Leisureville (15 page)

Disney lobbied the Florida state legislature for the creation of a wholly independent district, free of state, county, and local ordinances and land-use laws, and empowered with the ability to float
its own tax-free bonds—and even to build its own airport and nuclear power plant if it so wished. When Disney described the $400 million investment he planned to make, and the thousands of jobs his new theme park would create, the legislature was happy to oblige. It was called the Reedy Creek Improvement District, and despite its inherently controversial and despotic nature—some people have likened it to an imperial land grant from the king of Spain—it is still in existence today.

In 1980, the Florida state legislature decided to help spur development by formalizing portions of Walt Disney World's special status, so that it could be imitated easily across the state. The ensuing legislation was called Chapter 190. There are now hundreds of communities in Florida governed by these special districts, and similar legislation now exists in more than thirty states.

From what I can tell, this peculiar form of government works as follows. A developer encounters a number of challenges regarding infrastructure when working with raw land. He needs to clear the land, grade it, and build—among other things—roads, sewers, and storm water retention ponds. This can cost a lot of money, particularly when the local government doesn't have the means to help with roads, electricity, and water treatment. A developer can finance this burden in a number of ways.

The most common method, which Del Webb used when he built Sun City, is to borrow money from a bank. Webb earned the money back when his homes were sold because the infrastructure improvements were included (front-loaded) into the price of the houses. Chapter 190 provides another way for developers to fund these infrastructural improvements without help from the county, by allowing the builder to create his own quasi-government with its own “community development districts” to help govern the development and pay for its infrastructure.

This financial structure affords a developer many advantages, such as the ability to obtain tax-free bonds, which are ordinarily
available only to traditional governmental bodies, such as municipalities and school districts. This process makes it unnecessary for a developer to persuade a private bank to lend him a large sum of money, usually at higher interest rates. Rural counties generally give Chapter 190 projects their approval because the local government reaps all the eventual tax benefits from the new development (more people mean more gross tax revenues), without having to spend a penny.

The developer doesn't have to repay these bonds himself; he can pass them on to homeowners. Instead of paying for the infrastructure up front, Villagers theoretically pay a reduced rate when purchasing their homes; but upon closing, they must accept their portion of the bond's repayment. Because the costs are back-ended, the homes can appear to be less expensive than they are.

The Villages' ten mini-districts (or CDDs) are each governed by five supervisors, who for the first several years are appointed by the developer at will. These supervisors are often family members, friends, and business associates of the developer. It is during these first few years of existence as a governmental body that the CDDs borrow millions of dollars and set up conditions for repayment. By the time homeowners are allowed to elect their own representatives, most decisions of consequence have already been made. Residents are basically empowered to doll up roadside flower beds and repaint streetlights.

Morse began tapping into Chapter 190 financing when The Villages spilled across the county highway that borders Orange Blossom Gardens. This financing covered many infrastructure costs, but Morse was still left paying for his golf courses and recreation centers.

Morse created two special “central districts” (one for Spanish Springs and one for Sumter Landing), which govern the other mini-districts. The central districts encompass only the development's commercial areas, but they still govern the rest of the community. Not only did their creation help reimburse Morse for additional expenditures; they also ensured the family's control over the community for years to come.

Unlike the mini-districts, which eventually enfranchise their inhabitants when they revert to civilian control, the central districts are structured in such a way that no residents of The Villages live inside their boundaries. Hence, as the majority landowner in the central districts, the Morse family rules them unchallenged. Once again, the boards are filled with friends, business associates, and family members.

When Gary Morse wants to be reimbursed for his recreation centers and golf courses, he sells them to these central districts. It's important to remember the mantra of most developers: “Build; sell; leave.” Maintaining pools and golf courses to the exacting specifications of demanding residents doesn't fit that model.

The central districts buy the properties—recreation centers, golf courses, swimming pools, etc.—as well as the amenities contracts connected to these properties. Consequently, a recreation center that the county tax appraiser values at $5 million could be sold to a central district for $50 million, because the central district is also buying future revenue. Villagers collectively owe several hundred million dollars for their community's infrastructure and amenities, and that number is likely to increase in coming years as the community continues to build out. Sixty percent of every monthly amenity fee goes toward debt service.

In the past, when evaluating the developer's asking price, the central districts have used a consultant who has also worked for Morse. The Villages refuses to acknowledge any conflict of interest. But even if such a conflict was acknowledged, it wouldn't much matter: Chapter 190 exempts these districts from Florida's laws governing conflicts of interest. And although the residents of The Villages pay the developer for these properties and contracts (and assume liability for them), they don't actually “own” them in the way they own their homes; the central districts (over which they have little control) own them. Residents are free to complain about these financial arrangements, but they have no leverage in the matter. And
yet, to many residents, such details amount to splitting hairs. As far as they are concerned, the central districts, whose primary functions are to administer their recreational amenities for the benefit of the residents, are doing a fine job.

As Rohan's presentation winds down, a resident from Michigan asks if it's true that The Villages is planning a third downtown with a western motif. The Villages filed for permission with Sumter County years ago to build a third downtown, and for most people the information is common knowledge.

“A third downtown? Gee, I don't know,” Rohan says. “But I would encourage you to keep yourself up-to-date the same way we do—by reading the
Daily Sun
.”

I look over at the two reporters from the
Daily Sun
. One of them is staring out the window, and the other is impatiently jiggling her leg. Neither has asked a single question. At exactly noon a secretary comes in to remind Rohan that he has a lunch date. “Wow! It's noon already?” he says, then hastily hands out gold-stamped certificates of completion. Outside, I invite the two reporters—Mark and Kim—to lunch. They readily agree.

