Title
Update on Affordable Housing Development Utilizing Public Private Partnership with the McKinney Housing Finance Corporation
Summary
COUNCIL GOAL: Financially Sound Government
4A: Provide funding and organizational framework to ensure continual economic improvements
MEETING DATE: June 6, 2023
DEPARTMENT: Housing and Community Development
CONTACT: Cristel Todd, Affordable Housing Administrator
Janay Tieken, Director of Housing and Community Development
RECOMMENDED CITY COUNCIL ACTION:
• N/A
ITEM SUMMARY:
• MHFC approved a Resolution authorizing negotiations with Palladium USA International, Inc., on January 4, 2023.
• On May 12, 2023, MHFC Board approved the draft Memorandum of Understanding (MOU) with Palladium USA International, Inc.
• The project will provide Class A housing for families, working professionals and seniors.
• All units will be rent restricted at 60% Area Median Income.
• The development will consist of 172 rental units including one-bedroom, two-bedroom and three-bedroom units.
• Development amenities will include resort pool with pavilion, playground and playroom, clubhouse, business center, fitness center, conference room, grills, picnic tables and yard games.
• Supportive services for residents will include community-building special events like movie nights and food trucks and other services to benefit residents.
• Total estimated cost for the project is $45,012,256.
BACKGROUND INFORMATION:
• On April 8, 2022, the MHFC approved a recommendation to City Council for a RFQ for a 2023 affordable housing, public/private partnership.
• On May 17, 2022, City Council approved the RFQ.
• The RFQ sought to identify one 4% tax credit co-development partnership and one Public Facility Corporation (PFC) partnership for FY23.
• On September 20, 2022, City Council was updated that an evaluation team determined Atlantic Pacific Communities, LLC as the most qualified firm for a 4% tax credit co-development partnership.
• Atlantic Pacific Communities, LLC did not receive a 2023 bond allocation so was unable to move forward with the development and partnership.
• Palladium USA International, Inc., received their reservation for a 2023 bond allocation in January and reached out to MHFC to discuss possible partnership.
• Palladium USA International, Inc., had previously received a Resolution of Support from the City Council for their development.
FINANCIAL SUMMARY:
• The McKinney Housing Finance Corporation will recognize financial gain from
the transaction as a percentage of the developer fee and cash flow. These amounts have been negotiated by partnership counsel and reviewed by City counsel.
• Section 394.001 of the Texas Local Government Code allows Housing Finance
Corporations to partner with private developers in the creation of affordable or mixed-income developments.
• Project proceeds may be used to meet City of McKinney affordable housing needs.
BOARD OR COMMISSION RECOMMENDATION:
• N/A