Disney World’s Model for Cities of the Future
2022-06-28 · Guest: Richard Foglesong (Author and political scientist) · 52:15
Political and legal structure of Disney World
Bob Zadek interviews Richard Foglesong, author of Married to the Mouse, about the unique political and legal structure of Disney World in Florida. They discuss Walt Disney’s vision for an autonomous corporate city, the creation of the Reedy Creek Improvement District to bypass local regulation, and the current political conflict with Governor Ron DeSantis.
Topics: Disney World, Reedy Creek Improvement District, Ron DeSantis, Municipal Governance, Corporate Autonomy, Urban Planning, Florida Politics
Speakers: Bob Zadek, Richard Foglesong
The Spat in Florida [00:00]
Bob Zadek: Hello everyone, welcome to the Bob Zadek Show, the longest-running libertarian show in all of radio. Thank you so much for listening this morning and giving us an hour of your time. Most of you probably are aware of the fact that there is a bit of a spat going on in Florida these days. The senior management of the Walt Disney Company, the proprietors of Disney World, a destination resort in Florida, have incurred the attention, the wrath, indeed almost a declaration of war by the Governor of Florida, DeSantis, who, because the senior management of Disney World has started to take a position on some public policy issues regarding the rights of parents in control of the education of their children and involving gay rights type issues, Disney Company has been outspoken in their opposition to DeSantis’s policies, policies that he holds dear, and he has decided to punish Disney World.
And he has a tool at his disposal—maybe he doesn’t have the tool, but he thinks he does—and that is to take away some of the autonomy which Disney World has over its environment. Most of you may not be aware of the fact that the Walt Disney Company, the owners of Disney World, when they acquired the land and put together the plan to build Disney World, Walt Disney himself envisioned building a political subdivision, the Reedy Creek Improvement District, which he would have, he the company, would have almost exclusive control over. He would run the police, the fire department, design the building code, in effect be in charge. A pure, pure company town.
But maybe not. We will see. Was that a success in governance? Does Disney World represent merely the power of a large US corporation to push around local government, or does it represent the wave of the future? Is that something to be emulated as a model for local governance, or is it something which must, as DeSantis wants, be undone because it is bad for government, bad for the citizens, and just a bad way to operate a subdivision?
I got really curious about this issue, and as I poked around to learn more, I discovered an author and a book that answers all of these questions and was written several decades before this controversy began. And it is the book to learn about the fascinating story of how Disney World came to be its own world. The book is entitled Married to the Mouse: Walt Disney World and Orlando. Its author, Richard Foglesong, has appeared frequently in the media. He is a historian, a political scientist. He has focused on Florida and US politics. Well, there’s a full-time job. Richard has been generous enough to share his wisdom with us this morning and his insights and to tell us how the world, an entire world, Disney World, got created to help us understand: is it a bad idea or is it the wave of the future? Should we aspire to have all cities in America acquired by corporations so we decide, “Let’s live in US Steel Land. No, no, let’s move to Microsoft Land,” and we move from independent city run by independent companies from one to the other and have the corporation be in charge of everything?
And by the way, that is not too far-fetched an idea. There are cities in our country today—I did a show about 10 years ago on Sandy Springs, Georgia, which is a municipality in Georgia that has, if I remember correctly, two employees. Everything else is outsourced. It is as privatized as a place can be. Good idea or bad idea? Richard will help us understand. Richard, thank you so much for offering to spend some time with us. Help us understand how Disney World got to be the world. In effect, tell us about the somewhat localized Big Bang that created the world of Disney. Richard, first of all, thank you for joining us.
Richard Foglesong: Well, it’s great to be here. That’s a pretty good summary, Bob. I couldn’t have done it better. Maybe you should write about Disney World as well.
Bob Zadek: Thank you so much, Richard.
The Vision and the Anaheim Experience [06:25]
Bob Zadek: Now, so let’s start with the vision. Now, Walt Disney always invites the word “vision” to be part of any conversation of the man. He was truly a visionary in so many ways. We will not be talking so much about his artistic creativity, his use of animation, his almost invention of animation. That’s for another day, Richard. But tell us how Disney World got to be. What is the story of how a bunch of orange groves in a very comfortable part of the country got to be the mega-city that it is today?
