Disney has abandoned plans to open up a new employee campus in Lake Nona, Florida, amid rising tensions with the state’s governor.
Citing “changing business conditions” and the return of CEO Bob Iger, Josh D’Amaro, chairman of Disney’s parks, experiences and products division, penned a memo to employees Thursday, announcing that the company will not move forward with construction of the campus and will no longer be asking more than 2,000 California-based employees to relocate to Florida.
“This was not an easy decision to make, but I believe it is the right one,” D’Amaro told employees.
Many Disney employees balked at the company’s relocation plans when they were first announced in July 2021 by former CEO Bob Chapek. While some left the company, or transitioned to other posts within Disney that would not require a move to Florida, others held out hope that the plan would fizzle out after a postponement. The campus was originally slated to open in 2022-2023, but was later delayed to 2026.
Disney is headquartered in Burbank, California, but operates a number of satellite offices across the country and the world.
D’Amaro said employees who have already moved to Florida may be able to relocate back to California.
“It is clear to me that the power of this brand comes from our incredible people, and we are committed to handling this change with care and compassion,” he said.
Disney’s announcement comes amid a bitter feud between the company and Florida Gov. Ron DeSantis. The company filed a lawsuit accusing DeSantis and the new board members of its special district of carrying out a campaign of political retribution against the entertainment giant.
DeSantis targeted Disney’s special district, formerly called the Reedy Creek Improvement District, after the company publicly criticized a controversial Florida bill — dubbed “Don’t Say Gay” by critics — that limits discussion of sexual orientation and gender identity in classrooms.
The special district has allowed the entertainment giant to effectively self-govern its Orlando parks’ operations for decades. The district was ultimately left intact, but its five-member board was replaced with DeSantis picks and renamed the Central Florida Tourism Oversight District.
Disney filed its suit in late April after the new board voted to undo development contracts that the company said it struck to secure its investments. The company has since updated that lawsuit to include newly passed legislation targeting its monorail system as further evidence of retaliation by the governor.
Iger has publicly lambasted DeSantis and the Florida government, noting that Disney has created thousands of indirect jobs, brings around 50 million visitors to Florida every year and is the state’s largest taxpayer.
In a statement later Thursday, representatives for DeSantis called the decision to nix the Lake Nona campus “unsurprising.”
“Disney announced the possibility of a Lake Nona campus nearly two years ago. Nothing ever came of the project, and the state was unsure whether it would come to fruition,” DeSantis’ office said in the statement.
D’Amaro reiterated in his memo that the company still plans to invest $17 billion in Florida over the next 10 years, including the addition of around 13,000 jobs. The company currently employs more than 75,000 people in the state.
Disney declined to provide specific updates on that investment, but has previously announced plans to update park attractions, expand existing parks and add more cruise ships to its fleet in Florida.
“I remain optimistic about the direction of our Walt Disney World business,” D’Amaro told employees.
This story originally appeared on CNBC.