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

[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.

 

[Chi84]

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.

Until now, no one has ever talked of leveling the playing field by making sure the government is harming two businesses equally for no good reason.

 

[GoofGoof]

Until now, no one has ever talked of leveling the playing field by making sure the government is harming two businesses equally for no good reason.

This is a great point. If the goal is a level playing field, instead of removing a “special privilege“ from Disney which is only beneficial and hurts nobody, why not offer that same privilege to anyone else who wants it. Then the playing field is level even if nobody else takes the state up on that offer.

 

[mikejs78]

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.

Maybe leveling the playing field would be opening up special districts to any company that wants to take on that responsibility....

 

[Brian]

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.

The reason I get queasy about the garages, despite your point about the district having a valid reason to build it for Disney, is that Universal built their garages without any public assistance when their expansion ambitions, and the expansion they had recently completed (City Walk and Islands of Adventure), necessitated it. Of course, their expansion was a boon to the surrounding area, and the garages served not only Universal directly, but also the CityWalk tenants.

Universal doesn't have a special district to pawn costs like this on to. They do get some good deals from the city and county, but they, as far as I know, paid for their garages out of pocket, despite a similar rationale for them (if not better) than the Disney Springs garages.

 

[mikejs78]

This is a great point. If the goal is a level playing field, instead of removing a “special privilege“ from Disney which is only beneficial and hurts nobody, why not offer that same privilege to anyone else who wants it. Then the playing field is level even if nobody else takes the state up on that offer.

Maybe leveling the playing field would be opening up special districts to any company that wants to take on that responsibility....

Great minds.

 

[Brian]

This is a great point. If the goal is a level playing field, instead of removing a “special privilege“ from Disney which is only beneficial and hurts nobody, why not offer that same privilege to anyone else who wants it. Then the playing field is level even if nobody else takes the state up on that offer.

Maybe leveling the playing field would be opening up special districts to any company that wants to take on that responsibility....

I don't believe there's anything stopping any of the major attractions from petitioning for a special district, and ultimately receiving one. I'm sure DeSantis would jump at the opportunity in today's political climate, as a means of "sticking it to Disney."

 

[GoofGoof]

The reason I get queasy about the garages, despite your point about the district having a valid reason to build it for Disney, is that Universal built their garages without any public assistance when their expansion ambitions, and the expansion they had recently completed (City Walk and Islands of Adventure), necessitated it. Of course, their expansion was a boon to the surrounding area, and the garages served not only Universal directly, but also the CityWalk tenants.

Universal doesn't have a special district to pawn costs like this on to. They do get some good deals from the city and county, but they, as far as I know, paid for their garages out of pocket, despite a similar rationale for them (if not better) than the Disney Springs garages.

If the city of Orlando paid for Universal’s garages it would be similar to the DLR example. Local taxpayers would eat the cost. Instead Universal paid for the garages and charges for parking. No local resident is paying for it. I’m sure they also pass on some of the cost to vendors at City Walk through their rent. Disney’s garages were paid for by RCID so also no local residents are paying for them. Since Disney pays just about all of the taxes to RCID they are still paying for the garages through tax payments. Economically it’s virtually the same.

 

[mkt]

The reason I get queasy about the garages, despite your point about the district having a valid reason to build it for Disney, is that Universal built their garages without any public assistance when their expansion ambitions, and the expansion they had recently completed (City Walk and Islands of Adventure), necessitated it. Of course, their expansion was a boon to the surrounding area, and the garages served not only Universal directly, but also the CityWalk tenants.

Universal doesn't have a special district to pawn costs like this on to. They do get some good deals from the city and county, but they, as far as I know, paid for their garages out of pocket, despite a similar rationale for them (if not better) than the Disney Springs garages.

Part of Universal Orlando sits in special districts called the Orlando Community Redevelopment Agency and the I-drive Community Redevelopment Area, on top of which they regularly receive HUGE tax breaks (ironically larger than what Disney's clawed back from lawsuits) and they've been actively seeking an arrangement similar to the RCID.

But sure, they paid for those garages 25 years ago.

 

[GoofGoof]

I don't believe there's anything stopping any of the major attractions from petitioning for a special district, and ultimately receiving one. I'm sure DeSantis would jump at the opportunity in today's political climate, as a means of "sticking it to Disney."

There is nothing to stop them which is why the “level playing field” issue isn’t really an actual issue. More of a political talking point to justify the actions recently taken for what I think most of us agree was a completely unrelated reason.

 

[mkt]

I don't believe there's anything stopping any of the major attractions from petitioning for a special district, and ultimately receiving one. I'm sure DeSantis would jump at the opportunity in today's political climate, as a means of "sticking it to Disney."

There's nothing to stop them, and Universal is actively seeking one.

 

[Brian]

If the city of Orlando paid for Universal’s garages it would be similar to the DLR example. Local taxpayers would eat the cost. Instead Universal paid for the garages and charges for parking. No local resident is paying for it. I’m sure they also pass on some of the cost to vendors at City Walk through their rent. Disney’s garages were paid for by RCID so also no local residents are paying for them. Since Disney pays just about all of the taxes to RCID they are still paying for the garages through tax payments. Economically it’s virtually the same.

Agreed, except the only difference is that Universal paid taxes on the garage construction, as they paid for it with private funds. Disney did not, on either coast.

Could Universal have secured a deal with Orlando similar to the deal Disney got with Anaheim? Maybe. But at the end of the day, they didn't.

There is nothing to stop them which is why the “level playing field” issue isn’t really an actual issue. More of a political talking point to justify the actions recently taken for what I think most of us agree was a completely unrelated reason.

The "level playing field" argument was never a really good one; merely an attempt to cloud the real rationale behind the actions the state took, which we can all agree was retaliatory.

 

[mkt]

The "level playing field" argument was never a really good one; merely an attempt to cloud the real rationale behind the actions the state took, which we can all agree was retaliatory.

Especially since it was never "leveled".

Instead Disney now has regulatory challenges that no other attraction in Florida has to deal with, while paying extra for it.

 

[Brian]

Especially since it was never "leveled".

Instead Disney now has regulatory challenges that no other attraction in Florida has to deal with, while paying extra for it.

I don't think that Disney was necessarily disadvantaged nor advantaged prior to DeSantis' retaliation campaign, given the control they wielded over the land was likely worth the extra they were paying in taxes. In other words, the extra taxes they were paying that might have put them at a disadvantage when compared with their competitors, but it was balanced out by the control they have over their land, which their competitors do not also have.

Now it's a distinct disadvantage, moreso if the agreement made by the outgoing RCID board is ultimately invalidated, as they still have to pay the extra taxes, but will presumably have a hostile board of supervisors acting against them at every opportunity.

 

[mkt]

I don't think that Disney was necessarily disadvantaged nor advantaged prior to DeSantis' retaliation campaign, given the control they wielded over the land was likely worth the extra they were paying in taxes. In other words, the extra taxes they were paying that might have put them at a disadvantage when compared with their competitors, but it was balanced out by the control they have over their land, which their competitors do not.

Now it's a distinct disadvantage, moreso if the agreement made by the outgoing RCID board is ultimately invalidated, as they still have to pay the extra taxes, but will presumably have a hostile board of supervisors acting against them at every opportunity.

I'd argue that the invalidation of the agreement will not be respected by Disney and would expect things to get even worse between both parties while the suits go through the courts.