Preface

In the Epcot film, Walt Disney's last screen appearance, viewed for the first time in Winter Park, Florida, on February 2, 1967, two months after Walt died, he famously declared: "I don't believe there's a challenge anywhere in the world that is more important to people everywhere than finding solutions to the problems of our cities." I agree. This book views Walt Disney World through the prism of urban politics and urban history. Whether the Disney enterprise makes a virtue of unreality and promotes the values of patriarchy and patriotism, as scholars writing from a cultural perspective have argued, is irrelevant here. Taking seriously Walt Disney's urban vision, yet examining it critically, Married to the Mouse assesses the significance of Walt Disney World for city-building and urban governance in the new millennium.

True, the Disney Co. never built the Experimental Prototype Community of Tomorrow that Walt described on screen. What they did build—Walt Disney World—is like a city, though. It has many urban-like qualities, at least—a workforce of 55,000 as of this writing; a nightly residential population exceeding 100,000 ensconced in twenty-five on-site hotels; shopping, dining, and nighttime entertainment facilities; its own "public" officials; an overall land-use plan; and, of course, unparalleled amusements and attractions. And more to the point, Walt Disney World incorporates the free-enterprise vision that Walt had for Epcot.

In planning Epcot, Walt and his "imagineers," as the company's creative people are called, produced more than a physical model. Beneath theglitter and all the futuristic imagery, they offered a governance solution to "the problems of our cities." Their agenda of reform aimed to remove the "impediments to change," among which they included "traditional property rights and elected political officials," as company consultants wrote in 1966. In other words, both capitalism and democracy were problematic; each produced fragmentation of effort. The Disney solution was centralized administration—benign, paternalistic, based on expertise.

Walt Disney World thus raises the interesting question of how cities should be built and governed and their services provided. Is the Disney model of centralized land-ownership and private government best, or is the status quo of democracy and capitalism a better arrangement? Married to the Mouse addresses this and other questions by examining the "economic-development marriage" between Disney World and the surrounding governmental community, tracing that relationship from the 1960s to the present. This perspective allows us to compare two methods of urban administration, one based on fusing public and private powers, the other on their separation; one based on centralized control, the other on political and economic fragmentation.

This book is written in the style of history-as-narrative. Believing with the historian C. Van Woodward that the best history is informed by art, I have tried to marry the analytical approach of political science—my discipline—with historians' more discursive approach to explaining, in Bernard Bailyn's words, "how the present got to be the way it is." More than a matter of taste, I use this narrative style to put the people back in the story. Political scientists have constructed sophisticated quantitative studies of the politics of urban development policy, yielding macro-level insights into the determinants of such policies. Though valuable, these studies de-emphasize the role of human agency by taking a policy type rather than "the deal" as their unit of analysis. Instead, this book uses a storytelling motif to emphasize the role of human beings rather than abstract forces in making choices, coping with consequences, and shaping events.

This project spanned two sabbaticals, explaining why the interviews occur in two intervals, 1990-91 and 1998-99. My interviews with most elected officials and with important participant-observers such as Billy Dial were conducted in person. In other cases, I interviewed people over the phone, typing copious notes as we spoke. All quotations from interviews are supported by notes or tape recordings; none of the quotation is imagined. In some cases, the quotations are attributed by persons who were present, as when I rely on Billy Dial's recollections for Martin Andersen's side of their conversations. (Andersen died before my research commenced.) Attributed quotes are apparent in the text or from the notes.

In writing this account, I have tried to be fair. Yet fairness does not mean, as a journalist once told me, going straight down the middle and not offending anyone. It does not mean offering equal measures of praise and criticism to all concerned. Rather, it means being fair to the story, fair to the facts, so that some persons get knocked more than others. For those painted in unflattering tones, I have tried to offer your perspective, too, subject to limits of space and evidence, so readers can judge for themselves. I have also tried to be mindful that while people make history, they do not always do so just as they please.

