So then your point that RCID is not a tax break is irrelevant. Either it is a benefit or it is not.
This is the absolute-ism that just makes all this crap go in circles. This is not a binary thing. The reality is it's good for some things, worse for others. The problem is not only do people try to make it binary, they include all kinds of just flat out wrong cites to make it that way in their head. That's why you see lazyboy interjecting left and right debunking claims - but looking like it's both sides. No.. he's simply debunking the falsehoods being repeated.
The Improvement District is both an advantage and disadvantage depending on the topic. And not everything is an immediate gain.. some are more strategic or simply 'the long game'.. aka pay more now, but be better overall.
Money/Taxes
Disadvantages
- More expensive due to no No economies of scale, no one else to really share the costs with
- More expensive because you pay not only for the 'thing' but the overhead of the managing entity as well
Advantages
- Input/control over spending initiatives
- Input/control over strategic approach to topics (standards, spending levels, etc)
- No outside stakeholders to convince or negotiate with when setting initiatives and priorities
- Spending done as a tax - has tax credit advantages for the businesses instead of just paying for it outright as an expense
- Alternate funding avenues - projects handled by RCID can be tax advantaged vs doing it yourself and municipal bonds are far cheaper funding than commercial loans
RCID is not the only tax collector Disney pays - but for services it is the one that they touch most directly and locally - so it's a big deal to influence and dictate how the local amenities are funded and managed
Net for Money/Taxes? It's more expensive to you, but you have far more control over what they are spending on/for. You end up self-funding (either directly or through RCID taxes) a lot of things other people get without paying extra for. But you also get this huge asset of having alternatives for RCID to fund things. It's more expensive short term for Disney, but probably cheaper long term.
Planning/Regulation
Disadvantages
- Another entity in the mix
- Stricter Standards than outside the district (But these are also standards you control)
- Alot of overhead to fund and sustain
Advantages
- You control the people that control the standards
- You can control priorities - You aren't fighting for priority with a much larger work pool
- You have a fixed boundary around you where you can keep others at bay - No NIMBY audiences to appease
- You control the land management plan and it can be pushed to change to match your own initiatives
- You don't have to negotiate proffers with hostile 3rd parties
RCID is not the only regulator Disney has to deal with - it can't apply these pros/cons to everything.. but they do get these pros/cons for that portion of things. This area really isn't a big advantage for Disney.. this is more legacy from earlier years. Disney could largely do what they already do without RCID in this bucket. But it is nice insulation - just not complete isolation
Net for Planning/Regulation? Still an advantage because they can shape the standards and push land management based on their own needs - not compromising with others on EVERYTHING. They do not escape other regulation, but some is in their pocket.
Services/Utilities
Disadvantages
- More expensive due to lack of economies of scale
- Not a core competency to have to deal with
- Investing in large capital projects that are not revenue generators
Advantages
- Control of standards/expectations
- Control of expenses/planning
- Your own scale gives you negotiating power with 3rd parties
- Can control what is company paid for vs RCID paid for
- Long term plans can be aligned to your company plans exclusively
Net for Services/Utilities? This one is probably a 'eye of the beholder' answer. If you are the type that is all about managing your standards... the pain is probably worth it. If you are a pure money guy.. the opportunity cost losses of all this money tied up in utilities and services probably looks horrible and you'd rather get it all off your books and just outsource it all.
What it's not?
'a tax break for disney'
'a burden for disney'
The real answers are far more give and take than that.
The 'gain' or not for Disney is very complex - you can't dismiss it with one liners. But what we do know is they've preferred to KEEP it all these years... so all the overhead and expenses have been considered at least valuable enough to the company to keep it as it is.
www.proptaxadjust.com
