The Road to This Theme Park Is Paved With Tax Dollars

Plus: A wild new proposal on banking and sports stadiums.

Universal, which is owned by the telecom giant Comcast, is planning to add a new theme park to its suite of attractions in Orange County, Florida. Named Epic Universe, it will be neighbors with the company’s other Florida hotspots, such as Universal Studios and Islands of Adventure.

But the road that would connect one park to another could cost community residents way more than they bargained for.  

On Tuesday, the Orange County commission will vote on whether or not to contribute some $125 million toward a new road between Universal’s old parks and the site of the new one. Local activists are organizing against the giveaway, leading to an unprecedented PR push by the company to hype the supposed benefits the new park will bring to the area.

Now, you may be asking: Aren’t roads one of those things that government is supposed to take care of? And yes, helping people move from place to place is generally a core government function that shouldn’t raise anyone’s ire. But there are several complicating factors making this situation much more boondoggle-y.

1) The $125 million mostly comes from a special fund that keeps tax dollars from benefiting everyone. Property taxes from the area around Universal’s parks don’t go into the county’s general fund, to be spent on schools and health clinics or whatever, but instead into a special fund, that can only be spent on transportation projects around the theme parks.

Universal’s road project jumped the queue to receive this special funding. Meanwhile, several public transit initiatives have just been languishing. Also, some perspective is required on just how much the fund collects that winds up failing to benefit the wider community: The $125 million for one road to a Universal theme park is twice what the county spends on its entire bus system. So the money in that fund could go a long way, but doesn’t, instead benefiting a small slice of land that is mostly held by one big corporate interest.

2) The nearby community is being left further behind. In theory, the special tax fund could be used to help with development in the historically black neighborhood of Tangelo Park, which is stuck in the middle of the theme park region. In practice, that hasn’t happened: Residents say they’re earmarked just $50,000 per year from the fund, and oftentimes don’t even see that money, according to a report from the local chapter of Unite Here, a tourism workers union that is organizing against the road handout.

Meanwhile, because everything in their immediate area is geared toward tourists, residents need to go further and further afield to access basic services, and deal with incessant traffic. The new road will make the whole situation demonstrably worse. If you build a road, after all, people drive on it.

3) This boondoggle may get a big extension. The special fund in question is supposed to sunset in 2028. But Orange County’s commissioners are proposing to extend it to 2040, elongating the amount of time local residents won’t get to reap benefits from the tax dollars collected around them. Orange County’s mayor opposes the extension, though he did leave himself enough wiggle room to revisit it later by saying he would have his staff study the issue.

Adding one final insult to this whole situation, Universal is also set to receive $350 million in state tax credits for a new headquarters based at Epic Universe.

Comcast, Universal’s parent company, made $11.7 billion in profit last year.

While this isn’t quite a road to nowhere situation, it’s pretty clear the local residents are experiencing the negatives of having a big theme park in their neighborhood, without reaping much benefit. It’s also worth pointing out that Orange County doesn’t need to continue to subsidize a company with such a major presence within its borders; the opportunity costs of starting over elsewhere are probably too high for Universal to seriously consider pulling up the stakes on any of its projects.

What’s worse, in theory, theme parks are actually an OK way to gin up revenue for a local economy: They tend to draw in visitors from outside the area who wouldn’t be there otherwise, and those visitors tend to stay within the park, keeping their money in the area and not putting a strain on other local resources.

But Orange County has decided to take what could be a big benefit and simply redirect it back to a giant corporation. It’s a total dead end.

---

FYI: Bank regulators are currently proposing changes to the Community Reinvestment Act, the federal law aimed at preventing banks from discriminating in their lending. Bloomberg’s Noah Buhayar and Jesse Hamilton found, buried on page 100 of the proposed revamp, the suggestion that banks be allowed to meet their lending obligations to low-income neighborhoods via investing in sports stadiums in Opportunity Zones.

As you may remember, I first reported that at least 52 pro sports stadiums are in those zones, which were created as part of the GOP’s 2017 tax cut. If these CRA changes go through, banks could receive anti-discrimination credit for putting money into stadiums via a program meant to help low-income neighborhoods. Seems … not quite right if you ask me.

---

The perfect holiday gift: Know someone who’s interested in politics, economics, and corporate power? Maybe a sports or movie fan? Or someone interested in local government? They’d all love The Billionaire Boondoggle! Pick up a copy here or from your local independent bookstore. It makes for a great gift for the holidays.

---

Thanks for reading this edition of Boondoggle. If you don’t subscribe already, just click the green button below.

If you liked this post, take a moment and click the little heart under the headline or below. It helps.

If you’re already a subscriber, please send this around to friends, family, neighbors, or whoever you think might like it, and tell them to sign up too.

Finally, if you’d like to pick up a copy of my book, The Billionaire Boondoggle, go here. Thanks again!

— Pat Garofalo