Chapter One

Serendipity

Walt Disney didn't say anything. He merely raised his right eyebrow in response to the offending remark. His staff, seated around him at the dinner party, knew what that meant. There he was—a self-made man, renowned as the world's greatest showman, his corporation pursued by a host of European nations, as well as Egypt, to build a Disneyland in their countries. And he was being insulted by the local business titan, the scion of inherited wealth, a bit tipsy, in the city where the cartoonist-showman proposed building a major tourist attraction. Walt was fuming.

The remark concerned an old issue that the Disney organization had already addressed. In late 1963, the city's mayor had raised the liquor issue again, leading Disney Co. vice president Donn Tatum to restate the company's position: liquor could be sold in "adjacent facilities" but not on Disney premises.1 Their executives were not teetotalers—cocktails before dinner were part of their corporate culture—and they understood as businessmen how alcohol could lubricate deal making, hence they allowed cocktail parties in areas reserved for industrial exhibitors. But selling alcohol to the public violated the Disney image. Thus the remark had not offended Walt's sense of morality; it was actually worse than that. It had insulted his business acumen.

Until that night the deal was nearly set. The Disney Co. was poised to launch their first major venture since Disneyland's opening in 1954, following a search process stretching back to 1959. In all, thirteen venues were considered, mostly in the eastern United States. The company knew from market surveys that only two percent of Disneyland's visitors in California traveled from east of the Mississippi, where three-fourths of the nation's population resided. Before the fateful remark, the planning for the expansion site was on track: company officials were negotiating the financial arrangements and planned to sign a letter of commitment the next day.

This new Disney facility would crown a larger project intended to resuscitate the city's economy. Walt liked that the project was a private-sector undertaking, planned by private business people rather than government bureaucrats, and he wanted it to succeed as a showcase for free enterprise. He had commissioned a study of the area's history to help his "imagineers" develop authentic themes for the facility. Having flown in with twelve of his executives to finalize the deal, he was busy imagineering himself. "Boy, this is going to be great," he told Adm. Joe Fowler, the vice president for construction who had built Disneyland, as they sat on Walt's hotel balcony, gazing over the site. Bubbling with enthusiasm, he talked of using paddle-wheel steamers like those in their movie "Hannibal" to ferry visitors to their gate.

That night, the Disney entourage attended a big dinner party with the politicians, businessmen, and local bankers involved in the project. It was there the offending remark was made. "Any man who thinks he can design an attraction that is going to be a success in this city and not serve beer or liquor, ought to have his head examined," said the head of the city's leading business. Hearing the remark, the mayor gasped, "Oh, my god." He turned to Adm. Fowler, who sat next to him, and apologized, saying, "I just can't control that guy."

But the damage was done. Walt hated being challenged, especially in public. Upon returning from the dinner party to his hotel suite, he asked Card Walker, another Disney vice president, "What time can we have the plane in the morning?" Surprised, Walker responded, "But you know we've got—" He tried to say they had legal papers to sign the next day, but Walt cut him off. "It's all finished," said Walt. "We're not coming. Forget about it."2 Afterwards, local bankers made three trips to California trying to change Walt's mind, all unsuccessful. August (Gussie) Busch, Jr.'s insulting remark had killed the deal—Disney World would not be in St. Louis.

As this incident shows, urban economic development involves an element of serendipity. A city's growth—its increase in population, employment, and tax base—can be planned, but only so much. Local development efforts are subject to chance events and the influence of human conduct, for good and ill. So it was that night in St. Louis in November 1963. Were it not for Gussie Busch's boorish behavior, a Disney "River Front Square" might shoulder the banks of the Mississippi, next to Busch Stadium, its entertainment drawn from the themes of old St. Louis and New Orleans, Louis and Clark, and the Louisiana Purchase. The events that evening changed the history of two cities. For the beer baron was like the guilty party in a broken engagement: in repulsing the Disney fiancée, he enabled another city to win her. The failure of the first relationship facilitated the second one.

