Disney Dropping $1 Billion Florida Campus May Screw Over Other Developers

Disney's decision to scrap its $1 billion campus in Orlando, Florida, this month could leave many surrounding development projects in Orlando scrambling, The Wall Street Journal reported.

The House of Mouse purchased the land in the Lake Nona community in 2021 but ultimately decided not to follow through and canceled plans to build the campus, the Journal reported on May 18. Hundreds of employees set to work at the new campus had already moved to Lake Nona before Disney announced it would be abandoning the plan.

Lisa McNatt, a director of market analytics for CoStar Group, told the Journal that when Disney initially announced plans to build in Lake Nona, 2,100 new apartment units were built in Orlando as a result, with 1,200 units currently being constructed. McNatt told the Journal that only 750 units had been built in the preceding three years.

Representatives for Tavistock Development Co., the group behind Lake Nona, told the Journal that it had been "intentional in curating the selection of organizations, innovators, and entrepreneurs that fuel our ecosystem." The representatives added that 95% of the multifamily housing at Lake Nona was currently being occupied.

A spokesperson for Lake Nona told Insider that, despite Disney's move, there is still a high demand for multi-family units within the campus. Of the 1,400 apartment units at Lake Nona, more than 98% are occupied, the spokesperson said. The spokesperson also clarified that the number of units had been planned years before Disney announced it would start building in Lake Nona.

McNatt said that Disney's presence "would have resulted in a strong uptick in higher-income jobs that could have benefited the Orlando area at large."

Disney's decision to scrap the plans was part of the company's focus on cutting costs, the Journal previously reported, as well as its ongoing political battle with Gov. Ron DeSantis of Florida, which began after Disney spoke out against a law backed by the governor that would limit discussions on sexual orientation and gender in public schools.

Insider's Kelsey Vlamis previously reported that if the feud continued, the state of Florida could see significant financial loss if Disney — the second largest private employer in the state — decided to tap out of more projects in the state. Although that was not quite happening yet, Deadline reported.

"I think DeSantis has more to lose, as this incident made apparent, depending on whether, as a fairly skilled politician, he can somehow put a good face on this," Richard Foglesong, an expert on Walt Disney World's history and politics, told Insider.

"Disney announced the possibility of a Lake Nona campus nearly two years ago," a spokesperson for DeSantis told Insider. "Nothing ever came of the project, and the state was unsure whether it 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."

Representatives for Disney did not immediately respond to a request for comment.

May 31, 2023 — This story has been updated to specify that the new units were built in Orlando. It's also been updated to include comments received from DeSantis's office and a spokesperson from Lake Nona.