Disney-governed district in Florida reacts to calls to abolish it

The Walt Disney Company’s special governing district in Florida has responded to a new law that seeks to dissolve it by claiming that the state will be responsible for the district’s $1 billion in outstanding financial commitments.

The bill, signed by Gov. Ron DeSantis during a special legislative session last week, would put a stop to any autonomous special districts created before Nov. 5, 1968.

The Reedy Creek Improvement District was formed in 1967 by Disney and the state as a mechanism for Disney to generate its own cash to cover municipal infrastructure costs at Disney World, such as roads, garbage management, fire safety, and water. Reedy Creek basically acts as Disney’s agent, issuing bonds and levying taxes on properties inside its borders, which border the Orlando area.

“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,” the statement says.

The dissolution act was enacted in response to Disney’s stance on the so-called Don’t Say Gay law, which prohibits the teaching of gender and sexual orientation to youngsters.

Reedy Creek’s latest statement echoes several experts’ predictions that if Disney loses control of the district, Florida taxpayers will be forced to pay for the district’s outstanding commitments.

“Disney pays its way when it comes to government services,” Florida lawyer Tom Wilkes, who has worked on matters involving Reedy Creek, said this month. “It pays [two] counties and two county school boards — and gets very little services in return. It doesn’t get any exemptions there.”

The ratings agency Fitch put the Reedy Creek Improvement District’s financial obligations on negative watch as a result of the law’s passage. In a statement, a Fitch executive said it was unknown how the debt would be handled if Reedy Creek was liquidated, but that it would damage Disney.

“Dissolution of the district would eliminate access to tax-exempt issuance,” said Michael Rinaldi, Fitch’s head of U.S. local government ratings, adding that “it could cost Disney and other landowners within the district more to finance various projects.”

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