17 ms·

Disney tells investors state can’t dissolve special district without paying debt

48 points by mzs 5y ago

mzs 5y ago
>that it will not in any way impair the rights or remedies of the holders, and that it will not modify in any way the exemption from taxation provided in the Reedy Creek Act, until all such bonds together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged. https://emma.msrb.org/P21566885-P21210477-.pdf https://emma.msrb.org/P21566885-P21210477-.pdf
- Terretta 5y ago
  For clarity, "exemption from taxation" can be better thought of as "exemption from double taxation" or "exemption from external government taxation" since the special district is currently allowing Reedy Creek to tax itself for its own self-provided services. Disney is not exempt from paying taxes for services in the way people think it's exempt. It's not paying zero. On the contrary, it's reportedly currently taxing itself 3x the maximum tax rate the city or county is allowed to tax.
  - deleted 5y ago
    [deleted]
- cryptonector 5y ago
  > In the Reedy Creek Act the State of Florida has pledged to the holders of any bonds issued by the District: So it's in the statute, not any contract? State statutes are not contracts. Nor can one legislature session bind a future one through statute.
  - WarOnPrivacy 5y ago
    From what I see, the state statute grants the ability for RCID to issue bond contracts. I don't believe the statute grants the state any ability to interfere with those contracts. ref: https://news.bloombergtax.com/tax-insights-and-commentary/the-contractual-impossibility-of-unwinding-disneys-reedy-creek https://news.bloombergtax.com/tax-insights-and-commentary/th...
    - cryptonector 5y ago
      That article doesn't add anything new. Again, a statutory promise is not a contractual clause and cannot bind a future legislature. I'm sure there will be interesting court cases out of this. That is, whether cancelling the special district interferes with the extant bonds will be an interesting question for the courts, but if Disney can pay... And anyways, the legislature could always make it so the counties inherit the bonds (and the 3x tax power until they're paid off, maybe), so it seems unlikely that the legislature can do nothing here.
throwaway0a5e 5y ago
Disney is a mega-corp. Florida is a state. Politics are involved in the current situation. Politics were very involved in the prior situation in which Disney received special treatment. You can read the law, the case law and the contract agreements all you want but the error bars on "which way is this gonna go" are massive. Anyone saying anything with any sort of certainty is not to be taken seriously.
- Terretta 5y ago
  Reportedly, per this article, the the "special treatment" is being allowed to tax itself 3x more than the maximum city/county tax rate so it can provide services to itself in the manner it feels are appropriate for Disney and its customers.
  - smileysteve 5y ago
    3x might say a lot about why Disney streets are cleaner than average American streets
    - jjulius 5y ago
      I mean, sure, but Disney also has significantly fewer streets than a typical city, and what streets they do have typically see less vehicle wear than cities as well.
      - HappySweeney 5y ago
        All true, but I assume they see more litter touch them than an equivalent stretch of average American road.
      - thehoff 5y ago
        But wouldn't those same streets see a lot more foot traffic? I'm thinking more along the lines of trash and cleaning.
    - colburnmh 5y ago
ngcc_hk 5y ago
To be honest Disney is not your usual housing estate. Tax may be a name. But that is for maintaining service and I suspect they pay more to maintain it. 3x reported. Possible. Anyway this is a good show how property rights are relate to politics. Let us see.
h2odragon 5y ago
they could secede from the state of Florida. the First Mouse War. I bet a lot of people would want to immigrate to the Great State of Disney. Orderly management and mandatory morning sing alongs would probably be a great comfort.
- ggillas 5y ago
  https://en.m.wikipedia.org/wiki/Down_and_Out_in_the_Magic_Kingdom https://en.m.wikipedia.org/wiki/Down_and_Out_in_the_Magic_Ki...
- downrightmike 5y ago
  ...It's a small world after all...
- the_only_law 5y ago
  So this is our cyberpunk future?
- _fat_santa 5y ago
  While I get the politics surrounding Reedy Creek, I think DeSantis is making a huge mistake. Regardless of what you want to say about Disney's politics, one can't deny that they have been very good stewards of the Reedy Creek district. And while it may seem wired that a company gets to govern itself, when you're actually on Disney property it starts to make more sense. The property is freaking massive, like medium sized town massive. The government can take the district back but now they are on the hook for providing services to the place and I think that's going to cost the taxpayer in Florida a pretty penny.
