Title
Consider/Discuss/Act on the First Amendment to the Honey Creek Annexation and Development Agreement between the City of McKinney and McKinney Ranch, LTD, Honey Creek Investments, LLC, and Barcelona 93, LTD
Summary
COUNCIL GOAL: Direction for Strategic and Economic Growth
(1C: Provide a strong city economy by facilitating a balance between industrial, commercial, residential and open space)
MEETING DATE: May 20, 2025
DEPARTMENT: Development Services
CONTACT: Michael Quint, Executive Director of Development Services
RECOMMENDED CITY COUNCIL ACTION:
• Approve the proposed first amendment to the Honey Creek annexation and development agreement.
ITEM SUMMARY:
• On September 17, 2024, the City Council approved an annexation and development agreement governing the approximately 1,650-acre property commonly referred to as Honey Creek, which is generally located east of FM 1461 (Future Lake Forest Drive) and County Road 166 and south of County Road 168 and FM 543.
• Since the execution of said agreement, Staff has been in negotiations with the Developer to modify the obligations surrounding the construction of Laud Howell Parkway. The goal of these negotiations was to expedite the construction of four lanes of the roadway as soon as possible, rather than only two lanes. Typically, arterial roadways are constructed concurrently with the adjacent phase of development. By negotiating to have the entire roadway built with the initial phases of development, the roadway's full capacity will be accessible to the public many years earlier than would otherwise be possible.
• The annexation and development agreement states that the Developer shall construct two lanes, including a six-lane bridge, of Laud Howell Parkway from its current terminus just west of the intersection with Trinity Falls Parkway to the intersection of Lake Forest Drive by no later than December 2027. The remaining two lanes were to be constructed concurrently with the adjacent phases of development, whenever that phase may eventually occur.
• The proposed first amendment to the annexation and development agreement states:
o Laud Howell Parkway:
§ The Developer shall construct two lanes (lanes 1 and 2), including a six-lane bridge, by December 31, 2027, and the two remaining lanes by December 31, 2028.
§ The City shall contribute $15M in grant funds from the North Central Texas Council of Governments toward the construction of the two remaining lanes (lanes 3 and 4). If the Developer is required to reconstruct two Natural Resources Conservation Service (NRCS) dams on the property, they may opt out of constructing lanes 3 and 4 of Laud Howell Parkway.
o Dam Rehabilitation:
§ The City agrees to use grant funds from the Texas State Soil and Water Conservation Board to reconstruct two dams on the Honey Creek property. If the City does not receive the grant funds, the Developer will be required to reconstruct the two dams. If the Developer reconstructs the two NRCS dams, they may opt out of constructing lanes 3 and 4 of Laud Howell Parkway.
BACKGROUND INFORMATION:
• The annexation and development agreement approved by the City Council in September 2024 generally addressed the following topics:
o Required the dedication of land to the City for an elevated water storage tank, fire station, parks maintenance facility, and other municipal uses;
o Required the dedication of at least two city parks that are at least 10 acres in size, $3 million in park design and construction, in addition to other open space amenities and community enhancements;
o Established the potential for a partnership for up to 50 affordable housing units;
o Required the dedication and construction of at least two lanes of Laud Howell Parkway with the first phase of development (open by December 31, 2027);
o Required the City to contribute up to $18.5 million towards the construction of a six-lane bridge over Honey Creek;
o Established architectural standards for all land uses within the master-planned community;
o Established a maximum District Bond amount of $350 million; and
o Established a requirement to notify the City before the sale of any District Bonds.
• In February 2024, the City Council consented to the creation of a Municipal Management District (MMD) through the Texas Commission on Environmental Quality (TCEQ), subject to specific conditions (2024-02-020(R)). One of the conditions was that on or before September 30, 2024, the developer must enter into an agreement to govern the use and development of the subject property with the City. The City Council’s approval of the annexation and development agreement satisfied this condition and cleared the way for the creation of an MMD. This MMD will be the first of its kind in McKinney.
FINANCIAL SUMMARY:
• As mentioned above, the City is tentatively scheduled to receive two grants to support the development of the Honey Creek master planned community.
• The first grant is from the North Central Texas Council of Governments for a total of $15M for the construction of two additional lanes of Laud Howell Parkway. The grant has a 20% match requirement, which requires the Developer to spend an additional $3M to realize the full grant amount.
• The second grant is from the Texas State Soil and Water Conservation Board and is estimated to cover the full reconstruction costs for two Natural Resources Conservation Service (NRCS) dams on the subject property. These grant funds will only be awarded if the state’s budget and funding bill allocating these funds is signed into law by the Governor. Typically, funding bills become effective on September 1.
BOARD OR COMMISSION RECOMMENDATION:
• N/A