Florida Governor Ron DeSantis recently announced that he would revoke development agreements that challenge the authority of the local board he appointed to oversee Disney. He will impose new regulations on the entertainment company to ensure it abides by the same laws as others living in Florida. DeSantis has authorized state agencies to increase regulatory oversight of Disney’s operations, including the monorail system and amusement rides, and has suggested that the oversight board could sell the Disney-run utility and negotiate alternative land usage with the state.
By Mary Ellen Klas; April 17, 2023
The Disney versus DeSantis fight headed into round three on Monday as Florida’s governor announced that the Legislature will revoke development agreements that undercut the authority of the new local board he appointed and he will impose new regulations on the powerful entertainment company.
“We want to make sure that Disney lives under the same laws as everybody else,’’ said Gov. Ron DeSantis at the headquarters of the Reedy Creek Improvement District near Orlando. DeSantis said he has authorized state agencies to increase regulatory oversight of Disney operations, such as the monorail system and amusement rides. He suggested the DeSantis-controlled oversight board could sell the Disney-run utility and negotiate with the state to use the company’s land for other purposes.
“Maybe create a state park, maybe try to do more amusement parks,’’ he said. “Someone even said like, maybe you need another state prison. Who knows? I mean, I just think that the possibilities are endless.”
The announcement comes two days before the newly-named Central Florida Tourism Oversight District’s Board of Supervisors is scheduled to review a new proposal to strengthen its authority over planning, zoning and land development regulations for the special taxing district that operates the 39-square-mile property on which Walt Disney World exists.
DeSantis said the new board on Wednesday will declare the last-minute agreements signed by the old board with Disney void because they “have a plethora of legal infirmities.”
‘PARENTAL RIGHTS’ BILL LIT THE FUSE
DeSantis first targeted Disney last year after he was angered at the company’s vocal opposition to the “Parental Rights in Education” law, also known as the “don’t say gay” bill. The governor then tried and failed to dismantle the Reedy Creek Improvement District with legislation but had to withdraw that effort because it would have left local residents to shoulder nearly $1 billion in debt that Disney would otherwise have paid for.
In February, DeSantis sought again to wrest control of the Disney-controlled district, including within the two cities under its jurisdiction, Bay Lake and Lake Buena Vista. At his urging, he asked the Legislature to dissolve Disney-controlled Reedy Creek and replace it with the Central Florida Tourism Oversight Board whose members are appointed by the governor and confirmed by the Senate.
But that effort was thwarted when the Disney-backed board outmanuevered the governor and entered into last-minute development and restrictive covenant agreements with Walt Disney Parks and Resorts, U.S., Inc. on the eve of the legislative special session to pass the DeSantis-backed plan.
Under the agreements, which last for decades, the existing regulations are frozen in place and the governor-controlled board is effectively limited in what it can do with the special district’s property.
That property includes the Magic Kingdom, EPCOT, Hollywood Studios and the Animal Kingdom, which are inside the city limits of Bay Lake, and Disney Springs which is in the city of Lake Buena Vista.
The arrangement removes the DeSantis board’s authority over land-use regulations, restrictions on things such as building heights, and future development projects — including the potential regulation of two new theme parks allowed in the agreements.
DeSantis, who has also ordered his inspector general to investigate, suggested the move was corrupted by “self dealing” and other “ethical violations.”
LEGISLATION MAY SEEK TO DISSOLVE AGREEMENTS
The proposed legislation, which is expected to be released later this week, will take the governor’s fight to a new level by declaring the development agreements no longer lawful in Florida and potentially ordering the company to do what the state wants with its property.
“That’s a classic taking of property,’’ said J.C. Planas, a Miami lawyer who teaches about Disney’s special district in his local government law class at a South Florida law school. Election
He said the governor and legislators have attempted to portray the arrangement with Disney as unique when it is treated like any other taxing district in the state. “The reason that Reedy Creek sets the millage rate and the tax rate for Disney was because they provide all the municipal services,’’ he said. “Reedy Creek has not been doing anything different than other municipal service providers.”
The DeSantis-controlled board “can take a vote but it opens them up to a lawsuit,’’ he said. “And I have a feeling Disney has other contingency plans in place and didn’t think the development agreements would be the last thing.”
Jake Schumer, a municipal attorney in the suburban Orlando law firm of Shepard, Smith, Kohlmyer & Hand, also warned that the proposed legislation could lead to litigation.
“It will be very difficult to draft a law which creates a situation where compliance with the development agreement is impossible without either singling out Disney in a way that hands them a strong case, violates the promises to bondholders, violates the contracts clause or some combination of the three,’’ he said.
“But even if they succeed in that or Disney doesn’t fight it, that still leaves the restrictive covenants, which were arguably more dramatic and extraordinary in their limitations.”
HOW MIGHT LEGAL CHALLENGES PLAY OUT?
Michael Wolf, a professor of local government and property law at the University of Florida, said in an interview with the Herald/Times last month that Disney could respond to such an effort that Florida has preempted its private property rights.
“That would open up a difficult conflict for the Florida Supreme Court,’’ Wolf said. “The conservative court will have to choose between defending the rights of private property owners, which is typically something that conservative judges do, and supporting an administration that is taking, perhaps what appears to be a conservative political strategy against a major corporation.”
Disney did not immediately respond Monday to a request for comment. Last month, the company defended the actions of the Reedy Creek Improvement Board, saying they were done in public meetings following the state Sunshine Law requirements. At a Disney annual shareholder’s meeting earlier this month, Disney CEO Bob Iger called DeSantis’ move “anti-business and anti-Florida.”
In a recent interview with Time, Iger said he would be happy to meet with DeSantis to discuss the future of the district.
“I do not view this as a going-to-mattresses situation for us. If the governor of Florida wants to meet with me to discuss all of this, of course, I would be glad to do that,” he said. “You know, I’m one that typically has respected our elected officials and the responsibility that they have, and there would be no reason why I wouldn’t do that.”
LEGISLATORS BACK DESANTIS
Two legislators who appeared with the governor said they are ready to continue to battle with the corporate powerhouse in an attempt to influence the entertainment content the company produces — a position that could lead to First Amendment challenges.
“It’s time for Disney executives to have a sober conversation and retake the company from the radical ideologies that have hijacked it,” said Rep. Carolina Amesty, a Windermere Republican. “You are in the business of entertaining children and families. You are not in the business of social reengineering or promoting radical political ideologies. And if you think you are we have good news for you. As our great governor has said, Florida is a place where woke goes to die.”
Sen. Blaise Ingoglia, R-Spring Hill, said he had some advice for Disney: “You are not going to win this fight. This governor will. Just let it go.”
Amesty “was saying the quiet part out loud,’’ Planas said. “They are afraid that Disney uses LGBTQ characters and they want to put an end to that.”