  - treeman79 5y ago
    - boardwaalk 5y ago
      It would be easier to have a frank discussion without using “grooming” where it should not be. Seems to be a lot of that recently, with other words and terms as well, which is sad.
vmception 5y ago
cryptonector 5y ago
> they failed to notice an obscure provision in state law that says the state could not do what legislators were doing — unless the district’s bond debt was paid off > In essence, the state had a contractual obligation not to interfere with the district until the bond debt is paid off If it was written into the contract, yes, and maybe the state can't just break the contract willy-nilly. If, however, the bond matter was written into the law that made these special districts possible rather than into the contract, then no, it's not part of the contract, and no legislature can be bound by statutes passed by past legislatures.
- colburnmh 5y ago
  The bond promise is not covered in the law that was effectively repealed by SB-4C which is s. 189.072(2), which covers how special districts could be dissolved prior to SB-4C. The bond issue is covered elsewhere, hence the "obscure provision" designation. [1]: SB-4C text: https://www.flsenate.gov/Session/Bill/2022C/4C/BillText/er/PDF https://www.flsenate.gov/Session/Bill/2022C/4C/BillText/er/P... [2]: 189.072(2) text: http://www.leg.state.fl.us/statutes/index.cfm?mode=View%20Statutes&SubMenu=1&App_mode=Display_Statute&Search_String=189.072&URL=0100-0199/0189/Sections/0189.072.html http://www.leg.state.fl.us/statutes/index.cfm?mode=View%20St...
  - cryptonector 5y ago
    Thanks. The former says: > (2) Notwithstanding s. 189.072(2), any independent special23 district established by a special act prior to the date of24 ratification of the Florida Constitution on November 5, 1968,25 and which was not reestablished, re-ratified, or otherwise26 reconstituted by a special act or general law after November 5,27 1968, is dissolved effective June 1, 2023. I.e., the legislature in 2022 does not feel bound by the legislature in 2021, and just to be sure they came up with a specific constitutional rationale for that beyond the traditional one. It also says that the Reedy Creek district can re-apply to become an independent district again. In any case, SB-4C doesn't address the bond issue at all, and it doesn't say that 189.072 doesn't apply as to bonds. 189.072 says, about bonds: > (4) DEBTS AND ASSETS.—Financial allocations of the assets and indebtedness of a dissolved independent special district shall be pursuant to s. 189.076. and 189.076 says: > (2) Unless otherwise provided by law or ordinance, the dissolution of a special district government shall transfer the title to all property owned by the preexisting special district government to the local general-purpose government, which shall also assume all indebtedness of the preexisting special district. So I assume that continuity will be provided: the financial obligations of the special district will become the financial obligations of the two counties spanned by Disney's special district. That doesn't seem in the least mysterious. I'm sure there will be court cases, but ISTM that the text in question is pretty straightforward.
dhosek 5y ago
It’s somewhat frightening that the biggest thing currently blocking the authoritarian impulses of politicians like DeSantis or a former president is their sheer incompetence. The dissolution of Reedy Creek is on its face an unconstitutional action (given that it as explicitly done to punish Disney for exercising its free speech rights), and the implementation of the punishment was done in such a way that within days it was obvious that the worst case for Disney is that they end up with a financial windfall and potentially have to negotiate about regulations with local governments who would likely be bending over backwards to appease the house of mouse.
- daenz 5y ago
  I have not been following the story as closely as others, but how is reversing special privileges for a corporate titan (Disney), that give it abilities that nobody else is allowed to have, authoritarianism? That only seems authoritarian relative to anarcho capitalism or extreme libertarianism.
  - deleted 5y ago
    [deleted]
  - dragonwriter 5y ago
