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 Presidium, to Construct a New Affordable Housing Development to be known as Cotton Mill Phase I
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: April 15, 2025
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 Cotton Mill Phase I:
o Located east of South McDonald Street at 610 Elm Street
o Includes the construction of a new apartment complex with a total of 257 units, being a mixture of studio, one-bedroom, two-bedroom, and three-bedroom units. The apartment complex will be comprised of 50% affordable units:
§ Market Rate: 128 units (50% of total units)
§ 80% AMI: 116 units (45% of total units)
§ 30% AMI: 13 units (5% of total units)
• The affordable housing units are estimated to provide approximately $8.2 million in rental savings to the McKinney community over a 10-year period.
• The overall planned Cotton Mill project will include a total of four phases, approval of this resolution is limited to Phase I only.
• MHA will partner with Presidium.
• The MHA Board approved the public/private partnership on January 28, 2025.
• MHA will own the land beneath the development and provide a ground lease to a Texas limited partnership in which both MHA and Presidium will have ownership stake.
• 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.
• On February 18, 2025, the City Council approved the Affordable Housing Scorecard to provide a uniform metric to evaluate tax exempt projects.
• Utilizing the Affordable Housing Scorecard, the Cotton Mill Phase I scores a total of 14 points (which exceeds the 12-point minimum required for consideration) as follows:
o Number of Affordable Units:
§ The project includes 50% of the total units at an affordable rate (1 point)
o Affordability Level:
§ The project provides 5% of the total units at 30% AMI (1 point)
o Housing Type:
§ The project includes multi-family rental units (2 points)
o Rent Saving to Tax Exemption Ratio:
§ The project would provide $3.28 in rent savings for every $1.00 in McKinney tax exemption provided over a 10-year period (3 points)
o Granting Entity Benefit (one-time):
§ The project would provide approximately $1.2 million in one-time payments over a 10-year period (1 point)
o Granting Entity Benefit (reoccurring):
§ The project would provide approximately $1.4 million or 13.5% of the total tax exemptions over a 10-year period (3 points)
o Location:
§ The project is located in the Eastside and is located within a 2-mile radius of other affordable housing (1 point)
o Project Type:
§ The project is a new build (2 points)
• Presidium is a Texas-based real estate developer, owner and operator with a 21-year operating history.
• Presidium has $2.6 billion in assets under management, has built 3,194 apartment units, and has bought and renovated 20,000 apartment units.
FINANCIAL SUMMARY:
• The proposed partnership provides tax exemption for the property.
• The MHA is projected to receive approximately $3.8 million (including $1.2 million in disposition/transfer fees) in fees and payments. The funds received by MHA can be reinvested in future affordable housing initiatives.
BOARD OR COMMISSION RECOMMENDATION:
• N/A