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

[WoundedDreamer]

The difference in this case is Disney is paying for them not the public at large as they are paying about 90% of the taxes in the district in addition to paying 100% of their share of taxes to the counties

Sort of. You're right Disney will end up footing most of the bill through taxes. But by using the RCID to improve its property, it means that Disney technically spent no capital on the project. Any costs associated with the project are hidden in their tax bill. It's basically a really potent way to hide CapEx from investors and also take out debt through low-rate municipal bonds. This is not the intended function of government. Was it legal? Yes. Would I have done it if I were Disney? Of course. But should governments allow firms to hide CapEx and debt in their tax bill? No, absolutely not.

Again, I understand how reasonable people can have different views on this. If you're corporate development maximalist, then you might see this as no big deal. I'm just not a fan.

 

[JKick95]

This is the question, as the district really has no suitable land for any of these. Also, it’s not really the district’s responsibility or mandate to be building any of these things.

Listening to the board members talk it would appear that is exactly what their mandate is plus ensuring everything outside of the district is great.

I am also confused about their continued talk of competition. However, does Universal and Sea World not compete with Disney? Don’t I (the consumer) get to choose where I want to spend my money based on who offers me a better value?

 

[Figgy1]

Listening to the board members talk it would appear that is exactly what their mandate is plus ensuring everything outside of the district is great.

I am also confused about their continued talk of competition. However, does Universal and Sea World not compete with Disney? Don’t I (the consumer) get to choose where I want to spend my money based on who offers me a better value?

You wouldn't have a choice if the powers that be had their way imho
Still curious why they need an eminent domain expert

 

[castlecake2.0]

Listening to the board members talk it would appear that is exactly what their mandate is plus ensuring everything outside of the district is great.

I am also confused about their continued talk of competition. However, does Universal and Sea World not compete with Disney? Don’t I (the consumer) get to choose where I want to spend my money based on who offers me a better value?

It’s all very interesting to listen to, but at the end of the day, Disney owns most of the land, not the district.

 

[Figgy1]

It’s all very interesting to listen to, but at the end of the day, Disney owns most of the land, not the district.

Not to hear them talk
Well, there are those teeny tiny itty-bitty slivers of land they can build a shed on

 

[Batman'sParents]

This is the question, as the district really has no suitable land for any of these. Also, it’s not really the district’s responsibility or mandate to be building any of these things.

The future land that they were talking about months ago for the housing could be a potential contender. The area between Flamingo Crossing hotels and ironically by the Disney affordable housing project.

 

[WoundedDreamer]

You wouldn't have a choice if the powers that be had their way imho
Still curious why they need an eminent domain expert

It's possible they could use eminent domain to take land from Disney in order to develop property (for the promised Disney prison for example). That would be an insane thing to do for a variety of reasons, but they might just try it. That would represent a major escalation. I'm hoping things thaw rather than continue to get worse.

 

[peter11435]

Don't worry, I have all the local government, taxation, legal and ethical experts here for my unbiased analysis.

Everyone is on the internet. The internet is full of people who don’t know anything, but it’s also full of “local government, taxation, legal and ethical experts.” And yes there is tons of biased information but there is also unbiased analysis available if you know where to look. The challenge for any discerning individual is to identify who those experts are and to determine from who and where they should gather additional information and insight if they want accurate unbiased reporting.

The links you post clearly demonstrate that you have not yet learned that skill.

 

[Vegas Disney Fan]

Sort of. You're right Disney will end up footing most of the bill through taxes. But by using the RCID to improve its property, it means that Disney technically spent no capital on the project. Any costs associated with the project are hidden in their tax bill. It's basically a really potent way to hide CapEx from investors and also take out debt through low-rate municipal bonds. This is not the intended function of government. Was it legal? Yes. Would I have done it if I were Disney? Of course. But should governments allow firms to hide CapEx and debt in their tax bill? No, absolutely not.