Richard Foglesong: Well, let me start with Disneyland in California. Walt Disney was a lot like me in that he’s a grandfather. He was a grandfather. He’s a lot more of an artist than I am, but he wanted a place to take his grandchildren where there would not be carny-type workers. And he saw that opportunity, yeah, in orange groves, but in California. And that was in 1955 when Disneyland emerged as an amusement park—except you don’t want to use that word around Disney people, because they find that word offensive.
They had a problem, though, in Anaheim, California, namely that they didn’t like dealing with the city of Anaheim. They did not like depending upon the municipality of Anaheim to provide public services. They wanted to provide their own public services that would be precisely tailored to their exact needs rather than having to depend upon a government, an elected government, that didn’t just provide public services to them but provided public services to all sorts of other businesses as well as residences. And that didn’t meet their needs.
The other thing they didn’t like was being regulated by Anaheim, California. And I’m talking about building inspections, for example. Obviously, the Disney Company has a lot of exotic buildings. “Black boxes,” a term they use, where inside those boxes you’ve got rides of one kind or another. And by the way, that’s kind of dangerous, I’m trying to say, because you’ve got a fire danger inside those buildings. And they didn’t want Anaheim or any other city telling them how to inspect those kind of buildings. They didn’t think Anaheim was very competent at being able to do that.
So, that is 1955 when they begin that project, and it’s a big success. And the Disney Company pretty quickly learns that only 10% of the people who came to Disneyland in California came from east of the Mississippi River. So they thought there might be a market for what they called an “East Coast Disneyland.” 1964 New York World’s Fair, they test the theory. And Disney is the star of the New York World’s Fair because they had figured out, as you referenced a moment ago, how to do animation, how to use electronics to make figures move and talk and sing and do things of that nature.
And they were going to use that concept to attract people to Florida with a slightly different form of entertainment than they had created at Disneyland in California. And that’s what really put Florida on the map historically. Tourists had come to Florida to take advantage of the warm temperature and the beach and the sand. But Walt Disney figured out how to attract people to Central Florida, where there wasn’t much going on there, by using a different kind of entertainment—animatronics—that would have figures that moved and talked and whatnot.
And they looked around for a place where they could test this theory, and they looked all across the East Coast of the United States and finally figured out that Orlando was the place. And in fact, it was on November 22nd, 1963—a day that many of us remember, the day that John Kennedy was assassinated—and they flew to Florida and they flew from Tampa Bay over to Central Florida where Orlando is, and they looked down from the sky and they saw a swath of land that was fertile and not being used, and they saw the crisscross of two expressways, Interstate 4 and Florida’s Turnpike, and they decided, “That’s it, that’s where we will go.” And they flew on to New Orleans, they got out of their plane, they saw people crying in the street, and they asked the cabbie to turn the radio on, and he did, and they figured out, long story short, that John Kennedy had just been assassinated. And so, as I have told many audiences over the years, it was a fateful day for the nation in a bad way, but it was also a fateful day for Orlando and the state of Florida because that’s when the theme park in Orlando began. And ever since then, Orlando has been and became the number one tourist attraction in the United States.
The Reedy Creek Improvement District [12:43]
Bob Zadek: Now, Richard, you had mentioned in your introductory comments that the Disney Company wanted to avoid regulation. They didn’t like Anaheim inviting themselves to the design party and the like. I guess they found that to be possibly limiting on their creativity and their vision. And it’s important, I think, that we discuss that Disney, I don’t think, wanted to be free of regulation so he could be reckless or design—save money and make buildings that were cheap but not as safe or not as well constructed. In Disney’s opposition to regulation, he wasn’t, I don’t think, opposed to the goals of regulation, but only as to the intrusion of being told how to design them. Is that a fair summary, or was there an element of economics and a profit motive in his seeking to avoid regulation?
Richard Foglesong: Well, Bob, I think you nailed it. He absolutely believed in regulation; he just wanted to do it himself and didn’t want government to intercede with his company. For example, Cinderella’s Castle, 178 feet tall, was not the sort of thing that government could easily regulate. You’ve got to think about the threat of fire, for example. And so he wanted to be in charge rather than giving that task of designing the building and making it safe to a government entity, to a county government that didn’t know what the hell they might be doing. That, he thought, was a job for expertise.
