Disney: Dissolving Reedy Creek not legal until bond debt is paid

In its only public statement since Florida Gov. Ron. DeSantis signed SB 4-C, which abolishes the Reedy Creek Improvement District, Disney officials said the new law violates a “pledge” the state made when it established the district in 1967.

In a statement filed with the with the Municipal Securities Rulemaking Board, Disney asserts that the state “pledged” to protect district debt-holders and not alter the district’s status until debts are paid.

Currently, Reedy Creek’s bond debts total about $1 billion.

Disney’s statement reads: “In the Reedy Creek Act, the state of Florida has pledged to the holders of any bonds issued by the district: (1) that it will not limit or alter the rights of the District (a) to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects or to levy and collect the taxes, assessments, rentals, rates, fees, tolls, fares and other charges provided for in the Reedy Creek Act, and (b) to fulfill the terms of any agreement made with the holders of any bonds or other obligations of the district; and (2) that it will not in any way impair the rights or remedies of the holders, and that it will not modify in any way the exemption from taxation provided in the Reedy Creek Act, until all such bonds together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged. 

“In light of the state of Florida’s pledge to the district’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties,” the statement read.

DeSantis last week said dissolving the district would not raise property taxes on residents of Orange and Osceola counties.

“It is not the understanding or expectation for SB 4-C, abolishing independent special districts, to cause any tax increases for the residents of any area of Florida,” DeSantis said. “In the near future, we will propose additional legislation to authorize additional special districts in a manner that ensures transparency and an even playing field under the law.”

See Disney’s entire statement here.