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

[GoofGoof]

But if:

RCID could be restricted from issuing new bonds. The net effect would be RCID would sunset at the latest maturity date in affect. This would allow obligations not to be impaired and sufficient time to development.and execution of assimilation with the respective counties.

That ship sailed. In an effort to get the most Facebook likes they already passed a bill to dissolve the district. Perhaps if the bill went through the normal process and there was debate and there were experts brought in to discuss these very real concerns some better solution would have been reached. Instead we got this goat rodeo. The people pushing this got what they wanted….a political win with their base. As someone posted earlier DeSantis has seen an increase in donations. That’s what this is about, a political win.

The other issue with that plan is that we don’t even know if it’s legal. They can legally dissolve the special district but once created I’m not sure they can just cherry pick that this specific district can no longer issue bonds. They could dissolve RCID and create a new district without the right to issue debt but that would require Disney to approve and as discussed the Mouse has no reason to agree with that.

 

[GoofGoof]

The garages at Disney Springs are not leased to Disney. They are owned and operated by Reedy Creek. If you look at the employee name tags and uniforms they say RCID.

In that case I guess in theory the county could start charging for parking or something to cover the maintenance costs but Orange County would have no reason to start a conflict with Disney. If this went down they could even look to sell the garages to Disney and use the proceeds to pay down a small portion of the debt.

 

[Disstevefan1]

Isn’t this the issue though? From the article:
In authorizing Reedy Creek to issue bonds, the Florida legislature included a remarkable statement—included in Reedy Creek’s bond offerings—regarding its own promise to bondholders: “The State of Florida pledges to the holders of any bonds issued under this Act that it will not limit or alter the rights of the District to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects or to levy and collect the taxes, assessments, rentals, rates, fees, tolls, fares and other charges provided for herein … until all such bonds together with interest thereon, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged.”

So when the bond holders purchased those bonds it was right in the bond offering that the State pledged not to limit or alter the rights of the district to generate enough income to pay back the debt. If the state then breaks that pledge by passing new legislation it’s securities fraud. Municipal bonds are not subject to SEC regulatory compliance like corporate debt and equities, but they are still subject to Federal Securities fraud laws. Since the state legislature made the pledge and not Orange County I don’t know how that would play out in court, but the burden could potentially fall to the state itself and not Orange County. In that case the state would be obligated to pay any damages not the counties.

If the State of Florida pledged this then the cost of the removal of RCID should be paid back by the entire State (including the Red counties).

 

[flynnibus]

I realize there are counterarguments and am not trying to get into a debate. I'm only noting that one of the cases cited by Mr. Schumer raises questions.

The whole point is it's not just a question of state authority to give or take the authority for bonds... it involves the question of contracts and laws ABOVE the FL statehouse.

Just saying "Florida’s pledge to Disney (as far as I know) was in the law that it passed (i.e. the Reedy Creek Act). The legislature has wide-ranging powers to change existing statutes, and courts historically have given them a lot of leeway."

Infers its within the state house's leaway to decide what to do or not - they are not able to roam free in this matter because of the issues highlighted with contract law and constitutional protections.

 

[GimpYancIent]

Well folk's it looks like it's that time......

 

[flynnibus]

Well folk's it looks like it's that time......
View attachment 635794

 

[lazyboy97o]

Exactly.

The issue is that the State of Florida promised RCID bond holders that it would not mess with these bonds.

My post was more about the cases referenced in the Bloomberg article, whose applicability can be debated.

This gets us back to my bigger point, which is understanding the political makeup of the Florida Supreme Court.

The Florida legislature has the right to shut down RCID. At least so far, RCID is not disputing this.

Instead, RCID is saying, "You are breaking your promise to bond holders." It's a reasonable argument.

So which takes precedent? The Florida statute allowing the legislature to shut down RCID or the State of Florida's promise to bond holders in 1967?

In my mind, it's a little fuzzy. Once RCID is shut down, it is effectively part of Orange County. The responsibilities of the government of RCID continue to exist, but under the guise of Orange County. With this in mind, has the State of Florida really broken its promise to RCID bond holders?

