On April 22, 2022, Florida Gov. Ron DeSantis signed a bill dissolving the Reedy Creek Improvement District, ending perhaps the most successful experiment in private governance in U.S. history. The bill ended an arrangement that turned a swamp on the edges of Orlando into the home of Walt Disney World, one of the busiest tourist destinations on Earth. The governor's victory is not yet final—while the district was formally dissolved earlier this year, Disney attorneys quickly outfoxed DeSantis, delegating many of the district's powers back to the company. The company is now suing to reverse the change altogether.
For all the media sound and fury over the duel between the would-be president and the Mouse, experts seem to agree that Disney will retain most of its longstanding autonomy when all the lawsuits are through.
Whatever your views of the "Don't Say Gay" law that kicked off the DeSantis-Disney feud, or of the increasingly regrettable quality of the live-action Disney feature film reboots of its animated classics, DeSantis' attempt to dissolve the district is a blatant effort to bully a private company because he disapproved of its constitutionally protected speech. At best, it reveals DeSantis as a culture warrior rather than a small-government conservative. At worst, it exposes DeSantis as a politician willing to toss out the rule of law and free markets to score cheap political points, in the lead-up to a Republican presidential primary in which he's struggling to meet expectations.
For the most frivolous reasons imaginable, the fate of "the happiest place on Earth" now hangs in the balance.
'A Showcase to the World of the American Free Enterprise System'
By any reasonable metric, Central Florida was an odd place to build a theme park. When Disney selected Orlando as the site of Walt Disney World in the early 1960s, the city was a sleepy backwater of fewer than 100,000 residents lacking a dedicated civilian airport. (Today, Orlando International Airport is the eighth-busiest airport in the nation.) The remote 25,000 acres now covered by Walt Disney World were barren swampland, carved up by streams blackened by decaying organic matter and covered with mosquito-infested subtropical forests.
Unlike Niagara Falls or St. Louis—other contenders for what was then conceived as an East Coast Disneyland—Orlando enjoyed that most coveted resource: sunshine. Uncomfortable though the region's hot, humid summers may be, a Florida park could operate year-round. The $5 million project of buying up thousands of acres of Florida land became known within Disney as "Project Winter."
Orlando also had roads. Just as Disneyland was placed next to the brand new Santa Ana Freeway in Anaheim, California, Walt Disney chose Orlando on the straightforward basis that "the freeway routes, they bisect there." By the 1960s, the city sat at the junction of Interstate 4 and Florida's Turnpike, providing easy access for vacationing families traveling from the Northeast and Midwest.
Compared to contemporary scrambles for corporate relocations—consider Amazon's crony competition to build its HQ2 in 2018—Disney's move to Florida seems positively laissez faire. As political scientist Richard E. Foglesong points out in his definitive study of Disney-Florida relations, Disney chose Florida, not the other way around. Disney took great pains to hide its search from the public, even hiring William "Wild Bill" Donovan, the "father of the CIA," to help the company discreetly acquire land. When their decision to move to Orlando was finally revealed, the ask for Florida lawmakers was simple: Keep building roads and leave us alone.
At the behest of Disney, Florida lawmakers established the Reedy Creek Improvement District, effectively designating the 39 square miles the company had purchased as its own county. Through a board of supervisors appointed by landowners, Disney could tax itself to finance needed infrastructure and public services, exempt from state building and zoning rules. With only a handful of genuine residents—employees in homes rented from the company, legally necessary to establish two paper towns—the district had no local politicians to interfere with Disney's prerogatives.
All Disney had to do in exchange was pay county and state taxes and undergo state elevator inspections (the Tower of Terror notwithstanding). Curiously, while Disney could not run an elevator free of state oversight, it could have, in theory, run its own nuclear power plant.
Disney didn't want these broad governing powers just to build another theme park. Walt intended to also build and manage a model city, which would pilot, develop, and export a new approach to urban management. Amid a decade of rapid suburbanization, worsening traffic congestion, and mounting urban unrest, Walt viewed solving "the urban problem" as his last great project. Fresh off the success of the 1964 New York World's Fair—where he worked closely with master builder Robert Moses—it was a natural next step.
