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The Walt Disney Co. pulled the plug on a nearly $1 billion regional headquarters it had planned for Orlando amid a yearlong dispute with Florida Gov. Ron DeSantis. By walking away, Disney forwent a chance to earn up to $570 million, a historic sum, in tax credits.
The tax credit deal became one of Disney-related criticisms from DeSantis' expected rivals for the GOP presidential nomination; DeSantis is expected to announce a run for president, perhaps as soon as next week.
In a recent , former South Carolina Gov. Nikki Haley criticized DeSantis for having "thin skin" and spending taxpayer dollars on a lawsuit with Disney after years of playing nice.
"He passed the largest corporate subsidies in Florida history for Disney in Florida right before this," Haley said on a podcast, referring to then-Disney CEO Bob Chapek鈥檚 opposition to a barring classroom instruction on sexual orientation and gender identity.
By walking away from its project, the "record" tax credits Disney was approved for are null and void.
Here鈥檚 what we know about the deal Florida was going to offer Disney.
What was Disney鈥檚 Florida project?
Disney had planned to invest as much as $864 million to build a regional headquarters in Orlando, Florida鈥檚 Lake Nona community and move at least 2,000 employees, with average salaries of $120,000, from California.
If the project had been completed, Disney would have been eligible for up to $570 million in tax credits from Florida, over 20 years.
Before the cancellation, it had appeared the project was moving forward, albeit on a delayed schedule.
READ MORE: Walt Disney ditches $1 billion central Florida building effort
A Disney spokesperson in June 2022 that the project鈥檚 finish date had been pushed back about three years to 2026 to accommodate construction delays and give more flexibility to employees who are relocating. A company spokesperson denied the delay was because of Disney鈥檚 conflict with DeSantis.
More recently, in April, the Orlando City Council approved the proposal to build Disney鈥檚 new regional headquarters in the Lake Nona community. The 1.8 million-square-foot campus would have consisted of eight buildings, three parking garages, a central plant and a surface parking lot for visitors, according to the proposal.
But on May 18, Josh D鈥橝maro, chairman of Disney parks, experiences and products, sent an email to employees, announcing the project was canceled.
"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," D鈥橝maro wrote in the email.
While not addressed explicitly in the email, The New York Times that Disney鈥檚 feud with DeSantis factored into the company鈥檚 decision to cancel the Lake Nona project.
How the tax incentive worked
Florida offers for businesses with the hope that those businesses will boost the economy. Under the , businesses with projects that hit certain spending levels can receive an annual credit to lower their corporate income tax.
To , the company鈥檚 project must be a corporate headquarters or be related to sectors such as renewable energy, information technology or financial services. The company must also invest at least $25 million for the project and create at least 100 new jobs in the state.
Florida鈥檚 Department of Economic Opportunity, which , companies for participation in tax credit programs. The state Department of Revenue, which , then the tax credit amount and distributes the subsidies to businesses.
The Department of Economic Opportunity certified Disney鈥檚 project for a capital investment tax credit in February 2020, according to the department鈥檚 . It doesn鈥檛 offer further details.
When Disney applied for the credit, the Department of Economic Opportunity was led by Ken Lawson, a DeSantis appointee. After Lawson in August 2020, DeSantis named Dane Eagle, a former Republican state lawmaker, as the department secretary.
Disney qualified for the tax credit with its plans to establish a new regional hub in Orlando鈥檚 Lake Nona community, the Orlando Sentinel .
If paid out in full, this $570 million tax credit would be the largest documented corporate tax incentive the Florida government has approved for a single project, according to from Good Jobs First, a research center that tracks government tax credits and subsidies for corporations.
Before Disney鈥檚 Lake Nona project was canceled, the Florida government had not issued any tax credits to Disney for the project, Rose Hebert, a Department of Economic Opportunity spokesperson, told PolitiFact.
A spokesperson for DeSantis said the decision was "unsurprising" given the project鈥檚 delays and Disney鈥檚 "financial straits, market cap and declining stock price."
Jerry Demings, mayor of Orange County, which includes Orlando, issued a calling Disney鈥檚 decision to scrap the campus "unfortunate."
"However, these are the consequences when there isn鈥檛 an inclusive and collaborative work environment between the state of Florida and the business community. We will continue to work closely with our valued partners at Disney," he wrote.
Our Sources
- Email interview, Kasia Tarczynska, senior research analyst for Good Jobs First, May 12, 2023
- Email interview, Ashley Papagni, public information officer for the City of Orlando, May 17, 2023
- Email interview, Rose Hebert, spokesperson for the Florida Department of Economic Opportunity, May 17, 2023
- Email exchange, Disney spokesperson, May 18, 2023
- Gov. Ron DeSantis statement, , May 18, 2023
- David Brody, , May 9, 2023
- Rumble, "," May 9, 2023
- Good Jobs First鈥檚 Subsidy Tracker, , accessed May 16, 2023
- Orlando Economic Partnership, "," July 2021
- Enterprise Florida, "," accessed May 12, 2023
- Florida Department of Economic Opportunity, "," accessed May 12, 2023
- Florida Department of Economic Opportunity, "," accessed May 12, 2023
- Office of Program Policy Analysis and Government Accountability, "," accessed May 12, 2023
- Orlando City Council, meeting minutes, April 3, 2023
- Orlando City Council, Staff Report to the Development Review Committee - Lake Nona Parcel 20A Office Complex, March 9, 2023
- Florida Governor鈥檚 Office, "," Oct. 15, 2021
- Florida Governor鈥檚 Office, "," Sept. 21, 2021
- PolitiFact, "," March 1, 2023
- PolitiFact, "," May 4, 2023
- PolitiFact, "," March 23, 2022
- Florida Legislature, , March 8, 2022
- Orlando Sentinel, "," Jan. 24, 2023
- Orlando Sentinel, "," June 16, 2022
- Tallahassee Democrat, "," April 29, 2022
- Orlando Sentinel, "," July 21, 2021
- Orlando Business Journal, "," July 21, 2021
- Tampa Bay Times, "," July 22, 2021
- CBS Miami, "," July 22, 2021
- The Washington Post, "," Oct. 19, 2022
- The Associated Press, "," May 8, 2023
- Orlando Business Journal, "," June 6, 2022
- Tallahassee Democrat, "," Aug. 31, 2020
- NPR, "," March 10, 2022
