News Reedy Creek Improvement District and the Central Florida Tourism Oversight District

[Brian]

Something I’ve been wondering but have not had a chance to research: if no new legislation materialized, what if Disney and the District just did nothing? They take the position that the law doesn’t apply and the District and everyone else just continues doing business as usual?

In that case, a state entity or DeSantis ally would likely file for an injunction seeking to cease RCID operations.

 

[lazyboy97o]

In that case, a state entity or DeSantis ally would likely file for an injunction seeking to cease RCID operations.

Right, but that puts the onus of action on the State who would likely also have to go after the counties since they also didn’t take the District’s assets. They have to put in writing in a filing that the law applies to Reedy Creek Improvement District because it was specifically intended to target them.

 

[lazyboy97o]

I’m guessing that on June 1, 2023, RCID loses its taxing authority.

Maybe a bigger Issue is what happens to RCID’s bond rating since they technically no longer exist.

If your taxpayers keep paying then you still have authority.

The State can’t just let the bonds go poof.

 

[Brian]

They have to put in writing in a filing that the law applies to Reedy Creek Improvement District because it was specifically intended to target them.

That's assuming that the none of the other affected districts don't also take a similar approach (ignoring the law and maintaining status quo).

 

[Brian]

I’m guessing that on June 1, 2023, RCID loses its taxing authority.

Another factor would be if the Orange/Osceola County Tax Collectors continue to collect the assessments on behalf of the district. My guess is they would not, since they would recognize the district as having legally been dissolved (barring a course correct before then).

At that point, it becomes a matter of liquidity for the district, and operations would likely end in due course.

 

[UNCgolf]

I believe one of the big chunks of land owned by the District is the green belt around Celebration. It’s an acreage but it’s conservation land that isn’t going to be great for building. I also think there are spindly bits along I-4 and US 192, so not exactly desirable for development.

That's what I was thinking -- mainly conservation land etc. that would not have a high value.

 

[castlecake2.0]

I believe one of the big chunks of land owned by the District is the green belt around Celebration. It’s an acreage but it’s conservation land that isn’t going to be great for building. I also think there are spindly bits along I-4 and US 192, so not exactly desirable for development.

The area surrounding Celebration is owned by “different companies” that are all owned by Disney, like Compass Rose and The Celebration Company, all managed by the District. A lot of it is nature preserves and canal systems to manage Disney and Celebration’s water systems. As you said, not suitable at all for development.

 

[Chip Chipperson]

In that case, a state entity or DeSantis ally would likely file for an injunction seeking to cease RCID operations.

I'm not sure the other taxpayers in RCID would go along with it, either. I also think that if Disney and RCID want this to be settled by the courts then they're better off bringing their case there themselves rather than being forced to defend themselves for ignoring a law that they never fought in court.

 

[Disneybob1957]

Disney is a entertainment industry the people at the top running should keep out of
politics if they don’t the share holders should vote to have them removed from their position

 

[castlecake2.0]

Disney is a entertainment industry the people at the top running should keep out of
politics if they don’t the share holders should vote to have them removed from their position

Thanks for that riveting contribution to the discussion, in case you haven’t noticed no one has voted anyone out which seems to point that the majority of shareholders agree with the Company’s stance.

 

[Brian]

Thanks for that riveting contribution to the discussion, in case you haven’t noticed no one has voted anyone out which seems to point that the majority of shareholders agree with the Company’s stance.

It's more nuanced than that. Nearly 65% of DIS is owned by institutional investors, many of whom push these stances upon the companies they invest in. Even if every individual shareholder wanted to vote Bob and Co. out because of their foray into recent political/social issues, they wouldn't be able to with that kind of ratio and voting power.

Suggesting that Bob and Co. remaining in their jobs equates to popular support of their actions ignores a critical distinction between the "1%" and "99%."

 

[mikejs78]

I’m guessing that on June 1, 2023, RCID loses its taxing authority.

Maybe a bigger Issue is what happens to RCID’s bond rating since they technically no longer exist.

As I said before, I don't think they would. My take is that if The legislature does nothing, the law that was passed in March does not apply to Reedy Creek. The reason being that the Reedy Creek improvement act states that any Florida law that conflicts with the Reedy Creek improvement act does not apply to Reedy Creek, unless the legislature specifically repeals section 2 of the Reedy Creek Act.

