Discover the latest updates on Disney's Lake Nona project. Learn about its uncertain future amid financial pressures. Stay informed and explore the implications for jobs and the local economy.
Article date: May 18, 2023
Article source: The New York Times
Article URL: https://www.nytimes.com/2023/05/18/business/disney-ron-desantis-florida.html
Summarized by Chat GPT and Wayne McEachron AKA Osiris
1. Disney Chief Executive Robert A. Iger cancelled a nearly $1 billion office complex known as the Lake Nona Town Center, scheduled for construction in Orlando, Florida, which would have generated over 2,000 jobs with an average salary of $120,000, according to the Florida Department of Economic Opportunity.
2. The project's cancellation came amidst an ongoing feud with Florida Governor Ron DeSantis. Earlier, Disney labeled Governor DeSantis as "anti-business" for his attempts to increase oversight on Disney’s theme park resort near Orlando.
3. The Lake Nona project involved relocating more than 1,000 employees from Southern California, including most of Disney's Imagineering department, which collaborates with Disney’s movie studios to develop theme park attractions. The decision to move, however, was met with complaints and resignations from employees.
4. A key incentive for Disney to undertake this project was a Florida tax credit, which would have allowed the company to recoup as much as $570 million over 20 years for building and occupying the complex.
5. In a message to employees, Disney’s theme park and consumer products chairman, Josh D'Amaro, announced the project cancellation citing "changing business conditions". However, he expressed optimism about the Walt Disney World business, stating that $17 billion is still earmarked for construction at Disney World over the next decade.
6. The tension between Disney and Governor Ron DeSantis along with his allies in the Florida Legislature significantly contributed to the cancellation of the Lake Nona project, as per two anonymous sources briefed on the matter.
7. About 200 Disney employees had already relocated to Florida from California in anticipation of the project. Josh D'Amaro mentioned that Disney would discuss possible options with these employees, including possibly moving them back.
8. The Lake Nona project had initially been scheduled to open next year. However, Disney had already pushed back the move-in date to 2026 due to construction delays, even before the recent cancellation.
9. The conflict between Disney and Governor DeSantis escalated over a special tax district that covers Disney World. The feud began when Disney criticized a Florida education law limiting classroom instruction about gender identity and sexual orientation, referred to by opponents as the "Don't Say Gay" law. This led Governor DeSantis to retaliate by ending Disney's long-standing ability to self-govern its 25,000-acre resort.
10. Subsequently, the Florida Legislature, under the guidance of Governor DeSantis, targeted Disney with a range of hostile measures, including transferring control over government services at the resort to the Governor. This shift in control and subsequent actions have led to a legal battle, with Disney suing Governor DeSantis and his allies in federal court and the governor’s tax district appointees retaliating in state court.
Here are the key details of the original plans for Disney's Lake Nona project:
1. **Geographical Position and Extent**: The Walt Disney Company planned to establish its new regional hub at Lake Nona in Central Florida. The campus was to occupy an expansive 60-acre parcel of land in southeast Orlando, spanning a massive 1.8 million square feet.
2. **Transfer of Employees**: In July of 2021, Disney had made public its intent to move over 2,000 of its California-based Cast Members to the forthcoming Lake Nona hub. This decision, however, stirred controversy among Cast Members and Walt Disney Imagineers who considered California their home.
3. **Architectural Layout**: The Lake Nona campus had been meticulously designed with a central park being the focal point of all the buildings. It was planned to be well-integrated with pedestrian walkways interconnecting all the buildings. These walkways were designed to offer quick and convenient access to the Lake Nona Town Center, making the campus not just an office, but a community.
4. **Financial Allocation and Tax Incentives**: The financial plan for the Lake Nona project was ambitious, with Disney earmarking a substantial sum of nearly $900 million for campus development. However, due to Florida's tax incentive policies, Disney was eligible to receive considerable tax breaks of over $570 million spread over the subsequent 20 years. This would have significantly offset the massive cost of the project.
5. **Project Timeline**: Despite facing a series of hurdles, from internal disputes to clashes with Florida's governance, the Lake Nona project had finally received the green light to proceed with construction by January 2023. The anticipated completion and operational date of the Lake Nona campus was set for 2026.
Disney's decision to cancel the Lake Nona project may have been driven by financial pressures rather than solely legislative concerns. The fact that Disney's stock price has declined by approximately 44% from July 2021 to May 2023 adds weight to this speculation. While the disputes with Governor Ron DeSantis certainly played a role, the overall financial viability of the project likely influenced Disney's choice. This raises questions about the company's future investments and its ability to navigate economic challenges. The cancellation has raised concerns about job opportunities and the local economy. It is crucial to closely monitor Disney's actions and decisions moving forward in light of these circumstances.