Orlando Becoming East Coast Headquarters for Disney Parks, Experiences, and Products

[tallica]

https://www.cnn.com/2023/05/19/business/disney-ron-desantis-analysis/index.html

 

[flynnibus]

Where does the RCID get the money to pay its land taxes?

Municipal Govs don't pay land taxes And neither does RCID from what I see.

 

[flynnibus]

This is also not necessarily true. If RCID did not exist, much of this infrastructure probably would have been created by the counties, Disney would have cut deals with the counties to have them build a lot of the infrastructure. Some of it may have been paid for by Disney and then been private, but utilities, through-roads, etc, very well could have been done by the government as is the case with many other parks and businesses in the state.

'could have'

but as we know the gov doesn't build everything for businesses and most developments spend massive amounts building out private infrastructure, or paying utilities premiums to do so. Here, RCID through the cozy relationship can build far more than your typical arrangement would offer.

It's not a stretch at all to conclude RCID built far more under their umbrella than what would have happened in a traditional arrangement.

 

[flynnibus]

Just like the infrastructure that serves the other Orlando theme parks, almost all of the infrastructure that RCID owns would almost certainly be built and maintained by the counties, not Disney.

Then why is UNI paying for so much infrastructure build out even now? This premise of 'counties would have done it if RCID didn't' is rose colored glasses. Counties would have constrained what could have been done under municipal ownership for the very reason RCID was there to start with... because the counties were so constrained.

But, let’s take your hypothetical. Let’s say that all of the infrastructure in RCID was privately-owned by Disney and Disney had to pay property taxes on that land/those assets. Reedy Creek charges 13.9 mills in property taxes on Disney’s property today. That is more than 50% of all property taxes Disney pays on their land (27.5 mills). And Disney already owns about 70% of the land in the district.

The delta isn't just on taxes paid. The delta comes in cost to build as well - as noted in the RCID garage build out... the savings in costs was millions as a municipal project vs a private just in taxes on materials.

Disney is paying for many things with those tax dollars as the vehicle to pay for it (EMS, etc). It's not a comparison of 'is my property tax bill lower'... It's a "Is there advantages to paying for all this stuff via this vehicle vs doing it ourselves". Clearly there is... otherwise they wouldn't do it via RCID in the first place.

 

[lazyboy97o]

'could have'

but as we know the gov doesn't build everything for businesses and most developments spend massive amounts building out private infrastructure, or paying utilities premiums to do so. Here, RCID through the cozy relationship can build far more than your typical arrangement would offer.

It's not a stretch at all to conclude RCID built far more under their umbrella than what would have happened in a traditional arrangement.

A lot of developments might build out the infrastructure but they then hand it over to the local government that becomes responsible for the ongoing support costs.

 

[Stripes]

Then why is UNI paying for so much infrastructure build out even now?

Because they want it done. Even still, Universal is paying a fraction of what Disney would pay in the same situation. The road is even being built by Universal, not a government entity, and still about half the cost is being paid by taxpayers.

Universal Orlando’s new road deal with Orange County is lopsided, critics say

Universal Orlando and Orange County are negotiating a final deal to split the tab for a new road to the company’s planned Epic Universe theme park. The road, which would extend Kirkman Road s…

www.orlandosentinel.com

This premise of 'counties would have done it if RCID didn't' is rose colored glasses. Counties would have constrained what could have been done under municipal ownership for the very reason RCID was there to start with... because the counties were so constrained.

I think the counties would’ve chipped in quite a bit, just like they’re doing for Universal. If RCID was dissolved, it would result in a substantial tax decrease for Disney, would it not?

Disney could’ve also paid for a lot of the infrastructure directly and then deeded the land to the county in order to reduce their property tax bill and the cost of maintaining the infrastructure.

Disney is paying for many things with those tax dollars as the vehicle to pay for it (EMS, etc). It's not a comparison of 'is my property tax bill lower'... It's a "Is there advantages to paying for all this stuff via this vehicle vs doing it ourselves". Clearly there is... otherwise they wouldn't do it via RCID in the first place.

