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

[Brian]

Glad you finally worked out that the purpose behind rcid was not primarily about saving money - but because they wanted control. The financial tools it opened are advantageous and enablers but not the core reason it was pursued.

They wanted control and the predictability it helped bring. The structure of rcid allows them to spend in ways that are tax advantaged for disney but also insulates the financial stats of disney. But it was the long term planning and control the leadership had the foresight to lock up with such certainty before committing the company’s future.

Disney still paid for it. But they did so in ways that were advantageous to spend in that fashion.

By paying through taxes and having rcid do bonds instead of disney seeking it’s own financing it is cheaper for the company.

But the early spend was not huge. Disney spent more buying the land than rcid’s bonds yhag were part of the lawsuit were for.

Disneyland was at it’s peak of record breaking significance at this time in 1965. Disney would have had no problem finding investors willing to finance the disneyland east concept.

But disney was set on being in control after returning to their position of power. They bought out their Disneyland partners and operators… and looked to use their experience and lessons learned in their next major effort.

Disney walked on water at that point in time - anyone would have given them anything to be the next Disneyland

You do realize that we agree on virtually everything you said, right?

My original post was this:

Perhaps we can acknowledge that, notwithstanding the original intent of RCID being, in part, to build a city (EPCOT) and that though it didn't turn out, RCID was still critical to the development of WDW, as neither the state nor the company had the resources necessary to create the infrastructure needed to support such a project.

In 2023, the same can't be said. The company is wealthy beyond Walt and Roy's wildest imagination, and could develop a WDW-like project in a similar environment (ground-up infrastructure), if they were so inclined. They also have enough financial resources to support themselves without needing RCID to continue the operation of WDW; the only barrier to dissolution (done fairly, and without retaliation), in my mind, are the existing bonds.

The point in saying this at that point in the thread was to put to rest a claim that I saw as something which is more or less immaterial to whether RCID should exist today (that being RCID was supposedly established to support EPCOT, the city, and there is no EPCOT the city), and put forth an alternative reasoning as to why I think that RCID is not as necessary today as it was back when WDW was built up.

The only place we differ is that I don't believe that Disney of the sixties would be able to afford the development the land that became WDW (and its surroundings) on their own, considering that even the nearest power and water was 15 miles away. To be sure, the company was successful at the time, and there would have been private sector funders who would have been chomping at the bit to partner up with them to make it happen, but as you rightly point out, they had just bought out all of Disneyland's partners, the last thing they would want to do is bring other companies into the fold and potentially exert control over the final product. This left them with the state as their partner, and as an added benefit, the development done through municipal bonds was tax-free.

 

[flynnibus]

“nor the company had the resources necessary to create the infrastructure needed to support such a project.”

How do you think companies like reedy creek energy services got started and got their money to build out? (Pssst… it’s not rcid bonds)

 

[Brian]

How do you think companies like reedy creek energy services got started and got their money to build out? (Pssst… it’s not rcid bonds)

What are you even trying to posit at this point?

 

[flynnibus]

What are you even trying to posit at this point?

You are saying disney couldn’t have afforded it without rcid. I’m saying Disney could have done it without.

Everything rcid has funded through bonds could have been done with partners or financing. (Just like they did with the resorts). Public infrastructure was the smart way - not the only way. Disney still paid with the rcid path - they just got cheaper financing and the tax advantages of effectively paying as taxes instead of investment and debt. Disney in effect gets long term tax deductible spending.

It was fiscally savvy path - not the do or die way to pay.

But it was the path that kept others out…. And at that time Disney was really learning how to use their position to use other’s money without giving up control. Such is the power that success brings…

 

[lewisc]

The charter lays out the purpose of the district. It’s not to build EPCOT. In State vs Reedy Creek Improvement District the FL Supreme Court later confirmed that the purpose of the district was ”essentially and primarily directed toward encouraging and developing tourism”

There is simply no truth to the notion that RCID only existed to build EPCOT.

