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For Reference: Space for a 5th Park at Walt Disney World
- Thread starter Haymarket
- Start date
Eric M Blake
Active Member
So you think new resorts are incoming? That'd certainly be interesting.
Personally I think a complete overhaul and upgrade of Galactic Starcruiser is a given. They're not gonna tear it down, and a Star Wars themed hotel has SO much potential.
pdude81
Well-Known Member
If they write off the building in this fiscal year I think they have to tear it down. Otherwise they could fill out the rest of the year with bookings now that people know it's closing and have been shut out. They'd hate to pay taxes on those "improvements" while the lot sits empty.
Kamikaze
Well-Known Member
They are taking accelerated depreciation. Meaning that instead of taking the depreciation over 5, 10, 20, 30 years, they are taking it all at once. I don't believe this is a 'Batgirl' situation where they can never use that infrastructure again.
Kamikaze
Well-Known Member
Aren't road costs in the CFTOD/RCID budget and not Disney's? So they wouldn't be included in that $17b number?
Eric M Blake
Active Member
Well the latter does seem to be the case. They've been booking quite a bit since the announcement.
lazyboy97o
Well-Known Member
Depends on the road and even where on that road.
Kamikaze
Well-Known Member
Fair point.
pdude81
Well-Known Member
Sure, but they'd have to make even more money later on for the numbers to make sense if this is already fully depreciated. I'm not clear on how the IRS would deal with them claiming this is a worthless asset and then renting it out for 600k per night a year from now. They'd recapture on a sale, but I don't know how it works if you try to continue using something you claimed was worthless.
Goofyernmost
Well-Known Member
Where do you think CFTOD/RDIC gets the money to pay for those roads. I'll tell you, from the taxes that CFTOD/RCID charges WDW. That's pretty much where CFTOD/RCID ever got it's operational money either direct tax for something specific or principle and interested on the the bonds used for that purpose. It pretty much doesn't get in CFTOD's budget unless it is in WDW's budget. Basically CFTOD doesn't have a revenue source other than WDW.
Kamikaze
Well-Known Member
Yes, oh smart one, but Disney doesn't itemize RCID's budget in their expenditures. RCID has their own budget process where they set out what their taxpayers (Disney) pays them in taxes and how its spent. This essentially means that yes, some of that $17b will get spent twice, once by Disney and once by CFTOD/RCID.
danlb_2000
Premium Member
If a new park was built I would not be surprised if they built a new hotel in conjunction with it, especially with Universal upping the game with a hotel directly connected to the park.
Goofyernmost
Well-Known Member
What possible difference does that make, oh clever one. It still comes from the same entity whether itemized or taxed. Either way it would be the same budgeted expense to WDW no matter how it was labeled. If you pay $100 for a road or $100 for taxes used to create the road it is the same $100.
Kamikaze
Well-Known Member
You're confused with what they're doing. They aren't writing the building off and saying its worthless. They're taking depreciation on the asset of the building over two quarters. Kind of like lottery winners when they get the 30 year option or lump sum.
So instead of getting a tax break of 3.636% each quarter for 27.5 years, they're getting all of that money at once (and probably losing some value by taking it this way). If you use a hotel for 27.5 years you don't have to tear it down because its been fully depreciated. Same thing here, they don't have to tear it down because they took the full value early.
lazyboy97o
Well-Known Member
The difference is that property taxes aren’t touted as investment in a property.
Kamikaze
Well-Known Member
Literally you have no idea what you're talking about.
Disney gets taxed on its activities in the District. They pay those taxes, yes, but they don't say 'we're spending $1b this year but its actually all taxes'. They're not saying the $17b investment is on things the District wants/needs.
The District spends based on the tax money they take in (or they are supposed to anyway). They don't get an allocation directly from a taxpayer like you're seeming to imply.
Goofyernmost
Well-Known Member
Doesn't matter it still comes out of cash reserves. It is more a utility like sewage and water. Still the same $100. Like payroll that is an expense like taxes and property repairs.
Goofyernmost
Well-Known Member
Of course they do considerate it an investment. It is a business expense and thus is spent to maintain or enhance the property. I think you are confused as to how it is all claimed in the real world. If what you say is true, then were does the district get it's money? Who is paying for the roads, etc.? And how is it funneled and where do vendors send the bill for services rendered? And please don't say Florida or it's citizens directly.
Kamikaze
Well-Known Member
Disney doesn't directly pay the District's bills. They pay taxes to the District. They do not itemize 'taxes' as capex. Never have. This is not debatable, not arguable. You can look at their filings and see for yourself.
Yes, Disney is paying for those things, but Disney doesn't directly run the District. They don't put the District's expenses as their expenses. They just pay those taxes and the District spends them. Obviously Disney tells them most of where to spend them, but this doesn't happen on Disney's expense sheet, it happens in the District's.
Eric M Blake
Active Member
Indeed! Certainly something to keep in mind, regarding location.
Which reminds me...
That often overlooked upper lefthand region could be rife with possibilities.