Disney blocks Ron DeSantis’ Florida power play with a royal family clause

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Cinderella Castle in Walt Disney World.

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Forget about Disney princesses. Mickey Mouse might have just proved who’s the real king of Florida.

Disney used a legal clause that name checks King Charles III to apparently thwart Florida Gov. Ron DeSantis’ attempt to strip the company of its self-governance power in the state.

For nearly a year, state legislators, encouraged by DeSantis, have sought to exert more control over the company’s Florida-based theme parks by passing a bill that would dissolve Disney’s special tax district. DeSantis also wanted to rename the area the Central Florida Tourism Oversight District and plant a new board to oversee it.

Until recently, there had been no major public discussion about dissolving Disney’s long-established special district, which it’s occupied for 55 years, leading DeSantis’ critics to question its timing and the speed at which the governor acted against the company.

Widely seen as a contender for the 2024 GOP presidential nomination, DeSantis became locked in a bitter and public feud with the entertainment giant over the company’s denouncement of Florida’s HB 1557 law early last year. HB 1557, dubbed by critics as the “Don’t Say Gay” bill, limits early education teachings on sexual orientation or gender identity.

State Rep. Randy Fine told CNBC’s “Squawk Box” last April that the bill wasn’t retaliatory, but then said “when Disney kicked the hornet’s nest, we looked at special districts.”

While Disney remained quiet on the matter for months, it seems the House of Mouse had been hatching a plan to retain its control over the land within the outer limits of Orange and Osceola counties.

On Feb. 8, the day before the Florida House voted to put DeSantis in charge, the previous Disney-allied board signed a long-lasting development agreement that drastically limits the control that can be exercised over the company and its district.

As part a 30-year development agreement, Disney no longer needs board approval to build high-density projects or buildings of any height and can sell or assign development rights. It also bans the board from using Disney’s name or any of its characters.

March 30, 2023, Brandenburg, Brodowin: King Charles III. stands next to a cake made especially for his visit in Brodowin ecovillage during the royal visit to Germany. 

Pool | Via Reuters

The agreement includes a royal clause that dates back to 1692 in Britain and would extend its term limit for decades.

This “Declaration shall continue in effect until 21 years after the death of the last survivor of the descendants of King Charles III, King of England, living as of the date of this declaration,” the document said. This kind of clause is most often used in the UK, typically when it comes to trusts, and provides a buffer against perpetuities.

“So, as long as one of those grandchildren makes it 80, this clause would be there for 100 years,” explained Robert Lord, senior advisor of tax policy at progressive group Patriotic Millionaires.

DeSantis replaced all of the Disney-allied board members with five Republicans on Feb. 27. It was only then that Disney’s new binding agreement was discovered. The clause was so obscure that several journalists who attended the Feb. 8 meeting apparently didn’t pick up on it.

“This essentially makes Disney the government,” Ron Peri, one of the new board members appointed to the CFTOD by DeSantis, said at the Feb. 27 meeting. “This board loses, for practical purposes, the majority of its ability to do anything beyond maintain the roads and maintain basic infrastructure.”

Representatives for DeSantis did not immediately respond to CNBC’s request for comment.

Florida legislators have balked at the new agreement, vowing to find a legal way to repeal or void the document. However, Disney says all of its conduct was legal.

“All agreements signed between Disney and the District were appropriate, and were discussed and approved in open, noticed public forums in compliance with Florida’s Government in the Sunshine law,” The Walt Disney Resort said in a statement.

Florida Governor Ron DeSantis answers questions from the media in the Florida Cabinet following his State of the State address during a joint session of the Senate and House of Representatives, March 7, 2023, at the Capitol in Tallahassee, Florida.

Cheney Orr | AFP | Getty Images

The district in question is the Reedy Creek Improvement District, which was established in 1967. It was established by the Florida legislature so Disney could develop the infrastructure for Walt Disney World at no cost to Florida taxpayers.

The arrangement has allowed Disney to build theme parks, hotels and other tourist experiences within the Reedy Creek district with little to no oversight. The company also became the largest employer of Florida residents and helped the Orlando area become one of the largest hubs for tourism in the U.S.

And Disney allies came to the Feb. 8 meeting prepared to defend its special status in the state.

According to the minutes, Board President Larry Hames asked if there was any other business to discuss before closing the meeting.

John Classe, who’s been Reedy Creek’s top administrator since 2016, then quoted famed basketball coach John Wooden: “Things turn out best for the people who make the best of the way things turn out.”

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