Why let facts get in the way.

Wasn't Celebration, in part, the alternate to some of the original pie in the sky EPCOT original proposals

 

[GoofGoof]

Why let facts get in the way.

Wasn't Celebration, in part, the alternate to some of the original pie in the sky EPCOT original proposals

Agreed. It was to an extent at least a partial nod to the original EPCOT concept and that land was de-annexed from the RCID once the development was built. Celebration has its own local government mostly independent from RCID. If RCID was only designed to facilitate a city, EPCOT, then why not keep the city in the district? As has been stated repeatedly, RCID was never intended to be a general purpose government and it never has been. The purpose of the district is to facilitate tourism and economic growth.

 

[castlecake2.0]

Why let facts get in the way.

Wasn't Celebration, in part, the alternate to some of the original pie in the sky EPCOT original proposals

Partly that, partly Osceola County was getting mad that Disney wasn’t developing any land in their county. It also helped Disney keep control of urban sprawl on that side of property

 

[GoofGoof]

You do realize that we agree on virtually everything you said, right?

My original post was this:

The point in saying this at that point in the thread was to put to rest a claim that I saw as something which is more or less immaterial to whether RCID should exist today (that being RCID was supposedly established to support EPCOT, the city, and there is no EPCOT the city), and put forth an alternative reasoning as to why I think that RCID is not as necessary today as it was back when WDW was built up.

The only place we differ is that I don't believe that Disney of the sixties would be able to afford the development the land that became WDW (and its surroundings) on their own, considering that even the nearest power and water was 15 miles away. To be sure, the company was successful at the time, and there would have been private sector funders who would have been chomping at the bit to partner up with them to make it happen, but as you rightly point out, they had just bought out all of Disneyland's partners, the last thing they would want to do is bring other companies into the fold and potentially exert control over the final product. This left them with the state as their partner, and as an added benefit, the development done through municipal bonds was tax-free.

RCID is not necessary today. Even if Disney lost all the court cases and the governor continues to attempt to hurt their business they will still make money, WDW will continue. It also wasn’t technically necessary in 1967 either. The company could have built something at the WDW site without it. It is impossible to know for sure what they could have built, but economically the district didn’t change the project so significantly as to make it not viable without RCID. The major difference is in 1967 Disney had no roots in the state, no steel in the ground, nothing invested that couldn’t be recovered. If the state was run by a DeSantis back then who decided that companies shouldn’t get any breaks and the economy is irrelevant and therefore refused to work with the company then the company would likely have sold the land (probably at a gain but at least break even) and built their project somewhere else. The state offered RCID as a way to ensure Disney picked FL and picked that sight. It was a wise decision that has changed the state in a very positive way. Flash forward to today and they can threaten to take the district away because Disney can’t just pack up and walk away. So whether the district is necessary or not is irrelevant it’s whether the company has leverage that changed.

If you think I’m off base here then why hasn’t the state pulled back the $570M in tax credits they offered Disney to move jobs to Lake Nona? If Disney needs to be punished and if Disney needs to be on a level playing field with everyone else why allow those windfall tax credits to stand? Simple answer is the company could then pull back the jobs. They can’t pull back WDW.

The better question we should be asking is what would the benefit be of removing RCID today? Who gains from it? Even if Disney doesn’t need the district today is that a good enough reason to dissolve it? The district was still effectively doing exactly what it was created to do 50+ years ago, encouraging tourism and economic growth around the district property. The new board is so far failing to do that. The district was never intended to provide oversight. Disney is still required to follow state and local laws and the state and local governments provide oversight. The district should get back to the business of encouraging tourism and growth. I don’t know about anyone else but I’d say Disney is a lot better at tourism than 5 political appointees with zero years of combined experience.

 

[el_super]

There is simply no truth to the notion that RCID only existed to build EPCOT.

RCID was created to build EPCOT. That is the truth. No one in 1967 or in 1968 had any reason to believe that Disney wasn't being truthful in their desire to build EPCOT and that they would ultimately fail to build it.

