Title
Consider/Discuss/Act on a Request by Matthew Horner for a Level 3 (Preservation Level) Historic Neighborhood Improvement Zone Program Tax Exemption for the Property at 517 Heard Street.
Summary
COUNCIL GOAL: Enhance the Quality of Life in Downtown McKinney
MEETING DATE: December 1, 2022
DEPARTMENT: Planning Department - Development Services
CONTACT: Cassie Bumgarner, Historic Preservation Planner
Paula Jarrett Nasta, AIA, Planning Manager
RECOMMENDED CITY COUNCIL ACTION:
• Staff recommends approval of the request.
ITEM SUMMARY:
• The applicant requests approval of a Preservation Incentive (Level 3) HNIZ Program tax exemption for the property located at 517 Heard Street. This is a 30% exemption of the city’s ad valorem taxes for a period of 10 years.
• To be eligible for a tax exemption incentive under the HNIZ Program, residential properties must meet the minimum eligibility requirements of the program, along with specific criteria for the requested incentive level.
• Staff has reviewed the request and has found that it meets the minimum eligibility requirements of the HNIZ Program for a Level 3 (Preservation Level) exemption.
• Specifically, the criteria for a Level 3 Preservation incentive are as follows:
o The residential structure is at least 40 years old.
§ The home was built circa 1915.
o The owner receives a letter of eligibility from the City of McKinney verifying that proposed improvements qualify for a rehabilitation incentive.
§ The Letter of Eligibility was issued on July 20, 2022.
o No later than 12 months following the issuance of the letter of eligibility, the owner completes, or causes to be completed, verified, eligible improvements having a combined cost of at least $5,000.
§ The applicants did the following eligible work, which totals $5,000 within the last year:
• Foundation adjustment ($5,000)
BACKGROUND INFORMATION:
• The Historic Neighborhood Improvement Zone (HNIZ) Program was established in 2008 for the purpose of preserving the city’s unique and historic neighborhoods while encouraging property owners to maintain and/or rehabilitate residential properties and structures.
• The HNIZ Program includes a three-tiered incentive structure whereby residential properties that meet specified criteria are eligible to receive ad valorem tax exemptions on city taxes for a designated period of time.
• To be eligible for an HNIZ Program incentive, the following minimum general requirements apply:
o The property shall be located within the HNIZ Program area.
o The property shall be owner-occupied and shall maintain a homestead exemption from the Collin Central Appraisal District for the life of the incentive period.
o Verified, eligible improvements shall have received all necessary permits and approvals, including COAs.
o The structure, accessory structures, grounds, property elements and building elements with their materials and finishes have been maintained in good repair and in operable condition.
o There are no pending code violations.
o The total ad valorem taxes owed to the city must be current and paid on time.
FINANCIAL SUMMARY:
• A Level 3 (Preservation Level) incentive carries a 30% exemption from city ad valorem taxes for a period of ten years.
• In order to limit potential budgetary concerns, the HNIZ Program has an annual aggregate cap of $500,000 for the total amount of city ad valorem taxes that can be exempted in any budget year.
• Per Collin County Tax Assessor, ad valorem taxes for this property in 2022 are approximately $2,199.13.