The Mouse That Roared

Forty Years After Locating in Florida, The Walt Disney Co. Continues as a Top Owner

By Debra Wood

Beginning with its clandestine accumulation of land during the 1960s, the Walt Disney Co. has strategically invested in infrastructure, theme parks and hotels, creating a world-renowned resort and transforming Central Florida from a sleepy, agricultural community to an international vacation magnet.

"Without Disney, Orlando would be a miniscule fraction of what it is today," said Harris Rosen, president and COO of Rosen Hotels & Resorts of Orlando, which is currently developing a $200 million project in Orlando. "Mickey Mouse and Disney dramatically changed Orlando and made it one of the leading tourist destinations."

Hotelier Richard C. Kessler, president and CEO of the Kessler Enterprise of Orlando, highlighted Disney's influence in shaping people's perception of Florida as a family-friendly place.

"It created an aura that this is a wholesome place to raise a family," Kessler said.

The four-county Central Florida area - Orange, Seminole, Osceola and Lake counties - grows by more than 1,000 people per week, according to U.S. Census data. Many of them come to work in the hospitality industry. Some move to Celebration, the community the Disney Co. developed.

"Because of Disney, tourists came and enjoyed their visit, liked the environment and moved down here," said Abraham Pizam, Ph.D., dean of the Rosen College of Hospitality Management at the University of Central Florida in Orlando. "Nobody knew about Orlando before Disney."

Spurring Growth

Disney operates four theme parks at Walt Disney World: Magic Kingdom, which opened in 1971; Epcot, which opened in 1982; Disney-MGM Studios, which opened in 1989; and Disney's Animal Kingdom, which opened in 1998.

The resort includes 18 hotel or interval-ownership properties; the Downtown Disney restaurant, nightclub and shopping complex; water parks; golf courses; and Disney's Wide World of Sports.

Outside its boundaries, developers continue to build hotels, condominiums, resorts, restaurants and retail and entertainment facilities to serve the nearly 50 million people who visit the area annually.

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Kessler credits Disney with giving major corporations confidence to enter the Central Florida theme park market.

"Disney proved to people that it could be done," Kessler said. "It has made other people comfortable, and spin-off opportunities have come from Disney."

Rosen said if not for Disney, he would not be in Orlando. He estimated that without Walt Disney World, Central Florida hotel rooms would total no more than 6,000, rather than the 113,000 that exist today.

The area also supports more than 5,100 restaurants, 52 million sq. ft. of retail space and 95 attractions, according to the Orlando/Orange County Convention & Visitors Bureau Inc. The community boasts a 2.1-million-sq.-ft. convention center and a modern airport with excellent connections all over the world.

Industry experts agree that few of these amenities would exist without Disney.

"Some of the infrastructure we enjoy is in part because of the volume of visitors generated by Walt Disney World," said Orlando economist Henry Fishkind, Ph.D., owner of Fishkind & Associates, an Orlando-based economic forecasting and consulting firm.

Disney and Reedy Creek closely guard their future plans. The company declined to be interviewed for this story.

Reedy Creek

Central Florida's road system, with I-4 and the Florida's Turnpike crossing in Orlando, attracted Walt Disney to the area. Aiming to avoid the uncontrolled growth that occurred outside Disneyland, Disney set out to do things differently with his East Coast park.

The company stealthily purchased 27,000 acres in Orange and Osceola counties. Then to streamline permitting and ensure it could build what it wanted, the company sought and received unprecedented governmental powers with the Legislature's establishment in 1967 of the Reedy Creek Improvement District.

"Walt learned his lesson well in California, where he had frustrations and battles with the public sector, when all he was trying to do was build a business," Rosen said. "He made a true business decision, and it served Disney well. Disney would not have expanded as rapidly as it has if it had to deal with a traditional public-sector relationship."

Pizam said he doubts Disney would have built in Florida if the Legislature had turned down the company's request for the improvement district. The governmental powers, granted into perpetuity, continue to give Disney an advantage in developing without building inspections or other hassles.

"I think it would have been difficult for them to achieve what they have, certainly at the time, [without the governmental powers]," said Fishkind, adding that Orange and Osceola county officials eventually gained an understanding of how to deal with theme park developers' needs.

And local officials do not seem to mind.

"The governmental power is a positive," said Paul Owen, chairman of the Osceola County Board of Commissioners. "A lot of the costs we would have had to bear, they bear."

Economic Impact

"Disney has been the engine that drove this economy," Pizam said. "But now that the economy is changing, it's no longer as dependent on Disney."

