Walt Disney Company on Thursday scrapped plans to build a nearly $1 billion office complex and relocate 2,000 California-based cast members to Florida.
The move comes after Disney earlier this year announced reorganization plans to cut costs by $5.5 billion, including $3 billion related to content spending, while the entertainment giant faces a growing legal and ideological clash with Gov. Ron DeSantis.
Josh D’Amaro, Disney’s theme park and consumer products chairman, told cast members that “changing business conditions” spurred the decision to cancel the planned 1.8 million-square-foot Lake Nona corporate complex outside Orlando.
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Walt Disney World Resort President Jeff Vahle expressed similar sentiments in a letter to community leaders Thursday.
“Since we first announced this project, several dynamics have changed, including a change in company leadership and evolving economic and business conditions,” Vahle wrote.
Vahle added the company’s core business that helps draw “millions of visitors” annually to Central Florida continues to plan on investing $17 billion into the region over the next 10 years, creating 13,000 new jobs.
“We hope those plans will become a future reality,” Vahle said in the statement.
The company also expects to break ground next year on a 1,400-unit affordable and attainable housing development that is going up on 80 acres, Vahle added.
Disney CEO Bob Iger, who replaced Bob Chapek last November, and DeSantis, as he prepares an anticipated presidential run, have elevated their barbs in a fight that stemmed from the company’s opposition to a 2022 law that limits classroom instruction about gender identity and sexual orientation. Critics disparagingly dubbed the measure the “don’t say gay” act.
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The dispute has spread into multiple courtrooms and prompted state lawmakers to pass legislation recently signed by DeSantis that calls for state oversight of Disney’s iconic monorail system.
During the company’s second-quarter earnings call last week, Iger said questions about risks to Disney’s future should be directed toward the state.
“Does the state want us to invest more, employ more people and pay more taxes or not?” Iger replied when asked how investors should view the short- and long-term impacts of DeSantis’ clash with Disney.
Iger also used the quarterly call to outline how Florida has benefited from its half-century partnership with the company, as Disney pays more than $1.1 billion a year in state and local taxes and employs more than 75,000 people.
In an interview with The American Conservative released Monday, DeSantis elaborated on approach to Disney. He characterized the company as being held hostage by “a cabal of people who will go berserk if they don’t get their way.”
“Sometimes you just need an executive to come in and tell them to pound sand,” he said.
Democrats were quick to blame DeSantis for Thursday’s announcement.
“Florida just lost 2,000 jobs and millions in additional revenue because of Ron DeSantis’ unhinged personal vendetta against Disney,” Florida Democratic Party Chairwoman Nikki Fried said in a statement.
Orlando Democratic Sen. Linda Stewart called the decision “understandable given the business climate we are in as a state.”
Former President Donald Trump, who has repeatedly lashed out at DeSantis as an anticipated opponent in the 2024 Republican presidential race, also chimed in.
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“Ron DeSantis’ failed war on Disney has done little for his limping shadow campaign, and now is doing even less for Florida’s economy,” Trump’s campaign said in a statement.
The Lake Nona plans were announced in July 2021 but started to hit turbulence by March 2022, when Chapek expressed the company’s opposition to the education measure.
Employees in California were initially advised they had 18 months to move to the East Coast, but by January of this year the completion date of the complex was pushed into 2026.
DeSantis and state lawmakers have taken a number of steps targeting Disney in response to the company’s criticism of the education law.
Lawmakers, at DeSantis’ behest, last year stripped Disney of its unique self-governing power in Central Florida. The special taxing district was created in the 1960s and gave Disney control over issues such as sewage and roads.
In February, the Republican-controlled Legislature gave DeSantis the power to appoint board members of the renamed Central Florida Tourism Oversight District.
The state and Disney are also in a dispute over development agreements reached between the company and members of the former Reedy Creek Improvement District.
As the state moved to nullify the agreements, Walt Disney Parks and Resorts filed a federal lawsuit alleging retribution orchestrated by DeSantis has economically harmed the company and violated its constitutional rights in speaking out against a state law.
The current board has countered with a state lawsuit seeking to overturn the agreements, and DeSantis recently signed legislation that sets up a process to nullify the development agreements reached by the former board.
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