Title
Conduct a Public Hearing to Consider/Discuss/Act on a Resolution of the City Council of the City of McKinney, Texas, Regarding the Application of The NRP Group, to the Texas Department of Housing and Community Affairs, for a 4% Housing Tax Credit to Construct a New Housing Development to be Known as “The Franklin Branch Apartments”
Summary
COUNCIL GOAL: Goal 1: Direction for Strategic and Economic Growth
MEETING DATE: June 2, 2026
DEPARTMENT: Housing and Community Development Department
CONTACT: Cristel Todd, Affordable Housing Administrator
Margaret Li, Housing and Community Development Director
RECOMMENDED CITY COUNCIL ACTION:
• Approve the Resolution
ITEM SUMMARY:
• The NRP Group (the “Developer”) was selected as the co-development partner for the McKinney Housing Finance Corporation (MHFC) issued Request for Qualifications (RFQ)
• The NRP Group will be applying to the Texas Department of Housing and Community Affairs (TDHCA) for the non-competitive 4% tax credits to construct a new housing development to be known as the Franklin Branch Apartments (the “Project”)
• The NRP Group is requesting a Resolution of No Objection from the City Council which is required under TDHCA’s 2026 Qualified Allocation Plan and needed in order for the Project to receive funding from TDHCA.
BACKGROUND INFORMATION:
• On September 22, 2024, the MHFC issued an RFQ to select a qualified developer for a public private partnership deal.
• On December 13, 2024, The NRP Group was selected as the co-development partner for the MHFC RFQ.
• On February 3, 2026, the City Council approved a Petition to Annex and a Request to Zone the Subject Property to “MF36” - Multi-Family Residential District
• The Developer is proposing a 100% affordable, 288-unit multifamily housing development to be located on an approximately 15.7-acre site on the southwest corner of FM1461 and Baxter Well Road known as the Franklin Branch Apartments.
|
Area Median Income |
Number of Units |
Percentage of Total |
|
30% AMI |
29 |
10% |
|
60% AMI |
176 |
61% |
|
70% AMI |
83 |
29% |
|
Total |
288 |
100% |
• On December 6, 2022, the City Council adopted Resolution 2022-12-171 (R) to amend the City of McKinney Low Income Housing Tax Credit Resolution Policy.
o Project Location:
§ An approximately 15.7-acre site on the southwest corner of FM1461 and Baxter Well Road (the Project Site).
§ The Project Site is not located within one linear mile of an existing tax credit project.
o Housing Needs Characteristics:
§ There are currently 3,096 multifamily tax credit units in McKinney
§ To maintain the historic number of tax credit units at 1.25% of the population (or one unit for every 80 people), a total of 2,844 units of affordable housing would be needed.
§ With an estimated July 1, 2024, population of 227,526 (Source: U.S. Census Bureau, Population Estimates Program, updated annually), the City has exceeded the total number of units needed to date by 252 units.
o Project Characteristics:
§ The Project Site does not include the use of existing housing or propose a community revitalization plan.
§ The Project Site is partially undeveloped land; and includes some structures and outside storage associated with an existing retail use.
§ The proposed Project intends to construct 288 rental units for low-income households.
§ The proposed Project is not intended for eventual tenant ownership.
§ The development plan calls for nine three-story buildings, comprised of one-, two-, three-, and four-bedroom units. The proposed Project will include approximately 276,276 total net rentable square feet with additional space for a clubhouse and amenity areas.
o Sponsor/Developer Characteristics and Experience:
§ The Applicant is a privately owned national real estate company with over 30 years of experience developing, owning, and self-managing communities. Please see the attached Letter of Request.
o Anticipated Tenant Population and Special Housing Needs:
§ The proposed Project would serve the general population.
o McKinney Housing Authority (“MHA”) Waiting Lists and Support:
§ The proposed Project would accept Housing Choice Vouchers.
o Anticipated Tenant Population and Individuals with Children:
§ The proposed Project would serve the general population, which includes families with children.
o Whether there are any Restrictions on the Project Becoming Tenant Owned:
§ The proposed Project is not intended for eventual tenant ownership.
o Whether there are any Agreements Regarding Minimum Income Requirements on Potential Tenants Utilizing Vouchers or Rental Assistance Programs:
§ The Applicant’s management team has agreed that they will not impose any minimum income requirements related to rental assistance programs.
o Energy Efficiency of Project:
§ The proposed Project will comply with all applicable TDHCA, Federal, State and local energy efficiency guidelines.
