DeSantis’ Disney Dispute, One Year Later

Happy Thursday! Acting Federal Aviation Administration Administrator Billy Nolen said this week we’re experiencing the “safest period in aviation history.”

Unless, of course, you happen to be aviating an octagonal aircraft above Lake Huron. Then you’re toast.

Quick Hits: Today’s Top Stories

• The Commerce Department reported Wednesday that retail sales—including spending on food and fuel—climbed 3 percent month-over-month in January, the largest monthly gain since March 2021 and nearly double economists’ expectations of 1.8 percent growth. The statistic is not adjusted for inflation, however, so higher prices likely accounted for some of the increase. Still, strong consumer spending—along with January’s blowout jobs report and cooling but still high inflation—could encourage the Federal Reserve to continue its rate hikes campaign to fight inflation.
• A Food and Drug Administration panel voted unanimously on Wednesday to recommend allowing over-the-counter sales of nasal spray naloxone—a drug that reverses opioid overdoses—clearing the way for final approval next month. The FDA isn’t bound to honor the panel’s recommendations, but typically does.
• The Congressional Budget Office projected Wednesday that, unless Congress votes to raise the debt ceiling, the federal government will run out of the ability to issue additional debt to cover its obligations sometime between July and September this year, with the exact date depending on cash flow over the next few months. Some Republicans have demanded spending cuts in exchange for voting to raise the ceiling, but President Joe Biden and Democrats insist on a so-called “clean” debt ceiling hike, and the president and House Speaker Kevin McCarthy have made little outward progress on negotiating a deal.
• Laura Rosenberger—the National Security Council’s senior director for China and Taiwan—will leave the White House next month to be replaced by the State Department’s Sarah Beran. Rosenberger’s departure was reportedly long planned, but the transition comes amid heightened tensions between Washington and Beijing over the Chinese surveillance balloon that traversed the U.S. earlier this month.
• Turkish police have detained 78 people accused of making “provocative” social media posts that spread “fear and panic” in the aftermath of earthquakes that killed more than 41,000 people in Turkey and Syria. Authorities said 46 websites had been shut down for running earthquake donation phishing scams. Turkish President Recep Tayyip Erdoğan has also faced criticism for his government’s initially slow response to the disaster.
• Scottish first minister Nicola Sturgeon unexpectedly announced Wednesday she will resign her post after leading the Scottish National Party since 2014. Sturgeon is Scotland’s longest-serving first minister and a Brexit opponent, arguing it merited another Scottish independence referendum.
• Ohio Gov. Mike DeWine announced Wednesday a second round of tests from five wells serving the water system of East Palestine—where a train recently derailed, spilling toxic chemicals—showed no contamination, confirming the town’s municipal water is safe to drink. The Ohio Environmental Protection Agency still recommends people in the area with private wells drink bottled water and schedule water tests.
• The white man, 19, who killed 10 black people in a 2022 “racially motivated” shooting in Buffalo, New York, received a life sentence without parole on Wednesday. He pleaded guilty to state charges including 10 counts of first-degree murder, but still faces 27 federal felony charges, to which he has pleaded not guilty. 
• The Justice Department officially notified GOP Rep. Matt Gaetz of Florida he won’t face charges in a sex trafficking investigation, the representative’s office said Wednesday, confirming previous reports that prosecutors had declined to recommend charges.

A New Sheriff in Town?

Kathleen Passidomo. Ben Albritton. Paul Renner. Michael Grant. You might not recognize these names, but the 160 senators and representatives who meet in Tallahassee are about to become some of the most closely watched state lawmakers in the country. With Florida Gov. Ron DeSantis inching closer and closer to throwing his hat in the ring for the GOP presidential nomination later this year, it’s becoming increasingly clear he plans to use the state’s upcoming legislative session—and Republicans’ supermajorities in both chambers—to lay the groundwork for a national campaign. On the docket so far? Permitless concealed carry, tort reform, and possibly tighter abortion restrictions.

Oh, and DeSantis wants to annex the Magic Kingdom.

