Title
Consider/Discuss/Act on a Resolution Authorizing the Formation of McKinney Skyway Villas Holdings, LLC, (“The Ground Lessor”) in Connection with the McKinney Housing Finance Corporation Multifamily Housing Revenue Bonds (Skyway Villas), Series 2026; Authoring the Designation of the Corporation as the Sole Member of the Ground Lessor; Approving the Form and Substance of a Limited Liability Company Agreement and the Execution Thereof; Ratifying Certain Actions Heretofore Taken in Connection with the Ground Lessor; Authorizing the Execution of Documents and Instruments Necessary or Convenient to Carry out the Purposes of this Resolution; and Containing other Provisions Relating Thereto
Summary
COUNCIL GOAL: Goal #1.1: Provide a Strong Economy by Creating a Global Housing Strategy and Facilitating a Balance Between Industrial, Commercial, Residential, and Open Space.
MEETING DATE: July 24, 2026
DEPARTMENT: Housing and Community Development
CONTACT: Cristel Todd, Affordable Housing Administrator
Margaret Li, Director of Housing and Community Development
RECOMMENDED BOARD ACTION:
• Approve Resolution.
ITEM SUMMARY:
• The proposed Resolution authorizes the legal creation of the McKinney Skyway Villas Holdings, LLC, which will serve as the "Ground Lessor" for the project and designates the McKinney Housing Finance Corporation (MHFC) as the sole member of this new holding entity. This "leasehold" structure is a primary requirement for securing 100% ad valorem property tax exemptions under Texas law. By the MHFC owning the land, the project remains affordable while generating a net financial benefit to the Corporation.
• The proposed Resolution also establishes the framework for the Ground Lessor to enter into a Ground Lease with the Borrower (Skyway Villas (TX) Owner LP), allowing the MHFC to maintain long-term control of the property. Creating a separate LLC for land holding (the "Ground Lessor") provides essential asset decoupling, shielding the MHFC’s other assets and operations from liabilities specifically related to the project site.
• In addition, the Resolution appoints the following MHFC representatives as officers to manage the Ground Lessor’s affairs:
o Tyler Underwood - President
o Lisa Emry - Vice President
o Ranjith Raghunath - Treasurer
o Cristel Todd - Secretary
• The appointed officers are empowered to negotiate and execute the Ground Lease and all other documents necessary for the acquisition and financing of the development.
BACKGROUND INFORMATION:
• On April 21, 2026, the City Council approved a Resolution of Support for the proposed acquisition and rehabilitation of the existing affordable housing development known as Skyway Villas.
• On September 12, 2025, the MHFC board approved the submission of an application for allocation of Private Activity Bonds for the Skyway Villas Project in an aggregate amount not to exceed $52,000,000.
• Skyway Villas is an existing affordable housing project that originally received Low Income Housing Tax Credits (LIHTC) in 2003. The existing compliance period concluded in 2018, this new application will successfully preserve and extend the property’s affordability restrictions for an additional thirty (30) years.
FINANCIAL SUMMARY:
• The proposed Project is estimated to receive approximately $7.2 million in ad valorem tax abatement over a 15-year period.
• The MHFC is projected to receive approximately $3,189,892 in revenue, over a period of 15 years.
o Developer Fee split: 25% allocated to the MHFC, totaling $2,428,236
o Partnership Management Fee: $35,000 plus 3% annually- estimated at $761,656
o Residuals: 40% of ongoing net cash flow and future sale or refinancing proceeds.
• In addition, the apartment complex is anticipated to receive $22 million in capital improvements and generate approximately $405,270 in rent savings over a period of 10-years.