How Reedy Creek Changes Impact DVC Members
Florida just signed legislation that permanently changes the Reedy Creek Improvement District in two ways. One of them is entirely cosmetic, while the other has potential long-term ramifications for Disney.
As a Disney Vacation Club member, you’re probably worried about how the changes could impact your ownership interest. Here’s what we know.
What Happened with Reedy Creek in 2022?
The short answer here is that Florida’s elected officials voted to dissolve Reedy Creek in 2023 for reasons we won’t relitigate. However, the representatives created this legislation in a way that explicitly gave them an out.
The dissolution wouldn’t go into effect until the summer of 2023. That delay of more than a year served a vital purpose. When politicians chose this path, they didn’t have time to research the implications fully.
Almost immediately afterward, people with more experience in dealing with Reedy Creek pointed out practical flaws with the decision. Specifically, the dissolution of Reedy Creek would have saved Disney at least $1 billion in municipal bonds it owed through this entity.
Taxpayers in Central Florida would have footed the bill for these changes, which nobody on either side of the political aisle wanted. If Reedy Creek had dissolved, some bondholders would have deemed Florida in default on those payments, which would have had ramifications for DVC members.
Last fall, Ben Watkins, the Director of the Florida Division of Bond Finance, reassured bondholders that he wouldn’t allow that to happen. The default would have had severe ramifications on its own, but the later events of Hurricane Ian would have exacerbated the financial struggles.
That delay in dissolving Reedy Creek proved vital in protecting the interests of Disney, Florida, and DVC members. I say this because of what happened next.
What Happened with Reedy Creek in 2023?
During the second week of February, representatives of both Florida houses voted on updating this legislation. This new draft clarified the changes coming to the Reedy Creek Improvement District.
For various reasons, politicians wanted the name to change. So, Reedy Creek won’t be a thing as of 2025. Technically, the name changes later this year, but the legislation built in a two-year period wherein Disney can still use the old name on legal documents.
However, in the future, this largely autonomous entity will be named the Central Florida Tourism Oversight District. Friends, this is very good news because it hides what actually occurred.
After reviewing all the ties of Reedy Creek to other parts of Florida’s bureaucratic system, the politicians accepted Watkins’ perspective.
Reedy Creek couldn’t dissolve without taxpayers suddenly owing another $1 billion. Meanwhile, Disney would have saved $1 billion in debt in the process. Since the intent of this legislation involves giving Disney a slap on the wrist, saving them $1 billion isn’t an effective form of punishment.
By renaming Reedy Creek, the representatives establish that they have changed Disney’s standard operating procedures for the past 50+ years. Now, the system works differently, as indicated by the name.
How different is Central Florida Tourism Oversight District (CFTOD) from its predecessor? Most of the changes are small. Disney gets two years to change all the legal documents from Reedy Creek to CFTOD. Then, it faces regulatory rules in Florida that it had previously avoided under the old system.
The most significant change involves the panelists on the taxpayer’s board. Disney had historically chosen those participants. From now on, the governor does. In fact, the Orlando Sentinel has already revealed the new members of the governor’s board.
This change in panel composition could delay or block the progress of future construction projects, as none of the members advocates for the Mouse. That’s Disney’s chief concern here.
How These Changes Impact DVC Members
Let me provide you with all the reassurance I can. In speaking with legal experts on this matter and reading extensively on the subject, I’ve found no current reasons why these changes would impact you directly.
Obviously, anything could change down the line with new/updated legislation or an unfriendly taxpayer’s board. Nobody who has worked for Disney or any other theme parks during the past three years may join the panel. So, it’ll always consist of people without applicable experience with Reedy Creek’s practices, at least in the short term.
In future years, this panel could tax Disney in ways the company has never faced in Central Florida previously. I emphasize “could” because we’ve entered the speculative phase of the conversation.
In truth, most early headlines suggested that Disney had largely evaded any punishment of note. Once politicians researched the matter fully, they understood how deeply Disney’s roots run in Florida. Uprooting the tree could have unforeseen ripple effects elsewhere.
So, Reedy Creek survives in a new form and with new overhead in the form of the panelists. These individuals could cause problems with potential DVC constructions down the line, but that’s speculative as well.
Based on all tangible information available today, nothing should change with your DVC membership. I’m not even expecting higher maintenance fees due to this change, at least not for several years.
For now, Disney has avoided the worst. As DVC members, we should all be breathing a sigh of relief.