You and I might have one interpretation of this. Someone else might have another.

I've seen justices contort themselves into pretzels to reach conclusions they want to reach. Ultimately, will the Florida Supreme Court be sympathetic to Disney or to the governor?

This isn’t just a state issue. The US Constitution prohibits changing the terms of contracts.

What’s the argument that the state is not “limit[ing] or alter[ing] the rights of the District to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects or to levy and collect the taxes, assessments, rentals, rates, fees, tolls, fares and other charges provided for”?

You also keep only focusing on Orange County but it is not the only county involved. There are District assets and responsibilities in Osceola County. Assets would not longer have common ownership. How would you break up the bonds for a project that crossed county lines? That means ownership of a financed asset is no longer with the entity servicing the bond. If some bonds go to Osceola County you’re now further muddying repayment.

 

[Baloo62]

 

[GoofGoof]

Exactly.

The issue is that the State of Florida promised RCID bond holders that it would not mess with these bonds.

My post was more about the cases referenced in the Bloomberg article, whose applicability can be debated.

This gets us back to my bigger point, which is understanding the political makeup of the Florida Supreme Court.

The Florida legislature has the right to shut down RCID. At least so far, RCID is not disputing this.

Instead, RCID is saying, "You are breaking your promise to bond holders." It's a reasonable argument.

So which takes precedent? The Florida statute allowing the legislature to shut down RCID or the State of Florida's promise to bond holders in 1967?

In my mind, it's a little fuzzy. Once RCID is shut down, it is effectively part of Orange County. The responsibilities of the government of RCID continue to exist, but under the guise of Orange County. With this in mind, has the State of Florida really broken its promise to RCID bond holders?

You and I might have one interpretation of this. Someone else might have another.

Justices sometimes contort themselves into pretzels to reach conclusions they want to reach. (Which gets overturned on appeal.) Ultimately, will the Florida Supreme Court be sympathetic to Disney or to the governor?

But it’s not up to the FL Supreme Court. If this was part of the continuing bond offerings it falls under Federal Securities Fraud. It would go to the SEC not the FL courts and would need to be appealed in Federal Court. We have already seen the value of these bonds fall. The ratings agency has downgraded them. From the prospective of the bondholders they are not in the same position at all. Is Orange County (which includes an urban center in Orlando…see Detroit a decade ago) the same risk as RCID who has 1 major taxpayer with no reason to stop paying taxes to itself. It’s impossible to think the Federal Government will look the other way on that because the legislature and Governor wants to teach a corporation a lesson (a motivation they continue to remind everyone who will listen about).

 

[chrisvee]

hasn’t harm already been done to the bond holders given that RCID has lost taxation ability as of 6/1/2023?

and isn’t it impossible for RCID to issue any new bonds at this point?

it just seems as if the legislature has really stepped in it so to speak but not taking the time to think this through

revenge is of course a dish best served cold

 

[GoofGoof]

hasn’t harm already been done to the bond holders given that RCID has lost taxation ability as of 6/1/2023?

and isn’t it impossible for RCID to issue any new bonds at this point?

it just seems as if the legislature has really stepped in it so to speak but not taking the time to think this through

revenge is of course a dish best served cold

Yes harm was done. The bonds are already trading down 10% after this:

The Mouse That Roared: Disney

Disney Related Bonds Trade 10% Lower On Fitch Agency Downgrades and BondView Lowers Market Rating to 2 Stars.

blog.bondview.com

The Fitch ratings agency downgrade is not a full downgrade. They are just on negative watch which means the agency sees a potential for a more negative outcome in the future. It’s all about the uncertainty. RCID could still go out and issue bonds tomorrow if they wanted but they would come at a higher interest rate for sure. They are still investment grade so it wouldn’t be a junk bond. An investor who is willing to take a little more risk for a higher return may be interested. Current bond holders are likely more risk adverse.

https://www.fitchratings.com/research/us-public-finance/fitch-places-reedy-creek-improvement-district-fl-utility-ad-valorem-ratings-on-neg-watch-22-04-2022

 

[GoofGoof]

Are you suggesting that fraud is being commited?