Longtime TMD readers may remember an edition we put together nearly a year ago breaking down a protracted public spat between DeSantis and the Walt Disney Company. After Florida Republicans drafted and passed legislation prohibiting classroom instruction on sexual orientation or gender identity for public school students in kindergarten through third grade—and for students of all ages if that instruction is judged to be “not age-appropriate or developmentally appropriate” in accordance with state standards—then-Disney CEO Bob Chapek caved to pressure from LGBT activists, a vocal minority of Disney employees, and Walt Disney’s own granddaughter, releasing a statement condemning the bill and lobbying DeSantis to veto it.

The governor signed the bill into law days later, and concocted a plan to get back at Disney for trying to “effectively commandeer [Florida’s] democratic process” by criticizing the legislation. On April 19, he called on Florida’s legislature to consider terminating “all special districts that were enacted in Florida prior to 1968.” From the Daytona Beach Racing & Recreational Facilities District that oversees the Daytona International Speedway to the Greater Orlando Aviation Authority that controls Orlando’s International Airport, Florida had more than 1,800 such “special districts”—units of local government providing specialized services for unique circumstances—but only five were created before 1968. The one governing Walt Disney World in Orange and Osceola Counties, the Reedy Creek Improvement District, was established in … 1967. DeSantis signed Senate Bill 4C into law days later, giving lawmakers until June 1, 2023 to come up with a plan to dissolve the district.

Here’s how we described the RCID’s operations last year:

Walt died in 1966, but his older brother Roy put off retirement to carry out Walt’s vision for the second park—and the duo had learned some lessons from their first one. “Walt hated the fact that they were dependent upon Anaheim for public services and were regulated by the small city of Anaheim,” said Rick Foglesong, a political science professor at Rollins College who wrote a book on Disney World’s relationship with Florida. Once the real estate in Orange and Osceola Counties was secured—more than 50 times the size of the California park—Roy went to the Florida legislature and requested a carveout that—in exchange for bringing Florida billions of dollars in economic activity—would essentially allow the company to govern itself. 

“Legislators gave it to [Disney] because they wanted it, and they said they wouldn’t come unless they got it,” Foglesong told The Dispatch. “They didn’t want to put Disney to the test on whether they would back down or not.”

The resulting entity, the Reedy Creek Improvement District (RCID), encompasses two towns—Bay Lake and Lake Buena Vista—that combined have a permanent population of about 50, and elect their own mayors and city councils. The RCID itself is governed by a five-member Board of Supervisors that is chosen by senior Disney employees who own land in the District.

By siloing off the RCID, lawmakers granted Disney—through these elected bodies—the authority and autonomy to develop almost all of its own municipal services specifically catered to its own unique needs, as well as oversee zoning, building codes, and the construction of highways. It manages its own sewage system, electricity generation and distribution, and fire department. According to the RCID’s website, the body has overseen the construction of 134 miles of roadways and 67 miles of waterways. 

Some Florida lawmakers and economists expressed concerns at the time that—because of how Disney used the RCID to tax itself and issue bonds—DeSantis’ plan to dissolve the district entirely would end up dumping about $1 billion in debt on the residents of Orange and Osceola counties and force localities to raise taxes. Asked about this worry by The Dispatch, DeSantis spokeswoman Christina Pushaw dismissed it as a “baseless hypothetical” that does not “stand up to critical thinking or basic logic,” promising to let us know when she had “more to share regarding the specifics of the plan.”

Ten months later, turns out the concerns might not have been so “baseless” after all. Florida Republicans released an updated proposal regarding the RCID last week, and DeSantis’ backers might be surprised by the legislation’s second-to-last line: “The Reedy Creek Improvement District is not dissolved as of June 1, 2023, but continues in full force and effect under its new name.”

The bill—which quickly passed both chambers of the Florida Legislature and is headed to the governor’s desk for final approval—still stings Disney a bit on a couple key points, but it’s a far cry from the complete dissolution of the special district DeSantis promised last year, despite a spokesman denying any “U-turns” were made. Reportedly due to the aforementioned debt fallout, Disney’s special tax status and exemptions will remain in place, as will the district’s ability to issue bonds and manage its own fire department, water treatment and sewage system, waste collection, pest control, and more. Asked by USA Today reporters how the legislation would materially change anything Disney is currently doing, the bill’s sponsor, Rep. Fred Hawkins, said, “That I can’t answer.”