There are benefits to using Reedy Creek to pay for certain infrastructure and municipal services, as opposed to paying for it privately. But Reedy Creek ensures that the landowners in Reedy Creek pay for their own municipal infrastructure and services. If RCID did not exist or was dissolved that cost would be saddled with county taxpayers, reducing Disney’s property tax bill.

I’m 100% sure Disney would prefer that RCID be dissolved over the situation they’re facing now.

 

[flynnibus]

A lot of developments might build out the infrastructure but they then hand it over to the local government that becomes responsible for the ongoing support costs.

One way to reduce cost yes - but still missing out on other savings that are viable with RCID.

The real question should be... "Is the RCID overhead more than what we save by doing it via RCID?" -- Given the 50+yr history, I think we can assume what the conclusion there was.

 

[flynnibus]

Because they want it done. Even still, Universal is paying a fraction of what Disney would pay in the same situation. The road is even being built by Universal, not a government entity, and still about half the cost is being paid by taxpayers.

So we've gone from 'the counties would have done it...' to 'well sometimes the counties will chip in'... when we know there are a lot of cases where they won't at all. Without RCID's control... the county could MANDATE Disney put in and pay for the infrastructure (like road infrastructure) to get the approvals needed. Instead, in the RCID arrangement, Disney gets the zoning they want without having to haggle, and get to decide what RCID will do and what they will do. And obviously get to choose which works better for them financially or strategically..

Sure the alternative is "hey, sometimes tax payers will chip in making it cheaper" -- But then you also have to negotiate with the tax payers! But that path is still besides the point... to the original assertion, it is cost advantaged for Disney to do things via RCID vs themselves (the old 'tax advantage' point). When you change the question to 'is it cheaper for Disney to do it vs county/state tax payers do it' obviously you're dealing with splitting costs with others -- but you're also no longer solely in control.

So is there a cost advantage for Disney with RCID? YES
Is there a cost advantage to sharing costs with county/state vs doing it yourself? YES - but with strings attached

Disney chose the CONTROL path and opt'd to pay for everything themselves, but to leverage the municipal advantage of RCID where it makes sense to do so.

I think the counties would’ve chipped in quite a bit, just like they’re doing for Universal. If RCID was dissolved, it would result in a substantial tax decrease for Disney, would it not?

I assume Disney is willing to pay the premium because it also gives them control. The entire point all along was CONTROL.

Disney could’ve also paid for a lot of the infrastructure directly and then deeded the land to the county in order to reduce their property tax bill and the cost of maintaining the infrastructure.

Like I said to lazyboy - sure that reduces some of your long term costs, but misses out on other financial advantages up front from being a municipal project.

Plus... the county has to actually accept ownership of the stuff. They don't have to if they don't feel like they want it or can't afford it. So again, back to the original state... counties didn't have that base, nor was Disney looking to ask them to carry it.

There are benefits to using Reedy Creek to pay for certain infrastructure and municipal services, as opposed to paying for it privately. But Reedy Creek ensures that the landowners in Reedy Creek pay for their own municipal infrastructure and services. If RCID did not exist or was dissolved that cost would be saddled with county taxpayers, reducing Disney’s property tax bill.

I’m 100% sure Disney would prefer that RCID be dissolved over the situation they’re facing now.

 

[mikejs78]

One way to reduce cost yes - but still missing out on other savings that are viable with RCID.

The real question should be... "Is the RCID overhead more than what we save by doing it via RCID?" -- Given the 50+yr history, I think we can assume what the conclusion there was.

I don't think that question can be answered. There are so many variables and so many things could have been done differently. I don't think RCID resulted in an overall savings over not having RCID. What it did was give Disney control over the experience and timeline of things. Sure, the bond authority helped the situation they were in, but it did not, in my view, represent a savings over what things would have been without RCID.