And the same with providing public services: water, police, fire, sewer, infrastructure generally. He wanted to be the one in charge there and not someone else. Now, it’s a little unclear whether he really wanted to build a city. He clearly wanted to build a theme park, but it’s not so clear that he really wanted to build a city. I was able to gain access to the Disney archives in Burbank, and it was quite a find because in their archives, I found documents that kind of went both ways.
On the one hand, I found documents that showed that they had a desire to create something that was city-like, not necessarily a city. The main thing they wanted was self-control. Well, okay, I’ve said that already. And they tried to figure out how they could design and build this place without government interceding with them. And the challenge was how to escape from democracy. I found documents where a company attorney was explaining to Walt Disney that they couldn’t exactly escape democracy. He asked his aides whether he could build an experimental monarchy, and it was kind of laughed off.
But a man named Paul Helliwell, an attorney for the company, explained to Walt that on the one hand, they had to comply with democracy, but that on the other, they could maybe escape from it. And let me try to say this quickly, what they did: they created a two-tier government. On the one hand, it consisted of two municipalities, Bay Lake one and Lake Buena Vista the other. And on the top tier, there was this entity called the Reedy Creek Improvement District. And it embraced the whole property, a land area about the size of Manhattan.
But how do you keep it under private control? So here’s what they did: the two phony cities, Bay Lake and Lake Buena Vista, they had an elected government. Between them now, there are 52 people who live in these two cities. And those people are all long-term Disney employees, people who have executive positions so not eligible to belong to a labor union. And they elect a government, they create a planning and zoning commission, and those two governments, with essentially the same powers as the city of Orlando, they have all the authority.
But here’s the fascinating part: the attorneys figured out how they could create Reedy Creek Improvement District that would have a government too, but that government would be elected on the principle of one acre equals one vote. So it would be well like a monarchy. But the powers that were given to the two municipalities, they were given over to the Reedy Creek Improvement District. So that way, the Disney Company could have it both ways: they could have a non-elected government but with powers that were originally granted to the two phony cities. I call the Reedy Creek Improvement District a “Vatican with mouse ears” because it’s like the Vatican in Rome, which is within the state of Italy, the nation-state of Italy, but has its own independent powers. And that’s essentially what Disney has with the Reedy Creek Improvement District: an entity that’s controlled by the company, with commissioners elected on that fine capitalist principle of one acre equals one vote, but with powers that were originally given to a democratically elected government, Bay Lake and Lake Buena Vista.
The Problem of Too Much Democracy [19:20]
Bob Zadek: A few comments. I’m hooked already. But you said you found notes in the Disney archives that he was seeking to—this is in your words, these are my words—avoid democracy or avoid the evils of too much democracy. I have actually published a collection of my interviews on my show, and the title of the book was Does the United States Have Too Much Democracy? So that concept is not revolutionary; indeed, the founders were terribly fearful of democracy in excess. Democracy has a role, but it can have—we can have too much democracy, which means being governed by the uninformed and disinterested. So that concept is not anti-American; indeed, it is very pro-American and consistent with the view of the founders. So there’s nothing evil or threatening about the concept of too much democracy. Of course, you can have too much democracy, and maybe we have it in our country.
So Disney has designed governance of a municipality and of a district. And I should mention, by the way, that in our country, we have tens of thousands of districts. We all live in water districts, sewer districts, improvement districts, beautification districts. Districts ignore city or state or county lines; they are independent. So that concept is not foreign to us as a country. Disney just used it to great advantage. So Disney gets to design and control an area his way. Now, we have had, Richard, decades of living and watching how that all works. And what does one conclude about the model, the model of a private enterprise—clearly among other motives has the profit motive—of building a political subdivision from scratch and having total control over it? What can one look at Disney, the political unit, and conclude about how good or bad an idea it is, and whether or not it has only benefits, only flaws, or a combination? We’re talking about the concept as demonstrated through Disney.
Richard Foglesong: Well, I think I could argue it both ways as to whether democracy is the best way to build a city or not. That was one of the questions that I addressed in looking at what the Disney Company had built: that it might be a better way to do it and it might not. As a political science professor, I’ve sometimes been asked why American cities are so unattractive and why they don’t seem to work very well. And my answer some days is that, well, the problem with American cities is that they were the first cities in world history built under the conditions of capitalism and democracy. We sometimes call that “liberal government”—liberal in the old sense of that term liberal, not the progressive sense—where European cities, take Paris for example, was built under authoritarian rule, Napoleon III, who was elected democratically but then he became an authoritarian, and where most of the land in the heart of Paris was owned by the crown.
