“Crony Capitalism” and a “Puppet Board” — New Reedy Creek Board Files Lawsuit Against Disney

It seems we’ve entered a situation of dueling lawsuits in Florida related to the Reedy Creek Improvement District (now called the Central Florida Tourism Oversight District).

Disney filed a federal lawsuit against Florida Governor Ron DeSantis and the new board of the District, which DeSantis has called a “political” move. The new board later responded by authorizing their legal counsel to file a state court lawsuit against Disney and now that lawsuit has officially been filed. Here’s EVERYTHING you need to know.

The Central Florida Tourism Oversight District (via authorization of its new board of supervisors) officially filed a state court lawsuit against Walt Disney Parks and Resorts U.S., Inc. in the afternoon of May 1st, 2023.

It was filed in the circuit court of the 9th Judicial Circuit for Orange County, Florida. Again, this is a state court case while Disney has filed their lawsuit against DeSantis and the board in federal court. (While the lawsuit is brought in the name of the District itself, we’ll generally refer to the accusations as coming from the new board since that is who authorized the suit recently.)

The main document filed is the Complaint. This details the board’s allegations against Disney. In the introduction section, the board alleges that Disney had a “fiefdom” under the old Reedy Creek setup where it “wrote the laws that governed itself, chose whether and how to enforce those laws against itself, and set its own tax rate.” They claim that “No other Florida business, large or small, enjoyed those benefits.”

The board acknowledges, however, that “much good came from the special status that the Florida Legislature granted Disney in 1967.” But, they allege that things have changed, and “over time Disney used its influence to obtain what must have seemed like permanent exemptions from the democratic checks and balances that apply to all other Florida businesses.”

By way of example, they allege that Disney (like other Florida businesses) is “subject to building and fire codes…But unlike other businesses in Florida, Disney did not have to worry that these safety rules would be enforced against it. That is because the Disney controlled District board never adopted any mechanism for the enforcement of those codes.”

In later sections of the Complaint, they refer to the old Reedy Creek board as a “puppet board” and claim, “What began as an interesting and innovative experiment in privatization devolved into a depressing example of crony capitalism.”

The Complaint goes so far as to take issue with EPCOT itself. In the Complaint, the board claims that Disney didn’t create EPCOT as a true city because they wanted to “limit residents in the District.” They allege that this is why EPCOT became a theme park instead of a city and then Disney separately created “the town of Celebration so the town’s inhabitants could not dilute Disney’s control.”

To read a history of EPCOT from city to eternal World’s Fair, click here

They then detail how the Florida Legislature made changes to the Reedy Creek arrangement by passing a bill that replaced the existing board with new members appointed by DeSantis. They describe these actions as ones that were meant to “restore the people’s sovereignty.”

The board then argues that Disney “[i]n an effort to stymie Florida’s elected representatives…covertly cobbled together a series of eleventh-hour deals with its soon-to-be-replaced puppet government.” This is in reference mainly to the Development Agreement and Restrictive Covenants Disney entered into with the prior board before the new board took over.

The board alleges that “perhaps out of haste or arrogance, Disney’s deals violate basic principles of Florida constitutional, statutory, and common law.” The board claims that due to several issues, these agreements Disney entered into are “null and void—not even worth the paper they were printed on.”

They then go on to discuss how the Board previously “expressed to Disney its desire to work together to achieve a win-win solution,” but allege that “Disney would have none of that.” (This seems to reference the conversation some board members claim they had with a Disney VP prior to becoming aware of the Development Agreement.)

The Complaint sets forth various counts (basically formal claims brought against Disney) including issues with public notice, a violation of certain parts of the Florida Constitution and/or Florida Statutes, and more.

So what does the board want with this lawsuit? Well, they’re asking for a few things. Specifically, they want the court to:

• Declare that the Development Agreement is “void, unenforceable, and/or invalid”
• Declare that the Restrictive Covenants are also “void, unenforceable, and/or invalid”
• Issue an order stopping Disney from enforcing the Development Agreement and the Restrictive Covenants, and
• Grant any other relief the court thinks is proper

Things are just at the beginning stages here with this state court lawsuit (and with Disney’s federal lawsuit too) but we’ll be on the lookout for more details. Stay tuned for all the latest.

Click here to get a comprehensive overview of the entire situation with DeSantis and Disney

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