 

[flynnibus]

I don't think that question can be answered. There are so many variables and so many things could have been done differently. I don't think RCID resulted in an overall savings over not having RCID. What it did was give Disney control over the experience and timeline of things. Sure, the bond authority helped the situation they were in, but it did not, in my view, represent a savings over what things would have been without RCID.

I think its because the discussion topic floats between 'something in isolation' and 'the thing as a whole'

There is no doubt Disney saved money by having RCID build the parking garages for instance. (something in isolation)
But is Disney saving money OVERALL with RCID? Or are they paying a premium and happy to do so for the benefits it gives (the thing as a whole)

Without people scoping the point very clearly - people can debate different things with each being right in their own lane.

It's my opinion when you look at the whole, Disney is paying a premium. But when someone tries to argue there isn't a financial incentive to RCID, you can't escape the truth that Disney is taking advantage of that in pieces... even if the OVERALL net is still paying a premium. Because Disney could just as easily SKIP using RCID for those things, and still have the RCID control perks... yet they don't. That suggests its still advantageous for Disney to do so.

 

[WDWFanRay]

Disney apparently finds it convenient to announce it in the context of their ongoing dispute with the state over ownership of RCID. I find it disingenuous to blame this decision on that dispute.

If Disney didn’t have the cover of the DeSantis dust up to get out of this Florida move, imagine how negative Disney’s pullout would have been portrayed. They upended hundreds of California families who have already sold their houses in SoCal and bought new houses in Florida. Disney says they can move back, but think of hard that will be…especially with young families. Many will probably stay in Florida and try and find new jobs but how disruptive is that. They’ve basically been marooned in Florida. The issue I have is that there was talk of Disney wanting out of the Florida move over a year ago, before the issue with DeSantis. Everything got too expensive in Florida and they wanted out. You can’t blame them for using what’s available to them, but the cancellation has very little if anything to actually do with the current political situation.

 

[WDWFanRay]

Disney (DIS) stock today fell about 2% on the heels of a fresh Wall Street downgrade. Macquarie analyst Tim Noller downgraded shares to Neutral from Outperform, citing declining linear networks, direct to consumer hurdles, and a slowing park’s business.

The economy and business in general is going through a contraction, after the COVID stimulus sugar high. It’s going to be tougher for most businesses to post year over year gains against the craziness of 2022. It’s not Disney’s fault for slowing park business. I just got an email for 35% off Dollywood rooms and I’ve received many other deals on vacation destinations. It’s going to be a slow couple of years in this (and many other) sectors.

 

[Chi84]

If Disney didn’t have the cover of the DeSantis dust up to get out of this Florida move, imagine how negative Disney’s pullout would have been portrayed. They upended hundreds of California families who have already sold their houses in SoCal and bought new houses in Florida. Disney says they can move back, but think of hard that will be…especially with young families. Many will probably stay in Florida and try and find new jobs but how disruptive is that. They’ve basically been marooned in Florida. The issue I have is that there was talk of Disney wanting out of the Florida move over a year ago, before the issue with DeSantis. Everything got too expensive in Florida and they wanted out. You can’t blame them for using what’s available to them, but the cancellation has very little if anything to actually do with the current political situation.

And to top it all off, DeSantis is taking the fall and looking like the bad guy. What goes around . . .

 

[WDWFanRay]

And to top it all off, DeSantis is taking the fall and looking like the bad guy. What goes around

Agreed. He couldn’t be helping Disney any more, to get out of the Florida move. If Disney could figure out a way to tie DeSantis to the Galactic Starcruiser closing, I’m sure they would. Disney has proven to be “smart” over the years, when it comes to tossing all of its bad performing assets into a convenient fire.

 

[Chi84]

Agreed. He couldn’t be helping Disney any more, to get out of the Florida move. If Disney could figure out a way to tie DeSantis to the Galactic Starcruiser closing, I’m sure they would. Disney has proven to be “smart” over the years, when it comes to tossing all of its bad performing assets into a convenient fire.

