District to investigate Disney after ‘shocking’ contracts zipped through in 11th hour

ORLANDO, Fla. (FLV) – The new district encompassing Walt Disney World hired firms to audit and investigate newly-approved long-term agreements between the previous Reedy Creek Improvement District and the Walt Disney Company.

The Reedy Creek Improvement District approved development agreements with Disney a day before the Florida House voted for the governor to control the district.

Gov. Ron DeSantis appointed members to the newly-established Central Florida Tourism Oversight District to oversee the area.

“The development agreement essentially strips the government of the government powers and gives those powers to Disney, which is, obviously, in our view an overreach,” Brian Aungst Jr. told reporters after the meting.

Special counsel for the newly-appointed Central Florida Tourism Oversight District found the agreement “highly unusual” and “suspect,” notifying the board the weekend leading up to the Wednesday meeting.

“I’m going to outline for you why these are unusual documents and the problems that I have just spotted with them initially,” special counsel said. “And I think this warrants additional investigation and evaluation.”

Taryn Fenske, the communications director for the governor’s office said the office is aware of Disney’s “last-ditch efforts” to execute contracts prior to a new law that transfers rights and authorities from the former Reedy Creek Improvement District 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 said. “We are pleased the new Governor-appointed board retained multiple financial and legal firms to conduct audits and investigate Disney’s past behavior.”

Special counsel told board members that as of Feb. 8, no other property owner in the district can expand or develop their property without buying development rights from Disney under the agreement. They believe the agreement is filled with “unlawful” delegation of legislative authority to a private party.

“I cannot tell you the level of my disappointment in Disney,” one board member said. “This essentially makes Disney the government.”

The chair, Martin Garcia, said it appeared the agreement was trying to “nullify” the work of the legislature and the governor.

“What it looks like to me is because Disney has the Magic Kingdom, they thought they could be king for the day,” Garcia said.

The development agreement reportedly prohibits the district from regulating the heights of any structure that Disney builds in the entire district.

“I’ve never seen anything like this. The timing circumstances in terms of the [development agreement] showed that the intent of the DA was to circumvent the enabling act of this district and to bind the hands of this board and future boards,” special counsel said.

It also would require the district to pay Disney fair market value for properties needed to build roads and utilities for public projects.

Special counsel said it takes away the board’s legislative, budget and appropriation authority to revise its capital improvements program.

“I found another document that’s just as shocking and abnormal, which is a set of restrictive covenants that the district signed in favor of Disney,” the special counsel said.

Aungst said it is “highly likely” that it could be argued that the documents are “void ab initio,” meaning they have no legal effect and should not be terminated because they don’t exist.

“But I’ll leave that for our independent counsel to determine whether that’s an appropriate thing or not,” he said.

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.

Walt Disney World statement to WESH

Aungst said after the meeting he is “hopeful” that Disney will work with the board to “correct” the situation.

“Obviously, we’re going to have to deal with it and correct it,” he said. “Because it’s a subversion of the will of the voters and legislature and the governor, and it completely circumvents the authority of this board to governor.”

Aungst said the board is not taking an “adversarial position” to Disney.

“We are defending ourselves and we’re defending the people,” he said. “And we’re going to be prepared for what the next steps are.”

During the meeting, special counsel discussed Disney’s wealth, access to lawyers and resources.

Editor’s Note: This story was updated to include a statement from the governor’s office.