Disney City, USA
Beware Disney's new residential communities.
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Disney last week announced a new plan to build entire residential communities, a major move into real estate that’s disconnected from its current theme parks and their surroundings. It’s calling the initiative “Storyliving.”
The first of these neighborhoods will be in Rancho Mirage, California, and is supposed to include homes, a hotel, and a bunch of other Disney-style stuff situated around an artificial lagoon, all staffed by “cast members,” which is the term of art Disney uses for its workers.
Just look at the star treatment “Good Morning America” — which runs on ABC, which is owned by Disney — gave the idea.
This has actually been a long-term goal for the corporation, as Walt Disney himself was enamored with the idea of creating whole Disney towns, a plan which was initially only abandoned upon his death in 1966. The company then revived it by building Celebration, Florida, in 1995. Celebration, though, was sold to a private equity firm in 2004 and has been plagued with problems.
But “Storyliving” turning into a flop like Celebration is not what I’m worried about. Far more damaging would be if Disney succeeds.
Why? Well, in communities where it already has a substantial presence, Disney uses its financial might to build political power, twisting local law to its advantage in order to extract subsidies, harm workers, and undermine competitors. And it’s now added secrecy measures to its local repertoire: Rancho Mirage officials approved the plans for Disney’s new development, then called Section 31, back in 2019, but Disney didn’t reveal its involvement until last week.
Disney building out new communities all over, then, could be very bad news for local economies, workers, and democracies, allowing the corporation to entrench itself all over and push pro-Disney, anti-worker, anti-competitive policy everywhere it goes.
Let’s review the history. First, voters in Anaheim, California, revolted against the massive subsidies Disney was receiving from the city in 2016 — when the mayor said roughly one-third of the city budget was supporting Disney’s parks, including Disneyland — and flipped the city council to put an anti-Disney faction in power. Disney refused to stand for that, so spent huge money in the 2018 elections to flip it back.
To give a sense of how much Disney poured in, just consider this: Disney spent six times more on pamphlets and phone banking for one of its favored city council challengers than the incumbent, Denise Barnes, spent on her entire campaign.
Disney’s spending spree worked, securing it an amenable council in 2018 and ever since. And that investment paid dividends: In 2020, the council beat back an effort to implement a gate tax on theme park visitors — which was proposed at a whopping $1 per ticket — that would have replaced some of the revenue the city lost during the pandemic, and which, of course, Disney opposed.
Disney also fought tooth and nail — with the backing of the city government — against a 2018 ballot measure Anaheim voters approved that would have required it to pay a living wage to its workers. Disney sued over the initiative and won on a bizarre reading by a judge, who ruled that Disney receiving payments from hotel taxes the city levied somehow wasn’t a tax subsidy.
And that’s just Anaheim. Things are, if possible, worse in Florida.
In the Sunshine State, Disney recently received a more than half a billion dollars in subsidies to move a bunch of jobs from California to a new office in Lake Nona. That tax break package will cover 60 percent of the total investment Disney intends to make, and will create all sorts of new financial pressures on the community.
But that’s just the out-in-the-open stuff. Through political donations and a web of trade associations and front groups, Disney wields its influence to protect its bottom line on everything from labor rules to land use to preemption of local ordinances. This power manifests itself in absurd ways, such as when the Florida legislature and Gov. Ron DeSantis approved a bill to supposedly rein in corporate censorship, but that exempted any corporation that owns a theme park, in the kludgiest possible way to get Disney out from under the new law.
I’m sure I’m just conveying the tip of the proverbial iceberg here, and that folks on the ground in Florida and California could convey many more egregious stores.
These are the sorts of power plays residents can expect with regard to their own statehouses and town councils wherever Disney builds its new communities. And expect the subsidies to flow too as Disney throws its weight around, adding to the more than $2 billion it has claimed from state and local taxpayers to date.
As it is, Disney is too large and should be broken up, due to the power it can wield over the entertainment industry alone. But we also need to beware its local influence if more of these “Storyliving” communities come to pass, lest laws all over the place be written and rewritten to benefit Disney’s bottom line, at the expense of local communities, workers, and taxpayers.
And finally, an ask: If you see — or just suspect — that a new development in your area is a Disney one, please flag it for me.
SHAMELESS SELF-PROMOTION: Last week, I testified before a Joint Legislative Budget Hearing in New York on economic development and corporate subsidies. You can read my testimony here or watch video of the (VERY LONG) hearing here.
ONE MORE THING: A bill to prevent cities from using federally tax-exempt bonds to raise money to build professional sports stadiums is back before Congress.
This idea has been floating around for a while — I wrote in my book about a previous effort failing in the Senate, after passing the House, due to the influence of then-President Trump and a Nevada senator who wanted to protect the Las Vegas Raiders stadium deal — but, hey, hope springs eternal.
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— Pat Garofalo