DeSantis’ Republican opponents in the state took notice. “What a massive capitulation this is,” tweeted Anthony Sabatini, a Florida state representative from 2018-2022 and longtime supporter of Donald Trump. “HUGE win for Woke Disney. BIG loss for conservatives.”

That’s probably overselling DeSantis’ acquiescence a bit, but what will actually change? The name, for starters. Out with the “Reedy Creek Improvement District,” in with the “Central Florida Tourism Oversight District.” But more importantly, the legislation grants Florida’s governor the authority to appoint all five members of the CFTOD’s Board of Supervisors, stripping that power from the handful of senior Disney employees who own land in the district. The appointees—who will serve four-year terms—must be Florida residents, and they can’t have worked for or with a company that “owns or operates a theme park” within three years of being appointed. Plus, the district will be subject to a few more permitting and oversight regulations, only be allowed to exercise eminent domain within its own borders, and lose its ability to build nuclear facilities or airports. “Disney is no longer going to have self-government,” DeSantis boasted last week. “There’s a new sheriff in town, and that’s just the way it’s going to be.”

(Jim Clark, an historian of Florida at the University of Central Florida, told The Dispatch the original language of the RCID agreement gave Disney the power to construct airports and nuclear power plants because Walt Disney had grand plans of building a full-on city. After his death, those plans turned into the Epcot theme park.)

At least publicly, the old sheriff in town seems to be at peace with the situation. “For more than 50 years, the Reedy Creek Improvement District has operated at the highest standards, and we appreciate all that the District has done to help our destination grow and become one of the largest economic contributors and employers in the state,” Walt Disney World President Jeff Vahle said in a statement this week. “We are focused on the future and are ready to work within this new framework, and we will continue to innovate, inspire and bring joy to the millions of guests who come to Florida to visit Walt Disney World each year.”

DeSantis may not have gotten everything he wanted out of the altercation, but the saga does seem to indicate the threat of governmental retaliation has a material effect on corporate behavior. Chapek, Disney’s CEO, was fired in November—not solely because of this squabble, but it certainly didn’t help his case. His replacement, former CEO Bob Iger, was even more outspoken about Florida’s so-called “Don’t Say Gay” legislation than Chapek was at the time—but has taken a much different tone since being reinstalled atop the House of Mouse. “I was sorry to see us dragged into that battle, and I have no idea exactly what its ramifications are,” Iger said in a recent town hall meeting with employees. Axios published a piece last week noting corporate leaders have grown noticeably less vocal on social issues in recent months.

DeSantis will almost assuredly seek to take credit for that trend if he decides to mount a presidential bid, and it’d be a potent message with Republican primary voters on the campaign trail. But the fight with Disney is also indicative of the Florida governor’s willingness to play fast and loose with governmental power in ways that don’t always stand up under scrutiny. Not only was he forced to water down this legislation after realizing it could cost taxpayers hundreds of millions of dollars, but bills he touted in recent years targeting social media platforms and “woke” college instruction have both been blocked by federal courts for violating the First Amendment. His grand promises on hot-button issues earn him plenty of good headlines in right-wing media and adulation from his various constituencies in the moment; the backtracking that comes later is done much more quietly.

Whether the CFTOD will meaningfully alter Disney World’s governance or simply be the RCID by another name depends largely on whether DeSantis chooses firebrands or serious actors for the district’s board. A clause in the new bill suggests some preference should be given to people with experience relevant to the operations of the park—construction, engineering, environmental sciences, public safety, infrastructure or utility management, etc.—but DeSantis could theoretically tap people willing to raise taxes on Disney or block new developments if the company crosses the governor again.

That said, Sean Snaith, an economist at the University of Central Florida, doesn’t think Disney has all that much to worry about. “This is a company that operates around the world, including in Communist China,” he told The Dispatch. “It’s not something they can’t navigate.”

