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

[Benjamin_Nicholas]

There is a forum member @Benjamin_Nicholas that sometimes posts in the forum . He has a home at GO.

And?

 

[mmascari]

They could just walk away.

If they do this, will they be wearing sunglasses and not look back at the fireball behind them?

 

[flynnibus]

I realize there’s history with the Florida Supreme Court but I’m not sure that Disney can win this argument.

Well starting with the case law over contracts cited in the bloomberg article is a good start. It sure doesn't look like a simple "state giveth, state can taketh' constraints here.. but far more involved including both state and US constitutional protections.

 

[Lilofan]

Not a chance , less than 5% holdings in Disney

Good…so you’ll still have 96% of your money by the time Slaphead is done with it

I’m just curious if he goes how much is he going to awarded going back to his mansion .

 

[Sirwalterraleigh]

I’m just curious if he goes how much is he going to awarded going back to his mansion .

Every cent of what the contract says…that’s why you don’t give another one.

This lady is in charge right now:

 

[GoofGoof]

I think Disney could win that PR battle. It would require more "fake news" than imaginable to turn "Politician did X, Disney said fine, county was hurt" into "Disney caused the problem". I mean, you're right, that's what they'll say. But, Disney certainly knows how to do messaging and communication if they put their focus on it.


What I said earlier is still true then. There's a Disney accountant bean counter and a strategy person sitting in a room right now, trying to figure out the short and long term cost differences and impacts. The actual Disney impacts may be very subtle in there, and with very different results for short and long term. We assume that long term, it's better for Disney to have the control. But, maybe they're working out other ways to get the same thing without the control in the long term. In the short term, it certainly feels like dissolving the district eliminates a bunch of taxes Disney pays. On top of that, they may be working out strategies to avoid having those taxes added back to them in the long term without the district.

Disney could be trying to work out a strategy where they don't need the district anymore and that works out better for them. If so, they don't need to fight or negotiate anything. They could just walk away.

Which also means there are 2 reasons Disney has been so quiet. First, best to be quiet and not tip your plan early. Second, they may not know which plan they want yet.

If Disney is willing to foot the bill directly for infrastructure then they maintain almost complete control for the most part. If they want to build another parking garage they just build it and pay for it. For roads, if they want to do improvements they won’t have any problem getting a green light from Orange County if the county isn’t paying anything. Keep in mind that’s what happens today. RCID pays 100% for these things, Orange County pays nothing and Disney eventually pays RCID back through tax payments. What Disney loses is the ability to finance these infrastructure projects off balance sheet with low interest municipal bonds. The more money they need to spend the more that’s a benefit.

On utilities RCID gets some state and Federal incentives only available to local governments. They would have to quantify the loss of those incentives and also the loss of ability to finance future utility projects like more solar panels using the muni bonds.

On emergency services I think Disney would need to consider how to move forward. There is an aspect that impacts guests directly so it’s possible they privatize EMT services to maintain full control or they could allow Orange and Osceola counties run this which would save them some money. They could also do both where they have a mix of private and public employees.

All that being said, I agree that if someone with more details than we have on actual costs laid out all the pluses and minuses they can draw a conclusion on how much losing RCID impacts the bottom line of TWDC.

 

[Sirwalterraleigh]

If Disney is willing to foot the bill directly for infrastructure then they maintain almost complete control for the most part. If they want to build another parking garage they just build it and pay for it. For roads, if they want to do improvements they won’t have any problem getting a green light from Orange County if the county isn’t paying anything. Keep in mind that’s what happens today. RCID pays 100% for these things, Orange County pays nothing and Disney eventually pays RCID back through tax payments. What Disney loses is the ability to finance these infrastructure projects off balance sheet with low interest municipal bonds. The more money they need to spend the more that’s a benefit.

On utilities RCID gets some state and Federal incentives only available to local governments. They would have to quantify the loss of those incentives and also the loss of ability to finance future utility projects like more solar panels using the muni bonds.

On emergency services I think Disney would need to consider how to move forward. There is an aspect that impacts guests directly so it’s possible they privatize EMT services to maintain full control or they could allow Orange and Osceola counties run this which would save them some money. They could also do both where they have a mix of private and public employees.