Again, I understand how reasonable people can have different views on this. If you're corporate development maximalist, then you might see this as no big deal. I'm just not a fan.

Disney and the RCiD was one of those rare instances where a wrong is a right.

Was it fair to other businesses they essentially ran their own oversight? Probably not. Was it fair they had access to lower bond rates? Probably not… but it brought a lot of money to the area and insulated the residents from footing the bill for a private companies benefit.

The RCiD worked for both Disney and Florida for decades, had it not they would have eliminated it decades ago, the fact they only removed it due to “politics” highlights just how well it worked.

 

[Batman'sParents]

Sort of. You're right Disney will end up footing most of the bill through taxes. But by using the RCID to improve its property, it means that Disney technically spent no capital on the project. Any costs associated with the project are hidden in their tax bill. It's basically a really potent way to hide CapEx from investors and also take out debt through low-rate municipal bonds. This is not the intended function of government. Was it legal? Yes. Would I have done it if I were Disney? Of course. But should governments allow firms to hide CapEx and debt in their tax bill? No, absolutely not.

Again, I understand how reasonable people can have different views on this. If you're corporate development maximalist, then you might see this as no big deal. I'm just not a fan.

This isn't that different from how professional sports stadiums get built. A public municipality will offer to help finance a stadium by issuing muni bonds for the project. The municipality may also own the stadium and parking facilities around it.

The municipality may set up TIFs or tax increment financing districts around the stadium to help pay off said bonds.

The similarities?

The teams like Disney don't have to spend additional capex on the project. Governments will always lower interest rates than private companies. Similar to the DS Garages, the local government owns the asset but a private entity is the said main user.


The difference?

RCID is more transparent and has greater ROI for everyone involved. Sports stadium deals always have some secrecy to them and are notorious for being bad public investments. If you have a choice between throwing money out of an airplane or building a professional publicly financed stadium, what generates more of an economic impact?

Throwing money out of the airplane.



Also, unlike sports stadiums, any public expense incurred by RCID probably has a pretty good ROI. WDW is a driver of indirect and direct employment, sales and bed tax, and other benefits as well. Unlike stadiums, WDW is a year-round operation so the economic effects aren't seasonal.

I don't think the current board also understands the scope and size of WDW. Need an extension to World Drive funded? Done, with relative ease.

It was a nightmare of a public process for Universal to get Orange County to get Kirkman Rd funded.

 

[Brian]

Everyone is on the internet. The internet is full of people who don’t know anything, but it’s also full of “local government, taxation, legal and ethical experts.” And yes there is tons of biased information but there is also unbiased analysis available if you know where to look. The challenge for any discerning individual is to identify who those experts are and to determine from who and where they should gather additional information and insight if they want accurate unbiased reporting.

The links you post clearly demonstrate that you have not yet learned that skill.

I posted the Daily Wire one as a joke, because we all know they are biased to the right. That said, I do think that practically every news source, even those established in the internet age with the intent to be unbiased and specifically to counter biased mainstream outlets, is biased to one extent or another.

Which sources do you consider to be unbiased, at least on this issue?

 

[WoundedDreamer]

Disney and the RCiD was one of those rare instances where a wrong is a right.

Was it fair to other businesses they essentially ran their own oversight? Probably not. Was it fair they had access to lower bond rates? Probably not… but it brought a lot of money to the area and insulated the residents from footing the bill for a private companies benefit.

The RCiD worked for both Disney and Florida for decades, had it not they would have eliminated it decades ago, the fact they only removed it due to “politics” highlights just how well it worked.

This is an example of an entirely reasonable take that diverges from my own view. I'd still assert that RCID's continued existence was probably more attributable to a lack of attention rather than it being good in its own right. Reform was well overdue. It's just unfortunate the reform ended up taking the form of this hostile political environment. My ideal reform would have looked like a collaborative process where each side were forced to negotiate and make concessions. That is not what has happened here. This is a circus.