So you see you had centralized authority and centralized power. Whereas in America, we’ve got fragmentation. We like fragmentation. We like a fragmented government where you’ve got lots of municipalities inside a county and inside the state, and where the land is fragmented in its ownership. Disney is like Paris was. Disney has centralized land ownership and it has a centralized government, the Reedy Creek Improvement District. And in many respects, that’s the virtue of the Disney city. It was made possible, yes, by a lot of money that a company had, and yes, of course, by the artistic ability of the Disney Company, their creativity, but also and in particular because of their centralized ownership and control. And if you look around America, while we have liberal democracies where elected officials and all that, but most of the places where people meet and interact are like Disney World. I’m talking about cruise ships, I’m talking about shopping malls, I’m talking about sports arenas and the like. They’re like Disney in that way.
Bob Zadek: And perhaps, Richard, gated communities. Don’t leave those out.
Richard Foglesong: They’re gated communities, yes.
Bob Zadek: And gated communities are another example of pretty much private control, not in one person, but certainly centralized control where when you move in, you surrender some freedom—freedom to paint your house, freedom how to plant your garden—and you say, “I’m willing to give up the freedom because the other benefits of planned, etc., outweigh the surrender of freedom.” So as to Disney World, people who voluntarily subject themselves to the jurisdiction of Disney World, they do so voluntarily, subjecting themselves to the total control of a corporation for the day because there are benefits that outweigh any—and I can’t think of any—disadvantages. So that point you made about Napoleon—and don’t forget Napoleon designed Paris. He not only controlled it, but he helped design it, and with its beautiful wide boulevards and with its squares, quite a livable place. And it was not designed by local ward bosses like Chicago or New York and other large American cities. There was no local control in the design; it was top-down control. So your comparison is quite apt, and I hadn’t thought of it until you mentioned it.
Safety and Livability [26:50]
Bob Zadek: So we have Disney with total control. But what can you tell us about the, let’s say, the safety of Disney buildings and the livability of them as to how they would have been if they had been subjected to typical local regulation of an existing city? Any comparison?
Richard Foglesong: Well, Disney is a very livable place. It has about 350,000 people sleeping there on any given day. They’re just not real residents; they’re not citizens of the property. They don’t get to vote. And in some agreement with you, that might be the virtue of Disney as a city. And I don’t want to be misunderstood as to say that I don’t believe in political democracy. It’s a good system of government from the standpoint of maximizing freedom, but maybe not such a good form of government from the standpoint of building things in a way that’s not only artistic but also efficient.
And that’s what Disney is so very effective at: creating a place, the most beautiful place in the world, some would say, that works well, that’s artistic, where everything is coordinated—the colors, the greenery, the shape of the buildings and the like. And people like being there. You can go to Disney World on a day when it rains and people are still smiling. Now, you know, how’s that possible? People can smile when they’ve traveled so far in many cases to go to Disney World for their vacation, but it rains on them. But they still seem to enjoy being there because of the way in which the campus is designed, the colors and so forth, and the “smile factor” that you get from Disney property.
Bob Zadek: And another thing, as I’m listening to what you’re saying: when one interacts in a more traditional city with what are strangely called “public servants,” when one interacts with the employees of the municipality, whether it’s trash collection or police protection or fire protection, it’s not—you are interacting with a governmental employee who does not get rated on how happy he makes the customers. On the other hand, when you are interacting with the same type of employee—fire, police, sanitation—and they are all Disney employees, and therefore their mission is to keep the customers happy. Am I over-glorifying that too much, or is that part of the difference in the experience being in a Disney city where you are a customer vis-a-vis anybody you meet, versus being in a city where you’re only somebody who police and fire are paid to protect?
Richard Foglesong: Well, Bob, I personally would not want to work in a Disney theme park. And that’s because of—you call it the “smile factor,” maybe I used that term first—there are some social psychologists who find that repressive, that a company should want to control your emotions, I’m talking about employees, and require you to smile and grade you on whether you smile and how effectively you smile. Don’t get me wrong, I like the Disney employees, I like being in a Disney park, but I wouldn’t want to personally be graded on how well I smile. And some people say that’s repressive.