 

[Disney Glimpses]

As I said before, I don't think they would. My take is that if The legislature does nothing, the law that was passed in March does not apply to Reedy Creek. The reason being that the Reedy Creek improvement act states that any Florida law that conflicts with the Reedy Creek improvement act does not apply to Reedy Creek, unless the legislature specifically repeals section 2 of the Reedy Creek Act.

Haha that would be a wild outcome, that it literally does nothing at all.

 

[lazyboy97o]

Haha that would be a wild outcome, that it literally does nothing at all.

And if your honest position is that a law does not apply to you then you don’t change what you are doing. You wouldn’t even have standing to file a lawsuit.

 

[GoofGoof]

Disney is a entertainment industry the people at the top running should keep out of
politics if they don’t the share holders should vote to have them removed from their position

Why would a shareholder care about this one way or the other? It has very little impact on the financials of TWDC. Disney and every other Fortune 500 company has positions on a whole range of political issues, including this one. This is nothing new and has been the case for many, many years. It’s only become a public spectacle now because the “conflict” is being used for political gain by a politician. Fundraising is way up.

 

[GoofGoof]

It's more nuanced than that. Nearly 65% of DIS is owned by institutional investors, many of whom push these stances upon the companies they invest in. Even if every individual shareholder wanted to vote Bob and Co. out because of their foray into recent political/social issues, they wouldn't be able to with that kind of ratio and voting power.

Suggesting that Bob and Co. remaining in their jobs equates to popular support of their actions ignores a critical distinction between the "1%" and "99%."

I agree with this. To take it a step further the institutional investors who own 65% of DIS would need to liquidate nearly all of their positions if they took the stance that they were going to sell off stock in any company that takes a political position. There would be very little left to invest in, if anything at all. The fact that these investors own DIs and other stocks is not impacted either way by these types of issues.

The 99% can vote with their wallets. They don’t need to overturn the board as a stockholder. They can just stop buying products and services from companies who take a political stand on these types of issues. Companies like TWDC and Google and Apple and Verizon and AT&T and Comcast/Universal and most major airlines and most major hotel chains and a whole bunch of dining and retail chains….etc, etc

 

[Lilofan]

I agree with this. To take it a step further the institutional investors who own 65% of DIS would need to liquidate nearly all of their positions if they took the stance that they were going to sell off stock in any company that takes a political position. There would be very little left to invest in, if anything at all. The fact that these investors own DIs and other stocks is not impacted either way by these types of issues.

The 99% can vote with their wallets. They don’t need to overturn the board as a stockholder. They can just stop buying products and services from companies who take a political stand on these types of issues. Companies like TWDC and Google and Apple and Verizon and AT&T and Comcast/Universal and most major airlines and most major hotel chains and a whole bunch of dining and retail chains….etc, etc

It would be a good way to pay down consumer debt if vote with their wallets. Paying down debt seems like a foreign phrase to some.

 

[Disstevefan1]

Why would a shareholder care about this one way or the other? It has very little impact on the financials of TWDC. Disney and every other Fortune 500 company has positions on a whole range of political issues, including this one. This is nothing new and has been the case for many, many years. It’s only become a public spectacle now because the “conflict” is being used for political gain by a politician. Fundraising is way up.

Agreed, Shareholders just care about the share price. However Disney can keep the share price propped up is all the shareholders care about.

Dissolving RCID seems to me, a big tax break to TWDC as they will no need to pay that bond back, that should be good for the stock price?

The only losers here are the Florida taxpayers in Orange and Osceola counties.

 

[GoofGoof]

Agreed, Shareholders just care about the share price. However Disney can keep the share price propped up is all the shareholders care about.

Dissolving RCID seems to me, a big tax break to TWDC as they will no need to pay that bond back, that should be good for the stock price?

The only losers here are the Florida taxpayers in Orange and Osceola counties.

Even if this really resulted in a tax break for TWDC it still probably doesn’t move the needle for their stock. Even if Disney saved $100M in taxes as a result that’s a few pennies on EPS. 1 season of Kenobi cost twice that to make. With the size of TWDC it’s just not much of a story financially either way.

 

[GoofGoof]

It would be a good way to pay down consumer debt if vote with their wallets. Paying down debt seems like a foreign phrase to some.

With rising interest rates the home equity loan market is quickly drying up and CC interest rates will be short to follow. We may see less borrowing as a result whether people want to or not. That’s a far greater threat to Disney than any financial implication from RCID. A recession combined with less consumer borrowing is bad news for a company where the majority of products and services are non-essential, luxury items.