I think the disconnect with your statement is in thinking that, an entertainment company building an experimental city wouldn't have been considered a form of tourism but as something else, something different. That wasn't really true though. The experiment itself was thought to be a tourist attraction.

 

[Chi84]

RCID was created to build EPCOT. That is the truth. No one in 1967 or in 1968 had any reason to believe that Disney wasn't being truthful in their desire to build EPCOT and that they would ultimately fail to build it.

I think the disconnect with your statement is in thinking that, an entertainment company building an experimental city wouldn't have been considered a form of tourism but as something else, something different. That wasn't really true though. The experiment itself was thought to be a tourist attraction.

https://ir.law.fsu.edu/cgi/viewcontent.cgi?article=1123&context=lr

“Your” truth isn’t “the” truth according to fact-based sources, the RCID charter and the Florida Supreme Court.

 

[GoofGoof]

RCID was created to build EPCOT. That is the truth. No one in 1967 or in 1968 had any reason to believe that Disney wasn't being truthful in their desire to build EPCOT and that they would ultimately fail to build it.

I think the disconnect with your statement is in thinking that, an entertainment company building an experimental city wouldn't have been considered a form of tourism but as something else, something different. That wasn't really true though. The experiment itself was thought to be a tourist attraction.

The 100+ page charter spells out what the district was created for. I haven’t seen anything in it that says it’s created just to build EPCOT. There’s also nothing in there that would stop Disney from building EPCOT. The charter specifically encourages the design and development of innovative public services, facilities and transportation. Disney and the state acknowledged that RCID didn’t have all of the same authority as a general government which is why they ended up also authorizing the 2 cities which never really were fully built out. If EPCOT was eventually built out they would have needed a general government too, just like celebration when that was eventually built. The RCID charter doesn’t allow all the functions needed for a general government. A list of services the district was not authorized to provide from the article attached prior:

• Authority to issue business and professional licenses as well as collect related fees;
• Authority to build and maintain health care facilities, including hospitals and health care research facilities
• Authority to provide police services
• Authority to regulate the manufacturing and sale of alcohol
• Authority to establish and operate a municipal court, including appointment of a municipal judge and city prosecutor

So said another way, if EPCOT was built RCID would not have been the general government controlling it.

 

[mikejs78]

RCID was created to build EPCOT. That is the truth. No one in 1967 or in 1968 had any reason to believe that Disney wasn't being truthful in their desire to build EPCOT and that they would ultimately fail to build it

Epcot was the icing on the cake to bringing Disney in. Most of the talk in FL initially was for Disneyland East. Epcot kind of sealed the deal in 1965.

After Walt's death and before RCID was chartered, talk of Epcot died down substantially. So while Epcot was still part of nebulous future plans, the impetus for RCID was not for Epcot - it was to do the necessary land engineering and infrastructure to make the initial plans for Walt Disney World possible.

 

[Brian]

If you think I’m off base here then why hasn’t the state pulled back the $570M in tax credits they offered Disney to move jobs to Lake Nona? If Disney needs to be punished and if Disney needs to be on a level playing field with everyone else why allow those windfall tax credits to stand? Simple answer is the company could then pull back the jobs. They can’t pull back WDW.

I don't think you're off base. I fully recognize the value of control for Disney, both back in the sixties and today. Given the hostility demonstrated by the state for the last year plus, I also can't necessarily fault them for their contract with the outgoing RCID board. It was a smart business move, really.

The better question we should be asking is what would the benefit be of removing RCID today? Who gains from it? Even if Disney doesn’t need the district today is that a good enough reason to dissolve it? The district was still effectively doing exactly what it was created to do 50+ years ago, encouraging tourism and economic growth around the district property. The new board is so far failing to do that. The district was never intended to provide oversight. Disney is still required to follow state and local laws and the state and local governments provide oversight. The district should get back to the business of encouraging tourism and growth. I don’t know about anyone else but I’d say Disney is a lot better at tourism than 5 political appointees with zero years of combined experience.