In 2004, tourists pumped $28.2 billion into the local economy, according to an economic impact study conducted recently by Global Insight of Waltham, Mass., for the Orlando/Orange County Convention & Visitors Bureau.

The study found that nearly 220,000 people, earning $7.8 billion, were employed in the tourism industry - 24 percent of total employment in the three-county Central Florida region of Orange, Osceola and Seminole counties.

Disney, the area's largest employer, has the largest single-site workforce in the country, with more than 49,000 cast members. Annual payroll exceeds $1.3 billion. An additional 1,200 people work at Celebration. Also, about 14,000 people work at Walt Disney World for other employers, including hotels, restaurants and related activities, and are paid $600 million, according to a report by Fishkind & Associates.

Fishkind estimated that Disney and its employees support an additional 46,000 jobs in Central Florida through corporate and personal purchases. The company's direct expenditures total about $2.6 billion, which generates an additional $2.6 billion in spending, for a total economic impact of $5.1 billion annually, 8.8 percent of the region's total gross product.

In 2003, Disney paid $63.9 million in Orange County property taxes on $9.1 billion assessed value. It is the largest taxpayer in the county. In addition, 35 percent of the $120 million annual tourist development tax is collected at Disney properties, Orange County Mayor Rich Crotty said.

That year, the company paid Osceola County $10.2 million in ad valorem taxes on $1.6 billion assessed resort and sports complex property. Private property in Celebration generated $2.9 million in Osceola taxes.

The Fishkind analysis found that the company and its employees generate more revenue for local governments than they require in services, creating a net fiscal surplus of nearly $350 million.

"It is estimated that because of having one huge taxpayer in the county, the average taxpayer pays $475 a year less in taxes," Crotty said. "That is a very significant contribution, with fairly minimal urban services required."

Owen agreed that Disney contributes more than it demands from Osceola County.

"The impact has been tremendous for the tax base, the revenue, the citizens and the job opportunities," Owen said.

Disney also philanthropically supports the community. It recently donated $750,000 to build a Boys and Girls Club of Central Florida facility in Osceola County. The company pledged $2 million to the Rosen College of Hospitality Management, and it accepts interns from the school, welcomes field trips and supplies guest lecturers.

"And they are hiring our graduates," Pizam said. "They support every aspect of our operation."

Growth Concerns

No one challenges Disney's phenomenal affect on Central Florida. However, Pizam said tourism projects do not exist without negatives. All that growth has resulted in traffic congestion and a high number of low-income service-sector jobs, which increases social service needs.

"There is always a downside to urban growth," said Richard Foglesong, Ph.D., a political science professor at Rollins College in Winter Park, Fla., and author of the book Married to the Mouse: Walt Disney World and Orlando. "In the case of Disney, the downside is greater or more acute because of the powers the Disney Co. enjoys, the immunities it enjoys that enables it to escape impact fees and forms of regulation adopted over the years."

With so many people relying on Disney, it is hard to find many naysayers in Central Florida. And in all fairness, many tourism and related executives earn high incomes. And Disney has contributed to local projects, including $140 million to area roads, Crotty said.

Owen also praised Disney for supporting projects.

Rosen faults the public sector for not anticipating the need for more and better roads and staying ahead of traffic demands. He said governments often do not spend funds from impact fees to mitigate the effects of additional hospitality development.

"It's not Disney's fault," Rosen said. "They've paid in taxes and fees, as we all have. Disney is a terrific asset to this community."

Looking Ahead

Disney never stays still for long. While no additional theme parks are anticipated, Disney World will continue evolving to create new experiences or conveniences for guests.

"You can never sit on your laurels and get stale," Pizam said. "They must keep it fresh and give tourists a reason to come back."

Granite Construction of Tampa is building a $50 million, 3-mi., four-lane Disney entry road from the new Western Beltway for Reedy Creek. It will provide easier access to guests traveling down Interstate 75 and to Disney employees who live on the west side of town.

Reedy Creek and other Florida utilities plan to construct an 800-megawatt, $1.4 billion, coal-fueled, power plant in Taylor County, Fla.

Additionally, Disney World announced plans for Expedition Everest, a 200-ft.-high, nearly 1-mi.-long, high-speed roller coaster that will open in Animal Kingdom in April. The mountain structure required 1,800 tons of steel.

Work also continues on Disney's Saratoga Springs Resort & Spa, an interval-ownership project. Hardin Construction Co. of Orlando is building the complex, with completion expected in 2007.