§ The proposed Project will meet National Green Building Standards and have Energy Star appliances and fixtures in each unit.
o Historic Nature of the Project:
§ Historic uses of the property were agricultural. The Project Site is not located in any of the City of McKinney’s historic districts.
o Whether the City Has More Than Twice the State Average of Units Per Capita Supported by Housing Tax Credits or Private Activity Bonds:
§ With a 2024 population of 227,526, and 3,096 existing tax credit units, the City’s total units per capita is 0.014 (Source: Texas Department of Housing and Community Affairs).
§ The City’s total units per capita is 1.28 times the state average of 0.011 units per capita.
o Whether the Applicant Notified the Entities Identified by the City’s Policy About the Filing of the Application:
§ Entities including Councilmember Franklin in whose District the Project is located, most City Council Members, and McKinney Planning Staff have already been notified.
§ The Applicant has indicated that all of the entities identified on the QAP will be notified as required by the TDHCA.
§ The Applicant has indicated that they plan to reach out to nonprofits and other community organizations in the area.
o Whether the Development of the Project at the Proposed Location Complies with the Existing Zoning or Requires a Change in Zoning and Whether the Project at the Project Site is Consistent With the City’s Comprehensive Plan and Housing Priorities;
§ On February 3, 2026, the City Council approved the annexation and request to rezone the Project Site to Multi-Family Residential District (“MF36”).
§ The approved zoning is consistent with the City’s Comprehensive Plan and housing priorities.
o Whether the Applicant is in the Process of Seeking the Appropriate Zoning From the City and whether the Applicant has Signed and Provided to the City a Release Agreeing to Hold the City and All Other Parties Harmless if the Requested Zoning is Denied:
§ The applicant has received the appropriate zoning from the City and has executed a Hold Harmless Agreement. Please see the attached Hold Harmless Agreement.
o Information regarding 4% Tax Credit Projects:
§ The proposed Project is seeking a 4% tax credit; and the McKinney Housing Finance Corporation will serve as the private activity bond issuer.
o Information Regarding Rehabilitation Projects and Accessibility Standards:
§ The proposed Project is not a rehabilitation project.
§ The proposed Project is still under design and is intended to comply with all required accessibility standards.
o Anticipated Impacts on City Services:
§ Police:
• The proposed Project is in line with the anticipated growth of the City.
• The McKinney Police Department has sufficient current capacity to absorb the proposed Project’s anticipated service demands.
• The McKinney Police Department has a multi-year plan to meet the demands of future City growth.
§ Fire:
• These proposed Project typically increases demand for Emergency Medical Services (EMS).
• The overall impact to fire suppression should be minimal under normal circumstances because new buildings are built within existing codes and standards including active fire protection features
• The proposed Project will create additional inspection requirements for the Fire Marshal Office.
§ City Services:
• Offsite improvements, include the extension of utility facilities will be necessary ensure there is sufficient water, sewer, and stormwater connections/capacity to serve the proposed Project’s intended use.
• Please see the attached Impact on City Services Map.
§ Traffic analysis:
• Trips generated from the Project (Multifamily Housing Low-Rise) are considered significant. However, the proposed Project will be dedicating public rights-of-way and improving existing street infrastructure.
• Please see the attached Traffic Analysis.
o Rehabilitation Projects and Compliance with Health and Safety Codes:
§ The proposed Project is not a rehabilitation project.
§ The proposed Project will comply with all applicable City health and safety codes.
FINANCIAL SUMMARY:
• The estimated cost of the Project is approximately $89,990,570. Tax credits make up approximately $32,083,414, with a deferred developer fee of $6,422,056 and private debt making up the remaining $51,485,000.
• As a public private partnership, the Project would receive an estimated $13,688,958.77 in property tax exemptions by partnering with the MHFC over the initial 15-year compliance period
• The Developer is not asking for any additional contribution or fee waivers from the city at this time.
• The MHFC will receive approximately $5.9 million over 15 years, based on the following fees from the public private partnership:
o Developer Fee: 30% of all Developer Fees (estimated at $2,713,000)
o General Contractor Fee: $335,000
o Partnership Management Fee: $20,000 + 3% annually (estimated at $372,000 over 15 years)
o Net Cash Flow: 50% of the Net Cash Flow (estimated at $2,505,000 over 15 years)
o Sale or Refinance Net Cash Flow: 1.5% of gross sales proceeds
BOARD OR COMMISSION RECOMMENDATION:
• On April 10, 2026, the MHFC approved a Memorandum of Understanding for the Project and resolutions authorizing the:
o Submission of applications for allocation of Private Activity Bonds to the Texas Bond Review Board
o Transfer and assignment of McKinney Franklin Branch GP, LLC, the General Partner of the Franklin Branch Apartments, Ltd, and designation of the MHFC as the sole member of the General Partner
o Designation of the MHFC as the sole member of the Ground Lessor
o Designation of the MHFC as the sole member of the Co-Developer
o Designation of the MHFC as the sole member of the Contractor