Disney Scrapping Florida Campus, Shuttering Hotel Amid DeSantis Feud | Video — The Wall Street Journal

Walt Disney Co. is reversing course on a nearly $900 million corporate campus and shutting down a costly new hotel amid growing tensions with Florida Gov. Ron DeSantis. WSJ’s Jacob Passy explains the reasons behind the company’s decisions. Photo: Octavio Jones/Reuters

apple.news

 

[Disone]

If Disney didn’t have the cover of the DeSantis dust up to get out of this Florida move, imagine how negative Disney’s pullout would have been portrayed. They upended hundreds of California families who have already sold their houses in SoCal and bought new houses in Florida. Disney says they can move back, but think of hard that will be…especially with young families. Many will probably stay in Florida and try and find new jobs but how disruptive is that. They’ve basically been marooned in Florida. The issue I have is that there was talk of Disney wanting out of the Florida move over a year ago, before the issue with DeSantis. Everything got too expensive in Florida and they wanted out. You can’t blame them for using what’s available to them, but the cancellation has very little if anything to actually do with the current political situation.

Ehhhhh. Less than 200 of the 2000 jobs moved the Florida but kind this in mind....

They move to Florida before, way before, breaking ground on the construction of the new campus. Something tells me these were the employees / "cast members" that wanted to move to Florida anyway.

So I think really for many of them the question is do they want to move back and can they be accommodated in Florida if they don't want to.

 

[Lilofan]

Ehhhhh. Less than 200 of the 2000 jobs moved the Florida but kind this in mind....

They move to Florida before, way before, breaking ground on the construction of the new campus. Something tells me these were the employees / "cast members" that wanted to move to Florida anyway.

So I think really for many of them the question is do they want to move back and can they be accommodated in Florida if they don't want to.

TWDC advised the third round of company layoffs will happen early summer. I would think the 200 that relocated from CA to FL for the Lake Nona project no longer happening are wondering about future employment.

 

[The Mom]

This is not the RCID thread. Please stay on topic. Thank you.

 

[Brian]

Presented without commentary.

Disney employees who relocated to Orlando from California prefer to stay, realtor says

Realtor: "It’s been actually overwhelming the amount of people who have said, no we love Orlando and as long as they don’t force us to go back, we plan on staying."

www.fox35orlando.com

Disney employees who relocated to Orlando from California prefer to stay, realtor says​

By Valerie Boey
Published May 19, 2023 11:23PM
FOX 35 Orlando

ORLANDO, Fla. - According to a Central Florida realtor, some who work for Disney are calling Orlando the "Happiest Place on Earth" And would prefer to stay, after a plan to develop a billion-dollar development in Lake Nona was scrapped.

"It’s been actually overwhelming the amount of people who have said, no we love Orlando and as long as they don’t force us to go back, we plan on staying." Realtor Ken Pozek relocates Disney employees to Lake Nona.

He says so far, all of his clients told him, they’d prefer to stay in Orlando, rather than move back to California if they have a choice. We asked, "Are you surprised or not?" He replied, "I am, especially with how people fought to stay in California when the news originally broke."

He explained how Orlando won over the hearts of many. "It was a slower pace of life, great weather, more stuff to do, more affordable."
If they do move Ken thinks clients won’t take a hit if they bought a home prior to the last 6 months and decide to sell.

As for his own business. "For us, it’s definitely a loss, and it’s a sad thing to see."

While some say politics had a role in this, the Governor says, "Given the company’s financial straits, falling market cap, and declining stock price, it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures."

 

[Chi84]

Presented without commentary.

Disney employees who relocated to Orlando from California prefer to stay, realtor says

Realtor: "It’s been actually overwhelming the amount of people who have said, no we love Orlando and as long as they don’t force us to go back, we plan on staying."

www.fox35orlando.com

I wonder if there’s any truth to that.