Perhaps the most insidious aspect of the
Daily Sun
is its ability to masquerade as a real newspaper. It's printed on state-of-the-art presses and carries local, regional, national, and international news, much of it from legitimate wire services. The hefty Sunday paper resembles that of any other mid-size city.

The
Daily Sun
is unabashedly conservative—not surprisingly, given Morse's political affiliations. Public records indicate that Morse, his family, and his associates have donated more than $1 million to the Republican Party, including at least $100,000 to President Bush's two campaigns, thus earning Morse the status of “pioneer.” He was also a strong supporter of the former governor, Jeb Bush, who visited The Villages many times and even borrowed
Morse's private jet. More recently, Morse handed the Florida Republican Party its largest single donation ever—a check for $500,000.

The
Daily Sun
won't run “Doonesbury,” but it does print a slew of conservative columnists, including Oliver North and Ann Coulter. Although most of the local news is unusually sunny, one gets the distinct impression that just enough bad news (drugs, crime, juveniles misbehaving) is sprinkled on top to make one feel relieved to live inside the gates.

My former neighbor Betsy Anderson tells me she is impressed with the
Daily Sun
because it concentrates more on cheerful profiles of fellow Villagers than on hard news. “It's nice to read about good news for a change,” she says. “I like reading about all these peoples' accomplishments. It's the sort of thing most newspapers ignore. And the
Sun
only costs a quarter. The paper back home was twice as expensive.”

The paper has a ninety percent penetration rate, something unheard of in the real world, and has thus cornered the advertising market, including the highly profitable classifieds. Morse's paper has another unique advantage: few residents appear to have an interest in other local newspapers or in the hard news they provide about surrounding communities. I spoke with a number of Villagers who even believed that deed restrictions prohibited home delivery of other papers. They were mistaken, but competing papers are hard to find. By comparison, the
Daily Sun
's vending machines are everywhere, even though many residents opt for home delivery: the newspaper lands in thousands of driveways every morning.

Mark, a former bartender, is a rookie reporter, and Kim has about three years of experience. Mark tells me he didn't know where The Villages' government building was until now, and he's not sure why he was required to take today's course. “I can't see how it relates to what I'm doing,” he says.

Because of their age, the two reporters necessarily live outside the community they cover. Both were hired after posting résumés on an Internet job site, and they suspect that their lack of training and experience helped them get a foot in the door. “I didn't even have any clips,” Mark explains. “I'm not sure why they hired me.”

“Me neither,” Kim adds. “I was hired as a crime reporter, but there's no crime. I get the sense they don't really want me covering anything, so I spend a lot of time doing nothing. I see this being a better place to end a career.”

“We're not allowed to cover anything even remotely controversial,” Mark adds. “I wanted to write about the 1,000-person waiting list for new homes. I thought that was a good thing. But the editor told me I couldn't write about it. He wouldn't even let me call public relations for a quote.”

“Look, every newspaper is owned by
somebody
, and that person usually exerts some editorial control,” Kim says. “But this is extreme. The Morse family owns everything and controls everything. It's a true company town.”

“All the businesses are linked,” Mark says. “I've been told that I can't tend bar at any of the country clubs after work, because then The Villages would have to pay me overtime.”

Like the owners of a theme park, the Morse family caters to the needs of a captive audience. From what I can tell, they own liquor stores and liquor distribution rights, a mortgage company, several banks, many of the restaurants, two giant furniture stores as well as a giant indoor furnishings arcade called the “Street of Dreams,” a real estate company, golf cart dealerships, movie theaters, and the local media. You name it; they probably own it. They own so many different businesses that's it's nearly impossible to tell which are theirs and which aren't. And what they don't own outright, they often lease. The Morses own hundreds of thousands of square feet of retail space. In addition to rent, many businesses also pay the family roughly seven percent of their monthly gross.

Mark tells me about an orientation for new employees he recently attended. The other participants were restaurant workers, engineers, personal trainers, real estate agents, and liquor store cashiers. “They wanted to teach us the philosophy of the company, to let us know we don't work for the newspaper so much as for The Villages itself,” Mark says. He shows me the back of his company identification card. It reads: “The Villages' Dream-Maker Passport. We're dedicated to building a retirement community where people's dreams come true.”

“How does the
Daily Sun
cover bad news?” I ask.

“They don't,” Kim responds.

I ask her if she could help me obtain some back issues. “I can't,” she says. “We don't keep old newspapers on file. We don't even keep our notes. We are supposed to destroy them after a story is run. Taped interviews, too. And every few months somebody from the company goes through our computers and deletes all our files. I think legal counsel suggested it.”

Mark has an epiphany. “I should change my résumé to say that I write public relations and marketing materials. I'm really just writing free advertising.”

“This place isn't normal,” Kim says. “I keep waiting for everything to just unravel.”

The Villages is not entirely without homegrown opposition. Relations between homeowners and management first soured years ago, when residents accused Gary and his father Harold of reneging on promised free cable television and trash pickup.

Residents banded together, took the owners to court, and won. In anger, father and son refused to acknowledge the scrappy group, which named itself the Property Owners Association (POA). Gary and Harold then sponsored the formation of a competing organization.
To this day, there remain two resident groups: the Village Homeowners Association (VHA) backed by the developers, and the feisty POA.