Disney quietly dodged DeSantis’s oversight board, appointees realize

The Disney World oversight board installed by Florida Gov. Ron DeSantis (R) accused its predecessor of using an 11th-hour agreement to sharply curtail the new board’s powers and bolster the entertainment giant’s control over the Florida-based amusement park.

In one of its last acts before DeSantis’s appointees took over, the board for the area that includes Walt Disney Co.’s Florida theme park agreed to a deal in February that grants the company broad veto powers over any improvements or changes to properties in the park, according to a copy of the agreement published by the Orlando Sentinel. Under the measure, any changes are “subject to [Disney’s] prior review and comment,” so as to “ensure consistency with the overall design and theming” of the park, effectively stripping much of the board’s power to regulate Disney.

The board is also prohibited from using Disney’s name or characters — “such as Mickey Mouse” — or distributing or selling Disney-related merchandise. It also gives the company the right to prior review and comment when the board changes building exteriors, among other strictures.

The new agreement invokes a “royal lives” clause: It is valid in perpetuity, or if forever is deemed to be too long, until the “death of the last survivor of the descendants of King Charles III, King of England living as of the date of this Declaration.” Such clauses have been employed for centuries as a workaround for restrictions on agreements in perpetuity.

The contract also contains stipulations allowing Disney to seek damages if the board violates any provisions.

Through a spokesperson, DeSantis said the governor-appointed board had contracted law firms to challenge the agreement, and suggested certain “legal infirmities” could render it void.

DeSantis, an ascendant voice in the Republican Party and widely seen as a likely contender for the party’s 2024 presidential nomination, appointed a new oversight board after Disney criticized education legislation he had promoted that prohibited teachers from discussing gender and sexual orientation in early grades. Critics derided the policy as a homophobic and discriminatory “don’t say gay” bill. DeSantis signed it into law last year.

Angry about what he called “a woke California corporation” protesting state policies, DeSantis called for a special legislative session last year to dissolve Disney’s special district. Lawmakers quickly passed a bill doing that, but gave Disney until June 2023 to work out the details.

In apparent retaliation for the critique, DeSantis replaced the previous Disney-friendly oversight board known as the Reedy Creek Improvement District with a new board, the Central Florida Tourism Oversight District, made up entirely of his own appointees, including religious and conservative activists. The board is responsible for approving infrastructure projects, as well as maintaining more mundane aspects of the park, such as trash collection and management of sewer systems. Disney would have been to some degree beholden to DeSantis’s board for its sign-off on major projects, in theory allowing it to hold sway over the company.

But in a bureaucratic coup, Disney and the previous board signed an agreement on Feb. 8 — the day before the Florida House passed a bill paving the way for the DeSantis appointees — that transferred much of the board’s power to Disney.

The new board, much to its chagrin, apparently discovered the agreement recently, although the outgoing Reedy Creek board placed the required public-hearing notice on the issue in the Orlando Sentinel newspaper, in early January.

“I’m surprised that they didn’t tell us about it as soon as we were appointed,” one of the board members, Brian Aungst Jr., told local station News 6 as the board held a meeting Wednesday. “We had to find out about it late at night on a Friday night.”

DeSantis’s new board should not have been caught off guard, said Chad Emerson, who wrote a history of the theme park, “Project Future: The Inside Story Behind the Creation of Disney World.”

“It looks like the governor’s team failed to monitor the RCID public meetings leading up to the change,” Emerson said. “I can’t believe they weren’t reviewing every agenda and attending every meeting where a contract was approved.”

Describing the agreement as a subversion of the will of voters, Aungst said the board will “have to deal with it and correct it,” according to the Associated Press.

Ron Peri, another board member, said at the meeting that under the agreement, “this board loses, for practical purposes, the majority of its ability to do anything beyond maintain the roads and maintain basic infrastructure,” according to News 6.

But Taryn Fenske, a DeSantis spokeswoman, countered that legal problems with the agreement could render it void, describing the deal as a last-ditch effort to transfer certain rights and authorities over to Disney.

“An initial review suggests these agreements may have significant legal infirmities that would render the contracts void as a matter of law,” Fenske wrote. “We are pleased the new governor-appointed board retained multiple financial and legal firms to conduct audits and investigate Disney’s past behavior.”

The oversight board was created in 1967 when the state, in coordination with Disney, created a special tax district for the park that had similar powers to a county government in an effort to free the park from some state-level bureaucracy. More than 1,000 other special taxing districts exist in the state, but none as consequential as Reedy Creek.

DeSantis, who has repeatedly criticized Disney since it came out against his education policy, said in his February announcement that he was ending Disney’s “corporate kingdom” and “preferential treatment.”

At another special session in February, legislators approved the new board and DeSantis’s appointees. Several Republican lawmakers said they hoped the changes would help bring things back to the “apolitical and innocent” status that they believe Walt Disney sought for his company’s content, according to one state senator.

The board has retained Cooper & Kirk, a conservative D.C. law firm, to challenge the agreement. Along with four other law firms, it provided a statement to CNN saying the new board will evaluate the “overreaching documents” and protect the public’s interest.

“The lack of consideration, the delegation of legislative authority to a private corporation, restriction of the Board’s ability to make legislative decisions, and giving away public rights without compensation for a private purpose, among other issues, warrant the new Board’s actions and direction to evaluate these overreaching documents and determine how best the new Board can protect the public’s interest in compliance with Florida Law,” the law firms told CNN.

Disney said that “all agreements signed between Disney and the District were appropriate, and were discussed and approved in open, noticed public forums.”