As everyone knows, it was Orlando that "won" Walt Disney World. What Orlando got was the glitz, international name-recognition, and growth bonanza that few corporations besides Disney could offer. In the refrain of a commemorative Disney movie, it was "a dream come true"—not only for the Disney executives who built the Magic Kingdom following Walt's death in 1966, but also for the local civic boosters who sought a "gimmick," said one, to stop tourists from bypassing Orlando en route to Miami.3 "Show me a mayor in the United States of America who wouldn't just love to have Walt Disney sitting on his doorstep as a neighbor," said Carl Langford, Orlando's mayor when Disney came to town.4 His comment came on the tenth anniversary of the giant theme park, before Langford retired to the mountains of North Carolina to escape "from all the traffic," as he said in 1990.5

Back in 1969, before Disney World opened, a mere 3.5 million tourists visited central Florida. But that soon changed. In 1971, the Magic Kingdom's first year, the tourist count zoomed to 10 million. By the unveiling of Epcot in 1982, Orlando had become the most popular tourist destination in the world. With the launching of Disney-MGM Studio in 1989, the annual visitor count reached 30 million, and when Disney's fourth theme park, Animal Kingdom, opened in 1998, company officials predicted 55 million visitors annually by 2001.6 Like bees to honey, a swarm of other attractions followed Disney to Orlando, as shown in Table 1. Amusement Business magazine finds six of North America's eight largest theme parks in greater Orlando, and Fodor's Guide counts more than 80 fun zones in the area.7 Seldom has the location decision of a single corporation so transformed a city.

Between Disney's opening in 1971 and 1999, Orange County's population more than doubled, swelling from 344,000 to 846,000 residents. The fast pace of metro Orlando's growth is shown in Table 2. Post-Disney World construction, Orlando has consistently ranked among the nation's ten fastest-growing urban areas. In the mid-1980s, it was the second fastest-growing area in the Sunbelt, and in 1994, it became the nation's fastest growing urban region. With a metropolitan population exceeding one million, it received 17 million air passengers a year in the mid-1990s, making its sleek, modern airport the fastest growing and one of the busiest in the nation. And its hotel room count has exploded from 8,000 before Disney World to over 100,000 by 2000—more than New York, Chicago, and Los Angeles, and second only to Las Vegas in the United States.

But there is another side to the story, reflecting that urban growth both gives and takes away. It transforms cultural life, the natural environment, and the character of the urban economy while expanding employment and economic opportunity. It creates public expenditure needs, but not always matching tax resources; it brings new employment, though not always living wages. It is a process, moreover, in which some gain while others lose. Some say it is Disney that snared Orlando, not the other way around.

On the cost side, Disney World has generated traffic congestion, public facility deficits, affordable housing shortages, and a low-wage economy. These problems frequently accompany urban growth, but there is a complicating factor in the Disney-Orlando case. For the Disney Co. got something special in coming to Florida: their own private government, a sort of Vatican with Mouse ears, with powers and immunities that exceed nearby Orlando's. The entertainment titan was authorized, among other things, to regulate land use, provide police and fire services, build roads, lay sewer lines, license the manufacture and sale of alcoholic beverages, even to build an airport and a nuclear power plant. (In fact, Disney never established the public police force, relying instead on over 800 private security guards; nor did they build an airport or nuclear power plant, though they retain authority in state law to do so.) To the envy of other developers, Disney also won immunity from building, zoning, and land-use regulations. Orange County officials cannot even send a building inspector to Disney property, and sheriff deputies are obliged to check in when they come on property and to avoid conspicuous display of their marked cars on such occasions.

Officially, these powers were granted to permit the construction of a model residential community where "20,000 people would live and work and play," as Disney representatives told Florida lawmakers. The company wanted "flexibility to plan for the future" so their model community would "always be in a state of becoming."8 In other words, they wanted freedom from government regulation, from local elected officials, and from the reach of democratic government. What they got was a twin-tier government, with two general-purpose local governments on bottom and a special-purpose district, the Reedy Creek Improvement District, on top. Essentially, the District controls both tiers: the forty-seven residents in the two cities are trusted, supervisory-level Disney employees, and the special-district government is controlled by the landowner, Disney. Of course, these governments are overlain by federal and state government, though the Disney property is exempted from most state land-use and building regulations. Map 1 shows the location of the Reedy Creek government, encompassing the entire Disney property, relative to Orlando.