    > how is reversing special privileges for a corporate titan (Disney), that give it abilities that nobody else is allowed to have, authoritarianism? Making decisions about public goods explicitly as political retaliation for failing to support unrelated positions of the ruling party is authoritarianism. It's *particularly jarringly authoritarian from a faction that is simultaneously arguing that “free speech” is being violated when private actors choose not to actively relay their speech.
    - daenz 5y ago
      From my perspective, Disney should not have had special corporate privileges in the first place, so it's fair game that those special privileges are targeted for any reason since they are not rights, and in fact give them unfair legal advantages that nobody else can have, and therefore shouldn't be protected from infringement in the same way that rights are. I get why people are up in arms about it (the education bill), but it's really bizarre to see people defend special privileges afforded to a corporate giant, as if they are entitled to those privileges.
seanalltogether 5y ago
This whole saga feels like something that makes for great frontpage headlines for current politicians, with the expectation that all the problems teased out in court will only play out in the backpage stories.
jacknews 5y ago
Well obviously Disney got a plum deal back in the day, which should probably be migrated to fairer terms now. OTOH, watching the video, this politician is total disingenuous slime, I'm a bit angry just listening to him, and I'm not from Miami, or even America.
- RC_ITR 5y ago
  >Well obviously Disney got a plum deal back in the day, which should probably be migrated to fairer terms now. This is the tough thing about subsidies. Orange County's population has grown 10x since 1950, which has been a huge boon to Florida (from a tax base perspective, from a representation in Federal government perspective, etc.). You could argue that the subsidy is now too 'sweetheart' of a deal since Disney can't exactly move the park, but isn't that the literal opposite of the Republican economic platform?
- digsy 5y ago
  >should probably be migrated to fairer terms now. Maybe so. But this wasnt a re-negotiation. This was payback for Disney pausing donations to Republican politicians.
- colburnmh 5y ago
  Disney has a similar deal to over 1800 entities that have special district status in Florida.
_-david-_ 5y ago
It is amazing how many progressives are defending special privileges for one of the wealthiest and influential companies in the world.
- joshstrange 5y ago
  That's a very disingenuous way of putting it. There is a lot more at play here that just "special privileges". There is the increased tax burden on the surrounding counties that will now be responsible for upkeep/services/etc and the fact that this was very clearly backlash motivated by the company voicing support against the recently passed "Don't say gay" bill. Further more from what I can tell this was a mutually beneficial arrangement, it wasn't just "special privileges" for free.
  - codeguro 5y ago
    You are very disingenuous. It's not a "Don't say gay" bill, it's a "Parental Rights in Education" bill. The idea that Disney Corp and its employees have special tax exemptions that is enjoyed by nobody else in the nation while advocating that they should be able to teach sexually explicit topics to kindergardeners to 3rd graders - and hide the fact they're doing so from their parents is abhorrent.
    - colburnmh 5y ago
      > It's not a "Don't say gay" bill, it's a "Parental Rights in Education" bill It has been commonly referred to as the "Don't Say Gay" bill, rather than the official name of "Parental Rights in Education" bill in a wide variety of forums, which I'm sure you are aware of. Don't be willfully obtuse. Disney's special district status is not unique. More than 1800 entities ranging from theme parks, HOAs, libraries, energy district, etc., all have similar rights. Take some time to read this: https://floridajobs.org/community-planning-and-development/special-districts/special-district-accountability-program/florida-special-district-handbook-online/introduction-to-special-districts https://floridajobs.org/community-planning-and-development/s... Disney is far less of "unique snowflake" than the outspoken FL Republicans would like you to believe.
paxys 5y ago
This whole situation is such a mess. Disney World is clearly working great today. The company is happy since it has autonomy. Guests are happy because they get a great experience. The state is happy from all the jobs and tax revenue Disney (its largest employer) brings in. Now DeSantis has to throw a wrench into all this because of his presidential aspirations. I'm (thankfully) not a resident of the state, but the prospect of long term economic loss over the ambitions of one man would make me furious.

