Disney has scrapped plans to build a near $1bn (£804m) corporate campus for 2,000 employees in Florida, amid an increasingly bitter political and legal battle with the state’s governor, Ron DeSantis, over the future of the entertainment giant’s theme parks.
Walt Disney, which has also announced the closure of its $2,500-a-night “Star Wars” Galactic Starcruiser Hotel in Orlando, said it would no longer relocate California-based employees including theme park ride designers to the new campus about 18 miles (30km) east of Walt Disney World.
“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,” said Josh D’Amaro, head of Disney’s parks, in an email to staff on Thursday. “This was not an easy decision to make but I believe it is the right one.”
The former Disney chief Bob Chapek gave the go-ahead for the $864m campus in 2021, which could have seen the company benefit from almost $600m in state tax incentives over a 19-year period.
Separately, Disney also announced it was to shut its experimental “Star Wars” Galactic Starcruiser Hotel, which charged about $5,000 for a minimum two-night stay for two people and offered guests an interactive adventure aided by actors.
The hotel, which opened at Walt Disney World last March and is to close in September, drew criticism from reviewers and guests that complained about small rooms, which were designed to mimic the feel of a spaceship, and the lack of typical amenities such as a gym or pool.
The scrapping of the campus plan by Bob Iger, who returned to run Disney in November having been replaced by Chapek just two years previously, comes as relations between the entertainment giant and the potential presidential candidate DeSantis hit an all-time low.
Last year, DeSantis approved legislation stripping Disney of its special tax status, created by a 1967 law that allows it to self-govern the roughly 25,000-acre Orlando area where its Walt Disney World theme park complex is located, in a move seen as retribution for the company’s opposition to a new “don’t say gay” law limiting discussion of LGBTQ+ issues in schools.
The company remains in a legal battle with the state over the takeover of the special tax district. DeSantis has argued that “woke Disney” should not receive special treatment in the state.
D’Amaro appeared to give a nod that the dispute had played a factor in the decision to cancel the campus.
“While some were excited about the new campus, I know that this decision and the circumstances surrounding it have been difficult for others,” he said.
Many staff earmarked for the move to the campus, which would have served as a base for Walt Disney Imagineering and the Disney parks, experiences and products division, had also complained they did not want to relocate from California.
Jeremy Redfern, the governor’s press secretary, said that the state was never convinced the Lake Nona campus project 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,” he said.
Disney is part way through a plan to cut 7,000 jobs, a restructure prompted by mounting losses at its streaming business, and cut costs by $5.5bn.
Last week, 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, attracted millions of visitors each year to Walt Disney World and had plans to invest billions to expand the resort.
“Does the state want us to invest more, employ more people and pay more taxes, or not?” Iger asked.
On Thursday, D’Amaro said that Disney intended to stick to the longer-term plan.
“I remain optimistic about the direction of our Walt Disney World business,” D’Amaro wrote. ‘“We have plans to invest $17bn and create 13,000 jobs over the next 10 years. I hope we’re able to do so.”