I think the only "benefit" to dissolving RCID today is the "level playing field" argument, which is not necessarily a strong argument to make, as Universal enjoys similar benefits to Disney. If we were to have a serious conversation as a state, outside of the political retaliation of it all, about the "level playing field," I think the only true way to accomplish that would be to remove each and every special privilege for Disney and Universal. Of course, that has not been done as of this post, as the state's ire has been solely targeted at Disney, and as a means to retaliate, rather than with altruistic intentions of "leveling the playing field."

It begs the question, if examining the issue with altruistic (and non-retaliatory) intentions, however, why shouldn't some of the state's biggest economic powerhouses enjoy some special privileges as an acknowledgement of their contribution to the economy? After all, if not for the Orlando tourism industry, Floridians would likely be subject to a state income tax; the beaches alone wouldn't cut it. Though I never worked directly with RCID during my career with Disney, I never saw one instance of corruption or malfeasance during my tenure of several decades. In other words, if it 'aint broke, don't fix it.

The only thing that I would like to see change from the original arrangement is some oversight outside of the Disney sphere, whether that be state appointees or county appointees. I use this example a lot, so forgive me if you've heard this before, but it annoys me to no end; Disney should have had to pay for their Disney Springs parking garages out of their own enormous coffers. Instead, they pawned off the project to RCID to pay for. Of course, Disney is paying for them through their tax bill, but it was ultimately constructed with public, tax-free funds. A board with both landowner-elected and government-appointed members would be able to tell Disney to pay for their own garages.

 

[flynnibus]

If you think I’m off base here then why hasn’t the state pulled back the $570M in tax credits they offered Disney to move jobs to Lake Nona?

Because that wasn’t a disney specific deal - but a standing program disney qualified for

 

[Stripes]

I use this example a lot, so forgive me if you've heard this before, but it annoys me to no end; Disney should have had to pay for their Disney Springs parking garages out of their own enormous coffers. Instead, they pawned off the project to RCID to pay for. Of course, Disney is paying for them through their tax bill, but it was ultimately constructed with public, tax-free funds. A board with both landowner-elected and government-appointed members would be able to tell Disney to pay for their own garages.

The Disney Springs parking garages aren’t the only publicly funded Disney parking garages.

The Anaheim City Council agreed to build the Mickey and Friends Parking Structure at Disneyland which they lease to Disney for $1 per year and Disney pockets 100% of the parking fees of $20/$35. And once the bonds are paid off, the city is obligated to transfer ownership of the parking garage to Disney at no cost to the company.

 

[GoofGoof]

I don't think you're off base. I fully recognize the value of control for Disney, both back in the sixties and today. Given the hostility demonstrated by the state for the last year plus, I also can't necessarily fault them for their contract with the outgoing RCID board. It was a smart business move, really.


I think the only "benefit" to dissolving RCID today is the "level playing field" argument, which is not necessarily a strong argument to make, as Universal enjoys similar benefits to Disney. If we were to have a serious conversation as a state, outside of the political retaliation of it all, about the "level playing field," I think the only true way to accomplish that would be to remove each and every special privilege for Disney and Universal. Of course, that has not been done as of this post, as the state's ire has been solely targeted at Disney, and as a means to retaliate, rather than with altruistic intentions of "leveling the playing field."

It begs the question, if examining the issue with altruistic (and non-retaliatory) intentions, however, why shouldn't some of the state's biggest economic powerhouses enjoy some special privileges as an acknowledgement of their contribution to the economy? After all, if not for the Orlando tourism industry, Floridians would likely be subject to a state income tax; the beaches alone wouldn't cut it. Though I never worked directly with RCID during my career with Disney, I never saw one instance of corruption or malfeasance during my tenure of several decades. In other words, if it 'aint broke, don't fix it.

