Reedy Creek Will Change But Also Stay the Same

Florida’s legislature and governor have just enacted legislation that fundamentally alters the Reedy Creek Improvement District.

For Disney fans, especially Disney Vacation Club members, this change comes with potential ramifications.

Thankfully, what’s happened shouldn’t impact your future visits much…if at all. Here’s a stubbornly non-political evaluation of what just happened.

The History of Reedy Creek

Walt Disney suffered one regret when he plotted Disneyland. He couldn’t control the building permits and other aspects of bureaucracy.

Instead, Imagineers were beholden to the whims of the local government. This frustration later recurred when Disney tried but failed to build a ski resort at Mineral King.

When Uncle Walt secretly bought the swamp land that would become Walt Disney World, he sought more regulatory control.

Reedy Creek Will Change But Also Stay the Same | The History Of Reedy Creek

Given the overwhelming success of Disneyland, Florida government officials happily ceded the point. They willingly exchanged control for a massive influx of tourist revenue.

I suspect everyone felt exceedingly happy about the results during the 20th century.

In March 1966, Disney petitioned for the creation of the Reedy Creek Drainage District, which was actually a corporation in structure.

While not everyone signed on at the time, Florida’s government ratified this district two months later.

During the following year, mere months after Walt Disney’s death in December 1966, Florida politicians enhanced Disney’s landowner privileges.

On May 12th, 1967, bipartisan legislation ratified a new entity, the Reedy Creek Improvement District, which turned 45 years old last May.

How Reedy Creek Helps Disney

This agreement effectively empowered Disney with total autonomy across much of the land Uncle Walt had purchased.

You’ve likely read much about what Disney could do under the terms of the Reedy Creek Improvement District (RCID).

Various media members have exaggerated some aspects, but some of the more surprising stuff is true.

Disney possessed the ability to create a nuclear power facility and the right of eminent domain.

A few years ago, Disney willingly declared it would never build a nuclear power facility.

As for applying eminent domain, that reportedly hasn’t happened in more than 50 years.

You may have heard that the state of Florida used eminent domain to acquire property near Disney Springs in 2021. That move didn’t impact Disney either way, as it had long ago sold the property.

Mostly, Disney has utilized Reedy Creek for reasonable things that any mid-sized city would need to operate. And that’s really what RFID is.

This act allows Disney to self-govern in fields like drainage, trash, fire department responses, and the like.

Reedy Creek Will Change But Also Stay the Same | How Reedy Creek Helps Disney

Disney can file its own paperwork, but it’s smart enough not to overreach. The system empowers Disney with agency and a rare level of control.

In exchange, Florida’s state and local tax coffers fill an outsized amount.

After all, Walt Disney World is the most popular paid tourist destination of its kind in the world.

There’s a saying about a goose that lays golden eggs that applies here.

What Just Happened with Reedy Creek

Again, we’re not relitigating politics on this subject. So, I’ll be brief and to the point.

Last year, a proposed bill offended many Disney workers. Their outcry pressured then-CEO Bob Chapek to denounce the bill.

Notably, Chapek chose not to do that initially. Instead, his new PR advisor,

Geoff Morrell, believed that Disney could make more in-roads and possibly even change the bill through a quiet, behind the scenes effort.

How well did that work? Chapek asked Morrell to resign after roughly four disastrous months on the job. Six months after that, Disney fired Chapek. So…

What happened in the months between Morrell’s advice and both men’s terminations?

Cast members rebelled enough that former Disney CEO Bob Iger felt the need to express his support.

Once Iger denounced the bill, Chapek had little choice but to follow suit.

Florida’s Governor, Ron DeSantis, capitalized on Chapek’s wishy-washy nature by publicly admonishing him.

Soon afterward, Florida’s House of Representatives and State Senate passed legislation that would dissolve Reedy Creek as an entity. The Governor signed the bill.

Notably, nobody had time to vet the ramifications of dissolving Reedy Creek. Emotions ran too high at the time.

Almost immediately afterward, I had lawyers and government officials reaching out to say that if Florida dissolved Reedy Creek, taxpayers would be on the hook for at least $1 billion.

I suspect some of them expressed this fear to the politicians voting on the bill. I say this because the Reedy Creek dissolution came with a ticking clock.

With the bill’s wording, Florida quietly kicked the can down the road until the summer of 2023. So, nothing happened immediately.

Now, that same legislation has come up for a final decision, but cooler heads have prevailed.

Meet the Central Florida Tourism Oversight District

When Florida signed the legislation this past week, it included a surprise. You can read the entire bill here – it’s deadly dull – or just skip to the end.

On page 189 out of 189, Florida’s elected officials reveal the fine print. They’ve chosen not to dissolve Reedy Creek!

Since that would look like a political promise broken, the bill’s authors took a different approach.

They have renamed the district the Central Florida Tourism Oversight District. It just rolls off the tongue, doesn’t it?

What’s different about CFTOD from Reedy Creek? Here’s where you breathe a sigh of relief. The answer is “not that much.”

The headline involves one significant change. I’ll cut and paste how noted Disney analyst Brooks Barnes describes it:

“Disney would be allowed to keep the special tax district — which never went away — and almost all its perks, including the ability to issue tax-exempt bonds and approve development plans without scrutiny from certain local regulators. But Disney would no longer be able to appoint the five members of the tax district’s board. Florida’s governor would get to do that.”

I’ve placed the pertinent details in bold. They hit all the highlights here. Disney hasn’t lost much of anything except for one layer of control.

From now on, the governor’s office will choose the members of the CFTOD board. They will be political appointees who can also be political donors to the governor and other elected officials.

Meanwhile, the one thing they cannot be are former theme park employees within the last three years.

Anyone who has worked with/for Disney – or Universal Studios, Busch Gardens, or SeaWorld — during that time is ineligible.

The idea here is that this rule prevents Disney’s cronyism on the board.

Unfortunately, people who don’t know anything about theme parks will vote.

How These Changes Impact You

I think you can tell by my comments here that I don’t expect significant changes.

The earlier proposals about the dissolution of Reedy Creek would have impacted Disney fans and DVC owners, substantially more.

Instead, most of the changes here appear cosmetic in nature. I don’t want to mix speculation with facts too much.

However, some have correctly pointed out that the original version of the bill includes some elements that the representatives eventually removed from the final legislation.

For this reason, there’s at least some reason to believe that Disney and Florida’s government may have negotiated a bit behind the scenes.

The Orlando Sentinel quoted a politician as indicating that this was occurring at the time.

Almost immediately after the bill headed to the governor’s office, Walt Disney World President Jeff Vahle posted the following:

While many legal experts believe that Disney has a strong case for a lawsuit, these words suggest that the company won’t fight the legislation.

In fact, there’s some (unconfirmed) scuttlebutt that the end of Reedy Creek frees Disney to develop commercial real estate that it wouldn’t have otherwise.

Reedy Creek Will Change But Also Stay the Same | How These Changes Impact You

To a larger point, Reedy Creek didn’t dissolve. As such, there’s just nothing happening here that should impact you as a DVC member.

Last year, some concerns arose that maintenance fees could increase, but that’s a non-factor now. As long as the special district exists, you’re fine.

As a Disney fan, nothing should change in the short term, either.

We probably won’t know for a while whether the new board members prove meddlesome with future park projects. But that’s a problem that’s years away from today.

For now, you should breathe easier knowing that the status quo largely remains.