In a surprising turn of events, Walt Disney Co (DIS.N) has made the difficult decision to scrap its proposed $1 billion corporate campus in central Florida, which would have accommodated 2,000 employees. The announcement, made via an internal email to staff members on Thursday, comes at a time when the entertainment giant is engaged in a legal battle with Florida Governor Ron DeSantis.

Citing “changing business conditions,” Josh D’Amaro, Disney’s parks chief, revealed that the company has reconsidered its 2021 plan to relocate employees, particularly the Imagineers responsible for designing theme park rides, to a new campus in Lake Nona. The Orlando Sentinel estimated that the project’s total cost would have reached a staggering $864 million. This state-of-the-art facility would have served as the headquarters for Walt Disney Imagineering and the Disney Parks, Experiences, and Products division.

The decision to move California-based Imagineering staff across the country received backlash from employees who expressed their unwillingness to relocate to Florida. D’Amaro acknowledged the substantial changes that have occurred since the initial project announcement, including leadership transitions and evolving business conditions, leading to the conclusion that construction of the campus will not proceed.

Disney’s CEO, Bob Iger, raised concerns about Florida’s commitment to the company’s ongoing investments during a recent investor call. With over 75,000 employees in the state, Disney is a significant contributor to Florida’s economy, attracting millions of visitors to Walt Disney World annually. The company had planned to invest a substantial $17 billion in expanding the resort over the next ten years. Iger questioned whether the state truly wanted Disney to continue investing, expanding employment opportunities, and paying taxes.

The dispute between Disney and Governor DeSantis escalated in March 2022, when then-CEO Bob Chapek criticized proposed legislation in Florida regarding discussions on gender identity and sexuality in elementary schools. In response, DeSantis moved to revoke Disney’s longstanding self-governing authority over Walt Disney World, alleging that the company should not receive special treatment due to its political stance. Disney viewed the action as an act of political retaliation and subsequently filed a lawsuit against the state.

The news of Disney canceling the Florida campus project was swiftly capitalized on by former President Donald Trump’s 2024 presidential campaign. The Trump War Room Twitter account accused DeSantis of costing the state job opportunities and investments. Democratic State Senator Linda Stewart expressed disappointment over the loss of jobs, while former Congressman Carlos Curbelo, a Republican, praised DeSantis’s leadership during the pandemic but criticized his approach to governance.

Disney’s previous CEO had announced plans in July 2021 to relocate jobs from Southern California to Florida, citing the state’s favorable business environment. While the exact value of Disney’s investment remained undisclosed, it was reported that the company would receive tax credits amounting to nearly $580 million over the next 19 years. Despite this setback, D’Amaro expressed optimism for Walt Disney World’s future, highlighting plans to invest $17 billion and create 13,000 jobs in the next decade.