By Dawn Chmielewski and Lisa Richwine
LOS ANGELES (Reuters) -Walt Disney Co is scrapping plans to build a nearly $1 billion corporate campus in central Florida that would have housed 2,000 employees, according to an e-mail to employees on Thursday, against the backdrop of its ongoing legal battle with Florida Governor Ron DeSantis.
Disney parks chief 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 $864 million on the project, according to the Orlando Sentinel, on a campus that 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," D'Amaro wrote. "This was not an easy decision to make, but I believe it is the right one."
A week ago, Disney CEO 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 $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?," Iger asked.
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."
Redfern wrote that given the company's financial position, "it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures."
Disney and DeSantis have been locked in an increasingly acrimonious battle that started in March 2022, when Disney's then-CEO, Bob Chapek, criticized legislation in Florida that would limit discussion of gender identity and sexuality in elementary schools.
DeSantis, who is expected to soon announce that he will seek the 2024 Republican nomination for U.S. 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 last month 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 DeSantis's actions cost the state jobs and investment. Democratic State Sen. 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 DeSantis's leadership during the pandemic, but 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," Curbelo said.
Iger's predecessor 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 $580 million in tax credits over the next 19 years.
"I remain optimistic about the direction of our Walt Disney World business," D'Amaro wrote. We have plans to invest $17 billion and create 13,000 jobs over the next ten years. I hope we’re able to do so."
(Reporting by Dawn Chmielewski and Lisa Richwine in Los Angeles; Editing by Leslie Adler, Anna Driver and David Gregorio)