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Thursday, June 1, 2023

Disney Cancels Plans for $1bn Campus in Florida Amid Battle With DeSantis

Disney Cancels Plans for $1bn Campus in Florida Amid Battle With DeSantis – The Walt Disney Company has decided to abandon its previously announced intention of constructing a corporate campus worth close to $1 billion in Florida. This campus was intended to accommodate around 2,000 employees. The decision comes as a result of the ongoing legal dispute between Disney and Florida Governor Ron DeSantis. 

Josh D’Amaro, the head of Disney parks, communicated to employees via email on Thursday that due to shifting business circumstances, the company has reevaluated its 2021 proposal to relocate employees, including the imagineers responsible for designing theme park attractions, to a new campus situated in Lake Nona. According to the Orlando Sentinel, the estimated cost of the project was around $864 million. 

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The purpose of this campus was to act as a headquarters for Walt Disney Imagineering and the Disney Parks, Experiences, and Products division. The choice by Disney to relocate its Imagineering employees from California to Florida generated dissatisfaction among the staff, with many expressing their reluctance to make the move.

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“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’Amaro wrote. “This was not an easy decision to make, but I believe it is the right one.” One week prior, Bob Iger, the CEO of Disney, raised concerns about Florida’s commitment to the company’s ongoing investments in the state.

During an investor call to discuss quarterly results, he highlighted Disney’s significant contribution to Florida’s economy, including employing over 75,000 individuals, drawing millions of visitors annually to Walt Disney World, and outlining a $17 billion investment plan to expand the resort within the next ten years.

“Does the state want us to invest more, employ more people and pay more taxes, or not?” Iger asked. DeSantis’s press secretary, Jeremy T Redfern, wrote that while Disney announced the possibility of a Lake Nona campus nearly two years ago, “Nothing ever came of the project, and the state was unsure whether it would come to fruition.” Redfern wrote that given the company’s financial position, “it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures.”

Disney and DeSantis have been engaged in a progressively hostile conflict since March 2022. It all began when Bob Chapek, the CEO of Disney at the time, voiced his disapproval of a Florida legislation aiming to restrict discussions on gender identity and sexuality in elementary schools. Anticipating his bid for the 2024 Republican presidential nomination, DeSantis has taken steps to revoke Disney’s longstanding authority to govern itself at Walt Disney World in Orlando. 

The governor contended that Disney, which he referred to as “woke Disney,” should not be granted preferential treatment within the state. Disney filed a lawsuit against the state last month, denouncing the actions taken by DeSantis as political retaliation that infringes upon protected free speech. The company sought to reverse the measures implemented by the state.

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The news quickly caught the attention of Donald Trump’s 2024 presidential campaign, and promptly highlighted how DeSantis’s actions negatively impacted job opportunities and investments in the state. Linda Stewart, a Democratic state senator, expressed disappointment over the potential job losses in Florida.

Carlos Curbelo, a former Republican congressman representing Miami, commended DeSantis for his leadership during the pandemic but criticized the governor for tarnishing his own record and dissuading businesses from choosing Florida as a location for expansion. “This is first obvious negative consequence of an overly aggressive approach to governing and to politics,” Curbelo said. 

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In July 2021, the predecessor of Iger, the former CEO of Disney, unveiled intentions to relocate jobs from southern California to a newly established facility in central Florida.  The decision was primarily driven by the region’s favorable business environment. Although the exact value of Disney’s investment remains undisclosed, according to the Los Angeles Times, the company was set to receive approximately $580 million in tax credits over the course of the next 19 years. 

In an optimistic tone, D’Amaro expressed his confidence in the future of Walt Disney World, highlighting plans to invest $17 billion and generate 13,000 job opportunities within the next decade. On Thursday, the company made another announcement regarding the closure of its immersive Star Wars-themed luxury hotel in Orlando. Despite opening less than two years ago, the decision to shut down the hotel reflects Disney’s cost-cutting efforts across its entertainment and parks divisions. In February, Iger stated that the company aims to achieve cost reductions amounting to $5.5 billion.

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