Title
Consider/Discuss/Act on a Resolution of the City Council of the City of McKinney, Texas, Showing Support for the Efforts of the McKinney Housing Authority to Partner with SFA JPI Services Holdings, LLC to Construct a New Affordable Housing Development to be known as the Jefferson Wilmeth Apartments
Summary
COUNCIL GOAL: Direction for Strategic and Economic Growth (1B: Provide a strong city economy by implementing a Global Housing Strategy with a focus on affordable housing and facilitating a balance between industrial, commercial, residential, and open space)
MEETING DATE: December 17, 2024
DEPARTMENT: Housing and Community Development
CONTACT: Margaret Li, Housing and Community Development Director
RECOMMENDED CITY COUNCIL ACTION:
• N/A
ITEM SUMMARY:
• McKinney Housing Authority (MHA) is seeking a letter of support from the City Council of the City of McKinney regarding the proposed construction of a new affordable housing development named the Jefferson Wilmeth Apartments:
o Located at the southeast quadrant of Community Avenue and Wilmeth Road
o Includes the construction of a new apartment complex with a total of 442 units, being a mixture of studio, one-, two-, and three-bedroom units. The apartment will be comprised of 50% affordable units:
§ Market Rate: 219 units (50% of total units)
§ 80% AMI: 201 units (45% of total units)
§ 30% AMI: 22 units (5% of total units)
• MHA will partner with SFA JPI Services Holdings, LLC (JPI) in a public/private partnership.
• The MHA Board approved the public/private partnership on November 12, 2024.
• MHA will be the general partner.
• JPI will be the special limited partner, providing equity and securing financing.
• MHA anticipates ad valorem tax exemption under Tex. Loc. Gov’t Code Chapter 392.
BACKGROUND INFORMATION:
• City Council approval is not required but shows the City’s support for the public/private partnership to provide affordable housing as presented by the project proposal.
• The City Council previously approved resolutions of support for two MHA projects:
|
Project |
Tax Exemption |
Rent Savings |
MHA Benefit |
Public Benefit |
Benefit to Tax Ratio |
|
Magnolia Ranch |
$16,836,679 |
$12,563,923 |
$22,450,601 |
$35,014,524 |
208% |
|
Kinstead |
$16,523,399 |
$11,152,781 |
$15,858,129 |
$27,010,910 |
163% |
|
* Financial summary is based on a 10-year period ** Public Benefit includes Rent Savings and MHA Benefit *** Benefit to Tax Ratio is based on the amount of Public Benefit divided by the Tax Exemption |
• In addition to this project, MHA plans to partner with JPI in a separate public/private partnership to develop another new affordable housing development named the Jefferson Terry Apartments proposed to be located at the southeast quadrant of Highway 380 and Terry Lane
|
Project |
Tax Exemption |
Rent Savings |
MHA Benefit |
Public Benefit |
Benefit to Tax Ratio |
|
Jefferson Terry |
$11,568,953 |
$7,535,476 |
$12,157,446 |
$19,692,922 |
170% |
|
* Financial summary is based on a 10-year period ** Public Benefit includes Rent Savings and MHA Benefit *** Benefit to Tax Ratio is based on the amount of Public Benefit divided by the Tax Exemption |
• The McKinney Public Facilities Corporation (MPFC) partnered with JPI in 2022 on the Jefferson Verdant project.
• JPI has been a market and affordable development, manager, and acquirer for 35 years.
• JPI is one of the largest developers within the Dallas-Fort Worth area with 114,000 units.
FINANCIAL SUMMARY:
• The proposed partnership provides tax exemption for the property.
• The McKinney Housing Authority is projected to generate revenue from the transaction, including an acquisition fee, annual compliance fees, lease payments and a disposition fee. The funds can be reinvested in future affordable housing initiatives.
|
Project |
Tax Exemption |
Rent Savings |
MHA Benefit |
Public Benefit |
Benefit to Tax Ratio |
|
Jefferson Wilmeth |
$13,874,438 |
$9,062,863 |
$14,860,706 |
$23,923,569 |
172% |
|
* Financial summary is based on a 10-year period ** Public Benefit includes Rent Savings and MHA Benefit *** Benefit to Tax Ratio is based on the amount of Public Benefit divided by the Tax Exemption |
BOARD OR COMMISSION RECOMMENDATION:
• N/A