Plus, DeSantis will likely move on to his next target before too long. “Having some ongoing battle over a new Yoda ride [isn’t] going to score any political points,” Snaith added.

Worth Your Time

• Meet Nathan Berman, 63-year-old savior of New York City property developers frantic to make use of office buildings that emptied out during the pandemic and haven’t refilled. Berman’s an expert at transforming these buildings into residential units, but it’s not as simple as it looks. For the Financial Times, Joshua Chaffin explores the nitty-gritty barriers to a profitable conversion. “In a residential building New York City requires operable windows and minimum amounts of natural light and ventilation in each habitable room,” Chaffin writes. “Many modern office buildings lack operable windows and their floor plates tend to be far larger to suit corporate tenants. The depth from the edge to the core might be 45ft or more. A crucial challenge, then, for designers is what to do with all that windowless interior space?” In one early project, Berman took drastic measures. “To solve the depth problem, Berman and his architect, Avinash Malhotra—‘we call him the rabbi of conversions’—cut a 30ft by 40ft core from the center of the building.”

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Toeing the Company Line

• Our social media manager, Jonathan Chew, is out with a new YouTube explainer video today breaking down the impossible task of “fixing” Twitter. “The chaos at Twitter has provided a window into how social media companies like this actually work,” he says, “and whether their business model is sustainable in the long term.” Be sure to subscribe to The Dispatch’s YouTube page to get alerts when more videos like this are released!
• Jonah welcomes Coleman Hughes–host of the Conversations with Coleman podcast–on today’s episode of the Remnant for a lively discussion of race and religion. What’s the relationship between authenticity and identity? Is it possible to completely root out racism in American society? And what danger does audience capture pose to responsible journalism?
• On today’s episode of Advisory Opinions, Sarah and David take a look at Mike Pence’s argument for defying Special Counsel Jack Smith’s subpoena, dive into a challenge to a Connecticut school’s transgender policy, discuss more First Amendment issues plaguing social media, and much more.
• Chris Christie gets real on Ron DeSantis and Donald Trump in Wednesday’s edition of Dispatch Politics. “I’m sure as heck not going to worry about what Ron DeSantis is going to do or not do,” the former New Jersey governor tells Andrew, Audrey, and David M. Drucker. “Because none of us really know who he is outside of Tallahassee, Florida.” Plus: What’s next for embattled Sen. Rick Scott of Florida?
• In Wednesday’s Boiling Frogs (🔒), Nick argues the Democrats’ renomination of Biden and Kamala Harris might be enough to get him to look semi-seriously at a third-party ticket. “I’ll take incompetent over malevolent, but the prospect of a presidential election in which all four candidates at the top of the ballot are laughably unfit to wield power is so dark that I can scoff only half-heartedly,” he writes. “If ever there was a political moment that cried out for a bold independent alternative, a race between Biden/Harris and, say, Trump/Lake is it.”
• Everything old is new again, and the perennial push to “Buy American” is having a moment, even eliciting a bipartisan standing ovation at Biden’s recent State of the Union. Predictably, Scott isn’t a fan—and in Wednesday’s Capitolism (🔒), he gets into the weeds on the policy’s history and harms.
• Jonah also takes aim at “Buy American” in his latest G-File (🔒), along with “social justice” and a host of other catchy phrases shielding poor political decision making. “There is no universally agreed upon definition of social justice—and that’s why people use it,” he argues. “The moment you start introducing gauzy, poetic, elastically defined concepts into the decision-making process, what you are actually doing is saying the decision-maker can make the decision however they want, or close to it.”
• And on the site today, David M. Drucker covers Nikki Haley’s campaign launch from South Carolina and Kevin writes on the role of incompetence in the Michigan State shooting. Also, Charlotte reports from southern Turkey on the aftermath of last week’s twin earthquakes. “Presidential and parliamentary elections will take place in about three months,” she writes, “but Turkey’s road to recovery will last much longer than the campaign season.”

Let Us Know

Based on what we know now, do you think DeSantis “won” this altercation over the Parental Rights in Education Act? Did Disney? Should either the governor’s or the company’s handling of the situation serve as a model for other lawmakers or corporations?