LISTEN HERE:
The recent feud between Disney and Governor Ron DeSantis has led to the company pulling the plug on a new office complex in Orlando, which would have brought over 2,000 jobs to the region, with an average salary of $120,000. The project, known as Lake Nona Town Center, was supposed to cost $864 million, but cost estimates have been closer to $1.3 billion. The relocation of a department known as Imagineering, which works with Disney’s movie studios to develop theme park attractions, was also included in the plans.
However, Florida officials have repeatedly pointed to the Lake Nona development as an example of economic vibrancy in Orlando, which suffered significantly during the pandemic. Despite this, the company and governor have been locked in a bitter dispute over a special tax district that includes Disney World, which started when the company criticized a Florida education law that opponents labeled “Don’t Say Gay”. Governor DeSantis, feeling angered by this, has vowed payback, and has since targeted Disney–the state’s largest taxpayer–with a variety of hostile measures.
In its statement about the cancelling of Lake Nona, Disney made reference to its ongoing investment in Walt Disney World, saying “growth… would create an estimated 13,000 jobs.” Disney and Governor DeSantis have been feuding for over a year, with many Florida legislators targeting the company through a series of hostile measures. In February, they ended Disney’s ability to self-govern its 25,000-acre resort by giving Governor DeSantis control over government services at the resort. Disney’s efforts to void development contracts resulted in dueling lawsuits.
Last month, Disney sued the governor and his allies for what it called “a targeted campaign of government retaliation”. Disney warned that $17 billion in planned investment in Walt Disney World was in jeopardy. As a result, the company followed through on their threat to cancel the new office complex, showing that they were not bluffing.
Jerry L. Demings, the mayor of Orange County, which includes Orlando, expressed disappointment at the news. He said, “these are the consequences when there isn’t an inclusive and collaborative work environment between the state of Florida and the business community.” Disney has already spent millions of dollars in expenses related to the Lake Nona project, including relocation costs for around 200 employees who have already been moved from California to Florida. It is not yet known whether employees who quit over the news will have an opportunity to regain their jobs.
Disney’s Lake Nona campus, about 20 miles from Disney World near the Orlando International Airport, is a significant setback to the Orlando region, which had anticipated many hotel chains and retailers moving to the area with Disney’s arrival. The Orlando Business Journal, in January, described the complex as “a major economic driver for the region.”
Disney’s theme park and consumer products chairman, Josh D’Amaro, mentioned the earmarked $17 billion for construction at Disney World over the next ten years in his note to staff canceling the Lake Nona project. This development was immediately heralded, as growth is always seen as positive to the economy, with the potential to create an estimated 13,000 jobs.
The Lake Nona Town Center project was billed to be massive, costing around $1.3 billion, and was to bring over 2,000 high-paying jobs to the area. It would have also resulted in additional businesses, such as hotels and retailers, opening up there. Sadly, with the project cancelled, the future is uncertain for the area, and Florida’s recovery from the pandemic may take longer.
Bob Chapek, who served as Disney’s CEO from 2020 until his firing last year, had championed the Lake Nona campus, but Bob Iger, who has been reversing many of his decisions, ousted him. Iger, for instance, recently said that Disney would restructure its inner workings, ending a framework that Chapek had put in place. As part of the latest round of layoffs, Iger also shut down a 50-person metaverse project that Chapek had started.
Disney is in the midst of cutting $5.5 billion in costs to improve profitability, pay down debt, and restore its dividend. The company is also closing an underperforming luxury hotel at Disney World. Bookings started at $6,000 for a family of four; the price limited interest.
The Lake Nona Town Center, which was estimated to cost $864 million, and after recent cost estimates were closer to $1.3 billion, was slated to be Disney’s new office complex in Orlando. However, the company cancelled the project due to its feud with Governor DeSantis. Considered as an example of economic vibrancy in Orlando, the project failing is nothing short of a monumental setback for the region.
Disney has already incurred millions in expenses associated with the now-cancelled project, including the relocation costs of roughly 200 employees from California to Florida. However, behind the scenes, Disney is still expanding its footprint in Orlando, giving hope to many as the recovery from the pandemic is hoped to take hold. Despite cancelling its new office complex, Disney remains optimistic.
With the increasing volatility of their market cap, declining stock prices, and financial straits, Disney’s decision to restructure its business operations and cancel the unprofitable Lake Nona project is unsurprising. Florida officials, however, were hoping for more and saw the Lake Nona project as an example of economic vibrancy in Orlando, which underwent a hard reset due to the pandemic.
Disney’s decision to end its plans for the Lake Nona office complex in Florida, a project which would have created over 2,000 high-paying jobs, is a massive blow to the Orlando region. The announcement comes on the back of a long-running feud between the company and Governor Ron DeSantis. Disney sued the governor and his allies recently, warning that $17 billion in planned investment in Walt Disney World was on the line.
Disney’s decision is unsurprising, given the current challenges it faces, such as its declining stock price, and the financial burden the pandemic has caused, forcing the company to restructure its operations. Disney presently aims to cut $5.5 billion in costs. Despite the current challenges, the company has earmarked $17 billion for construction at Disney World over the next ten years, which it says could create an estimated 13,000 jobs in the region.
Jerry L. Demings, the Mayor of Orange County, which includes Orlando, expressed in a statement that he was disappointed with Disney’s decision to cancel the Lake Nona Town Center project. He said that the move highlights the consequences when there is no inclusive and collaborative work environment between the state of Florida and the business community.
