DeSantis allies on Disney oversight board threaten company with taxes, rate hikes and affordable housing

By Steve Contorno, CNN

Gov. Ron DeSantis’ political allies overseeing Disney’s special taxing district threatened on Wednesday to hike taxes, raise utility rates and develop land around the entertainment giant’s Central Florida theme parks as retribution for the company’s efforts to avoid a state takeover.

In a meeting full of harsh words for one of the state’s largest private employers, board members accused Disney of engaging in a covert, yet legally flawed attempt to take over the district’s powers and thwart DeSantis’ power grab and vowed it would not stand.

“It really is shameful what Disney tried to do,” board chairman Martin Garcia said.

The comments echoed recent criticism from DeSantis, who on Monday vowed swift punishment against Disney and suggested a prison or competing theme park could be built on the land around the company’s vast Orlando-area footprint.

The latest escalation follows DeSantis’ move earlier this year to take over the Reedy Creek Improvement District, the special taxing district that for half a century gave Disney control over the land around its Central Florida theme parks, and install his political allies on the district’s board of supervisors. However, Disney in February reached agreements with the outgoing board that seemed to render the body powerless to control the entertainment giant.

Garcia said that the agreements went unmentioned by a representative for Disney when the two sides met soon after DeSantis appointed the new board. In addition to Garcia, a Tampa lawyer whose firm has donated to DeSantis’ political committee, the governor also appointed the wife of the state Republican Party’s chairman and a former pastor who has suggested that drinking water is turning people gay.

“Our board truly wished to work with Disney,” Garcia said. “Instead, the corporation decided that compromise was out of the question. It was Disney’s way or the highway.”

Disney did not respond to a request for comment.

‘We’ll keep them in their pen one way or another’

The agreements Disney signed with the previous board ensured the company’s development rights throughout the district for the next 30 years and in some cases prevented the board from taking significant action without first getting approval from the company. One provision restricted the new board from using any of Disney’s “fanciful characters” until “21 years after the death of the last survivor of the descendants of King Charles III, king of England.”

Lawyers hired by the new board said that these agreements were improperly noticed and unlawful and asserted they would not stand up to legal scrutiny. Documents show the board approved of the development agreement over two meetings that were each noticed in the Orlando Sentinel as required by law. But the board’s legal advisers said that Disney should have also notified landowners within the district by mail.

Disney previously said in a statement that “all agreements signed between Disney and the District were appropriate, and were discussed and approved in open, noticed public forums in compliance with Florida’s Government in the Sunshine law.”

DeSantis earlier this week said lawmakers will also move legislation that would nullify Disney’s agreements. He said the state will look to take over inspections of Disney’s property, including its rides. Currently, large theme park operators in the state inspect their own rides.

The clash between Florida and Disney started last year when the state passed a new law that limited classroom instruction of sexual orientation and gender identity. Disney objected to the bill and vowed to help get it repealed. DeSantis responded by targeting the Reedy Creek Improvement District.

Speaking in South Carolina on Wednesday, DeSantis told supporters, “If Disney objects to that, then so be it, we’re going to do what’s right.”

“We’ll make sure that we’ll keep them in their pen one way or another. Don’t worry about that,” he added.

Decades-old agreement

The state legislature created the Reedy Creek Improvement District in 1967 and effectively gave Disney the power to control municipal services like power, water, roads and fire protection around its Central Florida theme parks that didn’t exist before Walt Disney and his builders arrived. But the special district also freed Disney from bureaucratic red tape and made it cheaper to borrow to finance infrastructure projects around its theme parks, among other significant advantages.

That special arrangement, though criticized at times, was largely protected by state politicians as both Disney and Florida benefited from the tourism boom. But throughout Wednesday’s meeting, the board and its attorneys depicted Disney as a bad actor that over time had used its special government to avoid paying property taxes to local school districts and failed to provide adequate housing for its workforce.

The board suggested it may end ongoing lawsuits that have tried to force Disney to pay more local taxes and could change zoning laws to allow for affordable housing to be built on district land. Garcia added that the board could raise rates on the district-operated utility to “make Disney pay more for every ounce of power it uses there,” Garcia said.

Garcia also said the board could monetize assets within the district to pay off outstanding debt ahead of schedule. That debt, estimated at $686 million by the board’s new financial adviser, prevented DeSantis from eliminating the district. The 1967 law that created the district prevents the state from dissolving the district without paying off its debt.

The board plans to vote at its April 26 meeting to void the previous agreements reached with Disney. Supervisors also directed staff to create recommendations to help the governor and legislature determine the district’s future.

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