Bob Zadek: You know, Richard, it’s funny you should say that. When you made that statement you just made, I immediately thought back to many, many years ago. I attended, happened to be a lawyer convention in Disney World. And I was living in New York at the time, in all of the environment which represents New York. And I went to Disney World, and I was going to be a four-day trip, a business meeting if you will. And I spent a lot of time in the park and everywhere being taken care of by Disney employees. And by the morning of the third day, I found myself wishing there was an 800 number I could call and I could just talk sarcastically to somebody and have them be sarcastic back. Because—and I almost wanted to find a rude person and to pay them to have coffee with me because I was missing it. So I know exactly what you mean. It’s—
Richard Foglesong: You can take the guy out of New York, but you can’t take New York out of him, right?
Bob Zadek: Oh my goodness, I would have paid for sarcasm by the word. I was missing it. So I know exactly what it is you mean. But yet, but yet, it’s a different, it seems to me, it’s a different relationship when anybody deals with a commercial enterprise. The commercial enterprise, if they don’t make you better off than you were before, you don’t patronize them anymore, and ultimately they fail. Cities don’t behave like they’re afraid of losing customers, although there has been a lot of foot-voting these days, especially funny between New York and Florida, it’s all in the paper. So obviously Disney is onto something in concluding that control over the product is the way to prosper.
The Motivation Behind Disney World [33:14]
Bob Zadek: Now, in Disney’s vision, had he concluded—was it purely economic that he concluded the way to make the most money is to acquire the land, negotiate with the state of Florida and with the city of Orlando and related counties, I suppose—was he driven ultimately by “this is the way to make the most money,” or was there more to his motivation than that?
Richard Foglesong: Well, they wanted to make Disney World bigger than Disneyland. And that was at a time when there were more people living in the Los Angeles metropolitan area around Disneyland than lived in the whole state of Florida. So in order to build a theme park, Disney World, that was supposed to be eventually ten times the size of Disneyland, they needed to import tourists from afar—to import them from, you know, New York state and up and down the East Coast, from I-75 down from the middle of the country. And to do that, they had to build hotels and they had to build infrastructure and they had to make this area, Disney World, a comfortable place to be and a comfortable place to ride rides and do that kind of thing and engage in this fantasy kind of life. And so that meant that they had to build something city-like that would be the home, the home base for this entertainment city that became Disney World.
Bob Zadek: Disney World is the citadel of municipal free enterprise, obviously. The company owns and controls everything. What is, as a place to live, a municipality, a place to live and to work? As you said, Disney never quite built out EPCOT, which was supposed to be the city of the future—that wasn’t exactly the phrase, I don’t recall the phrase—but he experimented in the ‘64 World’s Fair, which I remember. And EPCOT, I think it was called EPCOT Village perhaps, was supposed to be an evolving, always modern, always changing living place, not a park, not a theme park, but rather as a demonstration village or city, much like Reston, Virginia, and other planned communities. That never happened. What happened to the concept of not just the theme park, but the actual functioning city which looks and feels from the outside like any other city except owned by a corporation?
Richard Foglesong: Well, it never happened, that’s true. It never happened because it couldn’t happen. Why? Because America is a democracy. And you couldn’t allow people to live there, be citizens with a right to vote, and the company still maintain control of the property. Going back to your earlier comment, Walt Disney and company, they were afraid of democracy. So I found the document that addressed that issue, and it made reference to the problem of real citizens voting there. And someone, when I saw the document, someone had crossed out the words “real citizen” and written above it “temporary resident/tourist.” And at the end of this three-page memo written by a company attorney, it made a reference to real residents a second time. And someone had crossed that out and wrote “tourist” in inch-high letters. And I took the document to the archivist and I asked him, “Whose comments are these?” And he was proud to say to me, “Oh, those are Walt Disney’s comments. This was found in his drawer when he died.” He died in December of ‘65 before Disney ever got those powers.
So he understood the problem. And I see that as a sort of a philosophical challenge: how do you build a good city and allow democracy? Because residents can mess things up. When they go to city council meetings and complain about, you know, new rules and regulations, they intercede with the plans that city planners have come up with to build something that’s Disney-like. And therein lies the problem. People who’ve been to Orlando, Disney World, they know International Drive. Well, International Drive is a part of real town and it’s congested, it’s not very pretty, it’s not well put together. And it’s precisely the thing that bothered Walt Disney about Anaheim—is there’s all this ticky-tacky surrounding Anaheim that’s a product of what happens when you have a real city, traditional property rights, and elected political officials.
