Fitch Gives Thumbs-Up After Reedy Creek Changes


Article reposted with permission from The News Service of Florida.

Fitch Ratings on Thursday signaled that it is satisfied with a new law that shifted control of the Reedy Creek Improvement District to Gov. Ron DeSantis and renamed the district. Fitch lifted what is known as a “rating watch negative” issued last year because of concerns about how bonds would be paid after a potential dissolution of Reedy Creek. During a special legislative session last month, lawmakers decided against dissolution of the district, which was created in 1967 and essentially let Walt Disney Co. control issues such as land use, fire protection and sewer services that are typically handled by local governments. Lawmakers gave DeSantis authority to appoint the district’s board and changed the name to the Central Florida Tourism Oversight District. But the district continues to have wide-ranging authority, including the ability to levy property taxes and fees, issue bonds and provide services. “The removal of the RWN (rating watch negative) reflects the recent enactment of legislation … clarifying the future operational profile of the district, including the preservation of its existing revenue raising authority and other powers allowing for servicing of its debt obligations,” the rating agency said in a report. “While the new legislation makes key changes to the district, Fitch expects changes will not meaningfully diminish the district's credit strengths supporting the current rating.” Fitch also affirmed an “AA-” rating on ad valorem revenue bonds that had been issued by the Reedy Creek district. “The district's economic resource base is largely influenced by Disney and the operation of its Florida-based theme parks,” the report said. “Although the tax base is highly concentrated, Disney's long-standing record as one of the world's top tourist destinations and the general resilience of theme park performance through economic downturns are viewed as mitigating credit factors.” Lawmakers last year moved to dissolve Reedy Creek after Disney officials angered DeSantis by opposing a controversial education law that restricts instruction about gender identity and sexual orientation in schools. But lawmakers re-established the district last month, while making the changes.