Yet power, like growth, is two-sided. It is enabling—giving an actor, whether an individual or corporation, the capacity to do what it otherwise could not do. But it is also constraining—preventing other individuals, corporations, or government agencies from achieving their ends. So it has been with Disney's private government. On one hand, it has enabled the Disney Co. to build a giant pleasure palace that is the most popular tourist mecca in the world, not to mention the largest contributor of sales-tax revenue in Florida. Without their freedom from government regulation, without their ability to self-provide government services tailored to their precise needs, that success might not have occurred. On the other hand, the Disney Co. under Michael Eisner has used its powers and immunities to acquire a competitive advantage over other entertainment and hotel companies, building nightclubs and hotels on a scale never contemplated in their original government charter. Their immunities have impeded local government's ability to manage growth, even as Disney competes with surrounding governments for convention business, tourist spending, retail and professional office space, and entertainment venues.

More, the Disney Co. never built and, as detailed here, never planned to build the Epcot residential community that, in their presentation to Florida lawmakers, was the reason for their governmental powers in the first place. They wanted the powers of government but not real residents who could challenge their managerial prerogatives. Told here for the first time, it is nevertheless an old Florida story—of a big company that makes big promises to get concessions from government, then fails to keep its word. Hence the paradox of Disney World: its powers were ill-gotten, but they spawned amazing growth. In urban politics, is not growth the ultimate justification for power?

This book uses the metaphor of love and marriage to relate this story of growth and power. The underlying perspective, drawn from the academic field of urban political economy, assumes a city's relationship with a big local employer is like a marriage between people, a relationship characterized alternately by conflict and consensus, individuality and mutual dependence. The chapter headings—Serendipity, Seduction, Secrecy, Marriage, Growth, Conflict, Abuse, Negotiation, and Therapy—accord with this analogy.

Consider how the stages of love and marriage correspond with corporate-local relationships. Take the broken engagement: corporate officials reject a location deal and begin searching for a new plant site. Or the chance encounter: a traveling executive fortuitously learns of a business opportunity in a distant city. Or courtship: at chamber of commerce bazaars, like singles bars, local officials lure business executives with promises of tax breaks and land-lease agreements, while business executives dangle new investment, jobs, and tax base. Or the marriage contract: local officials and corporate CEOs stipulate their respective contributions to a corporate location deal. Or the extended honeymoon: the business grows and the city prospers. Or hard times: government regulators and company officials wrangle over the business's impact on air quality. Or divorce: the corporate-local relationship sours and a business relocates.

This analogy derives from the mutual dependence found in both relationships. When business-government partnerships form, as when people marry, reciprocal though sometimes unequal needs exist. The city needs investment, jobs, economic opportunity, philanthropic contributions to support cultural institutions, and, above all, tax resources. For its part, business needs a government that listens, favorably zoned land, a pro-business tax and regulatory climate, an appropriately trained and educated workforce, an efficient surface transportation system, and more.

There is no harm per se in government servicing businesses' needs; no more than when consenting adults do the same. The government that fails to compete with other governments for new business investment risks losing tax base and employment. Of course, the players in this competition are seldom evenly matched. Some cities are more attractive as places to live and do business; they can offer fewer overt incentives and still prosper. Some cities need a new employer more than the employer needs them; hence they offer the employer blandishments of all sorts. This mismatch of needs creates unequal bargaining strength, enabling one side to leverage the other.