The Better Deal: Disney vs. Florida [38:50]
Bob Zadek: I introduce the topic this morning of Disney World and its dispute with Governor DeSantis. My question is: at the signing of the documentation that gave Disney World all of the power that it has over this large swath of undeveloped land, in your opinion, with the benefit of hindsight, we have Disney on the one hand and government—whether it’s the city of Orlando, whether it’s the county, the state, they all were at the table, I suspect—who got the better deal, or did neither? In that agreement, which was of a profound economic value, it was a very large agreement, it covered a lot of wealth and power moving around. Did either side really clean the other’s clock, or did this negotiation result in something that was equally beneficial to both?
Richard Foglesong: I’m not sure I would say equally beneficial. I think the Disney clearly got the best of the deal. And the reason was that Disney was a big deal. They wanted to come to Florida. The local officials at the time were saying things like, “We just can’t believe that he’s coming here.” That’s what the publisher of the local paper, the Orlando Sentinel, said: “He’s too big. Why would he want to come here?” So that person, Martin Anderson his name, was disbelieving that it was Disney who was buying up all the land.
And what Disney got were the powers to provide public services themselves, tailored to their precise needs, as well as self-regulation. And that was institutionalized in the form of the Reedy Creek Improvement District. So that as time went by, when local government might have been able to take control of them and regulate them and take back those powers, they would have it institutionalized in the form of the covenant of the Reedy Creek Improvement District so that those powers could not be taken away from them. Who would have thought that a Republican governor, Ron DeSantis, would want to take those powers away? I don’t think, however, that Ron DeSantis is really so much bothered by the powers that Disney has; he’s just mad at the Disney Company because they disagreed with him about issues of LGBTQ rights and didn’t like Disney challenging him on those woke principles.
Bob Zadek: You’ve explained to us that it was a very, very good deal for Disney. But to the extent that it was a good deal for Disney, it doesn’t seem that it was a good deal for Disney at the expense of the state of Florida or the region where Orlando was located. So maybe Disney got a greater benefit, but it wasn’t, or was it, at the expense of the governmental entities that was sitting across the table?
Richard Foglesong: Well, there’s some things that we haven’t talked about. For example, Disney pays taxes, and they have the largest tax bill in Orange County because they own the most land and the richest land. But they also have exemptions from a lot of things. Here in Florida, because of the growth that we’ve had, like you have in California, there are impact fees that developers have to pay to build roads and the like. That is, on top of paying taxes for roads, impact fees are paid to help fund the initial cost of public infrastructure. Disney’s exempt from those, and it makes a lot of people angry. Universal Studios, a competitor to Disney, they don’t have that exemption; they have to pay these impact fees, but Disney doesn’t. And so people are unhappy about that. Also, people are unhappy about the low wages paid on Disney property. They pay a higher wage than other tourism and leisure entities, businesses, but it’s still lower than the wage paid by other kinds of businesses in Orlando. We have all this growth, but we have lower wages than other municipalities in the state of Florida.
Bob Zadek: But of course, there’s nothing unusual about a municipality or any government, city or state, to reward companies and induce companies to move there because it’s good for the economic base. Look what goes on with sports stadiums, always in the news, and with incentives being given to companies—remember Amazon and their battle in New York City, ultimately AOC said no and they got kicked out, but cities were falling all over themselves to induce Amazon to build a second world headquarters in their city. So Disney may have done a better job, but it wasn’t—Disney was treated in a way that no other company in America had been treated before or after. Disney just perhaps perfected the process. But don’t forget the benefits of Disney were far greater than perhaps the benefits of a single standalone factory or office building or campus of the like.
Richard Foglesong: Yeah, well, I tell you, I would disagree on one point, and that is about the difference between incentivizing and rewarding. I think most economists would tell you that there’s no good economic reason to reward a business for coming someplace where it was going to come anyway.
Bob Zadek: Of course not. It’s stupid.
