- Walt Disney, as reported by the New York Times on February 19, 1967
The late 1960s were an exciting time for Orange County, Florida.
America is full of examples of critical, localized investment decisions that reshaped regional economies and kept paying dividends for decades. Chapter 7 of Jump-Starting America opens with the story of the high-tech investments in eastern Orange County that would help that area add 100,000 jobs over the next 30 years and would propel the University of Central Florida to grow from less than 2,000 students in its first classes in 1968 to one of the world’s largest universities today. But while a newspaper editor in Orlando was brazenly requesting a new military base for his city from the President of the United States, an equally dramatic investment was being planned at the western end of Orange County.
In April 1964, companies like “Latin American Development and Management Corp.” and “Reedy Creek Ranch Corp.” started making large land purchases in the swamps southwest of Orlando. One of these purchases secured over 8,000 acres from a Florida state senator. In total, over 27,000 acres would be purchased. For over a year, nearly no one knew the true purpose of all this land acquisition. Then, in October 1965, the news suddenly came out that Walt Disney had orchestrated the purchases to begin a mammoth new project: the Walt Disney World Resort.
Disney had learned from his experience developing Disneyland in California: that park ran out of room to grow within a few short years, and ended up surrounded by hotels, restaurants, and other competing attractions. Land in Anaheim that had previously been dominated by orange groves suddenly became prime real estate. Disneyland was undoubtedly an economic success, but much of that economic success was captured by others, including the owners of that surrounding land. For his next big project, Walt Disney wanted unfettered room to grow and full control over his own economic destiny, including all the increase in land value that would undoubtedly come from the massive development of Disney World.
The increase in value of nearby real estate is an underappreciated benefit of large developments, whether high-tech or magical. When 52 million adventure-seekers pass through the same area every year, location is everything to the small and mid-sized businesses that provide them places to stay, meals, and all the other products a traveler might need. Right on que, even after Disney’s enormous and meticulously secretive acquisition of land, a host of additional hotels and attractions sprang up in parallel with the construction of Disney World, including another theme park occupying almost 5,000 acres. This is a textbook example of agglomeration: the city with the world’s biggest tourist attraction is also one of the best places to build the next attraction. Development and success beget more success. Disney was, first and foremost, a businessman, and he had a clear disdain for the competing and off-theme attractions that surrounded Disneyland. But for the regional economy in Los Angeles or Orlando, this multitude of additional businesses was a terrific boon.
Disney fancied himself and his creations as avatars of “the ingenuity and imagination of American free enterprise” (NYT 1967). However, as the stories of the economic benefits of military bases and state universities, and the sometimes fierce competition for major scientific and government facilities, can attest, the story of Disney World doesn’t have to be unique, and major developments don’t have to begin in secret. As we describe in Jump-Starting America, public investments in science, technology development, educational institutions and supporting infrastructure can be made in both a fully competitive and a fully transparent manner, bringing more high-tech jobs and economic growth to more communities across America. Even better, when the government makes these key investments, we can all benefit from the increased value of the land and assets of the new high-tech hub. If the government maintains ownership of some of the key assets that enable the development of the new hub, like valuable office and lab space, the land appreciation that Disney was so eager to control and avoid could instead fund an “Innovation Dividend” that benefits all Americans.
Read the rest of the story of Orange County, and the full proposal to develop an Innovation Dividend and new high-tech hubs all across America, in Jump-Starting America, available in stores and online on April 9th.
References:
Fogleson, Richard. “Married to the Mouse.” Yale University Press. 2003