Drawing liberally from a range of urban design traditions, Disney's unrealized vision was a far cry from the conspicuously conservative design of Main Street, U.S.A. In his final on-camera appearance, Walt described the Experimental Prototype Community of Tomorrow (EPCOT) as a carefully managed radial community of 20,000 residents, anchored by a central business district, divided into discrete use districts, connected by people movers, and ringed by a greenbelt.
If his design ideas now seem like cliché "city of tomorrow" fare, Walt's thoughts on governance remain provocative. The challenge of urban management, as Disney staff put it in a proposal prepared for the federal Department of Housing and Urban Development, involved keeping cities in a permanent "state of becoming." Walt sought a way out of the stagnation and decline that had come to characterize—and in many respects, still characterizes—U.S. cities.
The solution: centralized land ownership and private government. Reflecting the high modernist ideals of the time, Walt and company sought to replace fragmented property rights and democracy with islands of centralized administration, overseen by experts acting in compliance with a broader plan. Against the legal backdrop of the Reedy Creek Improvement District, EPCOT was to be a model of private city development, a "showplace to the world of the American free enterprise system," as Walt put it, profiting its owners and inspiring copycats. Free of ornery holdouts and meddling politicians, the thinking went, the city would be free to reach its fullest potential.
Of course, EPCOT as we know it today falls far short of this vision. (The park is now stylized as "Epcot," a subtle attempt to distance the park from its utopian origins.) Nearly as soon as Walt passed away in 1966, his brother Roy—always the practical one in the partnership—quietly scuttled the model city idea. But the expansive governing powers Walt secured for the district remained.
America's Greatest Success in Private Governance
Looking back over the past half-century, it's safe to say that the Reedy Creek Improvement District has been a remarkably successful experiment in private governance. If Disney World isn't technically a city, it may as well be. On a typical day, the district hosts 160,000 visitors and 77,000 employees, which would put it among the top 100 U.S. cities, well above Walt's vision of 20,000 EPCOT residents. Approximately 32,000 hotel rooms house tens of thousands of temporary—and nonvoting—residents each night.
The district had been a laboratory for public services, running instructive experiments in everything from mosquito abatement to green energy—though it never built that nuclear power plant. The district's boutique EPCOT Building Code, a nod to Walt's original ambitions for the project, optimizes safety and innovation better than the typical U.S. building code does. The district is still, for the most part, ringed by a carefully managed greenbelt, and the Disney World monorail is the ninth-busiest rapid transit system in the country.
Disney did eventually build a functioning model community. Developed in the 1990s and carved away from the Reedy Creek Improvement District—there couldn't be too many voting residents, after all—the community of Celebration, Florida, couldn't bear less resemblance to EPCOT. With a design sensibility that has more in common with Main Street, U.S.A., than The Jetsons, it's no one's idea of the city of tomorrow. Yet the company explicitly framed Celebration as a chance to fulfill Walt's vision of a model community—and implicitly, to turn fallow swampland into more easy money.
Designed according to then-pioneering "new urbanist" principles, the town swapped out cul-de-sacs and use segregation for a street grid extending outward from a commercial town center, with a range of housing typologies mingled together. As documented in Celebration U.S.A., an early history of the town authored by Douglas Frantz and Catherine Collins, Celebration was an attempt to rebuild community right as Americans were first starting to fret over "bowling alone." Thanks in no small part to the runaway success of Celebration, new urbanist towns can now be found across the country.
Even well beyond its official boundaries, it's nearly impossible to ignore the transformative impact of the Reedy Creek Improvement District. Orlando has been among the fastest-growing cities in the U.S. every decade since 1970, and its metropolitan population has quadrupled from approximately 344,000 to 1.5 million residents. Today, Orlando—and Florida as a whole—is synonymous with tourism, an economic powerhouse that holds the undisputed title of "theme park capital of the world."
Disney has occasionally been a difficult neighbor. The company could doubtless do more to fund off-site services and infrastructure. Disney opposition has hobbled attempts at regional transit, including a plan to stitch together Florida with private high-speed rail. With the highest-paying Disney jobs remaining in Southern California, the dynamic in Orlando can feel extractive. The city's dependence on low-paying tourism jobs has fed into recurring housing affordability issues, as captured in the 2017 film The Florida Project.
