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

[GoofGoof]

With the subject of energy being discussed, are the solar farms owned/operated by WDW or RCID? Just wondering

It’s an interesting question. Duke Energy operates the facilities and sells the output to RCID and they sell some but not all of the power to Disney. I believe the land is/was owned by RCID so I’m not sure if they are leasing the land to the project company or if it was contributed as part of the agreement to build there. Either way, this is part of the mess that needs to be sorted out if the district really is dissolved. What happens to both contracts?

Duke Energy Launches New Solar Facility at Walt Disney World Resort

A new solar facility designed in the shape of a “not-so-hidden-Mickey” is the latest step by Duke Energy to expand renewable energy in Central Florida.

news.duke-energy.com

 

[Sirwalterraleigh]

I think that’s easy for us to say and is a valid opinion and a likely outcome, but for vendors and employees who need to be paid come June it’s still not so clear cut. The clock is ticking and the closer we get to June the more worried I would be if I were in their shoes. Even just a semantics name change could lead to delays in payments and disruptions to services if they don’t have everything locked down and formalized by the deadline. I also don’t think the government cares too much if that happens.

I get it…but that’s why they shouldn’t have started this stunt in the first place

 

[Sirwalterraleigh]

It’s an interesting question. Duke Energy operates the facilities and sells the output to RCID and they sell some but not all of the power to Disney. I believe the land is/was owned by RCID so I’m not sure if they are leasing the land to the project company or if it was contributed as part of the agreement to build there. Either way, this is part of the mess that needs to be sorted out if the district really is dissolved. What happens to both contracts?

Duke Energy Launches New Solar Facility at Walt Disney World Resort

A new solar facility designed in the shape of a “not-so-hidden-Mickey” is the latest step by Duke Energy to expand renewable energy in Central Florida.

news.duke-energy.com

Have you considered that the Feds are likely financing those anyway?

Probably are. we just can’t scare the children with the truth

 

[GoofGoof]

Have you considered that the Feds are likely financing those anyway?

Probably are. we just can’t scare the children with the truth

Sure, they most likely get tax credits for those facilities, but it doesn’t change much for this discussion. The economics around one of these projects includes the benefit of the tax credits but they are still underwater if the person buying the power stops paying for it.

 

[Sirwalterraleigh]

Sure, they most likely get tax credits for those facilities, but it doesn’t change much for this discussion. The economics around one of these projects includes the benefit of the tax credits but they are still underwater if the person buying the power stops paying for it.

Jeeez…can we not defend Duke energy here?

The “free” (corporate welfare) system won’t die on this hill…I promise

 

[GoofGoof]

Jeeez…can we not defend Duke energy here?

The “free” (corporate welfare) system won’t die on this hill…I promise

The same issue of uncertainty around payment exists for EMS and other RCID employees as well as any other vendor providing services to the district. How will they be paid in June when the district is gone? In this case Duke had the ability within their contract to require a collateral posting while some or most of the others probably don’t have that safety net. I know the employees cannot ask to be paid in advance in May.

Whether Duke is an evil company benefiting from corporate welfare is really not relevant. We have gone down this path of tribalism in this country where everyone picks a side and wrongs only “count” when they are against your side and not when they are against the other. Wrong is wrong no matter who the victim is. Even if Duke is evil for various other reasons they still have a contractual right to be paid on time.

 

[Kamikaze]

RCID should simply stop paying WDWs electric bill and let WDW go dark.
You will see how quickly TWDC pays the electric bill to keep their park lit.

How would it benefit Disney to have RCID not pay the bill?

 

[castlecake2.0]

Not bringing up how we got to this point in time, I don’t think anyone can honestly say they’re ok with the State appointing their own hand picked members to serve on the Reedy Creek board. That’s a dangerous precedent.

 

[GoofGoof]

Not bringing up how we got to this point in time, I don’t think anyone can honestly say they’re ok with the State appointing their own hand picked members to serve on the Reedy Creek board. That’s a dangerous precedent.

Yeah it would be quite unusual for a district like this. Many pages back someone posted a link to a database of all of the special districts in FL and you could filter on all of the districts where board members are appointed by the state. They were almost exclusively around non-profit medical centers or entities that received the majority of their funding from the state. In that case it makes sense for the state to maintain control. There were no examples we could find of a special district funded by taxpayers where the taxpayers didn’t then get to elect their own board of directors. Basic concept of no taxation without representation.

 

[GoofGoof]

I wish we could keep this on the topic of what will happen to RCID. I assume at some point many of the recent posts will be deleted and there’s some good information here and good discussion that will probably get lost too

 

[GoofGoof]

What is the state giving up? One side giving and the other side taking is not a compromise.

If you compare this to the last 50 years the state gives up nothing. I concede that point. The fact of the matter is that outside of a successful 1st amendment lawsuit RCID would be gone in June. Passed officially by the legislature. So under those conditions the compromise is Disney gets to keep practical control of the district it wants to keep and the state gives up its plan to eliminate the special district completely which they have a right to do. That’s the compromise. If Disney keeps control and loses next to nothing they aren’t really giving up much either.

 

[Surferboy567]

If Disney keeps control and loses next to nothing they aren’t really giving up much either.

I’m no political expert…but they are giving up full control of the district. Yes, they may still technically have control but now they have to deal with the state breathing down their necks. It’s a compromise but they are definitely losing out from their current arrangement.

 

[GoofGoof]

I’m no political expert…but they are giving up full control of the district. Yes, they may still technically have control but now they have to deal with the state breathing down their necks. It’s a compromise but they are definitely losing out from their current arrangement.

