Disney ‘engaged in a caper worthy of Scrooge McDuck,’ lawyer for state-run board contends

Walt Disney World’s legal team drafted a “sweetheart deal” that seized control from Disney World’s governing board and gave that power to the company, charged Fred Thompson, a lawyer representing the now-state-run Disney board.

“My name is currently at the top of the document as a drafter,” Walt Disney World Resort Chief Counsel John McGowan wrote in the Jan. 24 email to another lawyer. “And I am comfortable having my name on it, but from an optics perspective that is not ideal and it would be better to have a non-Disney employee be the drafter.”

Thompson showed the email and accused Disney of covering up its role in drafting the agreement when Thompson spoke at Wednesday’s Central Florida Tourist Oversight District meeting.

“The bottom line is that Disney engaged in a caper worthy of Scrooge McDuck to try to evade Florida law,” said Thompson, a lawyer at Washington’s Cooper & Kirk law firm. “Its efforts are illegal.”

Wednesday’s meeting was the latest installment to the saga between Gov. Ron DeSantis and The Walt Disney Co. as the state-run board tries to wrestle back control over the district. The outgoing board approved agreements with Disney that gave the company more control in the weeks before the state took over the governing board overseeing Disney’s infrastructure.

The new board is planning to vote at its next April 26 meeting on a resolution to void the old board’s agreement with Disney.

Board chair Martin Garcia warned the board could raise Disney’s taxes to help cover the legal costs of fighting the agreements.

“Another reason we’re going to have to raise revenues is because of the expenses that we’re having to incur to deal with these illegal agreements that Disney entered into at the 11th hour,” Garcia said.

At Wednesday’s meeting, the board also fired the special district’s zoning and planning board members and self-appointed themselves to replace them.

The new board members also disclosed Wednesday how they plan to change Disney’s special district, and revealed new details how they were taken by surprise by the agreements the former board approved.

The new board is exploring changing zoning rules to add affordable housing for employees, Garcia said.

“I was shocked. I understand Disney has 75,000 to 100 (thousand) employees working in the district that commute in and out every day — no affordable housing for them,” Garcia said.

Last year Disney announced plans to eventually build 1,300 affordable housing units on 80 acres of its land.

Garcia said the board will look at giving the future residents voting rights in the district as well as “developing better traffic solutions for the surrounding counties, including transit.”

Garcia also expressed outrage that Disney World has the ability to set its own utility rates thanks to the agreement signed by Disney and its former board, he said.

“I’ve never heard of such a thing,” Garcia said. “That’d be like having all the CEOs of the utility companies in Florida on the Public Service Commission.”

Garcia also targeted Disney World’s longtime legal fight over its property taxes. For years, Disney has sought to save money on its property taxes and sued over its assessments. Garcia accused the previous Reedy Creek Improvement District board of taking a neutral stance on the litigation. Now, Garcia said the new board will align itself with Orange County government.

Garcia pushed for Disney to be regulated like other businesses as state officials said Disney World’s government has been in control of monitoring its pools, building its roads and more.

“In other words, we’re going to create a level playing field for everybody. I don’t know how anybody can argue against that,” Garcia said.

Disney World did not immediately send out a comment after Wednesday’s meeting.

Before the Governor appointed the new Disney World board, the incoming members met with Disney’s vice president of external affairs with hopes of working together with Disney, Garcia said.

“Unfortunately, when we were meeting with their VP, we were not told about these unlawful agreements,” Garcia said. “Weeks later, we discovered these agreements. Our lawyer, General Counsel, was able to turn them up, and we discovered that they didn’t want to work with us like we wanted to work with them. … Instead, the corporation decided compromise was out of the question. It was Disney’s way or the highway.”

Thompson called the agreements between Disney and the old board “completely one-sided.”

“Disney (took) governmental powers for itself for decades, and offered the district precisely nothing in return,” Thompson said.

Former Florida Supreme Court Justice Alan Lawson, another attorney hired by the new board, also called the agreements unlawful, charging the old governing board with “acting at the behest of a private for-profit corporation and attempting to contract away its governmental powers.”

Lawson also said the old board failed to properly mail notice to the district’s other property owners, which makes the agreements illegal.

Disney fell into Florida Republicans’ crosshairs more than a year ago when the company CEO Bob Chapek came out publicly against the state’s parental rights in education legislation, which critics call the “Don’t Say Gay” law.

That led to the Republican-majority Legislature passing a new law this year that removed the five members of Disney World’s governing board and let DeSantis appoint their replacements.

Previously, Disney had control of picking the members of the governing board. The board has oversight over the roads, infrastructure and emergency services on the massive Disney property. Board members can issue bonds similar to how a municipal government can.

DeSantis accused Disney and the old governing board of making the last-minute deals to circumvent the new board in the weeks before his appointees took over. Disney has said it has done nothing wrong and the agreements were approved in “open, noticed public forums in compliance with Florida’s Government in the Sunshine law.”

Since then, DeSantis has vowed state legislative action to overturn the old agreements.

Florida lawmakers moved forward Wednesday with DeSantis’ plan to nullify the development agreement.

The House State Affairs Committee tacked on an amendment to a development bill (HB 439) that would allow the Central Florida Tourism Oversight District to review the development deal sealed before the new board took office and decide whether to keep it in place.

The amendment passed on a party-line vote, with Democrats saying it was unconstitutional because it seeks to void a valid contract and because it would apply retroactively.

“It continues to be a distraction for us to focus on real-life issues by continuing the Disney versus DeSantis drama,” said Rep. Anna Eskamani, an Orlando Democrat.

Rep. Stan McClain, an Ocala Republican, at first said it would be retroactive then reversed himself. “That board will now have an opportunity to go back and look at any agreements made before they became the board.”

In his cultural fight against Disney, DeSantis has also threatened Disney with toll roads and appeared to joke about building a state prison in the special district where Disney World is located. He called on the state’s Chief Inspector General to launch a criminal probe against the old Disney World governing board and Disney.

Of Disney, DeSantis said earlier this month, “They are not superior to the people of Florida. So come hell or high water, we’re going to make sure that policy of Florida carries the day. And so they can keep trying to do things. But ultimately, we’re going to win on every single issue involving Disney, I can tell you that.”

But DeSantis has also received some public criticism over picking a fight with Disney — the state’s largest employer which paid about $1.15 billion in state and local taxes in 2022 and draws millions of visitors to Florida every year to the Magic Kingdom, the world’s No. 1 theme park.

“DeSanctus is being absolutely destroyed by Disney,” former President Donald Trump wrote this week.

“Disney’s next move will be the announcement that no more money will be invested in Florida because of the Governor — In fact, they could even announce a slow withdrawal or sale of certain properties, or the whole thing. Watch! That would be a killer. In the meantime, this is all so unnecessary, a political STUNT! Ron should work on the squatter MESS!”

DeSantis has not announced his candidacy for President but many view the Florida Governor as a challenger to Trump.

Florida Politics reporter Gray Rohrer contributed to this report.