Title
Consider/Discuss/Act on a Resolution of the City Council of the City of McKinney, Texas, Supporting the Efforts of the McKinney Housing Authority to Acquire the Kinstead 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: November 19, 2024
DEPARTMENT: Housing and Community Development
CONTACT: Margaret Li, Housing and Community Development Director
Cristel Todd, Affordable Housing Administrator
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 for the acquisition of the Kinstead Apartments.
• Property Information:
o Located at 5701 McKinney Place Drive, McKinney, TX 75070
o Built in 2019
o Total Units: 376
§ Market Rate: 185 units
§ 80% AMI: 162 units
§ 30% AMI: 29 units
• MHA will partner with Kalterra Capital Partners, LLC (Kalterra) in a public/private partnership.
o MHA will be the general partner.
o Kalterra will be the special limited partner, providing equity and securing financing.
• There are no interior or exterior renovations proposed.
• MHA anticipates ad valorem tax exemption pursuant to Chapter 392 of the Texas Local Government Code.
BACKGROUND INFORMATION:
• Kalterra is a real estate developer focused on multifamily and mixed-use properties.
• Kalterra has developed over $400 million worth of projects in Texas.
• City Council approval is not required for this partnership but shows support for the project.
FINANCIAL SUMMARY:
• Community Rent Benefit over 10-year period is estimated at $11,152,781
• McKinney Housing Authority is projected to generate $14,860,706 in 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.
• The proposed partnership provides tax exemption for the property. The existing development is currently assessed at $85,371,380 ($78.0M Improvement and $7.3M Land) and provides approximately $354,729 of annual tax revenue to the City of McKinney (2024 Tax Rate of 0.415513).
BOARD OR COMMISSION RECOMMENDATION: N/A