It’s not the same position they have today, no. But like I said, if they maintain control of a majority of the board seats (a big if that we don’t know until an official plan is announced) they maintain practical control. The state appointed directors would lack the ability to stop the elected directors from doing exactly what they would do today. Maybe some votes would be 4-3 instead of 7-0 but the outcome is the same. So if Disney (through RCID) wanted to add a 4th parking garage to Disney Springs or add another overpass to one of their roads or enter into a new agreements to buy solar power they would have the votes to do it. They would also have the votes to set budgets and tax rates and any other actions the board currently takes. The state appointed directors may have access to some information that was previously non-public so the worst they are is someone looking over your shoulder. A minor inconvenience unless you want to do something unethical or potentially illegal.

 

[Dranth]

I wish we could keep this on the topic of what will happen to RCID. I assume at some point many of the recent posts will be deleted and there’s some good information here and good discussion that will probably get lost too

Fair enough.

 

[Sirwalterraleigh]

I wish we could keep this on the topic of what will happen to RCID. I assume at some point many of the recent posts will be deleted and there’s some good information here and good discussion that will probably get lost too

My money is on “semantics” at most…and I’ll cover all bets

I’m no political expert…but they are giving up full control of the district. Yes, they may still technically have control but now they have to deal with the state breathing down their necks. It’s a compromise but they are definitely losing out from their current arrangement.

That is maybe one of the most unlikely results. Disney has more leverage than Florida does…they are waiting it out and giving the pols a chance to quietly escape from a scenario they created

 

[LSLS]

If you compare this to the last 50 years the state gives up nothing. I concede that point. The fact of the matter is that outside of a successful 1st amendment lawsuit RCID would be gone in June. Passed officially by the legislature. So under those conditions the compromise is Disney gets to keep practical control of the district it wants to keep and the state gives up its plan to eliminate the special district completely which they have a right to do. That’s the compromise. If Disney keeps control and loses next to nothing they aren’t really giving up much either.

Disney has 0 incentive to compromise at all. Sure, they lose control of the district. They have numerous things they could pursue and win if they choose to (as was brought up a while ago, they could make the argument that the elimination of the law that gave them the district does not apply to them anyways), but the worst case scenario is they lose the district, and the state of Florida has to justify an immediate 25-30% tax increase for everyone in those counties, and then figure out how to foot the bill for all the additional infrastructure/emergency services. And that doesn't include the damage potentially done to the state bond ratings.

 

[Sirwalterraleigh]

Disney has 0 incentive to compromise at all. Sure, they lose control of the district. They have numerous things they could pursue and win if they choose to (as was brought up a while ago, they could make the argument that the elimination of the law that gave them the district does not apply to them anyways), but the worst case scenario is they lose the district, and the state of Florida has to justify an immediate 25-30% tax increase for everyone in those counties, and then figure out how to foot the bill for all the additional infrastructure/emergency services. And that doesn't include the damage potentially done to the state bond ratings. They have all the power in this.

Agreed.

It was a stunt and Disney has ALL the leverage. They’re doing Tallahassee a favor by not highlighting what a stunt it is.

When I saw there was something like 500 of these “special districts” in Florida…the game was over.

 

[Disstevefan1]

How would it benefit Disney to have RCID not pay the bill?

It wouldn't at all.
The point is that RCID was created only to benefit Disney.
RCID is responsible for paying WDWs electric bill.
RCID is being dissolved and the Electric company is worried if the electric bill is going to be paid.

 

[mightynine]

Hey, wasn’t there an article posted about the latest on what would replace Reedy Creek in this thread? Did it get deleted or something? I thought that was what we were supposed to focusing on.

 

[GoofGoof]

Disney has 0 incentive to compromise at all. Sure, they lose control of the district. They have numerous things they could pursue and win if they choose to (as was brought up a while ago, they could make the argument that the elimination of the law that gave them the district does not apply to them anyways), but the worst case scenario is they lose the district, and the state of Florida has to justify an immediate 25-30% tax increase for everyone in those counties, and then figure out how to foot the bill for all the additional infrastructure/emergency services. And that doesn't include the damage potentially done to the state bond ratings.

I disagree. They have a very real incentive to negotiate. There are several buckets of possible outcomes to this:

1. Disney refuses to compromise and sues under some State or Federal law claiming the dissolution was illegal and a court agrees and reverses the law returning RCID to where they were before with 100% Disney control
2. Disney refuses to compromise and sues under some State or Federal law claiming the dissolution was illegal and a court disagrees and the state either takes control or creates a new district where Disney has no control
3. Disney plays ball and agrees not to sue assuming the agreement reached provides them control of the new district minus some rights like building an airport or a nuclear power station that they have no intention of using anyway

So if Disney decides to go the court fight way then 1 or 2 happens. They have to assess the percent likelihood of outcomes. For example let’s say it’s 70% they win in court 30% they lose. So if option 3 leaves them in virtually the same place economically then there’s a 100% chance they succeed. Going the court way they have 70/30 odds they are unharmed economically (minus legal fees). If court is 90/10 they probably have less a desire to negotiate. If it’s 50/50 or less more desire. Only Disney can say how they view a potential lawsuit.

This analysis is looking purely at the economic impact to having RCID. It does not take into account the fact that a court win would help ensure that the government does not attempt this again. So the benefit is beyond basic economics. However, the flip side to that is dragging this out in court could provide some bad PR for the company. Like it or not there are paying customers who agree with the state on this. A quiet resolution helps Disney to move on. While a politician only needs to get 51% of the people to like and vote for him to be successful Disney wants near 100% of those people to be customers. The politicians know this and will use it as leverage in negotiations.

All this being said, I believe the state is wrong here. They have over stepped and this is a dangerous precedent to set. The question for Disney is how much of a potential economic hit (from either potentially losing control of a special district or losing more paying customers) are they willing to risk to see the right thing happen.