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DeSantis-appointed board launches aggressive plan to counter Disney control

“Disney engaged in a caper worthy of Scrooge McDuck to try to evade Florida law,” one of the board’s lawyers said.
 
Among several moves Wednesday, the Central Florida Tourism Oversight District terminated all members of its Planning and Zoning Board.
Among several moves Wednesday, the Central Florida Tourism Oversight District terminated all members of its Planning and Zoning Board.
Published April 19, 2023|Updated April 19, 2023

TALLAHASSEE — Gov. Ron DeSantis’ hand-picked oversight board opened its meeting Wednesday armed with an array of new weapons in its fight against Walt Disney World, including a list of proposals that will require the district governing the largest taxpayer in Central Florida to raise taxes on itself.

“I want everybody to understand that we’re going to have to raise revenues,” said Martin Garcia, chairman of the DeSantis-appointed Central Florida Tourism Oversight District Board of Supervisors, which oversees the special taxing district in which Disney’s theme parks reside. “... In seeking to improve the functioning of the district, nothing is off the table for us.”

The need for new revenue is because it wants to provide “better services,” Garcia said, but also “because of the expenses we have had to incur to deal with the legal agreements,” a reference to the effort by Disney to pass development agreements and restrictive covenants that attempted to undermine the governor’s control over the newly constituted board.

Nearly three hours into the meeting in a Disney hotel in Lake Buena Vista, the board quickly voted to invalidate the last-minute arrangement between Disney and the previous board, with no discussion.

The action was sought by the governor after the Disney-backed board outmaneuvered him in February and entered into development and restrictive covenant agreements with Walt Disney Parks and Resorts, U.S., Inc., that usurped any ability of the new board to use its leverage to influence editorial content at the entertainment giant.

But the decision to void the deal is likely to draw a lawsuit, as the legal ground to invalidate a development agreement retroactively has little legal precedent in Florida law. As the board met, Florida legislative committees adopted an amendment to state law to authorize the ability to retroactively invalidate the agreements.

The board’s lawyers argued, however, they already had the authority to do it.

“Disney engaged in a caper worthy of Scrooge McDuck to try to evade Florida law. Its efforts are illegal, and they will not stand,” said David Thompson, the managing partner of Cooper & Kirk, a Washington, D.C. law firm hired by the board as part of a legal team to challenge Disney.

New services envisioned by the new board

Among the new services Garcia said the new board wants are affordable and workforce housing, voting rights for future residents, “developing better traffic solutions for the surrounding county, including transit” and “reducing the carbon footprint created by the district.”

“We’re going to look at aligning the district’s interest to join Osceola and Orange [counties] to fight the many lawsuits that Disney has filed to avoid paying their own ad valorem taxes,” he said. “We’re also going to join the counties and yes, the school boards in efforts to create more funding for public schools in Central Florida.”

All of those responsibilities are in line with the “meat and potatoes and infrastructure functions of the board, and there’s nothing surprising there,” said Jake Schumer, a municipal attorney in the suburban Orlando law firm of Shepard, Smith, Kohlmyer & Hand. “An ordinary government with good-faith intentions would do all of that stuff. That’s a huge amount of work.”

The DeSantis versus Disney feud began when the company voiced opposition to the Legislature’s passage of the Parental Rights in Education Bill in 2022, which prohibited classroom instruction on gender identity issues in certain grades

The governor then tried and failed to dismantle the Reedy Creek Improvement District with legislation, but had to repeal that law because it would have left local residents to shoulder nearly $1 billion in debt that Disney would otherwise have paid for.

In February, DeSantis sought again to wrest control of the Disney-controlled district but that effort was thwarted when the Disney-backed board approved agreements that freeze existing regulations in place for decades, undercutting the governor’s authority.

At the company’s annual meeting, Disney CEO Bob Iger spoke up for the first time against the governor’s actions, calling the move “anti-business” and “anti-Florida.” The company did not respond to requests for comment about the new board’s plans.

Garcia said that the new board “truly wished to work with Disney. Instead, the corporation decided that compromise was out of the question. It was Disney’s way or the highway. This is why we were forced to hire litigation counsel.”

Thompson, the Washington lawyer, told the board that the outgoing board’s agreements are “null and void” for several reasons, and former Florida Supreme Court Justice Alan Lawson, also hired by the board, laid out some of their arguments:

  • The previous board violated the state Sunshine laws and “failed to mail notice to the other property owners in the district.”
  • State law requires that the district needed to establish procedures before adopting a new development agreement but did not do so before approving the deal at its Feb. 8 meeting.
  • The district delegated authority to a private company, in violation of the Florida Constitution, such as setting the height of buildings.

“I’ve never seen a more blatant and hostile attempt on a scale like this to openly thwart the law, a governmental entity acting at the behest of a private for-profit corporation and attempting to contract away its governmental powers,” Lawson told the board.

Legal moves and counter moves

Schumer said most of the legal arguments could be easily countered by Disney, but if the company is proven to have shown that it was supposed to provide mail notice to residents and did not, that could be a significant oversight.

“There’s some Florida case law out there saying that if a government in taking an action had a statutory notice requirement and didn’t follow that notice, then the action is void as if it never happened,” he said.

That requirement has never before been applied to development agreements, he said, “and maybe there’s some argument that because Disney is the only entity that actually needed written notice, the district can’t be the one to complain. Or the district can’t be the one to complain because it’s the one that messed up.”

Schumer said that while the list of projects is “no surprise,” it underscores “how much taxing power Disney has no control over.”

The board sets the district’s tax rate, which is currently three times higher than that paid by residents of Orange and Osceola counties. Disney pays more than $1.1 billion in state and local taxes, including more than $160 million in property tax, which is used to maintain a higher level of services and infrastructure than the counties provide.

A litany of Disney outstanding lawsuits

Disney has about 90 lawsuits pending against the Orange County property appraiser, and if Disney prevails, the district may have to refund the company millions, said Daniel Langley, the board’s general counsel.

Though an exact amount hasn’t yet been determined, the figure may stand at more than $11 million, Langley said. The lawsuits may have also cost Orange County Public Schools $52 million to $105 million over the seven years Disney has been suing, Langley said.

The board also took action to increase the role of state regulators in oversight of Disney operations. It heard reports from the Florida Department of Health about how it could increase inspections of Disney swimming pools and a report from the Florida Department of Transportation about how it will now increase oversight of the district’s roadways.

Planning and zoning board members dismissed

The board also voted to remove from office and terminate all Planning and Zoning Board members in an effort to expand the governor’s control over the future of the district and replaced themselves as the local planning agency.

The board also adopted a resolution that attempts to expand the board’s power by giving it what it calls “superior authority and control” that allows the board to issue development orders within the district.