Disney Just Had a Major Legal Victory That Could Save Them and Other Hotels Millions!

Walt Disney World, just had a major legal victory that could save Disney and other big hotel owners millions of dollars in taxes. For Disney, this victory has been 5 years in the making!

Ruling in a years-long lawsuit between Disney and Orange County Property Appraiser Rick Singh, an appellate court determined that Singh’s office improperly inflated the value of Disney’s Yacht & Beach Club Resort, a luxury hotel with an annual property tax bill of more than $4 million.

Not only is this a huge win for Disney, it’s a win for the entire lodging industry! Here’s why- the court declared the entire method that Singh had used to appraise the Disney property is illegal under Florida law.

Now, experts predict that Disney and other hotel companies, whose finances have been crushed by COVID-19, will seize on the ruling and use it to push for lower tax assessments on scores of other properties. Disney alone is already challenging the appraisals for more than 10 other hotels.

Michael McElveen, a commercial appraiser in Tampa, told the Orlando Sentinel, “It’s huge, and I would imagine every hotel in the resort area of Orlando will be filing that appeal.”

When Rick Singh took over as apprised, his staff redid the values for a number of hotel properties using the “Rushmore” method. Singh’s approach led to some dramatically higher assessments. The assessed value of Disney’s Yacht & Beach Club, for instance, more than doubled, to nearly $340 million. This inevitably led to Disney filing a lawsuit, arguing that Singh’s office overstated the value of its hotel property by illegally including the value of intangibles, like the Disney brand. Disney also had the support of two industry groups that Disney helps fund — the Florida Restaurant & Lodging Association and the Central Florida Hotel & Lodging Association. Each group wrote legal briefs in support of The Walt Disney Company.

Since the court ruled the Rushmore method to be illegal, shockwaves were sent through appraiser offices. Property taxes are the largest source of revenue for cities, counties and school districts, and hotels are big property taxpayers. Local governments are already struggling with plummeting revenues from other sources, like sales and hotel taxes, because of the COVID-19 pandemic and the recession it has caused.

In a statement to the Orlando Sentinel, Jacques Wahler, a Disney spokeswoman, said;

At a minimum, Disney expects to see reductions on its own hotels. “We are pleased that the court concluded that the method used by the property appraiser violated Florida law. We look forward to a reassessment of our properties consistent with Florida law and the court of appeal’s ruling.”

Now, the ball is in Singh’s court. He could ask the appellate court for a rehearing in the hope that it might narrow its decision or try appealing to the Florida Supreme Court. Beth Watson, a spokeswoman for Singh, declined to say what the agency will do next. She said Singh’s office remains “confident” in its appraisal practices — but acknowledged that it was alarmed by the potential reach of the court’s ruling.

Source: Orlando Sentinel

Kristi is the Media and PR Director for The Kingdom Insider. She's a lifelong Disney fan and grew up spending her family vacations at the Happiest Place on Earth. She resides in Florida with her husband and two boys, ages 4 and 6.