Those were ceded to RCID, which could then float municipal bonds to pay for construction and improvements. The roads could have theoretically been kept private, and there are still private roads. And from the look of it, they ceded land for roads to the county and state.

https://www.rcid.org/wp-content/uploads/2020/02/RCID2020.pdf

 

[OSUZorba]

Or they'd issue corporate bonds.

To pay for highways? Nope.

 

[OSUZorba]

A lot of the infrastructure was the roads though. Those were ceded to RCID, which could then float municipal bonds to pay for construction and improvements. The roads could have theoretically been kept private, and there are still private roads. And from the look of it, they ceded land for roads to the county and state.

https://www.rcid.org/wp-content/uploads/2020/02/RCID2020.pdf

Roads are infrastructure, not sure what your point is. RCID handles infrastructure that the county would be if not for RCID.

 

[SuzErwin]

As I understand, those permits that are filed with Orange and Osceola counties are just notices of commencement. It is much different than how other businesses operate. Disney isn't going before the county boards or city council in Orange or Osceola for every change they make or building they want to construct.

Why would Disney go before a city council in a city in which they don’t operate?

Again, you are welcome to read the FSU Law Review paper to which I linked earlier which explains very clearly the legal and political history, basis and arguments for Reedy Creek, and why former FL legislatures let Reedy Creek stand despite having the power to dissolve it because Reedy Creek was a clear benefit to the greater Orlando area and the State of Florida, while acting highly responsible with regards to state and federal regulations - to which Disney was still beholden, Reedy Creek did not give it permission to be its own state or country and there are many agencies that had and exercised oversight into various activities.

It took me a lot less time to read the paper than to even fast forward through the DeSantis press conference, just sayin’.

 

[Mr. Drauer]

y

I agree that there are standards in place and Reedy Creek has built in process for infrastructure including the canal system. Every action that impacts those canals goes through the approval process with SFWMD.

But I think we can not diminish the massive amount of testing, design and application work that is done to get SFWMD approval for new projects and anything that substantially impacts runoff. Anyone has access to the paperwork process and the amount of paperwork it takes for the process is huge. It can be very interesting to look at these applications and all attached files. It brings a new appreciation to the approval process that so many keep proclaiming does not exist.

yes I know. It is part of my job to get permits from the WMD's, inlcuidng having done so for WDW. I am currently doing permitting for several FDOT projects within RCID. I know this process very well.

 

[AvidDisReader]

Since I was intrigued by the whole RCID flap with Florida, I was following closely what was going on. I noticed the Covenants were signed prior to Florida passing the change of the board legislation. This made me chuckle as I knew exactly what Disney was doing, protecting themselves from Government oversite on issues they should not be involved in, the development of and construction of new buildings and rides on Disney property. The board still has the right to do its due diligence to make sure all construction meets all the "health and safety issues", but cannot interfere with a design because it is too "woke". When all is said and done, the Gov should just have taken advise from Elsa and just : Let it Go".

 

[DisDad2001]

Since I was intrigued by the whole RCID flap with Florida, I was following closely what was going on. I noticed the Covenants were signed prior to Florida passing the change of the board legislation. This made me chuckle as I knew exactly what Disney was doing, protecting themselves from Government oversite on issues they should not be involved in, the development of and construction of new buildings and rides on Disney property. The board still has the right to do its due diligence to make sure all construction meets all the "health and safety issues", but cannot interfere with a design because it is too "woke". When all is said and done, the Gov should just have taken advise from Elsa and just : Let it Go".

It's Disney's property and property rights after all isn's it?

How does a political appointee get to micro-manage a for profit company in a capitalist society? I thought this was the party of limited government?

This situation is the kind of thing you see in China or The Russian Federation where only people who kow-tow to the current regime gets to operate a business. I mentioned Jack Ma of Alibaba before and its interesting that he has had to flee abroad. The oligarchs in Russia were all just doing their president's bidding and looked what has happened to them.

I was extremely pleased with Bob Iger's comments. This entire debacle was predicated on our "pro-business" Governor seeking retribution against Disney. The legislature tried to suggest that they were just cleaning up imrovement districts in Florida by sunsetting others, but if anyone was fooled by that the Governor's comments at the signing ceremony put that theory to rest.

 

[Disney Bobby]

If people want to argue that Disney should not have "special powers and privileges", that's fine. But then they should be treated like any other taxpayer. RCID should be dissolved and all of those city services rolled into Orange and Osceola counties. That's the way it works everywhere else. Several years ago, $125 million in Orange County taxpayer dollars were used to fund road improvements around Universal. Disney doesn't receive such funding because RCID operates independently.

A year ago I wrote about how dissolving RCID would potentially impact Disney and taxpayers. The article is focused on DVC members, but the general concepts apply to WDW as a whole.

RCID is formally referred to as a "Special taxing district." It's not named that because it serves as some sort of tax shelter. Rather the name signifies that the district has the power to levy its own taxes upon residents. In this case, "Disney" is effectively the only resident. For 50 years RCID has existed to tax Disney, using those tax dollars to fund upkeep on the property.

On the link above, look at the chart which illustrates how the 2021 taxes were broken out. The two most relevant numbers are the 4.4347 millages paid to Orange County and the 13.5741 mills paid to Reedy Creek. If you remove the special tax district, the RCID revenue goes away entirely. Disney's property gets rolled into the respective counties and is taxed the same as other residents.

No special taxing district--no special tax. Instead, the Reedy Creek property--and the $163 million annual budget that auditor Scott Randolph cited--become the shared responsibility of Orange and Osceola county taxpayers. Disney would BE one of those taxpayers. But since their millage rate effectively falls from 13.5741 to just the 4.4347, Disney would save money. Tens of millions per year.

In the end, the millage rate would have to be raised to fund the $163M in former RCID operating costs. But instead of Disney paying 100%, it would be spread among all taxpayers. There is no mechanism in place which allows Orange County to tax Disney at a higher millage than other taxpayers. Disney's property is valued higher, which results in higher taxes than someone who owns a $200k home. But the millages must be the same. The article cites estimates that every OC taxpayer would see their tax bill go up about 25% without RCID, ostensibly to cover the funding that Disney would no longer be obligated to pay itself.

(If you want higher millages for certain entities, that's the purpose of a special taxing district!)

If we want to compare Disney to Universal or any other taxpayer, here's the bottom line: Orange County has oversight of Universal Orlando. Universal's property is taxed at the same rate as any other resident. City services are provided by the county. Universal can lobby for--and receive--public funds for certain projects.

Disney operates independently. The counties have limited-to-no oversight on their infrastructure decisions. But also Disney is not using any public funds to support their roadways, utilities and city services. They pay all of their operating costs, at a rate which is effectively 3x what Orange County residents are paying for their own road maintenance, trash collection, rescue services, etc.

In effect, Universal is billed at the same rate as any other OC taxpayer while being subject to state and local oversight. Desantis wants Disney to continue to pay significantly higher tax bills than other area businesses and residents, while also having his own hand-picked committee in place to tell them how and where to spend it.

Good post. So will Disney still pay the same amount to RCID? Who will control that money?