ORLANDO, Fla. — A new board appointed by Gov. Ron DeSantis started outlining an aggressive plan Wednesday to make changes to a district that oversees Walt Disney World operations, a move that is part of a broader political fight the company is having with the governor.
The five-person board appointed by DeSantis, each of whom is a political ally, outlined steps it plans on taking in the future to exert more government oversight over the entertainment giant. Disney sparked a fight with DeSantis in March 2022 after it issued a statement opposing legislation championed by the governor that aimed to ban talk of sexual orientation or gender identity in classrooms up until third grade.
DeSantis responded by proposing the removal of Disney’s long-held self-governing status, but ultimately left it in place. He instead removed the board overseeing the Reedy Creek Improvement District, the technical name for the district that oversees much of the company’s operations, and replaced them with political supporters. The district has since been renamed the Central Florida Tourism Oversight District.
“Disney’s lobbying and marketing campaign succeeded for 55 years,” said Martin Garcia, the new DeSantis-appointed board chairman. “It succeeded for more than a century, above all, because nobody in Tallahassee was willing to shine a light on this agreement.”
“Then Gov. Ron DeSantis courageously — and I repeat courageously — called it out,” he added.
The board during a three-hour meeting Wednesday for the first time outlined its blueprint for changes to the district, many of which are likely to be opposed by Walt Disney World, which did not have a representative speak at the meeting.
The new board wants to make zoning changes to allow for the development of affordable housing on district land. In trollish fashion, DeSantis joked Monday that the new board could decide to build a state prison near Walt Disney World, a proposal that was not discussed during the board meeting.
The board will also direct its attorneys to join the legal defense of local taxing authorities Disney has sued to challenge property assessments it says are too high and could cost the company tens of millions of dollars. The board says those lawsuits should be dropped, so Walt Disney World would have to pay more tax dollars to local governments.
It will also hire an “independent rate consultant” to scrutinize how the district-owned utility company sets its rates. DeSantis has pitched the idea of giving the district-run utility to a private company.
Board members will also compile a report for DeSantis and the Republican-dominated Legislature making recommendations that can guide future legislative changes that affect the district.
Garcia also hinted that the district could start “monetizing assets,” but did not provide specifics. And he talked about the need to “raise revenues,” a nod to the fact that the district has the ability to assess taxes and levy fees, and could raise rates as needed.
He said that would have to happen, in part, because of what he alleged is an “illegal” development agreement that has been central to the latest round of fights between Disney and the DeSantis administration. In February, the old board approved a development agreement that would allow Walt Disney World to maintain significant control over district business, even as DeSantis was pushing the legislation to install a new board favorable to him.
“Another reason we are going to have to raise revenues is because of the expenses that we are having to incur to deal with these illegal agreements,” Garcia said.
The board, as expected, directed its staff to prepare a resolution that will be considered at its next meeting trying to nix the agreement, and at DeSantis' urging, the Legislature is likely to pass a similar measure trying to do away with the agreements before the May 5 end of the state’s legislative session.
Though no direct action was taken on the development agreement during the meeting, outside attorneys hired by the district, including a firm whose partner is former Florida Supreme Court Justice Alan Lawson, gave a presentation blistering Walt Disney World for the development deal.
The agreements “are completely one-sided. Disney takes governmental power for itself for decades and offered the district precisely nothing in return,” David Thompson, a partner with Washington-based Cooper & Kirk, told the board during a presentation. "The bottom line is that Disney engaged in a caper worthy of Scrooge McDuck to try to evade Florida law."
He said the agreement is "null and void" because Walt Disney World did not properly notify those affected before approving the deal, a contention that will no doubt land in court.
A Walt Disney World spokesperson did not immediately respond to a request seeking comment.
The development agreements that are now at the center of the fight stemmed from comprehensive land use changes that Walt Disney World got approved by the state last July, which means the DeSantis administration was aware of the underlying agreements going that far back.
The changes approved by the DeSantis administration, which reacted with surprise earlier this year when the agreements became public, allowed the previous board to approve the development agreements. Thompson, however, argued that the state approving Disney’s sweeping proposal that gave way to the development agreements does not mean it would have any idea the board would pass what he also termed an “illegal” agreement.
“Some may say well, what’s their comprehensive plan? Isn’t this just mirroring what’s in the comprehensive plan? And that can be fallacious for a number of reasons,” he said. “First of all, it’s just not true. … The restrictive covenants place all sorts of restrictions upon the district that were not in the comprehensive plan.”
The Department of Economic Opportunity, the DeSantis administration agency that approved the plan changes, did not immediately respond to requests seeking comment about its approval process.
DeSantis was not at the meeting, but dispatched top administration officials, including chief of staff James Uthmeier and officials from the Department of Health, Department of Transportation, and Department of Business and Professional Regulation. Each used their presentation to highlight what they said have been district regulatory failures under the previous board.
Department of Health deputy chief of staff Weesam Khoury pointed to pool safety and noted violations that have occurred on district property.
“Disney was the judge and jury for these incidents since 2014,” she said. “The state is only aware of what was reported. There was no ability for confirmation.”
CORRECTION (April 20, 2023, 10:36 a.m. ET): A previous version of this article misstated the name of the law firm at which David Thompson is a partner. It is Cooper & Kirk, not Cooper Kirk.