For local government the challenge is this: not to concede so much that the benefits of a new employer are traded off. If the city grants too much tax or regulatory relief, or spends too liberally on sewer and highway extensions, the deal may cost more than it is worth. Neither does a business wish to concede too much. It wants assurance that the benefits of a locale exceed its tax and regulatory costs. Governments and businesses thus pose a threat to each other besides offering a potential helping hand. Each can make their relationship untenable. That old chestnut "Can't live with them, can't live without them," applies to business and government too. Complicating urban economic development, this aphorism also applies: "Whom you marry affects what you may become."

Another complication is that divorce is sometimes too costly. Governments and corporations may not be able to extricate themselves from one another, or the cost of dissolving their relationship may be too high. The corporation may be dug in; the local government may extract too many benefits from the corporation to risk a major blowup. It is like the situation of many nineteenth-century women for whom divorce was a practical impossibility. Here the categories used by economist Albert Hirschman are helpful.9 He recognizes three methods of recuperation in political and economic affairs: exit, voice, and loyalty. Voice (complaining) is less effective, he writes, without the threat of exit behind it, creating a tendency toward loyalty or accommodation. Thus the impracticality of divorce (exit) makes loyalty more likely, however grudgingly accepted. This insight applies to corporate-local relationships as well as to married couples.

The Disney World-Orlando story is not only about growth and power, however. It is also interesting for what it reveals about the metamorphosis of Orlando, from citrus town to world-class tourist destination, and for what it relates about Walt Disney's urban vision, the Disney Co.'s pursuit of that vision after Walt's early death, the transformation of the company under Chairman Michael Eisner, and the company's use and abuse of their governmental powers. It is a story of CIA operatives, dummy corporations, private police powers, secrecy, and chicanery—but also of creative genius and commitment to a dream.

Beyond Disney lore and the metamorphosis of Orlando, the Disney-Orlando story relates to three sets of questions confronting modern postindustrial cities. The first concerns the power of global corporations over local governments and, realistically, whether local leaders can resist corporate demands. The trend toward corporate bigness is well known. Home-grown firms—like the business Walt and his brother Roy started in their garage in Kansas City in 1920—go international, marketing their products abroad and creating a global scale of operation. These firms establish multiple locations in places where they can find the cheapest production costs, the most compliant governments, and the best market access.10 Reflecting this trend, the Disney Co. became multilocational in building their East Coast Disneyland in Orlando in the late 1960s. The company then went multinational in adding Tokyo Disneyland in 1983, followed by Euro Disneyland (now Disneyland Paris) in 1992.

This corporate trend bodes ill for local government, it is said. Global corporations are essentially stateless, having little local or national loyalty. Global in their operations, footloose in their loyalties, they play one political jurisdiction against another in bargaining for lower taxes, less regulation, subsidized infrastructure, and more. The result: local governments become interchangeable parts in a global game of corporate survival.

So it is said. But are local governments always mismatched in bargaining with global corporations? Must the competition among cities for new businesses cause a loss of political autonomy as governments comply with business demands? These questions relate to an important debate in urban political science. On one side, political scientist Paul Peterson argues that cities have a "development interest" driving local leaders to press for growth.11 On the other, political scientists known as "regime theorists" say that cities have choices about how to grow, and that how these choices are made depends on the local "regime"—the informal network of groups and individuals that dominates local governance.12 At issue is whether external economic factors (says Peterson) or internal political factors (say regime theorists) exercises more influence on local growth strategies. Peterson's perspective suggests that local governments are largely at the mercy of global corporations, while regime theorists think local leaders can resist corporate demands. This is a key issue in interpreting whether Orlando might have avoided, and can now better manage, the problems spawned by Disney's growth.

