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 Magnolia Ranch Apartments
Summary
COUNCIL GOAL: Financially Sound Government
4A: Provide funding and organizational framework to ensure continual economic improvements
MEETING DATE: August 6, 2024
DEPARTMENT: Housing and Community Development
CONTACT: Cristel Todd, Interim Director of Housing and Community Development
RECOMMENDED CITY COUNCIL ACTION: N/A
ITEM SUMMARY:
• McKinney Housing Authority (MHA) seeks a letter of support from the City Council of the City of McKinney for the acquisition of Magnolia Ranch Apartments.
• The property, located at 3191 Medical Center Dr., McKinney, TX 75069
• 576 Units, Built 2001
o 286 market rate units
o 290 workforce units
§ 260 units - 60% AMI
§ 30 units - 30% AMI
• MHA will partner with Bridge Partners in a public/private partnership.
o MHA will be the general partner.
o Bridge Partners will be the special limited partner, providing equity and securing financing.
• $3 million will be spent to renovate the interiors of 48% of units that haven’t been renovated.
• $1.5 million will be spent on exterior renovations.
• MHA anticipates ad valorem tax exemption pursuant to Chapter 392 of the Texas Local Government Code.
BACKGROUND INFORMATION:
• Bridge Partners, founded in 1990, specializes in acquisition, renovation, and asset management of workforce and affordable multifamily properties.
• Completed over 200 transactions across 26 states and 50 domestic markets.
• Existing portfolio of 51 properties in 15 states with 7,300 units.
• Active in Texas for nearly 30 years, with properties owned in Dallas, Houston, and Austin.
• Successfully partnered with Texas Housing Authorities.
• 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 $12,563,923
• McKinney Housing Authority is projected to generate $22,450,601 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 $51,331,931 ($40.1M Improvement and $11.2M Land) and provides approximately $219,000 of annual tax revenue to the City of McKinney.
BOARD OR COMMISSION RECOMMENDATION:
• N/A