Yet these are problems of prosperity. If Disney weren't present, there wouldn't be any growth to put pressure on services or roads in the first place. By one estimate, Disney alone accounts for 2.5 percent of the Florida economy and one in 50 employees in the state. The company pours over a billion dollars each year into state and local coffers and hundreds of millions of dollars into local charities. It's hard to take Disney seriously as the primary culprit for housing unaffordability when every city in the region makes it illegal to build apartments in the typical neighborhood.
Walt Disney's grand experiment in private governance made Orlando into the tourism juggernaut it is today. While it didn't get Florida a model city, it did establish a framework whereby Disney took on nearly all of its own infrastructure and public service costs, footing the bill and sparing neighboring cities and counties from constantly having to be at the beck and call of the company. All it took was a degree of private government that's only different from the typical suburban mall—with its list of rules and its private promenades—in scale, if not form.
Far from being a failure, the Reedy Creek Improvement District has been a runaway economic development success, matched only by the free market economic zones that created Singapore and Hong Kong or turned China from a nation of peasant farmers into an industrialized nation in a single generation. The worst that can be said about it is that Florida didn't create even more such districts, offering a level playing field to competitors such as Universal Studios. With new cities and charter cities once again in vogue, we should be discussing the district as a model rather than pondering its apparent death.
So why did DeSantis decide to kill it?
Saying 'Gay' in the Happiest Place on Earth
On March 28, 2022, DeSantis signed the Florida Parental Rights in Education Act—or as it has come to be known by critics, the "Don't Say Gay" bill. The law restricted discussion of sexual orientation and gender identity in schools, required schools to disclose to parents any mental or physical health services received by students, and granted parents a private right of action to sue in cases of perceived violations.
For all DeSantis' complaints about "woke" corporate meddling, Disney initially did just about everything it could to avoid taking a stance on the bill. The company had actually been supporting state Sen. Dennis Baxley (R–Lady Lake), the bill's sponsor. Amid mounting pressure to take a stance in opposition to the bill, then-CEO Bob Chapek released a statement heavy on corporate fluff and light on firm positions.
It didn't help. The Human Rights Campaign announced it would be refusing future donations from Disney, and despite a more explicit statement against the bill from Disney later that week, employees at the company's Burbank headquarters staged a walkout later that month. Chastened, Disney released yet another statement the day the bill was signed into law, declaring that it "should never have been signed" and establishing the company's intent to have the legislation "repealed by the legislature or struck down in the courts."
In retrospect, Disney was probably just trying to avoid bad press. The company's tone-deaf "thoughts and prayers" approach garnered little more than eye-rolling from LGBT activists on the left. But its last-minute opposition would evoke righteous rage from culture warriors on the right. DeSantis promptly declared war on Disney. A bill dissolving the Reedy Creek Improvement District was introduced and swiftly moved through the Florida Senate. Days later, it was on the governor's desk and signed into law.
Senate Bill 4-C was supposed to be the end of Florida's grand experiment in private governance. The brisk two-page legislation called for the Reedy Creek Improvement District to be disbanded on June 1, 2023, without ever mentioning "Disney" or "Reedy Creek"—and affecting only five other special districts. The attempt to abolish the district quickly proved to be a comedy of errors, even by the low standards of contemporary policy making.
For starters, the hastily assembled bill didn't have any plan for the district's billion-dollar bond debt. As revealed by Florida attorney Jacob Schumer, the DeSantis proposal almost certainly violated provisions of the 1967 bill creating the district, which forbade its dissolution while debt is outstanding—debt the district had accrued building all of Disney World's infrastructure. The earliest the state can legally pay down this debt, and thus dissolve the district, is 2029—that is, assuming the state has $1 billion lying around.
