One can ask Bob Iger. It was during his watch. Everything can be said, everyone is allowed to be there. Still a stretch to tie that into safety and courtesy .
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News Reedy Creek Improvement District and the Central Florida Tourism Oversight District
- Thread starter castlecake2.0
- Start date
GoofGoof
Premium Member
Good read. Seems to sum it up well.
One thing I was thinking about when reading this is the long timeline and the statement from RCID that they will continue to operate as usual. I’m thinking that Disney could (if they wanted to) create a poison pill type effect by running up even more debt in the next 12 months. They would have to have actual projects to spend money on and ultimately would be on the hook to pay for them through taxes assuming this thing gets resolved, but on the off chance the debt goes to the counties it’s basically a blank check. Now 12 months isn’t much time when we talk about large municipal construction projects but what’s to stop Disney from instructing RCID to buy some equipment, say a turbine for a new power station that may cost a few hundred million, and issuing debt to fund the purchase. RCID will have to pay a higher interest rate now to borrow but they could run up even more debt. Maybe issue 30 year bonds with a clause that prohibits early redemption. Then if a Federal court finds that the district cannot be dissolved until all the debt is payed instead of delaying until 2029 they would buy more time until 2052. By then who knows what will have changed.
UNCgolf
Well-Known Member
This is absolutely what they should be doing -- there's basically no downside, as long as they are projects they want/need to complete . At worst they'll just pay for something they were going to eventually do anyways.
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GoofGoof
Premium Member
I wonder what interest rate they’d have to pay for RCID bonds now. Even if they were downgraded a notch they’d still be investment grade level so it may not be a huge increase.
Wendy Pleakley
Well-Known Member
It's an interesting concept that Disney could do this to thwart the change or even that Florida's hands are tied to 2029.
Does that give Disney (and other entities) too much power? Should Florida not have a mechanism to make this sort of change in a reasonable timeframe?
As much as I think the move from Florida is wrong on just about every level, it all raises interesting question.
Minthorne
Well-Known Member
Disney is rather fiscally exclusive - isn’t it?
Minthorne
Well-Known Member
Would you buy the new bonds from RCID in the next 12 months? Seems like an unstable investment option.
UNCgolf
Well-Known Member
I'm sure some people would -- it's not like you'd really have to worry that they'd disappear. Someone would have to pay out or that's an easy lawsuit.
GoofGoof
Premium Member
The ratings agencies haven’t even downgraded them yet. Just on negative watch. It’s risk reward. The same person who would have bought the bonds a month or 2 ago gets a higher return now.
GoofGoof
Premium Member
FL probably should have thought of that when they setup the special district or the other 1,500+ that exist in the state. How many have debt? How many would face similar obstacles if the state wanted to dissolve them on a whim? What’s a reasonable timeframe? People bought these bonds because they thought they’d be getting regular interest payments for the life of the debt (in some cases that’s 2029). If the bonds have a clause in them that prevents early redemption then the owners paid a premium for that benefit in the form of a lower interest rate. It’s not legal or fair to harm them for a political stunt.
Does RCID give Disney too much power? Remember that all RCID does is allow an additional municipal entity to charge Disney extra taxes above the tax they already pay (at the same rate as every taxpayer) for certain services. There’s no harm to Florida at all and a nice benefit to the local taxpayers. If RCID never existed and emergency services and roads and utility costs always fell to the counties then Orange and to a lesser extent Osceola county taxpayers would pay more today and would have for the last 50 years. Those same services Disney gets from RCID are provided to Universal and Sea World under the normal budget of the county but the county doesn’t need to foot the bill for Disney property even though they pay taxes to the county at the same rate. The district isn’t being dissolved because it’s an unfair benefit to Disney or hurts the people in any way, it’s purely being done out of spite because Disney spoke out.
JoeCamel
Well-Known Member
Insured with a 5 or 6% coupon? Sure in a heartbeat.
Wendy Pleakley
Well-Known Member
Totally agree, and to be clear I meant that Disney has power in the sense that it seems the decision whether or not to dissolve RCID lands primarily with them (assuming this rushed legislation with no planned endgame doesn't go through).
It's a win-win setup as it is, and Florida seems to be cutting off its' nose to spite its' face.
GoofGoof
Premium Member
Agreed. RCID was a huge benefit to TWDC that paved the way to build WDW in FL and expand at the pace they did on such a huge piece of land. The benefit to the state and local economy is equally astronomical. It was and still is truly a huge win/win scenario. At one point FL was considered one of the most business friendly states and they had things like this setup as creative ways to encourage economic growth and attract companies and jobs to the state. This action puts all of that in question. It certainly gives any company pause when considering a large investment in the state. That’s too bad for the citizens and for the economy long term. This could have negative impacts for decades but the people behind this will be long gone.
JoeCamel
Well-Known Member
From Carl Fisher onward entrepreneurs have looked for ways to entice people to the swamps and politicians in the 60's were no different. Think there were no "informal" meetings to get a district set up? I got some land in St Cloud you should like.
RCID was set up to help Disney develop their land in an advantageous manner and worked well to streamline the process and pay it's own way while not impairing the county's ability to collect tax. I remember year after year of Disney challenging the county's valuation and it being adjusted.
You want some fun? Find the debate notes from the legislative session that established the district, nothing but blue skies and rainbows.
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GoofGoof
Premium Member
This is the way I understand it. There are some private roads owned by Disney that they directly maintain. Think roads through a resort. The public roads are all owned and maintained by RCID. The private roads would continue to be Disney’s to maintain. If nothing changes between now and next June the public roads along with all the other RCID assets as well as all of the liabilities will transfer to Orange and Osceola county. There is no reason to take property from Disney since the roads are already controlled by RCID and would just transfer when it’s dissolved.
Other assets include wastewater treatment facilities, electric and water utility infrastructure and some first responder assets. Fire and EMS services are provided by RCID so some equipment and facilities there, I believe police is sub-contracted to the counties already. RCID is also responsible for garbage pickup so I assume there would be assets associated with that as well. The parking garages at Disney Springs are also assets of RCID. The liabilities are mainly the debt from municipal bonds. all of this would transfer if RCID is dissolved.
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GoofGoof
Premium Member
If anyone really wants to geek out on this stuff, here’s the annual report which details the assets, liabilities and what they spend money on. FYI….if you actually open this and read it you will likely have seen more detail than some of the people eagerly voting to dissolve the district.
This was posted earlier:
From the legend, I would say roads, water systems, and whatever else is shaded yellow is owned by RCID and is what would transfer. Stuff in green is Disney.
So, for a road, you have to look at which part it's covered by. Most of World Drive looks like it's RCID, at least the big parts. But, if you follow it all the entire way, the smaller northern parts look like they are owned by Disney.
GoofGoof
Premium Member
Speaking of the roads going over to the county, if that really happened does anyone know if it’s theoretically legal for the county to put a toll on roads into WDW? If the counties have an additional cost to maintain those roads and no increased tax revenue to pay for it could that be part of a solution? They could generate millions annually with even a small toll of a dollar or less. It would mostly hurt local visitors and especially hurt workers who really cannot afford it but if it can help avoid a 20-25% tax hike for the county I’d imagine they’d consider it.
UNCgolf
Well-Known Member
It looks like counties are authorized to create limited access (toll) roads under Florida state law, so it seems like they could.