Florida’s move to dissolve special districts and revoke Disney of its self-governance status is not a done deal, according to the entertainment company.
Disney told investors it expects to continue doing business as usual while exploring its options, noting Florida lawmakers overlooked a state agreement that prohibits the government from interfering unless its bond debt has been paid off. Therefore, Florida cannot legally repeal the Reedy Creek Improvement District where Walt Disney World resides, the company argued.
“It is hard to imagine a way that the state could successfully argue that this did not violate its own contractual obligations or unconstitutionally impair the contract between Reedy Creek and the bondholders,” wrote Jacob Schumer, a municipal attorney based in Florida. “Florida simply cannot promise to prospective bondholders that it won’t interfere with Reedy Creek, and then dissolve Reedy Creek … However, the dissolution will have to wait until all of its bonds are paid in full.”
The GOP-led Florida legislature passed a bill that Gov. Ron DeSantis signed last week dismantling the Reedy Creek district, which allows Disney to oversee its own zoning, infrastructure, laws, policing, and other similar districts. The move came in response to a public feud between DeSantis and the media conglomerate after Disney executives denounced the governor’s Parental Rights in Education bill, dubbed the “Don’t Say Gay” bill by opponents.
DISNEY HAS LOST $50 BILLION IN VALUE SINCE WAR WITH FLORIDA BEGAN
However, an existing promise to bondholders says the state “will not limit or alter the rights of the District … until all such bonds together with interest thereon … are fully met and discharged.” Florida established this provision in the Reedy Creek Improvement District Act that authorized the designation of the district in 1967.
Although the recently signed law doesn’t specify what would happen to the district’s debts, other state laws require the county to assume the burden, as well as any assets, once the territory is dissolved. The state legislature is set to meet near the end of May to discuss property insurance, although it is unclear whether Reedy Creek will be included on the agenda.
DeSantis responded to concerns that the company would receive a tax break after its district is dissolved, telling reporters Monday that Disney would pay its fair share.
“Trust me. Under no circumstances will Disney not pay its fair share of taxes,” the Republican said. “Under no circumstances will Disney not pay its debts.”
It’s not entirely clear how the state will enforce Disney to pay off its outstanding bonds, and DeSantis did not go into further detail during the press conference.
Disney being stripped of its special status has prompted concerns among some who live in the counties covered by the district. Orange County Mayor Jerry Demings said if Reedy Creek was dissolved, his budget would experience consequences, as the district reimburses the county sheriff’s office for its services.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
“If we had to take over the first response and public safety components for Reedy Creek with no new revenue, that would be catastrophic for our budget in Orange County,” Demings told reporters Thursday. “It would put an undue burden on the rest of the taxpayers in Orange County to fill that gap.”
Disney’s stock has lost nearly $50 billion in value since the start of March. It was down more than 2% on Friday and by more than 8.5% over the past few days.
