Disney World, one of the most iconic theme parks in the world, is making headlines for invoking the King Charles Clause in its very public feud with Florida Governor Ron DeSantis, a little-known legal provision that has its roots in the British monarchy.
The clause is being used by Disney to secure its corporate kingdom and keep its special tax district under its control in the face of recent tit-for-tat actions by Governor DeSantis and the Florida state legislature.
But what exactly is the King Charles Clause, and how does it relate to Disney World?
Let’s dive in to find out.
The King Charles Clause, also known as the Royal Lives Clause, is a legal provision that originated in the British monarchy in the 17th century. It was created to ensure that the property would remain within a family’s control for as long as possible, even in the event of the death of the last survivor of the descendants.
In essence, Disney’s agreement restricting the newly appointed Reedy Creek board’s powers will be in effect until 21 years after the death of the last survivor of King Charles III.
So, what does King Charles have to do with Disney World? In short, nothing. But it was this reference to the British royal family in the development agreement Disney signed on Feb. 8 that raised the eyebrows.
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Disney has incorporated a version of the clause in its “declaration of restrictive covenants” for its Reedy Creek Improvement District, which is the special tax district that encompasses Walt Disney World, and other Disney-owned properties in Central Florida.
The declaration was approved by the members of the former board that oversaw Reedy Creek Improvement District, just two days before the Florida House voted to change the board’s control.
Photo by Bayley Clark for MagicalGuides.com
The agreement gives Disney the ability to build high-density projects or buildings of any height and to sell or assign development rights, without board approval.
It also prevents the board from using Disney’s “fanciful characters” including Mickey Mouse. The board is also prevented from using Disney’s name and symbols without prior approval.
The clause will have the effect of extending the life of this declaration until the death of the last survivor of the descendants of King Charles III plus another 21 years.
It allows Disney to circumvent the decisions of the DeSantis’ Reedy Creek board for decades to come, rendering the new board completely powerless.
This means any future owners of Disney World and other Disney properties within the district will continue to have the same control over the board as the company does today.
The Reedy Creek Improvement District was created in 1967 to give Disney a special tax status and control over Walt Disney parks and its own infrastructure within the district, allowing the company to tax itself, build, and operate its theme parks and other facilities without interference from the local or state authorities.
However, recent actions by Florida Governor Ron DeSantis and the state legislature have threatened to end the Mouse House’s corporate kingdom by depriving the entertainment giant of its self-governance power and placing it under a new governing body named Central Florida Tourism Oversight District.
The public spat between DeSantis and Disney began when Dinsey opposed DeSantis’s Parental Rights in Education Law, the so-called “Don’t Say Gay” bill which banned classroom discussion of LGBTQ issues in public schools.
In response, Disney has invoked the King Charles Clause to ensure it maintains control over the district for as long as possible, even if the company no longer exists.
Specifically, the clause states that the Declaration shall continue in effect until 21 years after the death of the last survivor of the descendants of King Charles III, the King of England living at the date of this Declaration was signed, which not only includes Prince William and Prince Harry but their children Prince George, Princess Charlotte, Prince Louis, Prince Archie, Princess Lilibet, their children and so on.
It creates a window of time that would never actually expire.
The use of the King Charles Clause by Disney has undoubtedly raised eyebrows and sparked potential legal challenges. Some experts have questioned the legality of the clause, particularly in light of the common law rule against perpetuities, which prohibits property interests from being controlled by a family or entity beyond twenty-one years after the lives of the individuals living at the time the property interest was created.
To get around this rule, lawyers in the US, UK, and the Commonwealth have come up with a clever strategy- the Royal Lives clause which dates back to 1692. Royal lives clause can sometimes be replaced by a President’s lives clause in the U.S. But the Royal lives clause is preferred mostly because Royals are wealthier and could be expected to live a long time, and also royal bloodline makes it easier for anyone to map out the descendants with such accuracy.
How did Disney get this approved?
Let’s be clear, Disney didn’t get this done under cover of darkness. They did it in the open and legally according to the Sunshine Law.
The requirements to meet the Sunshine Law are easily met with these three criteria.
- Meetings of boards or commissions must be open to the public;
- Reasonable notice of such meetings must be given,
- Minutes of the meeting must be taken.
So was anyone from the Governor’s office not in the room when this meeting happened or were they celebrating the appointment of their own board? This upsets me as a taxpayer when officials aren’t necessarily doing the job they are paid to do.
Does Florida have any laws against Perpetuities?
Florida’s Uniform Statutory Rule Against Perpetuities is set out in § 689.225 of Florida Statutes. No other common law rule against perpetuities applies in Florida, and instead, the rule against perpetuities in Florida is governed solely by the provisions of this section.
According to section 689.225(2)(a)1 a non-vested property interest in real or personal property is invalid unless when the interest is created, it is certain to vest or terminate no later than 21 years after the death of an individual then alive. However, Disney’s Royal Lives Clause does not contain any limitation on the time duration.
As a result, the instrument could potentially continue indefinitely and may violate Florida’s rule against perpetuities.
Will Disney lose in court?
The District’s lawyers have announced their plans to take legal action against Disney, calling Disney’s agreement a subversion of the will of voters and their authority. If a lawsuit is filed, it will most likely be taken up before a bench trial in the circuit court for Orange County, Florida. In their complaint, Florida’s best argument likely challenges Disney’s agreement based on the rule against perpetuities.
Despite these potential legal challenges, Disney is forging ahead with its use of the clause, arguing that it is necessary to protect its interests and ensure the long-term viability of the Reedy Creek Improvement District.
Whether or not Disney will prevail in court remains to be seen, but for now, the company’s use of the King Charles Clause is just another chapter in the ongoing saga of its efforts to maintain its corporate kingdom in the face of external pressures.
Who is in charge of the Reedy Creek Improvement District now?
The former Reedy Creek Improvement District is now known as the Central Florida Tourism Oversight District. Previously the Walt Disney Co. was able to elect who served on the Reedy Creek board, but that’s changed.
The new board members are appointed by Florida Gov. Ron Desantis, and just like the Walt Disney Company, the board is slanted. While the board’s previous members actually lived on Disney property in a small area, the newly appointed board is from all parts of the state.
The newly appointed board includes:
- Chairman Martin Garcia
- Bridget Ziegler
- Brian Aungst Jr.
- Michael A. Sasso
- Ron Peri
Most of the board members have ties to law firms, and only one has direct ties to Orlando. I question whether the new Gov. Ron Desantis’ replacements are qualified to make decisions that govern the Magic Kingdom.
It’s clear that the Florida legislature is retaliating against the Walt Disney Company again. The company and the CEO at the time, brought it on themselves at the same time. It saddens this Disney AP (annual passholder), as this type of fighting, and arguing takes away from what makes Disney special.
The legal fight coming between Disney and the state of Florida will make news for sure. The state’s largest employer and governor are larger than life, but I do wonder if Desantis’ rumored run for the presidency will affect this.
As Disney fans, I think we can just hope that both parties will give and take for the sake of the consumers. Bob Iger has a short window to solve this problem that he was brought back to fix.
Feel free to leave a comment below with your thoughts, or let us know if you’re mad with Disney for any reason.