Title
Consider/Discuss/Act on a Request by Robert and Kelly Sheriff for Approval of a Rehabilitation Level Historic Neighborhood Improvement Zone Program Tax Exemption (Level II) for the Property Located at 612 W Virginia Street
Summary
COUNCIL GOAL: Enhance the Quality of Life in Downtown McKinney
MEETING DATE: April 3, 2025
DEPARTMENT: Development Services - Planning Department
CONTACT: Rayna Alam, Historic Preservation Planner
Cassie Bumgarner, Planning Manager
RECOMMENDED BOARD ACTION:
• Staff recommends approval of the request.
ITEM SUMMARY:
• The applicant requests approval of a Rehabilitation level HNIZ Program tax exemption for the property located at 612 W Virginia Street.
• 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 Rehabilitation Level exemption (Level II).
• Specifically, the criteria for a Rehabilitation Level incentive are as follows:
o The residential structure is at least 40 years old.
§ The home was built circa 1910.
o The owner receives a Letter of Eligibility from the City of McKinney verifying that the proposed improvements qualify for a rehabilitation incentive.
§ The Letter of Legibility was issued on February 14, 2025.
o A minimum investment of $10,000 in building improvements for the property has been demonstrated within 12 months of receipt of Letter of Eligibility.
§ Within the last 12 months, the owners have completed rehabilitation efforts to the structure totaling $21,752, including:
o Replace rotten wood, reset/reshim understructure ($18,732)
§ Install 10 Concrete Pads/Blocks
§ Install Surface Drainage System
§ Dirt Work/Grading
§ Debris Removal
§ Engineering
§ Permit
o Additional Work ($3,020)
§ The final engineering report details all work in more detail. The invoice, proof of payment, and final engineering report are all included as part of the applicant submittal.
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 Rehabilitation Level incentive carries a 50% 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.
• Under the current program, Staff estimates that the total amount of ad valorem tax revenues being forgone is approximately $298,4670.