McKinney Seeks $73M for Budget Commercial Airport "Proof of Concept"

 At its January meeting, the McKinney Community Development Corporation (MCDC) heard from organizations and groups wanting grants. The long-controversial city airport came asking for $30M in financing. Grant requests will awarded at the February meeting. Earlier in January, the city asked the McKinney Economic Development Corporation (MEDC) for $22.4M.

                          City Presentation 

The city cannot use property tax money for three years after two failed commercial airport bonds (one in 2015 for the land and another one in 2023 for a terminal). While the city waits out the clock, its only recourse seems to be the MCDC and MEDC.

The city of McKinney asked the MCDC for a $30M bridge loan, either from the fund balance or by taking out sales tax bonds, until a federal Rural TIFIA loan can be secured. This would require at least two years of yearly $1M interest only payments. The city is prepared to have the MCDC carry the entire loan if the TIFIA loan does not work out.

The combined $52M ask is for a budget, “proof of concept” commercial airport they will use to woo a budget airline. There is still no firm commitment from an airliner. Here is the specific wording from the grant application:

“The proposed infrastructure will enable development of various aviation uses on the east side of the airport. The plan is to maximize flexibility to allow for growth in the future as the market and economy dictate. The proposed terminal is a small phase one terminal that is expandable but is intended as an inexpensive terminal to prove that commercial service is viable at TKI. If commercial service is successful, future expansion would include the construction of an entirely new terminal north of the first phase. The first phase terminal would continue to offer gates for the terminal or could be repurposed as a maintenance facility and/or rental car facility.” 

Both the MEDC and MCDC collect a half-cent each of sales tax revenue. That allotment translates into roughly $25M a year. The MCDC alone has saved over $47M in a fund balance for future unnamed projects—like the airport.

The MCDC left the public hearing open for the $30M commercial grant.
Please email the MCDC board at Info@mckinneycdc.org on agenda item # 25-2377.

There will also be a joint City Council, MEDC, and MCDC meeting on 2/18/25 at 4pm. The airport will likely be discussed.

For more background on the changing role of the MCDC, please see the following past articles:

McKinney’s Community Development Corporation Changes Focus

McKinney Leadership’s Heard Problem

The $200M Airport Bond

190 Acre Airport Land Purchase

Demystifying McKinney's Airport

Citizens Should Track Streams of Influence in City Politics, Part 1

Note: Using influence within the law is not wrong. Using money to affect politics within the law is not wrong. Using our taxpayer dollars to help certain people and businesses without transparent or fair processes is a murky mess that should be avoided at all costs. 

Useful websites, like OpenSecrets.org, track federal-level campaign contributions to federal candidates. Political action committee (PAC) donations, lobbying group donations, and dark money donations meant to influence politicians should be out in the open. Most people want to know who is donating to whom and whether those donations could be leading to any paybacks that include beneficial legislation, government contracts, public/private partnerships, or other tangible rewards. We want to know—and we should want to know—if our federal dollars are benefiting certain people over others. 

Why do we suddenly stop wanting to track streams of influence in our own cities? Or worse, why do some get offended if questions are even asked about who is influencing whom and to what end? Is it less polite to want transparency closer to home because people we know might start to get uncomfortable or offended? 

Below is an illustration of how campaign contributions and connections among various people, politicians, and groups could lead to, at the very least, problematic optics. 

Tupps is a small brewery that has been open for business for five years in McKinney, Texas. At the time of their most recent application to the local community development corporation in July of 2020, Tupps had about 18 full-time employees and 20 part-time employees that were self-reported on their application. So far in our illustration, Tupps looks like any struggling five-year-old small business. 

 

What makes Tupps a perfect case study right now is because of all the questions about the deal and all the defensiveness as to why there would even be questions. It could also be because it is city council election time. These sorts of disagreements generally bubble up at these moments. 

In the span of five short years, Tupps has benefited from multiple city funding opportunities that other small businesses most probably have not gotten: 

• $27,000 loan and forgiveness if they hire 11 full time workers. This deal was from the McKinney Economic Development Corporation (MEDC) using sales tax dollars. Contract was signed in November of 2014. See here for info 
  
  
• $20,000 loan and forgiveness if they hire 6-8 full time workers. Again, this deal was from the MEDC. Contract was signed July of 2015. See here for info
  
  
• $600,000 loan and forgiveness from the MEDC for equipment in 2020 paired with a larger incentive listed below 
  
  
• $11.3 million lease with option to buy deal with the McKinney Community Development Corporation (MCDC), funded with our sales tax dollars, to relocate and build a very expensive brewery center with no parking lot (see next incentive below) on land the city bought in 2019 (so they could most likely sell it to the MCDC for this deal). Tupps is not required to put any of its own money into this deal. Tupps is only required to create around 5 full time jobs by the end of the forty year lease. Since the land is owned by the MCDC, there will be no property tax revenue. See here for info
  
  
• ~$3.5 million from the Tax Increment Reinvestment Zone #1 (TIRZ#1) so the city could use its eminent domain powers to take away affordable housing and pay for the relocation of the low-income occupants. This was done so Tupps could have a parking lot. Look in the plans for Tupps, there is no parking lot on the site plan. See here, here, and here  

How many other incubating businesses have gotten this kind of long-term monetary hand-holding from the city of McKinney? If not, why not? 

Tupps, it turns out, is well-connected. Three of the board members of Tupps are prominent business owners and residents of McKinney. We do not know how long they have been board members or how much of a stake they have in Tupps because the MCDC does not require those sorts of relevant details in their application packets. 

If any city is giving a business large amounts of citizen money and is going into a long-term lease agreement with them, the board members of the business, how long they have been on the board, and what their stake and/or investment is in the business should be a mandatory part of the application process. 

Those three board members are also members of municipal PAC that has been in operation for as long as Tupps has had its doors open—since 2015. Their PAC, the McKinney Team, is focused on endorsing city council candidates and school board elections. 

To be continued in part 2