48 points by mzs 5y ago

mzs 5y ago

>that it will not in any way impair the rights or remedies of the holders, and that it will not modify in any way the exemption from taxation provided in the Reedy Creek Act, until all such bonds together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged. https://emma.msrb.org/P21566885-P21210477-.pdf https://emma.msrb.org/P21566885-P21210477-.pdf

Terretta 5y ago
For clarity, "exemption from taxation" can be better thought of as "exemption from double taxation" or "exemption from external government taxation" since the special district is currently allowing Reedy Creek to tax itself for its own self-provided services. Disney is not exempt from paying taxes for services in the way people think it's exempt. It's not paying zero. On the contrary, it's reportedly currently taxing itself 3x the maximum tax rate the city or county is allowed to tax.
- deleted 5y ago
  [deleted]
cryptonector 5y ago
> In the Reedy Creek Act the State of Florida has pledged to the holders of any bonds issued by the District: So it's in the statute, not any contract? State statutes are not contracts. Nor can one legislature session bind a future one through statute.
- WarOnPrivacy 5y ago
  From what I see, the state statute grants the ability for RCID to issue bond contracts. I don't believe the statute grants the state any ability to interfere with those contracts. ref: https://news.bloombergtax.com/tax-insights-and-commentary/the-contractual-impossibility-of-unwinding-disneys-reedy-creek https://news.bloombergtax.com/tax-insights-and-commentary/th...
  - cryptonector 5y ago
    That article doesn't add anything new. Again, a statutory promise is not a contractual clause and cannot bind a future legislature. I'm sure there will be interesting court cases out of this. That is, whether cancelling the special district interferes with the extant bonds will be an interesting question for the courts, but if Disney can pay... And anyways, the legislature could always make it so the counties inherit the bonds (and the 3x tax power until they're paid off, maybe), so it seems unlikely that the legislature can do nothing here.

throwaway0a5e 5y ago

Disney is a mega-corp. Florida is a state. Politics are involved in the current situation. Politics were very involved in the prior situation in which Disney received special treatment. You can read the law, the case law and the contract agreements all you want but the error bars on "which way is this gonna go" are massive. Anyone saying anything with any sort of certainty is not to be taken seriously.

Terretta 5y ago
Reportedly, per this article, the the "special treatment" is being allowed to tax itself 3x more than the maximum city/county tax rate so it can provide services to itself in the manner it feels are appropriate for Disney and its customers.
- smileysteve 5y ago
  3x might say a lot about why Disney streets are cleaner than average American streets
  - jjulius 5y ago
    I mean, sure, but Disney also has significantly fewer streets than a typical city, and what streets they do have typically see less vehicle wear than cities as well.
    - HappySweeney 5y ago
      All true, but I assume they see more litter touch them than an equivalent stretch of average American road.
    - thehoff 5y ago
      But wouldn't those same streets see a lot more foot traffic? I'm thinking more along the lines of trash and cleaning.
  - colburnmh 5y ago

ngcc_hk 5y ago

To be honest Disney is not your usual housing estate. Tax may be a name. But that is for maintaining service and I suspect they pay more to maintain it. 3x reported. Possible. Anyway this is a good show how property rights are relate to politics. Let us see.

h2odragon 5y ago

they could secede from the state of Florida. the First Mouse War. I bet a lot of people would want to immigrate to the Great State of Disney. Orderly management and mandatory morning sing alongs would probably be a great comfort.

