The ongoing feud between Walt Disney Co. (NYSE:DIS) and the administration of Florida Gov. Ron DeSantis took another twist as the company is questioning the process that will eliminate its special status tax district in June 2023.
What Happened: Florida television station WESH 2 obtained an internal memo sent by Disney to its investors that said the dismantling of the Reedy Creek Improvement District cannot occur unless the state arranges for the transfer of its bond obligations — a requirement that was not cited in legislation signed into law by DeSantis that dismantles Reedy Creek.
"Pursuant to the requirements and limitations of Florida’s Uniform Special District Accountability Act, which provides, among other things, that unless otherwise provided by law, the dissolution of a special district government shall transfer title to all of its property to the local general purpose government, which shall also assume all indebtedness of the preexisting special district," the Disney memo said.
"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."
Reedy Creek was created in 1967 and is responsible for infrastructure and public safety needs for its area. It also carries more than one billion in bond debt, which would have to be absorbed by Florida’s Orange and Osceola counties beginning in June 2023 — a cost that neither county anticipated.
“My main concern as the mayor of Orange County is unintended consequences and costs,” Orange County Mayor Jerry Demings told WESH 2. “A lot is undetermined at this point. What I say to everyone is, don't panic at this time. You know, let's wait on all of the details, and we'll just have to see how this all shakes itself out.”
DeSantis has given mixed messages on how the question of Disney’s debt would be handled. Last Friday, his office released a statement promising “additional legislation to authorize additional special districts in a manner that ensures transparency and an even playing field under the law.” But on Monday, he proclaimed that “under no circumstances will Disney be able to not pay its debts – we will make sure of that.”
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What Else Happened: Separately, the Associated Press reported the union representing Reedy Creek’s firefighters is seeking assurances that its roughly 200 members will not lose their jobs and benefits if the district is dismantled.
“We have been told to stay quiet, don’t talk to the media, don’t engage with current events,” said union chief Jon Shirey during a Wednesday meeting of Reedy Creek’s board of supervisors. “We have been told the leadership of the district will tell the story. They will be the ones putting out the message. I ask you, ‘What is that message?’”
Shirey complained the absence of a public response from Reedy Creek leadership could be based on the apprehension that “the governor will find their statements unfriendly and that will complicate things.” Still, he insisted the story could take more twists between now and June 2023.
“We have 14 months, and a lot can change between now and then,” Shirey said.
Photo: Josh Hallett / Flickr Creative Commons
