Posts tagged with "Oversight Board"

Disney pulls the plug on $1 billion development in Florida

May 22, 2023

On Thursday, May 18, Disney CEO Robert E. Iger and Josh D’Amaro, Disney’s theme park and consumer products chairman, pulling the plug on an office complex that was scheduled for construction in Orlando at a cost of roughly $1 billion. It would have brought more than 2,000 Disney jobs to the region, with $120,000 as the average salary, according to an estimate from the Florida Department of Economic Opportunity.

The project, near Lake Nona Town Center, was supposed to cost $864 million, but recent price estimates have been closer to $1.3 billion. Disney had planned to relocate thousands of workers from Southern California to an area near Orlando’s Lake Nona Town Center—including most of a department known as Imagineering, which works with Disney’s movie studios to develop theme park attractions.

The New York Times reports that the move comes after Disney, in early March, came out against Florida’s Parental Rights In Education bill. The so-called “Don’t Say Gay” bill was passed by Florida’s House and Senate at the behest of presidential hopeful, Florida Governor Ron DeSantis. The bill limits discussions of sexual orientation and gender identity in schools.

Immediately following Disney’s comments, the Times says, DeSantis pledged that a newly formed oversight board would review and evaluate development in the 25,000 square acres in and around Walt Disney World. However, Disney moved first, to head off DeSantis and leave the committee virtually “toothless,” with no power.

In April, the Times notes, Disney sued the governor and his allies for what it called “a targeted campaign of government retaliation”—and the company made it clear that $17 billion in planned investment in Walt Disney World was on the line.

“Does the state want us to invest more, employ more people, and pay more taxes, or not?” Robert A. Iger, Disney’s chief executive, said on an earnings-related conference call with analysts last week.

Most of the affected 2,000  employees complained bitterly about having to move —some quit—but Disney held firm, partly because of a Florida tax credit that would have allowed the company to recoup as much as $570 million over 20 years for building and occupying the complex.

When he announced the project in 2021, D’Amaro cited “Florida’s business-friendly climate” as justification.

D’Amaro’s tone in an email to employees on Thursday was notably chillier. He cited “changing business conditions” as a reason for canceling the Lake Nona project. “I remain optimistic about the direction of our Walt Disney World business,” D’Amaro said in the memo. He noted that $17 billion was still earmarked for construction at Disney World over the next decade—growth that would create an estimated 13,000 jobs. “I hope we’re able to,” he said.

The memo, which was viewed by The New York Times, did not mention DeSantis. But the company’s battle with the governor and his allies in the Florida Legislature figured prominently into Disney’s decision to cancel the Lake Nona project, according to two people briefed on the matter, who spoke on the condition of anonymity to discuss private deliberations.

A spokesman for Mr. DeSantis said in an email: “Disney announced the possibility of a Lake Nona campus nearly two years ago. Nothing ever came of the project, and the state was unsure whether it would come to fruition. Given the company’s financial straits, falling market cap, and declining stock price, it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures.”

Florida officials have repeatedly pointed to the Lake Nona development as an example of economic vibrancy in Orlando, which suffered mightily during the pandemic. Noting that hotel chains and retailers were moving into the Lake Nona area in anticipation of Disney’s arrival, The Orlando Business Journal in January called the complex “a major economic driver for the region.”

In a statement, Jerry L. Demings, the mayor of Orange County, which includes Orlando, said it was “unfortunate” that Disney canceled its plans. “However, these are the consequences when there isn’t an inclusive and collaborative work environment between the state of Florida and the business community,” Demings said.

Research contact: @nytimes