There has been a lot of talk about the Florida Governor’s threat to revoke the authority, granted in 1967 by the Florida legislature, to the Reedy Creek Improvement District. Passed and signed into law by Governor Claude Kirk in the wake of Walt Disney’s passing, the RCID gives The Walt Disney Company the ability to establish and manage its own business codes, land use codes, environmental protections, taxes and essential public services (fire, security, pest and animal control, flood control, waste collection, etc.).
At the time, the surrounding counties did not have the resources to support the scale of project that the Disney company was proposing. So the Florida Legislature created the cities of Bay Lake and Reedy Creek (now City of Lake Buena Vista) and established the improvement district to manage their governance. Effectively, Disney World is its own county, except for the authority to arrest and prosecute violations of its codes.
There are consequences to the state if this authority is revoked. For one thing, Florida tax payers would become responsible for the infrastructure within the Disney property. The roads interconnecting the resorts and parks would be considered public. Further, revocation of the improvement district would again split Disney World into two separate counties (Osceola and Orange Counties), forcing both counties to assume responsibility for what Disney has built up over the last 50 years.
It should be noted that it is national and state GOP interests that are driving this effort; it is not supported locally. If the RDIC is effectively repealed, it will be a legal, logistical, financial, administrative and governing burden on the two counties. And both are quite happy not having that responsibility.
The practical impacts of a repeal in the short term would likely be a pause in construction while the two counties figure out what to do. In addition to planning, permitting and infrastructure issues, there are also certain tax and fee exemptions that could disappear. Or, there could be a transition period during which Reedy Creek continues business as usual while the two counties figure out how to proceed.
Remember, the counties and the state benefit greatly from the tax revenue Disney World brings in, so politics aside, there is a significant financial incentive to keeping the parks and resorts humming and guests happy and spending. Disney is the largest property tax payer in Orange County and is a significant source of funding for Osceola as well.
Regardless of the intent or actions by the state government, Disney still has quite a lot of leverage in its dealings with Osceola and Orange County. It will be difficult, and likely uncertain for shareholders, but Disney works with Orange County (coincidence) and the city of Anaheim to operate Disneyland Resort, so if it has to adjust, it will adjust.
Who still thinks Florida as a state doesn’t want to open this can of worms, but the story will have to play out…
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