Even if DeSantis could dissolve the Reedy Creek Improvement District, the cost of keeping it operating would simply fall onto neighboring counties: Orange and Osceola. According to Orange County Tax Collector Scott Randolph, the county would need to raise property taxes by 15 percent to 20 percent to cover $163 million in services and debt maintenance. A group of residents sued to block the law, alleging that dissolving the district would cause "significant injury to taxpayers." A federal court promptly threw out the lawsuit, but by then a storm was brewing.
In a scramble to correct these issues before the district's dissolution in June 2023, DeSantis signed House Bill 9-B, a 191-page bill establishing a successor to Reedy Creek: the Central Florida Tourism Oversight District. It was meant to be a near–carbon copy of the district, assuming its debt and most of its powers (with the notable exception of a right to build a nuclear power plant). The key difference was that the Central Florida tourism board would now be appointed by DeSantis, rather than indirectly elected by Disney.
As Schumer put it, Disney World was supposed to "go from being uniquely independent to uniquely under political control," forever at risk of having its taxes raised or permits stalled arbitrarily by a board of political appointees.
The Empire Strikes Back
That is, if that board had any real power. When the Central Florida Tourism Board took over in March, it soon realized the outgoing Disney-appointed Reedy Creek Improvement District board had transferred nearly all its powers over to Disney. Since a delegation of power can't run in perpetuity, it lasts "until twenty-one (21) years after the death of the last [living] survivor of the descendants of King Charles III," or 2-year-old Princess Lilibet. For obscure legal reasons, Disney—a company synonymous with princesses—has literally bet its future on a young princess.
At taxpayers' expense, DeSantis attorneys are still busy trying to poke holes in the delegation of power—a futile effort, given Disney and the district's adherence to procedural requirements. The meeting was even noticed in the Orlando Sentinel.
In the meantime, Disney isn't waiting around. In September, the company refocused its lawsuit against the district's dissolution on the rather obvious First Amendment issues raised by DeSantis' botched coup. According to company attorneys, the laws dissolving and replacing the Reedy Creek Improvement District were passed without any rational basis, except as retaliation for constitutionally protected political speech—and to silence future speech.
It will be hard for DeSantis attorneys to argue otherwise: In what little debate happened on the original bill, state Sen. Doug Broxson (R–Pensacola) chastised Disney for failing to remain "apolitical." DeSantis, for his part, has never bothered to hide the political nature of the fight, dedicating a whole chapter of his recent book to the feud—unimaginatively titled "The Magic Kingdom of Woke Corporatism." The fact that policy makers recently created a special district for apolitical competitor Universal Studios isn't helping the state's case.
To what end? Until recently, DeSantis had made his constitutionally dubious feud with Disney a mainstay of his flagging presidential campaign. But polling suggests that most Americans don't care either way, and those who do care are evenly divided. Disney retains net favorability—something that can't be said of DeSantis. Having milked the incident for what little it was worth, DeSantis now seems keen to forget about it, recently pleading for Disney to move on. Perhaps picking a fight with Mickey Mouse is a poor way to start a campaign. (It certainly isn't winning over my niece and nephew.)
Even former President Donald Trump, no stranger to bullying corporations, mocked the wisdom of the spat on the social media site Truth Social: "This is all so unnecessary, a political STUNT!"
DeSantis' war with Disney has only hurt Florida. In May, Disney announced it would be scrapping a long-anticipated plan to relocate the company's legendary Imagineering department to Orlando, which would have brought 2,000 high-paying jobs to the state. In August, the new DeSantis-appointed board stripped district employees of perks such as free season passes to the parks, sparking a backlash among district firefighters—the same firefighters who backed DeSantis' failing bid to dissolve their employer. Real life may not always be a Disney morality play, but it does occasionally have a sense of justice.
When Walt Disney set out to build his kingdom in Florida, his first priority was to insulate it from politics. As Disney staff sketched out the political philosophy of the Reedy Creek Improvement District in 1966, they dreamed of a community "freed from the impediments to change, such as…elected political officials." Walt's uniquely apolitical vision of private governance has received no shortage of criticism over the past half-century, especially from the left. But as politics infects every aspect of society, his concerns increasingly seem prophetic.
The post DeSantis vs. Disney: Florida's Fight Over Private Governance appeared first on Reason.com.