ggillas 5y ago
https://en.m.wikipedia.org/wiki/Down_and_Out_in_the_Magic_Kingdom https://en.m.wikipedia.org/wiki/Down_and_Out_in_the_Magic_Ki...
downrightmike 5y ago
...It's a small world after all...
the_only_law 5y ago
So this is our cyberpunk future?
_fat_santa 5y ago
While I get the politics surrounding Reedy Creek, I think DeSantis is making a huge mistake. Regardless of what you want to say about Disney's politics, one can't deny that they have been very good stewards of the Reedy Creek district. And while it may seem wired that a company gets to govern itself, when you're actually on Disney property it starts to make more sense. The property is freaking massive, like medium sized town massive. The government can take the district back but now they are on the hook for providing services to the place and I think that's going to cost the taxpayer in Florida a pretty penny.
- treeman79 5y ago
  - boardwaalk 5y ago
    It would be easier to have a frank discussion without using “grooming” where it should not be. Seems to be a lot of that recently, with other words and terms as well, which is sad.

vmception 5y ago

cryptonector 5y ago

> they failed to notice an obscure provision in state law that says the state could not do what legislators were doing — unless the district’s bond debt was paid off > In essence, the state had a contractual obligation not to interfere with the district until the bond debt is paid off If it was written into the contract, yes, and maybe the state can't just break the contract willy-nilly. If, however, the bond matter was written into the law that made these special districts possible rather than into the contract, then no, it's not part of the contract, and no legislature can be bound by statutes passed by past legislatures.

colburnmh 5y ago
The bond promise is not covered in the law that was effectively repealed by SB-4C which is s. 189.072(2), which covers how special districts could be dissolved prior to SB-4C. The bond issue is covered elsewhere, hence the "obscure provision" designation. [1]: SB-4C text: https://www.flsenate.gov/Session/Bill/2022C/4C/BillText/er/PDF https://www.flsenate.gov/Session/Bill/2022C/4C/BillText/er/P... [2]: 189.072(2) text: http://www.leg.state.fl.us/statutes/index.cfm?mode=View%20Statutes&SubMenu=1&App_mode=Display_Statute&Search_String=189.072&URL=0100-0199/0189/Sections/0189.072.html http://www.leg.state.fl.us/statutes/index.cfm?mode=View%20St...
- cryptonector 5y ago
  Thanks. The former says: > (2) Notwithstanding s. 189.072(2), any independent special23 district established by a special act prior to the date of24 ratification of the Florida Constitution on November 5, 1968,25 and which was not reestablished, re-ratified, or otherwise26 reconstituted by a special act or general law after November 5,27 1968, is dissolved effective June 1, 2023. I.e., the legislature in 2022 does not feel bound by the legislature in 2021, and just to be sure they came up with a specific constitutional rationale for that beyond the traditional one. It also says that the Reedy Creek district can re-apply to become an independent district again. In any case, SB-4C doesn't address the bond issue at all, and it doesn't say that 189.072 doesn't apply as to bonds. 189.072 says, about bonds: > (4) DEBTS AND ASSETS.—Financial allocations of the assets and indebtedness of a dissolved independent special district shall be pursuant to s. 189.076. and 189.076 says: > (2) Unless otherwise provided by law or ordinance, the dissolution of a special district government shall transfer the title to all property owned by the preexisting special district government to the local general-purpose government, which shall also assume all indebtedness of the preexisting special district. So I assume that continuity will be provided: the financial obligations of the special district will become the financial obligations of the two counties spanned by Disney's special district. That doesn't seem in the least mysterious. I'm sure there will be court cases, but ISTM that the text in question is pretty straightforward.

dhosek 5y ago

It’s somewhat frightening that the biggest thing currently blocking the authoritarian impulses of politicians like DeSantis or a former president is their sheer incompetence. The dissolution of Reedy Creek is on its face an unconstitutional action (given that it as explicitly done to punish Disney for exercising its free speech rights), and the implementation of the punishment was done in such a way that within days it was obvious that the worst case for Disney is that they end up with a financial windfall and potentially have to negotiate about regulations with local governments who would likely be bending over backwards to appease the house of mouse.

