Disney cancels plans for $1.3b campus, 2,000 jobs in Florida over feud with governor DeSantis

LOS ANGELES - Walt Disney Co is scrapping plans to build a nearly US$1 billion (S$1.35 billion) corporate campus in central Florida that would have housed 2,000 employees, according to an e-mail to employees on Thursday.

The decision comes against the backdrop of its

ongoing legal battle with Florida Governor Ron DeSantis.

Disney parks chairman Josh D’Amaro said “changing business conditions” prompted Disney to reconsider its 2021 plan to relocate employees, including its Imagineers who design theme park rides, to a new campus in Lake Nona.

The company was expected to spend as much as US$864 million on the project, according to the daily Orlando Sentinel.

The campus would have served as a base for Walt Disney Imagineering and the Disney Parks, Experiences and Products division.

Disney’s decision to move the California-based Imagineering staffers across the country drew complaints from employees, many of whom said they did not want to move to Florida.

“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,” Mr D’Amaro wrote.

“This was not an easy decision to make, but I believe it is the right one.”

A week ago, Disney chief executive Bob Iger publicly questioned Florida’s interest in the company’s continued investment in the state.

In a call with investors to discuss quarterly results, he noted that Disney employed more than 75,000 people in Florida, attracts millions of visitors each year to Walt Disney World and had plans to invest US$17 billion to expand the resort over the next decade.

“Does the state want us to invest more, employ more people and pay more taxes, or not?” asked Mr Iger.

Mr DeSantis’s press secretary Jeremy T. Redfern wrote that while 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”.

Mr Redfern wrote that given the company’s financial position, “it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures”.

Disney also announced it is shuttering its immersive Star Wars-themed luxury hotel in Orlando this September, less than two years after it opened.

Disney announced the closing of the two-night “Star Wars: Galactic Starcruiser” hotel and experience on Thursday, but did not provide a reason.

The hotel debuted with fanfare at Walt Disney World in March 2022.

Mr Iger announced in February that the company would reduce costs by US$5.5 billion as it works to make its streaming TV business profitable.

Some Star Wars fans had complained that the cost of staying at the Starcruiser was too high. Bookings started at US$4,800 for two guests.

The price included two days and two nights in one of 100 Starcruiser cabins, galactic-inspired food and drink, and a visit to Batuu, the Star Wars planet inside the Disney World theme park.

The 100 rooms at the site represented less than 0.5 per cent of Disney’s room inventory in the area.

Disney and Mr DeSantis have been locked in an increasingly acrimonious battle that started in March 2022, when Disney’s then CEO Bob Chapek criticised legislation in Florida that would limit discussion of gender identity and sexuality in elementary schools.

Mr DeSantis, who is

expected to soon announce that he will seek the 2024 Republican nomination

for United States president, then moved to strip Disney of its long-standing self-governing power over Walt Disney World in Orlando.

The governor argued that “woke Disney” should not receive special treatment in the state.

Disney called the move political retaliation over what should be protected free speech and sued the state in April to have the moves reversed.

Former president Donald Trump’s 2024 presidential campaign was quick to seize on the news, with the Trump War Room account tweeting that Mr DeSantis’s actions cost the state jobs and investment.

Democratic State Senator Linda Stewart, who represents part of Orange County, called it “disappointing” that Florida would lose jobs.

Former Congressman Carlos Curbelo, a Republican who represented Miami, praised Mr DeSantis’s leadership during the Covid-19 pandemic.

But he said the governor was tarnishing his own record and dissuading businesses from coming to Florida or expanding in the state.

“This is first obvious negative consequence of an overly aggressive approach to governing and to politics,” said Mr Curbelo.

Mr Chapek announced plans in July 2021 to relocate jobs from Southern California to a new facility in central Florida, citing its “business-friendly climate”.

While Disney has never disclosed the value of its investment, the Los Angeles Times reported that it would receive nearly US$580 million in tax credits over the next 19 years.

“I remain optimistic about the direction of our Walt Disney World business,” Mr D’Amaro wrote.

“We have plans to invest US$17 billion and create 13,000 jobs over the next ten years. I hope we’re able to do so.” REUTERS