The Walt Disney Company has announced it is cancelling an estimated $1 billion plan that would have set up a new complex in Lake Nona, a suburb of Orlando, for 2,000 high paying jobs to be relocated from California.
The Details
Disney paid $46.4 million in 2021 for 58 acres of land located in Lake Nona, located just southeast of the Orlando International Airport.
Plans were to turn it into a complex for its creative team, including Imagineering and other jobs, with average salaries cited as $120,000.
But in a memo to employees on May 18, 2023, Josh D’Amaro, Chairman, Disney Parks, Experiences and Products, announced the cancellation of the entire plan.
In it, he said, “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.”
When the plan was first announced, Disney cited Florida’s “business-friendly climate’ for the project, with the company set to get more than $500 million in tax credit for building the complex.
Some Disney Imagineers have already made the move to Florida from California, while some left the company because they didn’t want to relocate their families.
D’Amaro said the company would discuss options with those who have already moved, including the possibility of moving them back.
He also reiterated, “We have plans to invest $17 billion and create 13,000 jobs over the next ten years. I hope we’re able to do so.”
Jeff Vahle, President of Walt Disney World Resort, sent out a similar memo to business leaders, stating: “For decades, we have operated our business responsibly and being the region’s largest taxpayer, we paid and collected over $1.1 billion in state and local taxes during last year alone.”
“As the largest single-site employer in Central Florida, we are deeply rooted in this community, and we continue to make investments for the betterment of our region such as our contribution of 80 acres of land to create affordable and attainable housing for our community, which we announced last year.”
Contributing Factors
Though Disney was enthusiastic about the plan intitially, several things have happened in the almost two years since.
The “changing business conditions” is most likely a reference to the ongoing feud with Florida Governor Ron DeSantis, which began last year when the company opposed the state’s Parental Rights in Education legislation, dubbed “Don’t Say Gay” by its opponents.
As recently as last month, Disney had filed a federal lawsuit against DeSantis and the DeSantis-appointed board overseeing the district for what it called “a campaign of government retaliation.”
Disney is also in the middle of a reorganization of the company that started with the return of CEO Bob Iger, and involves eliminating 7,000 jobs across the company to cut about $5.5 billion in costs.
The first round of layoffs began in March, followed by a second round last month. A final round is expected to begin before summer.
The cost cutting is going even further than employees, as shortly after announcing the Lake Nona cancellation, it was announced that Walt Disney World would be shuttering its “Star Wars: Galactic Starcruiser” resort which provided an immersive two-night all-inclusive Star Wars-themed stay. It had opened in March 2022 adjacent to Disney’s Hollywood Studios.
Reactions
Orange County Mayor Jerry Demings, where Lake Nona is located, released a statement on Disney’s decision, saying, “It is unfortunate that Disney will not be moving forward with the construction of the Lake Nona campus. However, these are the consequences when there isn’t an inclusive and collaborative work environment between the state of Florida and the business community. We will continue to work closely with our valued partners at Disney.”
A spokesperson for the governor’s office released the following statement: “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.”
“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.”
The Announcement
Here is the full announcement that was sent out by D’Amaro:
Team,
I wanted to let you know that we’ve just begun communication regarding our updated plans for the Lake Nona campus.
As many of you know, the company had decided to build a new Disney campus in Lake Nona and many Cast Members, Imagineers, and employees were asked to commit to making a move to Florida. While some were excited about the new campus, I know that this decision and the circumstances surrounding it have been difficult for others.
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. This was not an easy decision to make, but I believe it is the right one. As a result, we will no longer be asking our employees to relocate. For those who have already moved, we will talk to you individually about your situation, including the possibility of moving you back.
It is clear to me that the power of this brand comes from our incredible people, and we are committed to handling this change with care and compassion. I remain optimistic about the direction of our Walt Disney World business. We have plans to invest $17 billion and create 13,000 jobs over the next ten years. I hope we’re able to do so.
We are committed to our teams who call Central Florida home and to all of our Cast Members around the world, and I want to thank you for your continued dedication to Disney Parks, Experiences and Products and for delivering world-class entertainment for our Guests.
Josh