A second set of questions concerns the division of labor between public and private, government and market, in city building and municipal service provision. How should buildings, land-use, and transportation be controlled—by private corporations responding to market incentives, or by elected governments catering to voter preferences? How should municipal services be provided—by private corporations or by popularly elected governments? And what values should be incorporated into local governance institutions—private or public ones? As political scientist Nancy Burns relates, the later question is especially important where special-purpose governments are concerned, since most are havens to private values.13

These questions are well asked about Walt Disney World because it is not only an amusement park. As noted in the Preface, it is like a city—with its own public officials, a workforce of 55,000 as of 2000, a nightly population exceeding 100,000, a comprehensive city plan, and more. It is no ordinary city, moreover, but a proprietary city—a "showcase for free enterprise," in Walt's phrase—founded upon two private-sector strategies: privatization and deregulation. As an experiment in privatization, municipal services at Disney World are provided by the Reedy Creek Improvement District, the governmental arm of the Disney Co. As an experiment in deregulation, the Florida legislature agreed in 1967 to roll back state and local regulation of building construction, land use, and so forth, in return for Disney's promised $600-million investment.

In the U.S. debate, privatization has meant "enlisting private energies to improve the performance of tasks that would remain in some sense public," writes political economist John Donahue.14 Within this frame of reference, economists have debated whether refuse collection, street maintenance, and other discrete municipal functions should be provided by private corporations working for government or directly by government. The Disney World experience pushes this debate to another level, however. Here the question is not whether this or that municipal function should be privatized but, rather, whether the whole business of city building and municipal service provision should be entrusted to a private corporation instead of elected political officials.

A third set of questions concerns the possibilities for transcending Orlando's tourist economy, and whether past decisions lock Orlando into a determinate path of development. Consider that the economic role of cities is changing as new types of cities emerge. Cities are evolving from places for manufacturing to places for shopping, office work, and entertainment. As tourism becomes a large-scale industry linked to the world economy, and as urban culture itself becomes a commodity, some cities have developed tourism-based economies. These tourist cities differ in the appearance and extensiveness of their tourist spaces; in the degree to which those spaces are integrated into the urban fabric; and in the objectives of their visitors, ranging from sin (Bangkok) to spiritual redemption (Jerusalem) to personal fortune (Las Vegas) to family fun (Orlando).15 Yet tourist economies share a reliance on low-wage work, often with limited job benefits. In the Orlando area, over half the metro workforce is engaged in the service and retail sectors, and despite a booming economy and record low unemployment in the late 1990s, average real wages have been stagnant for a decade.16

These developments pose what some historians term the "path dependence" question. As cities and their economies evolve, are the weak and inefficient examples eliminated so that evolution always moves in a positive direction? Will Orlando follow a path from agriculture to tourism to high-tech, as local leaders hope? Or will Orlando remain stuck with a predominately service-sector tourist economy? Path dependence theory, while not a proven theory, helps to explain why some destinations are unreachable in economic development. "Where you can get to," the theory postulates, "depends on where you are coming from; and some destinations you simply cannot get to from here."17 Orlando's economic development origins in tourism and passive government may eliminate destinations like Silicon Valley. The "networks" that support existing economic arrangements may make the "switching costs" too great. The mere possibility of this path dependence makes the history of Disney World and Orlando, of the formation and evolution of this economic development marriage, important to understand.

The Disney World-Orlando story is thus richly complex. It is interesting for what it reveals about how Disney World and Orlando, individually and together, got to be what they are. And more, it provides fertile ground for addressing important questions about the choices available to local governments confronted by global corporations, the viability of privatization and deregulation, and the path dependence of a tourist economy founded upon passive government. Yet these questions are not addressed all in one place, so that one chapter focuses on the first question, another on the second, and so on. Rather, they are addressed in the context of a chronological narrative with tangents, noted in the text, to the above agenda. The final chapter—Therapy—weaves these questions and answers together in assessing the options and switching costs confronting greater Orlando.

The story begins with roads, for it was through roadbuilding that visionary local elites worked to put Orlando on the map, to link it commercially with the rest of Florida, the Southeast, and the nation if not the world. Their efforts laid the groundwork for Disney's coming to Orlando. In this pre-figurative stage of economic development, we see the formation of a new regime of power based on commitment to growth, as private sector leaders dress up Orlando with high-speed roads to seduce investment and employment for the area.