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DeSantis Appointees Seek to ‘Void’ Disney World Agreement

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The showdown between the Walt Disney Company and Gov. Ron DeSantis of Florida increasingly appears as though it could end up in court.

On Wednesday, a board appointed by Mr. DeSantis to oversee government services at Disney World asked lawyers to prepare a resolution to “void” a recent development agreement and restrictive covenants that give Disney vast control over expansion at the resort complex for decades to come. When the appointees reported for duty last month, they were outraged to discover that Disney — in open, advertised public forums — had pushed through the agreement.

“The bottom line is that Disney engaged in a caper worthy of Scrooge McDuck to try to evade Florida law,” David H. Thompson, a high-powered litigator retained by the board, said during a presentation in which he accused Disney of “improper and illegal” maneuvers relating to development. He said one involved a failure to fully comply with a state law that required public notification of the actions it took.

To support an assertion that Disney pulled a fast one, Mr. Thompson displayed an email from John M. McGowan, chief counsel for the Walt Disney World Resort, suggesting that his name be removed as the writer of a draft document relating to the development agreement. “I am comfortable having my name on it, but from an optics perspective that is not ideal,” the email said.

Disney declined to comment on Wednesday. The company — one of Florida’s largest employers and taxpayers — has repeatedly described its actions as “appropriate” and in compliance with state law. Disney has also signaled a willingness to fight any attempt to revoke the development agreement and covenants, which prohibit certain types of construction on strips of land surrounding the resort (competing attractions, for instance).

The board asked its lawyers to have nullification paperwork ready for next week’s meeting.

At the Wednesday session, which lasted four hours, members of the oversight board also vowed to increase taxes on Disney to help pay for a legal battle; fired planning board officials and appointed themselves to replace them; and began to explore the possibility of building low-income housing on land abutting the resort. Part of the meeting was devoted to presentations by state officials who made a case for greater government oversight of certain Disney World operations, including swimming pool inspections (there are 267 pools at Disney hotels and water parks), alcohol licenses and road safety.

The board acted as the Florida Legislature, at the urging of Mr. DeSantis, prepared to take up a measure that would nullify Disney’s development agreement and restrictive covenants. Depending on the outcome, Disney could have grounds to sue for a violation of the contracts clauses of the Florida and U.S. Constitutions, legal experts said.

“It would impair a contract,” said Jacob Schumer, a Florida lawyer who specializes in government law and development agreements.

Mr. DeSantis and the Walt Disney Company have been sparring for more than a year over a tax district that encompasses Disney World, the 25,000-acre resort, which employs 75,000 people and attracts 50 million visitors annually. The district, created in 1967 south of Orlando, effectively turned the property into its own county, giving Disney unusual control over fire protection, policing, road maintenance and development planning.

After Disney criticized a contentious state education law and halted political donations in Florida, Mr. DeSantis and the Legislature restricted Disney’s autonomy by appointing a handpicked oversight board for the district. Previously, Disney selected the board members.

The education law, called Parental Rights in Education, prohibits classroom discussion of sexual orientation and gender identity for students through the third grade. Opponents labeled the legislation “Don’t Say Gay.” On Wednesday, the DeSantis administration expanded the ban through Grade 12.

The tax district has been a crucial tool for Disney in developing the resort, which includes four theme parks, two water parks and 18 Disney-owned hotels. Disney’s expansion plan, which lies at the center of the contested development agreement, involves the possible construction of 14,000 additional hotel rooms, a fifth major theme park and three small parks. The company has said it has earmarked more than $17 billion in spending to fuel growth at the resort over the next decade, expansion that would create an estimated 13,000 jobs at the company.

In July, the DeSantis administration reviewed and approved Disney’s growth plan.

Mr. DeSantis, a leading Republican presidential contender although he has not officially declared a bid, has drawn criticism this week from potential presidential rivals for his war with Disney. “This is all so unnecessary, a political STUNT,” former President Donald J. Trump wrote on Tuesday on Truth Social, his social media site.

But the governor has shown no sign of backing down, framing his efforts as protecting “the will of the people” and ending “an unfair special advantage.” At a news conference on Monday, Mr. DeSantis suggested a variety of potential punitive actions against Disney, including reappraising the value of the resort for property tax levies and developing adjacent land, perhaps with a new state prison.

“Nobody in Tallahassee was willing to shine a light on this arrangement,” Martin Garcia, the new chairman of the tax district board, said during the session, referring to Disney’s self-governing capabilities. “Then Gov. Ron DeSantis, courageously — and I repeat, courageously — called it out for betraying not only fair-market competition, but also the citizens of Florida.”

Brooks Barnes

2023-04-19 21:15:23

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