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

[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.

 

[GoofGoof]

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.

If you go back to the time the project happened (see below) RCID estimated a sales tax savings of around $1.4M from being exempt from sales tax on certain building materials. The garages cost $85M but most of the cost is labor and materials that aren’t taxed. Municipal debt in theory should be at a lower interest rate than similar corporate debt since its tax free earnings for the buyer so they take a lower rate for the same after tax return. As the below article states while Disney gained some advantages using RCID to build the garages at the same time the City of Orlando paid $9M for a pedestrian overpass for a new Universal resort. I don’t think that’s a bad thing. That overpass paid for itself by now in more sales tax revenue. Great use of public funds.

Reedy Creek to build parking garages for Downtown Disney expansion

Of all the additions Walt Disney World will make during the next few years as it transforms its Downtown Disney shopping district into the larger “Disney Springs,” none will be more imp…

www.orlandosentinel.com

 

[lazyboy97o]

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."

But they’d never truly be on a “level playing field” because they exist in different jurisdictions. How Orlando operates is different from how Orange County operates.

 

[Rich Brownn]

I do not subscribe to that. Every area that Disney has ever built a park, the surrounding area exploded and grew. If RCID was never estabilished, the surrounding counties and the state would have promoted the development of the theme parks and hotels. They grew because of pop-culture demand and there was a profit/loss business model that drove it.

Again...RCID was estabilished for the purpose of supporting the AGRESSIVE idea of the Experimental Prototype City of Tomorrow. This was a GIGANTIC futuristic functioning CITY with THOUSANDS of actual "RESIDENTS"...actually LIVING in the city!!

If Disney had told the state "before" they estabilished RCID in 1967...that EPCOT would NEVER be built and that only a theme park would be built...the state would have said "nope".

Special taxing districts are great...like The Villages...when you have thousands of real people LIVING there...

If they'd said "nope" we'd be visiting WDW in St Louis. And probably every other park too. And Orlando would still be next to 27,000 acres of swampland.

 

[lazyboy97o]

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.

The funds to pay off those bonds do come from Disney. It’s a bit of a complicated deal, but Anaheim is not paying for that garage. Like the District they’re a go-between to secure better financial terms.

 

[Chi84]

If they'd said "nope" we'd be visiting WDW in St Louis. And probably every other park too. And Orlando would still be next to 27,000 acres of swampland.

That’s true. From the articles I’ve read, Florida would have done just about anything to get Disney to build “Disneyland East” there.

 

[Rich Brownn]

Not historically accurate. When going before the legislature in 1967 (after Walt died), the legislature was really pushing to get a "Disneyland East", and the plans were for a vacation resort. Epcot was a far off possibility, but it was not the leading part of the discussion in 1967. Everyone forgets, the area WDW is in now was basically useless swampland.

Disney would not have been built if RCID hadn't happened. And FL wanted Disney and all of the tourism it would bring.

To quote Adm. Joe Fowler when telling Walt about Florida: "We have purchased 27,000 acres of the sorriest ground God put on earth. Most of it is under water." It took nearly $30 million in 1969 dollars just to build canals to drain the swamp.