Disney Neutered DeSantis' Board Before State Takeover

By Steve Contorno, CNN

(CNN) -- The battle between Disney and Florida Gov. Ron DeSantis may not be over yet.

The new board handpicked by the Republican governor to oversee Disney's special taxing district said Wednesday it is considering legal action over a multi-decade agreement reached between the entertainment giant and the outgoing board in the days before the state's hostile takeover last month.

Under the agreement -- quietly approved on February 8 as Florida lawmakers met in special session to hand DeSantis control of the Reedy Creek Improvement District -- Disney would maintain control over much of its vast footprint in Central Florida for 30 years and, in some cases, the board can't take significant action without first getting approval from the company.

"This essentially makes Disney the government," board member Ron Peri said during Wednesday's meeting, according to video posted by an Orlando television station. "This board loses, for practical purposes, the majority of its ability to do anything beyond maintaining the roads and maintaining basic infrastructure."

The episode is the latest twist in a yearlong saga between Disney and DeSantis, who has battled the company as he tries to tally conservative victories ahead of a likely bid for the 2024 GOP nomination.

The board on Wednesday retained "multiple financial and legal firms to conduct audits and investigate Disney's past behavior," DeSantis spokeswoman Taryn Fenske said. According to meeting documents, the board was entering into agreements with four firms to provide counsel on the matter.

"The Executive Office of the Governor is aware of Disney's last-ditch efforts to execute contracts just before ratifying the new law that transfers rights and authorities from the former Reedy Creek Improvement District to Disney," Fenkse said. "An initial review suggests these agreements may have significant legal infirmities that would render the contracts void as a matter of law."

In a statement to CNN, Disney stood by its actions.

"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," the company said. Documents for the February 8 meeting show it was noticed in the Orlando Sentinel as required by law.

Multiple board members did not immediately respond to request for comment. The Sentinel first reported on Wednesday's vote to hire legal counsel.

According to a statement Wednesday night from the district's acting counsel and its newly obtained legal counsel, the agreement gave Disney development rights throughout the district and "not just on Disney's property," requires the district to borrow and spend on projects that benefit the company, and gives Disney veto authority over any public project in the district.

"The lack of consideration, the delegation of legislative authority to a private corporation, restriction of the Board's ability to make legislative decisions, and giving away public rights without compensation for a private purpose, among other issues, warrant the new Board's actions and direction to evaluate these overreaching documents and determine how best the new Board can protect the public's interest in compliance with Florida Law," the statement from Fishback Dominick LLP, Cooper & Kirk PLLC, Lawson Huck Gonzalez PLLC, Waugh Grant PLLC and Nardella & Nardella PLLC said.

The spat between Disney and the governor stems from the company's opposition to a Florida law that prohibits the instruction of sexual orientation and gender identity through third grade and only in an "age appropriate" manner in older grades. In March of last year, as outrage against the legislation spread nationwide, Disney released a statement vowing to help get the law repealed or struck down by the courts.

DeSantis and Florida GOP lawmakers retaliated by eliminating the Reedy Creek Improvement District, the special taxing authority that effectively gave Disney control of the land in and around its sprawling Orlando-area theme parks. But Republicans in control of the state legislature changed course this year and voted instead to fire the board overseeing the district and gave DeSantis power to name all five replacements. It also renamed Reedy Creek as the Central Florida Tourism Oversight District and eliminated some of its powers.

DeSantis stacked the board with political allies, including Tampa lawyer Martin Garcia, a prominent GOP donor; Bridget Ziegler, the wife of the new chairman of the Republican Party of Florida; and Peri, a former pastor who once suggested tap water could be making people gay.

The controversy is central to DeSantis' political narrative of a leader who is unafraid to battle corporate giants, even one as iconic and vital to Florida as Disney. It is a saga that is featured prominently in his new book and one he often shares at events across the country as he lays the groundwork for a likely national campaign.

At last month's signing ceremony for the bill that gave him control of Reedy Creek's board, DeSantis declared, "The corporate kingdom finally comes to an end."

"There's a new sheriff in town," he added.

However, it may be a while before the new power structure has control, if Disney gets its way. One agreement signed by the outgoing board -- which restricts the new board from using any of Disney's "fanciful characters" -- is valid until "21 years after the death of the last survivor of the descendants of King Charles III, king of England," according to a copy of the deal included in the February 8 meeting packet.

The stealth move by Disney prompted allies of DeSantis' chief political rival, former President Donald Trump, to suggest the governor had been out-maneuvered.

"President Trump wrote 'Art of the Deal' and brokered Middle East peace," said Taylor Budowich, spokesman for the Trump-aligned Make America Great Again PAC. "Ron DeSantis just got out-negotiated by Mickey Mouse."

DeSantis' political operation insisted the governor's appointees were holding Disney accountable.

"Governor DeSantis' new board would not, and will not, allow Disney to give THEMSELVES unprecedented power over land (some of which isn't even theirs!) for 30+ years," Christina Pushaw, of DeSantis' rapid response team, wrote on Twitter.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.