This isn't that different from how professional sports stadiums get built. A public municipality will offer to help finance a stadium by issuing muni bonds for the project. The municipality may also own the stadium and parking facilities around it.

The municipality may set up TIFs or tax increment financing districts around the stadium to help pay off said bonds.

The similarities?

The teams like Disney don't have to spend additional capex on the project. Governments will always lower interest rates than private companies. Similar to the DS Garages, the local government owns the asset but a private entity is the said main user.


The difference?

RCID is more transparent and has greater ROI for everyone involved. Sports stadium deals always have some secrecy to them and are notorious for being bad public investments. If you have a choice between throwing money out of an airplane or building a professional publicly financed stadium, what generates more of an economic impact?

Throwing money out of the airplane.



Also, unlike sports stadiums, any public expense incurred by RCID probably has a pretty good ROI. WDW is a driver of indirect and direct employment, sales and bed tax, and other benefits as well. Unlike stadiums, WDW is a year-round operation so the economic effects aren't seasonal.

I don't think the current board also understands the scope and size of WDW. Need an extension to World Drive funded? Done, with relative ease.

It was a nightmare of a public process for Universal to get Orange County to get Kirkman Rd funded.

Fair, but I'm not a big fan of stadium projects either. Just because there is a behavior that occurs that is equivalent or worse than the one the RCID/Disney did, doesn't make RCID/Disney's actions a public good. And the very fact the Universal is forced to go through a burdensome public process while Disney is not is a cause for alarm. That is anticompetitive.

 

[WoundedDreamer]

"Speaking of the original 1967 Reedy Creek Improvement District act, Garcia said it was a "Pandora's box, a curse disguised in the form of a beautiful gift. Now that the truth is out, Florida lawmakers and government officials should expel the curse with more reforms to the district.""

This might be the most dumb thing I've read this year. This does not lend credibility to the report, which seems like it is mostly a sensationalized retelling of Orlando Sentinel articles I read a decade ago.

 

[Batman'sParents]

This is an example of an entirely reasonable take that diverges from my own view. I'd still assert that RCID's continued existence was probably more attributable to a lack of attention rather than it being good in its own right. Reform was well overdue. It's just unfortunate the reform ended up taking the form of this hostile political environment. My ideal reform would have looked like a collaborative process where each side were forced to negotiate and make concessions. That is not what has happened here. This is a circus.


Fair, but I'm not a big fan of stadium projects either. Just because there is a behavior that occurs that is equivalent or worse than the one the RCID/Disney did, doesn't make RCID/Disney's actions a public good. And the very fact the Universal is forced to go through a burdensome public process while Disney is not is a cause for alarm. That is anticompetitive.

I understand what you are saying. If WDW was built say in the late 1980s vs the late 1960s/early 1970s, we would have a completely different situation.

Florida and Orange County in the 1980s vs the 1960s are two different situations. If WDW had been built in the 1980s, the state would have more a developed economy, and Orange County would be more likely to have the needed facilities in place. This would probably lead to a smaller and less comprehensive special district.

But we also need to keep in mind the conditions of the 1960's. Florida was a state whose main economic industries and growth were tied to coastal cities, mainly Tampa Bay and SE FL.

The state's economy wasn't that diverse and the center of the state was lagging in growth compared to their coastal counterparts.

Enter RCID and Disney.


If you are a policy-maker in 1960s Florida and can transform the economic prospects of not just a region, but the whole state by forming the RCID to help facilitate EPCOT, which later turns into WDW, you are going to take that deal 9 out of 10 times.

The growth of Central Florida (economy and population) and the development of the state's economy since the 1970s can partially be attributed to the formation of RCID and its impact on Disney's operations.

Now are there other factors that stimulated growth?

Yes, without a doubt. Lockheed's expansion, tech, and defense companies, and the growth of UCF have helped facilitate the growth of the area as well.

But RCID/CFTOD is a byproduct of the economic and political environment of the 1960s and while we all do talk about the pros and cons of the district, it's important to keep in mind why it exists and what it has helped facilitate.