All that being said, I agree that if someone with more details than we have on actual costs laid out all the pluses and minuses they can draw a conclusion on how much losing RCID impacts the bottom line of TWDC.

Disney is a public traded company on the Dow 30…

They will NOT take on infrastructure and put it on their books. No. No. No. !

And why should they? No other big pants corporation in America would.

Because the tick needed a cheap score?

I’m gonna Quote shooter mcgavin on this one.

The current main problem is Disney’s ceo is INCOMPETENT…

…doesn’t that seem like the fix could be in? Watch for a puff of smoke on the grassy knoll

 

[Andrew M]

I apologize in advance for not reading all 225 pages, but am I missing something here? I can see Disney just letting them dissolve the district without much of a fight.

Disney only seems to be adding an attraction or two every five years. It just seems like all the major construction of theme parks/spread out hotel complexes/highways etc. that would greatly benefit from owning their own local government has already been completed. Disney no longer has to completely pay for fire, police, municipal officials, etc., so it would seem like it could have an upside.

 

[bpiper]

Repercussions have started:

According to this article from the Sentinel: https://www.orlandosentinel.com/new...0220427-u23ndqywwvginpbhdpmpnnri4e-story.html

The RCID supervisors met last night in public forum. They said that:

1. Fitch has put RCID on Negative Watch for its bond ratings.

2. From John Classe who oversees RCID operations; "I learned this week that our planned expansion... of our solar power program, just one of the 75-megawatt facilities that we have in the pipeline, could be delayed because of the developer experiencing financing challenges relating to the uncertainty surrounding the legislation,”


I wonder if any of their current bonds have covenants about maintaining a certain rating level?

 

[celluloid]

Well of course the company will use this as an excuse for not spending long after it is all done. So if nothing else we have that crud to look forward to seeing.

Don't forget three of the theme parks in Florida still do not have their parking trams back in any form...which was constantly touted by many due to Covid.

 

[Disstevefan1]

The law to eliminate RCID included a clause that eliminated landowners’ requirement to vote on this.

This is another area that RCID could possibly fight the state in court.

However, legislatures frequently change earlier statutes with later statutes, so RCID would have to find a reason why this is different than other laws.

Florida keeps saying Disney was not targeted but any reasonable jury will see they were targeted. Maybe they could use that to fight it?

 

[Chip Chipperson]

Disney is a public traded company on the Dow 30…

They will NOT take on infrastructure and put it on their books. No. No. No. !

And why should they? No other big pants corporation in America would.

Because the tick needed a cheap score?

I’m gonna Quote shooter mcgavin on this one.

The current main problem is Disney’s ceo is INCOMPETENT…

…doesn’t that seem like the fix could be in? Watch for a puff of smoke on the grassy knoll

And really, for all the talk about how the liabilities aren't on their balance sheets I've yet to see it mentioned that the offsetting assets also do not appear on their balance sheet, nor does TWDC get to apply the depreciation as an expense each year to help reduce their income taxes. While there are certainly benefits to the arrangement, people framing it as some sneaky game of 3 Card Monty are missing the full picture.

 

[mmascari]

On utilities RCID gets some state and Federal incentives only available to local governments. They would have to quantify the loss of those incentives and also the loss of ability to finance future utility projects like more solar panels using the muni bonds.

Is all the new solar generation they're building RCID or Disney owned projects?

Connecting it into the local grid as a local generation source clearly gets into the overall local grid control. But, as just the generation source, who really owns them and are they public or some private entity?

Locally around us, we've got municipal owned solar generation and private owned. Since power generation is mostly deregulated, it could be anything.

 

[mikejs78]

Is the Florida Supreme Court going to emphasize the state’s right to end a special district, or a promise the state made to (effectively) The Walt Disney Company in 1967?

What you're missing is that FL didn't make this pledge to Disney or to RCID, they made it in contract form to bondholders. And if it's one thing that legislatures aren't allowed to do, is change existing contracts.

