Legal counsel has been requested by the resort’s governing board in an effort to prevent Disney from retaining long-term, extensive control of the facility.
It is becoming more likely that Walt Disney and Florida Governor Ron DeSantis will settle their differences in court. Mr. DeSantis’s board for Disney World’s government services instructed lawyers on Wednesday to draft a resolution to “void” a new development agreement and restrictive covenants that give Disney extensive control over the future expansion of the resort complex.
The appointees were shocked when they came for duty last month and learned that Disney had pushed through the agreement in open, public forums without consulting them.
At a board meeting, high-powered counsel David H. Thompson accused Disney of “improper and illegal” development techniques, saying, “The bottom line is that Disney engaged in a caper worthy of Scrooge McDuck to try to evade Florida law.” He mentioned that one case included not giving proper public notice as mandated by state law.
Mr. Thompson presented an email from John M. McGowan, a general lawyer for the Walt Disney World Resort, in support of an allegation that Disney played a fast one by having his name erased as the writer of a draft document related to the development agreement. I’m fine with my name being attached to it, but I realize that the optics aren’t great.
As of Wednesday, Disney had no response. As one of Florida’s major employers and taxpayers, the business has frequently defended its conduct, saying it is “appropriate” and legal. Disney has also made clear that it will battle any effort to nullify the development agreement and covenants that prevent competing attractions and other uses from being built on strips of land next to the resort.
The Board Has Requested That Its Legal Counsel Present The Necessary Nullification Documents At Next Week’s Meeting
On Wednesday, members of the oversight board met for four hours to discuss the feasibility of constructing low-income housing on land adjacent to the resort; they also vowed to increase taxes on Disney to help pay for a legal battle;
they removed planning board officials and appointed themselves as their replacements, and they fired the officials. During the meeting’s first segment, state representatives argued for more regulation of Disney World in areas including alcohol licensing, traffic safety, and swimming pool inspections (267 pools total at Disney resorts and water parks).
In response to Mr. DeSantis’s advocacy, the Florida legislature was getting ready to consider a bill that would have voided Disney’s development agreement and restrictive covenants, and the board acted in anticipation of this. Legal experts have indicated that,
depending on the outcome, Disney may have a case for a breach of contract under the Florida and United States Constitutions. A Florida attorney who focuses on government law and development agreements stated, “It would impair a contract.”
DeSantis’s Latest Legislative Initiative Is An Escalation Of His Fight With Disney
Earlier today, April 17th, Reuters reported: On Monday, Florida Governor Ron DeSantis continued his war of words with Walt Disney Co (DIS.N), stating that the state’s Republican legislature will take action to reject the company’s attempt to evade state oversight of Walt Disney World.
DeSantis, a potential Republican presidential candidate who has made battling “woke Disney” a recurrent topic, said the legislature would withdraw a development agreement Disney negotiated with incoming members of an oversight board.
DeSantis explained that the opposition planned to undo all of their work by signing a “development agreement” that would invalidate their efforts. Say it with me: “That’s not gonna fly.”
In March 2022, Disney’s then-Chief Executive Bob Chapek spoke out against a bill limiting discussion of sexual orientation and gender identity in Florida elementary schools, sparking a long-running feud between DeSantis, who has yet to announce a presidential bid, and one of the state’s largest employers.
Disney Stock Dropped $0.2 To $99.68
DeSantis and the Florida legislature have been attempting to reduce Disney’s “unfair advantage” of having virtual sovereignty over Disney World for more than 50 years. About 75,000 people in the state have jobs with Disney.
State legislators in Florida enacted a bill in February giving DeSantis de facto leadership of the board responsible for municipal services and development in the central Florida special district that includes the Walt Disney World resort.
Former Disney CEO and current investor Bob Iger characterized the action as “anti-business” and “anti-Florida.” On Monday, the firm declined to respond to DeSantis’s comments.
Disney already pushed through revisions to the special tax district agreement that limit the board’s action for decades before the takeover by DeSantis appointees.
Last month, a lawyer for the newly formed Central Florida Tourism Oversight District revealed the “shocking” news that the arrangement had been negotiated three weeks before DeSantis signed legislation giving the state jurisdiction over the district.
On March 29th, lawyer Daniel Langley observed, “I’ve never seen anything like this.”
The agreement formalizes a 10-year comprehensive plan that was approved on July 15, 2022.2 This plan will serve as a blueprint to direct future development. It allows Disney to potentially construct a fifth major theme park, two secondary parks, one million square feet of retail space, and around 14,000 hotel rooms.
It also guarantees that subsequent boards would keep their word on spending $527 million on infrastructure upgrades to accommodate Walt Disney World’s expansion over the following decade.