Wisdom From The Bench

On Tuesday (updated Wednesday), The Washington Examiner reported that U.S. District Judge Cecilia Altonaga threw out the lawsuit against Florida Governor Ron DeSantis filed to prevent the ending of the special deal between Disney World and Florida.

The article reports:

A federal judge tossed out a lawsuit against Gov. Ron DeSantis (R-FL) that sought to halt the dismantling of the Walt Disney World Resort’s Reedy Creek Improvement District.

U.S. District Judge Cecilia Altonaga determined Tuesday that the federal court lacked standing because it was a state issue, the plaintiffs’ First Amendment arguments were flawed, and the lawsuit was premised on a piece of legislation that does not go into effect until July.

“In Count I, Plaintiffs allege that Senate Bill 4-C violates Florida’s Reedy Creek Improvement Act and ‘contractual obligations’ the state owes to Floridians,” Altonaga, a Bush appointee, wrote. “The Court lacks subject-matter jurisdiction over Plaintiffs’ sole remaining claim for violation of Disney’s First Amendment rights. ‘[A] party generally may assert only his or her own rights and cannot raise the claims of third parties not before the court.'”

In the 1960s, Florida established RCID as a special district under the Reedy Creek Improvement Act. RCID is run by the landowners in the district, predominantly Disney, who oversee basic local government functions such as zoning, infrastructure, and building codes.

The lawsuit was filed last week by William Sanchez, a Democratic contender for Senate. Michael and Edward Foronda and Vivian Gorsky were listed as plaintiffs. The suit challenged a bill DeSantis signed last month stripping RCID of its special district status.

The article concludes:

In response to DeSantis signing the bill, RCID released a statement arguing that the state would be on the hook for its roughly $1 billion in outstanding debt — something DeSantis has disputed.

“In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its 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,” RCID said in a statement, per CNN.

It is quite possible that after all is said and done, the taxes of the people in the counties involved may decrease instead of increase. This is something to watch.

How Disney Corporation Built In Florida

The Daily Wire recently posted an article titled, “‘Shell Companies And Shady Lawyers’: Why Did Disney Get To Govern Itself In Florida?”

The article reports:

Why does a giant entertainment conglomerate get to self-govern on its very own slice of land in the Sunshine State — and who is left better off as that privilege appears to be coming to a close?

…If you have ever visited Disney World Resort in Lake Buena Vista, Florida, you have been to the Reedy Creek Improvement District. Sitting in central Florida to the southwest of Orlando, the area was feverishly pursued by Walt Disney himself as the home of his company’s second theme park.

Frustrated by the businesses that crowded Disneyland in California, Walt Disney set up multiple shell companies — with names like Latin-American Development and Management Corp., Tomahawk Properties, and M.T. Lott Co. — to grab tens of thousands of acres in Florida. According to journalist and author David Koenig, who has spent years covering the rise of Disney, the strategy was meant to mask Disney’s intentions in the region and thereby keep real estate as inexpensive as possible.

“There were dozens of landholders, and as soon as someone heard that Disney bought lot one, they knew the price on lots two through 50 would go through the roof,” Koenig explained to the Los Angeles Times. “It had to appear as if it were just a coincidence that there were 10 different companies buying land in the same area.”

Disney took other measures to hide the fact that it was the “mystery” land buyer acquiring uninhabited swampland at a breakneck pace. A blog post from Disney acknowledges that legal counsel Bob Foster — working under the pseudonym “Bob Price” — took steps to obfuscate Disney’s intentions from citizens of Florida. 

The article explains the Reedy Creek Improvement Act:

For several decades, Disney has been a powerful political influence in Florida. According to data from Open Secrets, the company gave $350,000 to $610,000 to seven firms lobbying in Florida during the 2020 election year, followed by $460,000 to $719,974 to eight firms in 2021.

Still, Disney’s greatest lobbying victory came in the years after it acquired the large tracts of land in central Florida.

Gov. Claude Kirk (R-FL) signed the Reedy Creek Improvement Act in 1967 — the year after Walt Disney passed away — in response to the company’s lobby. The legislation allowed the state legislature to establish the Reedy Creek Improvement District, allowing Disney to act with the same authority as a county government for its 39-square-mile property. The district encompasses the cities of Bay Lake and Lake Buena Vista, as well as 175 lane miles of roadway, 67 miles of waterway, various power and water plants, hundreds of restaurants and retail properties, and more than 40,000 hotel rooms.

Most importantly, Reedy Creek has permission to levy taxes, issue bonds, and write its own construction and wastewater management laws — avoiding the regulatory headaches with which other companies throughout the state must wrestle. 

The article concludes:

No matter how the magic stars align, University of Central Florida historian James Clark concluded that there is only one “clear winner” from the situation.

“If taxpayers get stuck with the bonds, then the counties will be the big losers from this bill, and Disney loses a lot by losing the control they get from having Reedy Creek,” Clark said. “The only clear winner if this bill passes is Ron DeSantis.”

“Whatever you do,” Walt Disney once said, “do it well.” It seems that DeSantis has taken that advice to heart.

When lobbyists get their way, the result does not always favor the voters and taxpayers. The Reedy Creek Improvement Act was not a good thing–no business should be able to set up their own fiefdom making their own laws in the middle of a state.

Don’t Mess With Ron DeSantis!

On Friday, Just the News reported that Florida Governor Gov. Ron DeSantis has signed a bill that will strip Walt Disney World of its special tax and administrative status after the company opposed a parental rights bill the state passed in late March. I have very mixed emotions about this. The head of a corporation should be free to express opposition to a law without the state government penalizing the corporation. It is quite possible that it was time for the ‘Disney deal’ to end, but I am uncomfortable with it being in response to a political stand.

The article reports:

The Reedy Creek Improvement District, a special administrative unit under Disney control will cease to exist under the measure, according to CBS News.

After Florida passed a parental rights bill, derided by critics as a “Don’t Say Gay” measure, the company organized opposition to the law and vowed to see it repealed. The company’s stance earned sharp rebuke from Florida Republicans, who quickly moved to revoke the company’s tax privileges.

In late March, DeSantis signed into law the Parental Rights in Education bill which limited discussion of sexual topics in the classroom by grade levels and restricted inappropriate material.

Disney stock fell 2.79% on Friday, according to Google Finance. Company stock has fallen 31.25% in the past 6 months and trades for $118.27 per share as of press time.

I believe that the Parental Rights in Education bill was a good bill and that Governor DeSantis was correct in signing it. I also believe that a lot of what was reported about the bill was inaccurate and designed to create opposition to the bill. However, I am sincerely concerned about the way the Disney situation was handled. Would conservatives be celebrating if the shoe were on the other foot?