Richard Foglesong: Yeah, that’s wasting public resources. And there are many examples of that with Disney, other businesses as well, where roads were built for them, bridges, highways were built for them when they’re already dug in here. So it wasn’t going to create new investment that would not have occurred otherwise. So it would have been better to let them fund things for themselves and only incentivize for businesses, maybe in some cases Disney, who would only come with the incentive.
The DeSantis Conflict and Final Thoughts [45:47]
Bob Zadek: So Disney, through negotiation, accumulated a fantasy world, no pun, of self-control, of autonomy. Now, tell us what does DeSantis—you’ve told us about how Disney protected itself contractually by creating the district, giving it a lot of autonomy, becoming exempt from lots of fees and levies and other costs that other commercial entities have. So now Disney got DeSantis agitated, and a declaration of war of sorts has been declared, at least by DeSantis towards Disney, not the other way around necessarily. But bring us now to the current state of affairs. What is it—does DeSantis want Disney to pack it up and go home and take his theme park somewhere else? Well, of course not. So tell us, so we can follow the fight, tell us, give us the libretto on what’s going on now. What has the state of Florida through DeSantis threatened to do, and how will it affect Disney and the state of Florida?
Richard Foglesong: I don’t think that Ron DeSantis is particularly concerned about the privileges that Disney has. I think he’s revengeful towards them because they are contrary to his political messaging. So I think that in the end, Disney will still have its powers. I think that Ron DeSantis is in a problem place because someone has to retire those bonds that Disney’s able to sell. And I don’t particularly want to; I don’t think other Orange County and Osceola County homeowners want to pay an extra couple thousand—that’s the right range—for municipal bonding just in order to satisfy Governor DeSantis. Someone else is going to have to foot that bill.
Bob Zadek: Now, tell us a bit more mechanically. What exactly, if DeSantis becomes out of control, what specifically—we have an entity, the Reedy Creek Improvement District, that exists. That pays for its own services. We have Disney which owns the land. Disney pays income tax—well, Florida perhaps doesn’t have a corporate income tax, I don’t even know the answer to that. I know they have no individual income tax. But we have Disney is a corporation which owns property and pays income taxes like anybody else would. But what power does—if DeSantis exercises all of the powers, what power does he have? How much is he able to undo? What is the teeth behind this threat of his?
Richard Foglesong: Disney taxes itself to pay bond cost. That’s how it borrows money. People buy Reedy Creek Improvement District municipal bonds, and Disney taxes itself to retire those bonds. If Reedy Creek goes away, it would no longer have the ability to tax itself to retire the bonds. Someone else, therefore, would have to compensate bondholders. The law says that it would need to be a local government, a general-purpose local government. That would be Osceola County and Orange County. That would be me. I pay property taxes in this county. I don’t think Governor DeSantis can get re-elected if he allows that tax burden to fall upon residents here.
Bob Zadek: What do we as citizens of our country learn from the Disney experiment in totally autonomous privately owned municipalities? Is it the wave of the future? Is it the last gasp of a past that we’ll never see again, or is it just ho-hum, no lesson, let’s get on with life?
Richard Foglesong: I think that there is something to be said for this form of government with concentrated land ownership and deep pockets and the powers of a company to self-provide public services. I think that there’s some reason to reconsider whether democracy is the best way to build a city.
Bob Zadek: Anything to fear in this 21st-century company town?
Richard Foglesong: The valuable things about democracy are civil rights and the kind of freedoms that don’t really touch upon what it is that businesses are allowed to build. So I think that it’s important to consider what the virtues are of democracy that are much needed, but also what the virtues are of big entities, the kind that build city-like places as you have on a cruise ship, in a sports arena, and at a theme park.
Bob Zadek: So the lesson is we have to make a tender offer, Richard, you, I, and a few of your wealthy friends, see if we can buy New York and we’ll show them how to run the place. Richard, thank you.
Richard Foglesong: I think that’s a great idea. I’ll stay in Florida.
Bob Zadek: All right, keep your phone handy, Richard. I may call you back on this a little bit later. This is Bob Zadek saying thank you to all my listeners out there. Thank you for spending an hour with Richard and myself learning about the backstory behind Disney, how Disney World got to be where it is, how it got to be what it is, and what’s going on in the fight between free enterprise and a conservative Republican governor. Who would have thought it? Thanks a lot, Richard, and thanks to my friends out there for giving us an hour of your time. Have a nice rest of the weekend.