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Disney is pulling out of a $1 billion investment in Florida amid DeSantis feud

Disney scraps $1B Florida development plan
Disney scraps $1 billion Florida development plan amid tensions with DeSantis 01:39

The Walt Disney Co. said it is pulling out of a roughly $1 billion investment in Florida, citing "changing business conditions." The media and entertainment giant announced the move amid a year-long feud with the state's Republican governor, Ron DeSantis, after Disney publicly opposed his bill to limit instruction on sexual orientation and gender identity in public schools. 

In a memo sent to Disney employees, Josh D'Amaro, chairman of Disney Parks, Experiences and Products, said that the company isn't moving forward with its plans to build a new Disney campus in Lake Nona. 

The decision to scrap the development comes less than a week before DeSantis is expected to announce his presidential campaign. On Friday, the editorial board of the Miami Herald wrote that national voters should take Disney's cancellation of the project as a warning, noting, "Floridians are the losers here. We've lost jobs and investment, and we could lose even more, all because DeSantis picked a petty fight with Disney."

The Lake Nona complex would have included several buildings employing 2,000 Disney workers that would have been relocated from California to Florida.

The decision to scrap the Lake Nona campus also comes as Disney cuts more than $5 billion in costs, with CEO Bob Iger seeking a "transformation." But Iger recently mulled on an investor conference call about his company's frayed relationship with Florida, which led to Disney suing DeSantis last month, alleging that the governor had overseen a "targeted campaign of government retaliation."

"Does the state want us to invest more, employ more people and pay more taxes, or not?" Iger mused on the May 10 conference call. 

Iger also noted that Disney is the largest taxpayer in Central Florida, providing more than $1.1 billion in state and local taxes last year. 

Desantis response to Disney

In a statement emailed to CBS MoneyWatch, DeSantis' office said that Disney had announced "the possibility" of the Lake Nona project almost two years ago. 

"Nothing ever came of the project, and the state was unsure whether it would come to fruition," the spokesperson said. "Given the company's financial straits, falling market cap and declining stock price, it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures."

However, as recently as March Disney was moving forward with its plans to develop the site at Lake Nona, with Orlando's Development Review Committee giving the green light to the company's plans on March 9, according to public data.

Disney's stock has increased more than 7% this year through close of trading on Thursday.

Disney's Lake Nona project

The Lake Nona project would have added 1.8 million square feet of office space, and was described by the Orlando Sentinel as "arguably Orlando's most anticipated development." 

Most of the employees who were to move to Lake Nona work in Disney's Imagineering department, which works on developing theme park attractions, the New York Times reported.

"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 said in the email. "This was not an easy decision to make, but I believe it is the right one."

Will Disney cut more spending in Florida?

Disney has plans to invest $17 billion in Florida, which it says would create 13,000 jobs over the next decade and, according to the company, lead to "spectacular economic growth" in the Orlando area. D'Amaro's memo alludes to that planned investment, while injecting a note of doubt about Disney's commitment, writing that "I hope we're able to do so."

In its lawsuit, Disney alleges that DeSantis's actions jeopardize "its economic future in the region." 

The battle between the governor and the entertainment and media giant flared after DeSantis sought to gain control of the Reedy Creek Improvement District (RCID), a government entity that oversees the region where the Walt Disney World resort is based. 

After gaining control of the RCID, DeSantis reconstituted the group as the Central Florida Tourism Oversight District and appointed five people to replace the RCID's elected members. He mused he might impose taxes on Disney's hotels, tolls on its roads or even construct a prison next to Walt Disney World.

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