Title
Consider/Discuss/Act on a Resolution Authorizing the City Manager to Execute a Non-Binding Term Sheet with McKinney Ranch, LTD., Honey Creek Investments, LLC, Barcelona 93, Ltd., and MRP HTMHCB, LLC, Governing the Development of Approximately 1,786-acres, 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
Summary
COUNCIL GOAL: Direction for Strategic and Economic Growth
(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: May 19, 2026
DEPARTMENT: Development Services
CONTACT: Michael Quint, Executive Director of Development Services
RECOMMENDED CITY COUNCIL ACTION:
• Approve the proposed resolution authorizing the City Manager to execute the proposed non-binding term sheet.
ITEM SUMMARY:
• Since September 2025, Staff and Republic Property Group, the Developer of the Wildwood master planned community, have been negotiating modified development terms to govern the Subject Property. The Subject Property consists of approximately 1,786-acres commonly referred to as Honey Creek and is subject to Honey Creek Municipal Management District (MMD) No. 1 (the District), 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. The proposed non-binding term sheet is meant to serve as a foundation from which a third amendment to the Honey Creek Annexation and Development Agreement.
• The proposed term sheet generally addresses the following topics:
o The City is now responsible for constructing Project 2 (lanes 3 and 4 of Laud Howell Parkway) using $15M in funding from the North Central Texas Council of Governments (NCTCOG) by December 31, 2028. In order to realize the full $15M grant amount, a 20% local match ($3M) will be required from the City.
o The District is formally allowed to phase the construction of Project 1 (lanes 1 and 2 of Laud Howell Parkway), with the City’s approval, so long as the entire project is completed by December 31, 2027.
o The District is now responsible for rehabilitating two Natural Resources Conservation Services (NRCS) dams located within the development. The District and/or Homeowner’s Association will pay perpetual maintenance costs ($10K plus a compounding annual increase of 2%) to the City or to the Collin County Soil and Water Conservation District. Staff is still working to identify who will ultimately be responsible for maintaining the dams and this issue will be fully addressed in the forthcoming agreement amendment. The cost of rehabilitating the dams in 2026 dollars is estimated to be $8M - $10M.
o The District’s maximum bond issuance amount is increased from $350M to $400M to account for properties recently incorporated into the District's boundary.
o The District’s responsibilities for intersection improvements at Hardin and Weston Roads are more fully defined.
o The City will fund up to $750K for a traffic signal at the intersection of Laud Howell Parkway and Trinity Falls Parkway.
o Clarity is added to when the District must construct sidewalks along Lanes 1 and 2 of Laud Howell Parkway.
o The District may now use parkland credits to construct offsite sidewalks and trails.
• Since the City Council’s adoption of the first amendment to the annexation and development agreement, Staff learned that the State of Texas would not be awarding any grant funds for the rehabilitation of the two dams on the Subject Property as previously contemplated by the first amendment to the agreement. Rather than opting out of their obligations under the existing agreement, the Developer sought to restructure the partnership in the hopes that everything originally planned for construction would still be completed.
• The proposed term sheet includes a reworking of each party’s original obligations and Staff is recommending approval.
BACKGROUND INFORMATION:
• The Honey Creek Annexation and Development Agreement was approved by the City Council in September 2024, and 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 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.
• In May 2025, the City Council approved the first amendment to the Honey Creek Annexation and Development Agreement, which generally stated:
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.
• In August 2025, the City Council approved the second amendment to the Honey Creek Annexation and Development Agreement, which added additional property to the MMD’s boundary, as contemplated by the original agreement.
FINANCIAL SUMMARY:
• The proposed terms will see the City utilize a grant from the North Central Texas Council of Governments for a total of $15M for the construction of two additional lanes (3 and 4) of Laud Howell Parkway. The grant has a 20% match requirement, which requires the City to spend an additional $3M to realize the full $15M grant amount.
• Additionally, the City has agreed to pay up to $750K for a traffic signal at the intersection of Laud Howell Parkway and Trinity Falls Parkway.
• As the proposed term sheet is non-binding, these financial obligations will not be formalized until a third amendment to the Honey Creek Annexation and Development Agreement is considered by and approved by the City Council at a future meeting.
BOARD OR COMMISSION RECOMMENDATION:
• N/A