The Reedy Creek Improvement District, Disney’s self-governing special district, claims that Florida’s plan to dissolve the district next year is illegal unless the state pays off Reedy Creek’s massive debts.
Reedy Creek is a special purpose district established by state law in May 1967 that grants The Walt Disney Company extensive governmental control over the land surrounding its central Florida theme parks. Reedy Creek currently has approximately $1 billion in outstanding bond debt, according to credit rating agency Fitch Ratings.
Reedy Creek stated to its bondholders last Thursday that the 1967 law also includes a pledge from Florida to its bondholders. According to the law, Florida “will not in any way impair the holders’ rights or remedies… until all such bonds, together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged.”
Reedy Creek stated that it expects to continue doing business as usual as a result of that pledge.
“In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to investigate its options while continuing its current operations, which include levying and collecting ad valorem taxes and collecting utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants, and operating and maintaining its properties,” Reedy Creek said.
CNN has reached out to the office of Florida Gov. Ron DeSantis for comment on Reedy Creek’s statement.
The statement, which was posted to the Municipal Securities Rulemaking Board, is the first response from the Disney-run district since Florida Republicans introduced legislation to dissolve the special purpose district on June 1, 2023. On Friday, DeSantis signed the bill into law. Disney has made no public statements regarding the law.
The new law is only two pages long and avoids any discussion of how to unwind a half-century of infrastructure deals, as well as laying out the next steps in the complicated process. Lawmakers in neighboring Orange and Osceola counties have expressed concern that they will be tasked with repaying Reedy Creek’s debts, which will necessitate significant increases in property taxes for residents.
“It would be catastrophic for our budget here in Orange County if we had to take over the first response — the public safety components for Reedy Creek — with no new revenue,” Orange County Mayor Jerry L. Demings told reporters on April 21, before the official legislature vote that day. “It would place an undue burden on the rest of Orange County taxpayers to fill that gap.”
How did we get here
With 75,000 employees, Disney is Florida’s largest single-site employer and a key driver of the state’s vital tourism industry. Nonetheless, state officials adopted the company’s self-governing status in retaliation for Disney’s criticism of a law restricting discussion of LGBTQ issues in schools.
The “Parental Rights in Education” bill, dubbed the “Don’t Say Gay” bill by critics, prohibits schools from teaching children about sexual orientation or gender identity “in an age-appropriate or developmentally appropriate manner.” The legislation also allows parents to sue school districts for potential violations.
The law’s ambiguous language and the threat of parental lawsuits have raised concerns that it will lead to discrimination against LGBTQ students and chill classroom debate. However, DeSantis’ spokesperson, Christina Pushaw, stated that the legislation would protect children from “groomers,” a slang term for pedophiles, and labeled those who oppose the legislation as “probably groomers.”
Disney CEO Bob Chapek initially refused to condemn the law, but changed his mind after employee backlash. A company spokesperson stated last month that the company’s goal is for the law to be repealed by the legislature or overturned in court.
“Florida’s HB 1557, also known as the ‘Don’t Say Gay’ bill,” the statement said, “should never have passed and should never have been signed into law.” According to the company, it is “dedicated to advocating for the rights and safety of LGBTQ+ members of the Disney family, as well as the LGBTQ+ community in Florida and across the country.”
Earlier this week, DeSantis challenged lawmakers to repeal the Reedy Creek Improvement Act, which has been in effect for 55 years, as part of a special legislative session. The impact of that legislation, as well as its legality, is unknown.
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