 

[Chip Chipperson]

Repercussions have started:

According to this article from the Sentinel: https://www.orlandosentinel.com/new...0220427-u23ndqywwvginpbhdpmpnnri4e-story.html

The RCID supervisors met last night in public forum. They said that:

1. Fitch has put RCID on Negative Watch for its bond ratings.

2. From John Classe who oversees RCID operations; "I learned this week that our planned expansion... of our solar power program, just one of the 75-megawatt facilities that we have in the pipeline, could be delayed because of the developer experiencing financing challenges relating to the uncertainty surrounding the legislation,”


I wonder if any of their current bonds have covenants about maintaining a certain rating level?

So the list of damages that can be used against the State in court is growing. I'm sure there's some laughter in Tallahassee over this, but it's exactly what they should have hoped wouldn't happen.

 

[bpiper]

Is all the new solar generation they're building RCID or Disney owned projects?

Connecting it into the local grid as a local generation source clearly gets into the overall local grid control. But, as just the generation source, who really owns them and are they public or some private entity?

Locally around us, we've got municipal owned solar generation and private owned. Since power generation is mostly deregulated, it could be anything.

John Classe, head of RCID operations said last night: "I learned this week that our planned expansion... of our solar power program, just one of the 75-megawatt facilities that we have in the pipeline, could be delayed because of the developer experiencing financing challenges relating to the uncertainty surrounding the legislation,”

 

[Animal_Kingdom_09]

Based on the language, I don't think it could. The FL state legislature pledged, in contract, to not alter the powers of Reedy Creek. Even if they create a new district, that's not Reedy Creek and therefore is a breach of contract.



I think though that this time he may have bitten off more than he can chew. This may be what ultimately comes back to bite him because it's potential to be so impactful without any real plan.

You don't f*** with the mouse.

Except that there isn't much Disney can do. The issue is a government entity issue, nothing more, nothing less. Reedy Creek simply moves part of the county governance to the district. The one's really being messed with are the non-Reedy Creek taxpayers in Orange/Osceola counties. Reedy Creek provides a boundary for who gets taxed for the infrastructure bonds. Take away the boundary and it flows to the next boundaries, which are the county lines. Disney will operate the parks just fine with or without RCID.

But as I said, RCID isn't going anywhere and Disney knows it. The whole thing is theater.

 

[Sirwalterraleigh]

I apologize in advance for not reading all 225 pages, but am I missing something here? I can see Disney just letting them dissolve the district without much of a fight.

Disney only seems to be adding an attraction or two every five years. It just seems like all the major construction of theme parks/spread out hotel complexes/highways etc. that would greatly benefit from owning their own local government has already been completed. Disney no longer has to completely pay for fire, police, municipal officials, etc., so it would seem like it could have an upside.

You’re missing a lot (no foul)…

It’s not about electrical permits for rides or subverting building codes…

It’s mostly about being free of the political whims of the surrounding governments and the ability to issue bonds for the big money guzzler without them hitting their books.

 

[GoofGoof]

Is all the new solar generation they're building RCID or Disney owned projects?

Connecting it into the local grid as a local generation source clearly gets into the overall local grid control. But, as just the generation source, who really owns them and are they public or some private entity?

Locally around us, we've got municipal owned solar generation and private owned. Since power generation is mostly deregulated, it could be anything.

The projects could be privately owned but the developer gets RCID to sign a power purchase agreement to buy the output of the facility. Since its an A credit rated municipality the developer gets good (meaning cheaper) financing because the primary risk for the developer is default of payments from the purchaser of the power since these contracts tend to be long term 10-30+ years. A few years back when PG&E was heading to bankruptcy over the wild fires there were major concerns from owners of renewable projects because of the fear that these contracts could be voided in bankruptcy. Flash forward to this situation. If I have a contract with RCID to sell them power and they get dissolved by the state then I have no contract going forward. So if they want to build new facilities there’s now a negative credit watch on RCID which makes them less desirable.

 

[GoofGoof]

John Classe, head of RCID operations said last night: "I learned this week that our planned expansion... of our solar power program, just one of the 75-megawatt facilities that we have in the pipeline, could be delayed because of the developer experiencing financing challenges relating to the uncertainty surrounding the legislation,”

Should have read down before posting