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Disney sues DeSantis in federal court over Reedy Creek takeover

Florida Gov. Ron DeSantis vows to keep restaurants open during COVID-19 at a news conference on Dec. 15, 2020, at Okeechobee Steakhouse in West Palm Beach, Florida. Emails suggest that DeSantis’ campaign for the 2022 cycle made two requests of the Tampa Convention Center, the downtown venue that hosted the governor’s November election night celebration: no guns and no fingers pointing at the campaign for seeking such a prohibition.(Michael Laughlin/South Florida Sun Sentinel/TNS)

The Walt Disney Co. is taking Gov. Ron DeSantis and state officials to federal court, accusing them of engaging in a “targeted campaign of government retaliation” in the feud over the Reedy Creek Improvement District.

The entertainment giant filed the lawsuit on Wednesday as DeSantis’ hand-picked oversight board declared Disney’s agreements seeking to retain control over development were null and void.

“A targeted campaign of government retaliation — orchestrated at every step by Governor DeSantis as punishment for Disney’s protected speech — now threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights,” the lawsuit filed in Tallahassee reads.

The tourism oversight board’s lawyers say the previous Disney-friendly Reedy Creek board failed to follow procedural requirements and properly notify affected property owners of the development agreements, according to a resolution approved by the new board.

The new board members wanted to work with Disney’s leadership but were blindsided by the Disney deals that they only discovered after they took control of the district in March, Martin Garcia, chairman of the Central Florida Tourism Oversight District’s Board of Supervisors, said at Wednesday’s meeting.

“They did this at the 11th hour. … They decided that a couple of weeks before this board takes action that they are going to tell the Florida Legislature and the governor and this board that they can’t act according to Florida state law,” Garcia said.

Told of the lawsuit after the meeting, Garcia said he had no comment.

Disney did not immediately respond to a request for comment on the board’s actions, but its communications office sent out a copy of the lawsuit.

In a previous unsigned statement, Disney company officials said the agreements were approved in open and public meetings in accordance with Florida law.

The resolution includes accusations of other faults with Disney’s agreements with the special taxing district overseeing government services for Disney World, including self-dealing and one-sided contract terms. Lake Buena Vista and Bay Lake didn’t hold public hearings on the deals, even though the affected property inside their city limits, and the district didn’t post the entire text of the agreements on its website until the new board took over in March, according to the resolution.

Although the agreements were publicly advertised and approved in public meetings, an investigation found no record of those notices being sent by mail as required by law to affected property owners, the new board’s lawyers said.

The district also did not have the authority under Florida law to give up its governmental powers through restrictive covenants, the resolution alleges.

At issue are a development agreement and restrictive covenants approved on Feb. 8 by the Reedy Creek Improvement District’s Board of Supervisors ahead of a state takeover. State lawmakers voted to put DeSantis in charge of appointing the five members of Reedy Creek’s board, replacing an arrangement that essentially allowed Disney to hand-pick the board and self-govern its theme parks and resorts.

The development agreement preserved Disney’s control over growth and planning, according to an analysis by the new board’s lawyers. A separate declaration of restrictive covenants spelled out Disney must review aesthetic changes to the district’s buildings, among other stipulations.

Board members also adopted a resolution declaring that Disney and other businesses in the district cannot require customers to be vaccinated against COVID-19 or undergo COVID-19 testing as a condition of entry. State law already makes it illegal for businesses to require customers show immunization credentials known as vaccine passports.

DeSantis, widely seen as a 2024 GOP presidential contender, vowed to get the agreements voided, which he says runs contrary to his desire to end Disney’s control over the Reedy Creek district.

To bolster the state’s case, state legislators are moving to amend state law to stipulate that the development agreement can be voided by the new board, which is known as the Central Florida Tourism Oversight District.

The district is considering hiring Glen Gilzean, president and CEO of the Central Florida Urban League, as its new administrator, Garcia said. The present administrator, John Classe, would stay on as a special adviser.

“It’s still up in the air,” Gilzean said. “I’m really excited about the opportunity, and I’m looking forward to working with the board.”

The ongoing feud between DeSantis and Disney has sparked concerns from some business owners at the Disney Springs entertainment complex. Several business owners told the new board members on Wednesday they should consider how their decisions could affect their operations.

“The discussion of additional taxes and additional utilities has been very concerning for us,” said Stephen Lombardo III, CEO of Gibsons Restaurant Group and owner of The Boathouse at Disney Springs “I want you to just please understand when you make these decisions it impacts far more than just Disney.”

DeSantis said the state may have to look at toll roads and hotel taxes as he escalated his battle with Disney.

The district may have to consider raising taxes to pay for legal work needed to undo Disney agreements, Garcia said.

“Disney picked the fight with this board,” he said. “We were not looking out for a fight.”

This is a developing story that will be updated.

Staff writer Steven Lemongello contributed to this report.


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