The other thing is no one will want to dissolve the district because of existing debt obligations. The debt will still exist for another 15 years. So, we have at least 15 more years of RCID existing before it is even practical for oversight to revert to the counties.

 

[mikejs78]

probably more attributable to a lack of attention rather than it being good in its own right.

What would you replace it with, then?

 

[mikejs78]

If WDW had been built in the 1980s, the state would have more a developed economy, and Orange County would be more likely to have the needed facilities in place.

It's questionable whether Orange County would have been as developed if Disney had not been there to begin with.

 

[mmascari]

IMO The parking garages were kind of odious. It was basically a way for the WDC to pay for an improvement to its property using tax dollars.

Sort of. You're right Disney will end up footing most of the bill through taxes. But by using the RCID to improve its property, it means that Disney technically spent no capital on the project.

Where I live, we have county owned parking garages, and private ones too. The county ones were funded and owned by the county as a way to increase services to constituents, along with improving business conditions to attract and have prosperous businesses. Presumably, it also generates more local tax revenue. I'm sure towns all over the country have government owned garages and parking lots to encourage and support use of their downtown areas.

If this is a good idea or use of money is really a matter between our county government and all of the constituents who have a say in voting to keep that government or change to one that makes different decisions.

In the case of Disney and RCID, it really wasn't any different. RCID made the decision to build the garages. Presumably, they thought it would provide better services to those in the district. Increased use of shopping, less traffic, more prosperous businesses. Additionally, the decision was supported and desired by constituents of the district.

 

[Batman'sParents]

It's questionable whether Orange County would have been as developed if Disney had not been there to begin with.

That's a valid assumption. WDW was about 10-15 miles from the closest facilities or utilities.

WDW's presence in SW Orange and Northern Osceola leads to growth in those areas and new public utilities being built to serve WDW, residents, and tourists.

Also probably leads to an expansion in county revenues and is a cost driver.

 

[mmascari]

What would you replace it with, then?

As we watch the new board actions, I wonder how things would be different if RCID didn't exist. If none of the public roads within RCID were public roads at all, if RCID didn't own any property at all. If it was just one huge private compound owned by Disney. All private roads. Entrance gates at the district boarders. No driving through, if you're not visiting Disney, just turn back at the gate. There's ranches in Montana that cover just us much land area.

Obviously, the financing to create and manage that would be different. How it's used would be different too. Create some traffic routing problems too in the surrounding area, much like a military base with no cutting through does.

Sometimes I wonder how hard it would be for Disney to dissolve the district and reacquire all the land back to turn it into that private compound. Probably exceedingly difficult if not impossible to turn it back into that.

 

[lazyboy97o]

It's possible they could use eminent domain to take land from Disney in order to develop property (for the promised Disney prison for example). That would be an insane thing to do for a variety of reasons, but they might just try it. That would represent a major escalation. I'm hoping things thaw rather than continue to get worse.

There are limitations to how properties acquired through eminent domain can be utilized. Development would have to be done directly by the district.

Disney and the RCiD was one of those rare instances where a wrong is a right.

Was it fair to other businesses they essentially ran their own oversight? Probably not. Was it fair they had access to lower bond rates? Probably not… but it brought a lot of money to the area and insulated the residents from footing the bill for a private companies benefit.

The RCiD worked for both Disney and Florida for decades, had it not they would have eliminated it decades ago, the fact they only removed it due to “politics” highlights just how well it worked.

Again, other companies also control districts that provide much of the same services and oversight. Even if it’s not all in one package they can get them together. Without the District some of the oversight would not have even existed for years.

This is an example of an entirely reasonable take that diverges from my own view. I'd still assert that RCID's continued existence was probably more attributable to a lack of attention rather than it being good in its own right. Reform was well overdue.

The district wasn’t just being ignored. It had been looked at multiple times over the years. The legislature published a whole report on the District in 2004 when they were concerned about Comcast taking over Disney.