Disney Cancels $1 Billion Florida Development Deal As War With State Government Continues
Disney's ongoing war with the state government in Florida has escalated, as the company has scrapped plans to build a new employee campus in Lake Nona. This was to be a massive $1 billion office complex as part of a planned $17 billion investment by Disney in the state in the coming years. Now? It's off the table and the many, many employees who were asked to relocate to Florida are caught in the middle.
According to The New York Times, Josh D'Amaro, chairman of Disney's parks, experiences, and products division, confirmed the news in a memo to employees. Under former CEO Bob Chapek, more than 2,000 employees were going to be forced to relocate to the new campus, a decision that was met with widespread disapproval at the time. With CEO Bob Iger back at the helm, things are different. Despite the fact that many had already relocated, Iger and D'Amaro aren't willing to play ball with Florida governor Ron DeSantis (more on that in a moment). Here's what D'Amaro had to say in the memo:
"Given the considerable changes that have occurred since the announcement of this project, including new leadership and changing business conditions, we have decided not to move forward with construction of the campus. This was not an easy decision to make, but I believe it is the right one. As a result, we will no longer be asking our employees to relocate. For those who have already moved, we will talk to you individually about your situation, including the possibility of moving you back."
The campus had been slated to open in 2026. It now seems that Disney will likely shift back to primarily operating in California — although the situation in Flordia, which is home to Walt Disney World and other Disney theme parks, is likely just beginning.
Disney vs. DeSantis
Disney has (or at least had) a unique situation in Florida, in large part because it employs so many people in the state, and brings so much money to the local economy. Disney has a special tax district that, in essence, allows the company to self-govern on the land it occupies. Ron DeSantis has recently tried to upend this deal, which has been in place since the '60s. The Republican politician, who is viewed as a frontrunner in the 2024 presidential election, installed a special board to oversee Disney's operations earlier this year, but Disney essentially blocked them from being able to do much of anything.
So, the situation heated up and has gotten progressively ugly from there, with Disney even suing DeSantis, saying he was waging a "relentless campaign to weaponize government power." All of this stems back to Florida's controversial "Don't Say Gay" bill, which Bob Chapek initially failed to outright rebuke. Bob Iger, on the other hand, has been happy to share his criticism of it publicly, which is the genesis of this war with DeSantis.
At risk for both Disney and Florida is a great deal of money. "Does the state want us to invest more, employ more people, and pay more taxes, or not?" Iger said on a recent earnings call. The implication is that the company is willing to back away from further investment in Florida. The planned office complex would have employed 2,000 people with lots of well-paying jobs. Disney is putting their money where their mouth is. The ball is now in DeSantis' court.
Disney could further pull out of Florida
The fact that some of Disney's biggest and most popular theme parks are housed across acres upon acres of Florida land makes the situation extra tricky for the company. There's no real way to just up and leave entirely. But they can certainly invest less in the state, moving operations elsewhere. That's exactly what Josh D'Amaro hinted at in his memo, saying the following:
"It is clear to me that the power of this brand comes from our incredible people, and we are committed to handling this change with care and compassion. I remain optimistic about the direction of our Walt Disney World business. We have plans to invest $17 billion and create 13,000 jobs over the next 10 years. I hope we're able to do so."
"Hope" is doing a lot of heavy lifting there. It's evident that, under Bob Iger's direction, Disney will not simply stand by and look the other way while Ron DeSantis and his government pass harmful legislation. DeSantis can put on a brave face and play tough for now but, at some point, losing all of that benefit to the local economy is going to hurt the people he represents. Something's going to have to give, and Disney isn't flinching.