daenz 5y ago
I have not been following the story as closely as others, but how is reversing special privileges for a corporate titan (Disney), that give it abilities that nobody else is allowed to have, authoritarianism? That only seems authoritarian relative to anarcho capitalism or extreme libertarianism.
- deleted 5y ago
  [deleted]
- dragonwriter 5y ago
  > how is reversing special privileges for a corporate titan (Disney), that give it abilities that nobody else is allowed to have, authoritarianism? Making decisions about public goods explicitly as political retaliation for failing to support unrelated positions of the ruling party is authoritarianism. It's *particularly jarringly authoritarian from a faction that is simultaneously arguing that “free speech” is being violated when private actors choose not to actively relay their speech.
  - daenz 5y ago
    From my perspective, Disney should not have had special corporate privileges in the first place, so it's fair game that those special privileges are targeted for any reason since they are not rights, and in fact give them unfair legal advantages that nobody else can have, and therefore shouldn't be protected from infringement in the same way that rights are. I get why people are up in arms about it (the education bill), but it's really bizarre to see people defend special privileges afforded to a corporate giant, as if they are entitled to those privileges.

seanalltogether 5y ago

This whole saga feels like something that makes for great frontpage headlines for current politicians, with the expectation that all the problems teased out in court will only play out in the backpage stories.

jacknews 5y ago

Well obviously Disney got a plum deal back in the day, which should probably be migrated to fairer terms now. OTOH, watching the video, this politician is total disingenuous slime, I'm a bit angry just listening to him, and I'm not from Miami, or even America.

RC_ITR 5y ago
>Well obviously Disney got a plum deal back in the day, which should probably be migrated to fairer terms now. This is the tough thing about subsidies. Orange County's population has grown 10x since 1950, which has been a huge boon to Florida (from a tax base perspective, from a representation in Federal government perspective, etc.). You could argue that the subsidy is now too 'sweetheart' of a deal since Disney can't exactly move the park, but isn't that the literal opposite of the Republican economic platform?
digsy 5y ago
>should probably be migrated to fairer terms now. Maybe so. But this wasnt a re-negotiation. This was payback for Disney pausing donations to Republican politicians.
colburnmh 5y ago
Disney has a similar deal to over 1800 entities that have special district status in Florida.

_-david-_ 5y ago

It is amazing how many progressives are defending special privileges for one of the wealthiest and influential companies in the world.

joshstrange 5y ago
That's a very disingenuous way of putting it. There is a lot more at play here that just "special privileges". There is the increased tax burden on the surrounding counties that will now be responsible for upkeep/services/etc and the fact that this was very clearly backlash motivated by the company voicing support against the recently passed "Don't say gay" bill. Further more from what I can tell this was a mutually beneficial arrangement, it wasn't just "special privileges" for free.
- codeguro 5y ago
  You are very disingenuous. It's not a "Don't say gay" bill, it's a "Parental Rights in Education" bill. The idea that Disney Corp and its employees have special tax exemptions that is enjoyed by nobody else in the nation while advocating that they should be able to teach sexually explicit topics to kindergardeners to 3rd graders - and hide the fact they're doing so from their parents is abhorrent.
  - colburnmh 5y ago
    > It's not a "Don't say gay" bill, it's a "Parental Rights in Education" bill It has been commonly referred to as the "Don't Say Gay" bill, rather than the official name of "Parental Rights in Education" bill in a wide variety of forums, which I'm sure you are aware of. Don't be willfully obtuse. Disney's special district status is not unique. More than 1800 entities ranging from theme parks, HOAs, libraries, energy district, etc., all have similar rights. Take some time to read this: https://floridajobs.org/community-planning-and-development/special-districts/special-district-accountability-program/florida-special-district-handbook-online/introduction-to-special-districts https://floridajobs.org/community-planning-and-development/s... Disney is far less of "unique snowflake" than the outspoken FL Republicans would like you to believe.

paxys 5y ago

This whole situation is such a mess. Disney World is clearly working great today. The company is happy since it has autonomy. Guests are happy because they get a great experience. The state is happy from all the jobs and tax revenue Disney (its largest employer) brings in. Now DeSantis has to throw a wrench into all this because of his presidential aspirations. I'm (thankfully) not a resident of the state, but the prospect of long term economic loss over the ambitions of one man would make me furious.