Title
Consider/Discuss/Act on a Resolution of the City Council of the City of McKinney, Texas, Supporting the Efforts of the McKinney Housing Finance Corporation to Partner with Jefferson Terry (Phase 2), LLC for the New Construction of the Development known as Torrington Terry Apartments
Summary
COUNCIL GOAL: Goal 1: Direction for Strategic and Economic Growth; Strategy 1.1: Provide a strong city economy by creating a Global Housing Strategy and facilitating a balance between industrial, commercial, residential, and open space.
MEETING DATE: September 15, 2026
DEPARTMENT: Housing and Community Development
CONTACT: Cristel Todd, Affordable Housing Administrator
Margaret Li, Housing and Community Development Director
RECOMMENDED CITY COUNCIL ACTION:
• Staff recommends that the City Council approve the proposed Resolution supporting the partnership between the McKinney Housing Finance Corporation (MHFC) and Jefferson Terry (Phase 2), LLC, for the Torrington Terry apartments.
ITEM SUMMARY:
• The MHFC is seeking a Resolution of Support from the City Council of the City of McKinney regarding the proposed new construction of the Torrington Terry apartments located at 4404 W University Dr, McKinney, TX 75071. Partnership with the MHFC will provide the project with ad valorem tax exemption under Tex. Loc. Gov’t Code Chapter 394. The new apartment complex will include a total of 394 units, comprised of one-, two-, three- and four-bedroom units.
The development will include 100% affordable units comprised of the following levels:
|
Affordability Level |
Number of Units |
Percentage of Total Units |
|
70% AMI |
38 |
10% |
|
60% AMI |
335 |
85% |
|
30% AMI |
21 |
5% |
|
Total |
394 units |
100% |
BACKGROUND INFORMATION:
• MHFC will partner with Jefferson Terry in a public/private partnership and be the general partner. The partnership will include the provision of ad valorem property tax exemptions pursuant to Tex. Loc. Gov’t Code Chapter 394.
• Jefferson Terry will be the special limited partner, providing equity and secure financing.
• While City Council approval is not required, approval of the proposed Resolution demonstrates the City’s support for the public/private partnership to provide affordable housing as presented by the project proposal.
• On February 18, 2025, the City Council approved the Affordable Housing Scorecard to provide a uniform metric to evaluate tax exempt projects. Over the last 12 months, the City Council approved similar Resolutions of Support for the following MHFC projects:
|
Project |
Tax Exemption |
Rent Savings |
MHFC Benefit |
Public Benefit |
Benefit to Tax Ratio |
|
Skyway Villas |
$7,268,490 |
$514,270 |
$405,342 |
$919,612 |
13% |
|
Franklin Branch |
$20,904,667 |
$18,123,568 |
$4,967,278 |
$23,090,846 |
110.5% |
|
* Financial summary is based on a 10-year period ** Public Benefit includes Rent Savings and MHFC Benefit *** Benefit to Tax Ratio is based on the amount of Public Benefit divided by the Tax Exemption |
• Utilizing the Affordable Housing Scorecard, the Torrington Terry apartments would score 19 points (which exceeds the 12-point minimum required for consideration) as follows:
o Number of Affordable Units:
§ The project includes 100% of the total units at an affordable rate (4 points)
o Affordability Level:
§ The project includes 5% of the total units will be offered at 30% AMI, 85% of the total units will be offered at 60% AMI, and 10% of the total units will be offered at 70% AMI. (4 points)
o Housing Type:
§ The project includes multi-family rental (2 points)
o Rent Saving to Tax Exemption Ratio:
§ The project includes a rent saving to McKinney tax exemption ratio of $1.92 (1 point)
o Granting Entity Benefit (one-time):
§ The project would result in the MHFC receiving approximately $1,331,925 in one-time payments (1 point)
o Granting Entity Benefit (reoccurring):
§ The project would result in the MHFC receiving approximately $1,375,667 in recurring payments, representing 6.8% of the total tax exemptions (1 point)
o Location:
§ The project would be located in the southwest quadrant (3 points)
o Project Type:
§ The project would be a new build (3 points)
• During the 2024 legislative session, House Bill 21 (HB 21, amending Tex. Loc. Gov’t Code Chapter 394) was adopted to reform how housing finance corporations operate and claim property tax exemptions for multi-family affordable housing. Staff is currently updating the Affordable Housing Scorecard to reflect the statutory changes under HB 21. Although the scorecard framework is undergoing revision, the Torrington Terry project’s 100% affordability structure (ranging from 30% to 70% AMI) directly aligns with both state policy objectives and the City's strategic housing targets.
FINANCIAL SUMMARY:
• Development of the Torrington Terry apartments is estimated to cost $79,286,085.
• The proposed partnership between Jefferson Terry and MHFC will provide the project with approximately $20,334,054 in property tax exemptions over a 10-year period.
• The MHFC is projected to receive approximately $2,857,592 in revenues from the partnership, including a construction fee, annual compliance fees, lease payments and a disposition fee over a 10-year period. The funds can be reinvested in future affordable housing initiatives.
• In addition, the Torrington Terry apartments is anticipated to provide approximately $6,032,916 in rent savings for future residents, over a 10-year period.
|
Project |
Tax Exemption |
Rent Savings |
MHFC Benefit |
Public Benefit |
Benefit to Tax Ratio |
|
Torrington Terry |
$20,334,054 |
$6,032,916 |
$2,857,592 |
$8,890,508 |
43.7% |
|
* Financial summary is based on a 10-year period ** Public Benefit includes Rent Savings and MHFC Benefit *** Benefit to Tax Ratio is based on the amount of Public Benefit divided by the Tax Exemption |
BOARD OR COMMISSION RECOMMENDATION:
• Following Jefferson Terry’s submittal of their bond application to the Bond Review Board, the MHFC will convene a meeting to approve a Memorandum of Understanding with Jefferson Terry for the proposed partnership.