The Disney Company’s last-minute deal to retain control of Disney World’s special district is legally flawed for multiple reasons and will probably be voided, a source close to the deal’s investigation said.
Florida Gov. Ron DeSantis has already launched a state investigation into the February deal—one made less than three weeks before the state took control of the district and placed over it five trustees appointed by the governor.
DeSantis on Feb. 27 signed the bill ending Disney’s self-governing powers that have been in place for almost 60 years.
Prior to that, the company announced its deal with the old district would preserve its control over the development of the 39-square-mile entity for 30 years and give it other rights as well.
The bill appeared to catch DeSantis and the new board—the Central Florida Tourism Oversight District—flatfooted.
The new board hired lawyers to fight the deal. And DeSantis, on April 3, announced his office’s inspector general would investigate the deal.
A source close to the investigation told The Epoch Times on April 18 that the deal has fatal flaws, which would be presented to the board at its meeting on April 19.
There are several problems, the source said.
One is its failure to meet all the requirements of Florida’s Government in the Sunshine Laws.
The deal between Disney and the old Reedy Creek Improvement District board is, by state law, considered a development agreement.
The source said that the law requires two public hearings, with notice of each posted in a general circulation newspaper in the area.
That took place, the source said.
But the law also requires neighboring property owners to be notified, which did not occur, the source said.
Disney owns much but not all of the district. Some of it is owned by private businesses such as hotels and resorts.
“Florida law is particularly strong on this point,” the source told The Epoch Times.
“It requires strict compliance on public notice requirements, particularly for land development issues. If you miss it, the contract is null and void.”
A second problem is this: a development agreement is a contract between a local government and a developer.
Contracts require a consideration, where each party gives the other something of value, such as one party giving land and the other party giving money, the source said.
But in the Disney deal, what’s being given goes entirely in one direction—toward Disney.
Options for the Board
The source said that the deal legally binds the district to $300 million in future road projects and to tax property owners to raise the money.The only “consideration” the district receives is Disney’s commitment to selling property to the district at fair market value. “They have to do that anyway, so it’s illusory, and not a consideration,” the source said.
A third problem is the old district board giving Disney core government powers, such as zoning and taxation power. Disney can set its own building heights, the source said. All of that is illegal under the state’s non-delegation doctrine.
The state’s Sunshine Laws prohibit the board members from discussing matters among themselves outside meetings, so its April 19 meeting will be their first discussion of it, the source said.
The board can move in the direction of nullifying the deal by directing its lawyers to frame a suitable resolution or to take legal action.
In a situation unique in Florida, Disney has enjoyed quasi-governmental status, acting through the Reedy Creek Improvement District as its own county. Disney World straddles property in Orange and Osceola counties.
After Disney came out against DeSantis’s Parental Rights in Education bill last year, which prohibits sex education in public schools for kindergarten through 3rd grade, he retaliated by stripping the company of the special status it had enjoyed since 1967 as the company planned what became Disney World.