The only thing that I would like to see change from the original arrangement is some oversight outside of the Disney sphere, whether that be state appointees or county appointees. I use this example a lot, so forgive me if you've heard this before, but it annoys me to no end; Disney should have had to pay for their Disney Springs parking garages out of their own enormous coffers. Instead, they pawned off the project to RCID to pay for. Of course, Disney is paying for them through their tax bill, but it was ultimately constructed with public, tax-free funds. A board with both landowner-elected and government-appointed members would be able to tell Disney to pay for their own garages.

I don’t get the level playing field argument. A business friendly state is by design not a level playing field. Bring in jobs, boost the economy and get some benefit from the state. That’s just good government in my opinion. There are limits to this though. For example, let’s say I want to build a coal burning power plant right next to a residential area. That plant may bring in jobs and boost the local economy but the air pollution and risk of water contamination could be harmful to residents. So as long as the jobs and the growth are not harmful to the local population I am all for it. Other local business benefit a heck of a lot more than they are harmed by WDW.

With WDW nothing they want to do is harmful and even if it was the property is so large that not many people would probably be directly impacted. I guess my point is why is a level playing field actually beneficial? Also, what other company wants to have their own RCID? I haven’t heard any competitor claim Disney has an unfair advantage. I can’t imagine anyone would want to have this setup where they pay for services provided today for free from the local government (free meaning already covered by property taxes vs an additional special district assessment). For Disney the Huge property is a blessing and a curse. The district helps address the curse part.

On the parking garages I think it actually makes some sense. When I first heard it was done by RCID I thought that was odd too, but thinking about it further makes a lot more sense. Who benefits from the garages? Disney and the vendors at Disney Springs plus guests. By my office they just recently put in a parking garage at the train station. It was paid for with municipal debt and that debt is being paid off with a parking fee at the garage. So the local government financed the garage upfront but users of the garage end up paying for the garage not all local taxpayers. This is a common municipal setup. In the Disney Springs case Disney could have done something similar but Disney and the vendors wanted free parking for guests so no parking fee. RCID paid for the garage (which as I said is a common municipal action) but without a parking fee the cost falls to the taxpayers. In this case the leases at Disney Springs require the vendors to cover the cost of real estate taxes for their stores so they are indirectly paying for the parking garages along with Disney. Who is harmed by this setup? Remember that the district‘s purpose is to encourage tourism and economic growth. Can anyone argue that Disney Springs doesn’t meet that definition? Disney Springs expansion was only possible by replacing the flat lots with garages.

 

[GoofGoof]

Because that wasn’t a disney specific deal - but a standing program disney qualified for

Nah, they could just amend the program. Exclude any company whose business spans a special district that crosses 2 counties or some nonsense.

 

[GoofGoof]

The Disney Springs parking garages aren’t the only publicly funded Disney parking garages.

The Anaheim City Council agreed to build the Mickey and Friends Parking Structure at Disneyland which they lease to Disney for $1 per year and Disney pockets 100% of the parking fees of $20/$35. And once the bonds are paid off, the city is obligated to transfer ownership of the parking garage to Disney at no cost to the company.

Right, so to take this back to FL, if RCID never existed or was dissolved before DS was built out and if Disney convinced Orange County to pay for the garages and lease them to Disney for $1 then all local taxpayers in Orange County would be paying for the garages just like all local taxpayers in Anaheim are paying for the DLR garage. So RCID actually keeps the cost away from Orange County taxpayers while allowing them to still enjoy the benefits of added jobs and the sales tax from the expanded shopping district. Big win for local residents and the local economy.

 

[mikejs78]

remove each and every special privilege for Disney and Universal

Sure, but how would you handle the tax situation? The FL constitution kind of hampers things unless there is a special district.

 

[Brian]

Sure, but how would you handle the tax situation? The FL constitution kind of hampers things unless there is a special district.

That's one of the reasons why I don't support dissolving RCID. I'm merely saying to truly "level the playing field" they would have to remove Universal's special privileges as well.