Yes, absolutely. From a federal perspective a municipality in the state of FL issued bonds publicly with a guarantee from the state and now the state is reversing that guarantee through legislation and has negatively impacted the bond holders who a reasonable person would see relied on that guarantee. That’s securities fraud.

Securities fraud is described as defrauding someone connected to a security or commodity, or obtaining any money or property from the purchase or sale of a security by using means of false or fraudulent pretenses, representations, or promises.

 

[lazyboy97o]

Just in the first 10 minutes

• Ignores that Florida has nuclear power plants
• Kissimmee is nowhere near Walt Disney World, so they’d never had oversight
• Mischaracterizes impact fees, which are a small one time fees. Universal doesn’t pay Orange County impact fees for the North Campus because it’s in Orlando.
• Reedy Creek instituted standards that didn’t exist.
• Confuses the timeline. Walt was dead before the District was created.

 

[lazyboy97o]

Contracts can be changed by mutual agreement by both parties.

Contracts can be transferred.

Contracts (generally) survive when someone dies. Effectively, RCID is "dying", with its inheritors being Orange and Osceola Counties.

Is the State of Florida allowed to transfer RCID bonds to the governing bodies that replace it?

I'll say it again, this time a little differently. It doesn't matter what you and I think. What matters is what the members of the Florida Supreme Court think.

At least until RCID decides to appeal any decision to federal courts.

With this in mind, what's your opinion of the Florida Supreme Court?

This isn’t a change by mutual agreement.

Personal contracts are undertaken with the knowledge that people die. The Reedy Creek charter sets out a perpetual existence. It wasn’t intended to fulfill a specific purpose and then wind down, it was supposed to continue existing.

We’re not just talking about a simple transfer to a single new entity. The assets and obligations have to be split and separated from each other and their revenue source. The new solar power projects aren’t even in the constituent counties, so who gets that property and liabilities? The state hasn’t laid out a path for apportioning the assets.

I don’t think the Florida Supreme Court would lightly jeopardize the full faith and credit of Florida and its various subdivisions. We’re talking about the potential for extremely serious consequences.

 

[Obobru]

I guess the mouse has a plan

 

[UNCgolf]

I'd love to know his actual name to look up his credentials. He must be a solo practitioner because I can't imagine any halfway reputable firm would allow him to have a Youtube channel, especially one that's providing misleading at best information.

He's either a terrible attorney or he knows he's not being completely truthful on his channel and is just trying to make extra money. It seems like the kind of thing the bar would look down on, though.

 

[lazyboy97o]

I'd love to know his actual name to look up his credentials. He must be a solo practitioner because I can't imagine any halfway reputable firm would allow him to have a Youtube channel, especially one that's providing misleading at best information.

He's either a terrible attorney or he knows he's not being completely truthful on his channel and is just trying to make extra money. It seems like the kind of thing the bar would look down on, though.

Did you actually make it through the whole thing? I’m guessing it doesn’t get better?

 

[UNCgolf]

Did you actually make it through the whole thing? I’m guessing it doesn’t get better?

Oh, I didn't even bother watching it. I just perused his page and saw some of the other videos he'd posted -- checked out a little bit of one of them and that was enough for me. He was referencing Project Veritas as a legitimate information source.

 

[Sirwalterraleigh]

Ah ah, yeah that makes sense. I need to stop thinking as a civil engineer sometimes.

I hang with a crew of them…no harm done.

And I hope all of you get back to your home planet safely one day

 

[Sirwalterraleigh]

Think of it this way.

The U.S. Supreme Court is conservative.

The Eleventh Circuit (which oversees Florida) is conservative.

The Florida Supreme Court is conservative.

These are the legal minds that ultimately matter. Not an attorney in a YouTube video or one who writes an article for Bloomberg.

Laws are complex, with different justices emphasizes different aspects of the law.

How much confidence do you have that all three will rule in favor of RCID/Disney?

I’m 99% all will rule against Florida