Disney Sues DeSantis After Board Votes To Get Rid Of Special Agreement

Topline

The board overseeing Walt Disney World’s special district, made up of officials appointed by Florida Gov. Ron DeSantis (R), voted Wednesday to revoke a controversial development agreement Disney made before their appointment that takes away much of the board’s power, prompting Disney to file a lawsuit against the state and board in federal court.

The entrance to Walt Disney World in Orlando, Florida, on March 16, 2020.

SOPA Images/LightRocket via Getty Images

Key Facts

The board voted unanimously at a public meeting to declare the development agreement “void and unenforceable,” directing the special district’s attorneys to “commence litigation” that would complete the process of nullifying the agreement and prohibit its enforcement.

The development agreement, which was enacted just before DeSantis took control of the special district’s board, gives Disney broad control over the special district, through steps like allowing it to build projects without seeking approval from the district and sell development rights to other landowners.

In addition to the development agreement, the previous special district—made up of board members elected by Disney—also enacted a separate set of restrictive covenants that give the company power to veto buildings the special district oversees as long as they’re on Disney’s property, which the board also challenged and voted to revoke.

Ahead of Wednesday’s meeting, the special district released a 92-point document detailing its legal reasons for why the agreement and covenants should be revoked, including that municipalities in the district didn’t sign the agreement, it goes against laws enacted by the state legislature, cites a separate agreement that wasn’t actually finalized by the time the development agreement was enacted and unlawfully delegates government authority to Disney, arguing the agreement’s benefits are “entirely one-sided” toward the theme parks.

Disney filed a lawsuit in federal court almost immediately after the board voted, which names DeSantis and the district’s board members, describing the vote as a “last strike” arguing the state’s “targeted campaign of government retaliation” threatens “Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.”

The lawsuit alleges the state violated Disney’s First Amendment rights by retaliating against it for opposing Florida’s Parental Rights in Education law, known by critics as “Don’t Say Gay.”

What To Watch For

Disney’s lawsuit asks the court to nullify the board’s vote on Wednesday, which would leave the development agreement intact, as well as overturn the Florida state laws that overhauled Disney’s special district, taking away DeSantis’ power over the district and company.

Crucial Quote

“Disney regrets that it has come to this,” the company said in its lawsuit. “But having exhausted efforts to seek a resolution, the Company is left with no choice but to file this lawsuit to protect its cast members, guests, and local development partners from a relentless campaign to weaponize government power against Disney in retaliation for expressing a political viewpoint unpopular with certain State officials.”

Tangent

Wednesday’s meeting also included a series of public comments from small business owners who operate businesses within Walt Disney World that aren’t owned by Disney directly, like shops and restaurants in its Disney Springs shopping district. They asked the board not to take steps to punish Disney that could impact their small businesses by extension, such as raising taxes or imposing tolls on roads, warning such moves could have devastating impacts to their business or harm their employees and their livelihoods. The board also passed a resolution Wednesday that prohibits Covid-19 restrictions by businesses within the district, such as mask mandates.

Key Background

The special district that oversees Walt Disney World—originally named Reedy Creek Improvement District and now renamed to the Central Florida Tourism Oversight District—functions essentially as a local government for Disney’s Florida property, taking care of maintaining infrastructure like roads and waste collection, emergency fire services, construction permits and other duties. The district is separate from Disney, but as its major landowner, the company had previously been able to essentially handpick its board, as well as other residents who live on the property and have voting powers. DeSantis and the state legislature overhauled the special district in February, passing legislation that changed the special district to have a governor-appointed board, part of a broader fight against Disney for its opposition to the “Don’t Say Gay” law. Disney’s opposition to the law—which the state is now expanding—initially led the Florida government to enact legislation getting rid of Reedy Creek entirely. That plan was then revised amid concerns that nixing the special district could pass a huge tax burden onto local taxpayers.

What We Don’t Know

What the board will do in the special district without the development agreement in place. DeSantis and the board have floated a series of possible steps they may take in retaliation for Disney enacting the development agreement, such as imposing toll roads and taking steps that could raise taxes on Disney. DeSantis has also said the board could develop land within the special district that Disney doesn’t own—with the governor floating that could include a new theme park or a state prison. “Nothing is off the table,” board chair Martin Garcia said at a meeting last week.