Florida governor Ron DeSantis will have effective control of the board of the special tax zone that Disney has operated for more than 50 years under a new proposal from the US state’s lawmakers.
However, the zone itself will remain largely intact under the proposal, after DeSantis appeared to have backed away from a threat to dissolve it altogether.
The legislation introduced on Monday aims to end a conflict that erupted in April, when DeSantis, a Republican, signed a bill to revoke Disney’s ability to govern the area around the Walt Disney World theme park in Orlando. The move was seen as retaliation over the entertainment company’s opposition to the state’s so-called Don’t Say Gay bill.
DeSantis frequently labelled Disney as a “woke” corporation, staking out a bold position against his state’s largest private employer.
The special district has allowed Disney to tax itself to cover the costs of providing water, power, roads and fire services in the area. The Financial Times reported in December that state lawmakers were working on a compromise that would keep the arrangement largely in place with a few modifications, including the possibility that DeSantis would appoint board members.
The 189-page draft bill says that the tax zone, known as the Reedy Creek Improvement District, “is not dissolved, but continues in full force and effect under its new name”, which will be the Central Florida Tourism Oversight District. The word “Disney” does not appear in the draft legislation.
The district’s tax collection, outstanding debt and contracts will remain the same. But DeSantis will be allowed to appoint all five of its board members.
The proposal comes just two days before Disney’s Bob Iger is due to speak to investors for the first time since returning to the company as chief executive in November.
The proposed measure will be a relief to Reedy Creek bondholders if it is passed by the Florida legislature during a special two-week session, which began on Monday.
Fitch Ratings placed Reedy Creek’s debt on negative watch after lawmakers moved to dissolve the district last year, but the proposal had eased those concerns, said Michael Rinaldi, head of local government ratings at Fitch.
“The bill appears to address key uncertainties created following last year’s dissolution legislation, primarily, preserving the revenue-raising powers of the district and its ability to service its outstanding indebtedness,” Rinaldi said.
A spokesman for DeSantis, Bryan Griffin, said on Twitter that Reedy Creek had “gifted extraordinary special privileges to a single corporation”.
“This is over, and we are beginning a new era of accountability and transparency,” he added.
Anna Eskamani, a progressive Democrat who represents Orlando in the Florida House, said that “overall, Disney will be fine with the bill”. But she condemned DeSantis’ push to appoint all the seats on the board as a “power grab” and a “gross farce at corporate accountability”.
In a statement, Disney said it was monitoring the progress of the draft legislation, which it said was “complex” given the long history of the special tax district.
“Disney works under a number of different models and jurisdictions around the world, and regardless of the outcome, we remain committed to providing the highest quality experience for the millions of guests who visit each year,” said Jeff Vahle, president of Walt Disney World Resort.
