Is McKinney's CDC Supposed to Pay for Normal Business Maintenance Now?

**Original edited on 8/11/25 to add after original article at bottom.
Should the MCDC give $233,137 to a multi-use development established in 2008, with restaurants, bars, businesses, and green space, for a new fire suppression system for its parking garage? The ask represents nearly 72% of the total cost. If I'm not mistaken, this is a first. 

The rationale is quoted below in its application to the MCDC:

“All expenses, including structural maintenance, system repairs, insurance, and regulatory compliance, are borne entirely by the private property owners through the Association. Over the past three years, the Association’s operating budget has averaged $406,000 annually, much of which has been consumed by the compounding costs of maintaining the aging and unreliable fire suppression system. The Association has depleted its reserves and levied multiple special assessments to meet these obligations, placing a significant and unsustainable financial burden on local stakeholders.

This situation represents a unique disconnect. While the garage serves a broad public benefit, supporting restaurants, retail establishments…it is funded exclusively through private means. The public at large has long benefited from the infrastructure without assuming any proportionate cost share for its upkeep. This grant request seeks to partially rebalance that equation by asking MCDC to contribute toward the public’s pro rata share of a critical life safety system that protects both public users and the viability of key community destinations.”  

A private entity wants customers at its restaurants, bars, and retail, but also wants taxpayer sales tax dollars to pay for customer parking. This private entity is Adriatica. Does that change your answer to the original question? The MCDC looks very open to this cost. Does that mean all existing businesses will get the same response when they come asking for the same types of maintenance grants?

See the complete application here. Watch the video here.

** This is a quote for the garage work included in the original application packet. For some reason, the quote was given to the recently former mayor's, Geore Fuller, construction company. He must be in some official capacity in the HOA to be getting quotes sent to him.

Taxpayer Input is Repeatedly Ignored in McKinney

The city of McKinney is inviting citizens to a public input session about the amenities they would like to see in the underground tunnel park (the inverted park), despite not being listened to when they expressed their opposition to a tunnel park in 2022. The invite on the city's social media page says, "We are planning a new community space under Hwy. 5, and we want your input!" Who wouldn't want community space under a highway?

The city says it wants input. Does it truly want taxpayer input, or is this public participation just a formality, as it was the last time the public was asked to weigh in on how east and west downtown could be connected?

McKinney's taxpayers might not remember, but there was a public hearing in July of 2022 regarding how to improve the pedestrian access between the west and east side of downtown. The public was quite decisive in its condemnation of the tunnel park option. The public voted to put the tunnel park idea nearly at the bottom of all other options presented, just above doing nothing.

A tunnel park requires additional funds for upkeep and extra money for security due to the inherent safety concerns associated with a tunnel park. Downtown McKinney continues to battle problems with homelessness and safety as it is. The additional yearly M & O costs of the tunnel park continue to fluctuate between $1M-$2.5M. Does that funding include the extra police needed? Are they using today's dollars to estimate, or will the price tag go up in the future when the additional police are actually needed?

The 2022 public input consisted of 4 options: Option 1 - deck Park like Klyde Warren Park in Dallas- an above-the-highway park Option 2 - tunnel park (an inverted deck park under a highway) Option 3 - improving the pedestrian crossings on Hwy 5 at a cost of under $1M Option 4 - doing nothing

Results of the public input from 7/22, click to enlarge

Public comments at the 2022 public input session showed a pattern of concerns regarding the expense and safety issues associated with the tunnel park option. As of the last City Council meeting on July 15th, regarding this issue, no plan has been discussed because it is said to be too far in the future. If that's the case, why are we being given a yearly M&O estimate now? Improvements to the existing crossings would have been less expensive with negligible additional yearly costs for taxpayers.

The tunnel park plan has never been a dream of the city's taxpayers. This vanity project was all the idea of the former mayor, George Fuller, during his time in office. When he first brought up the idea, it was presented as a Klyde Warren-type park with a park above the highway. Once the out-of-reach costs of this kind of park came to light, City Council just pivoted to the second most costly idea--a tunnel park. This decision by City Council was reached after the public input consensus was shared with them. In 2024, Pete Buttigieg, Secretary of Transportation during the Biden administration, visited McKinney to celebrate the awarding of funds from the Reconnecting Communities and Neighborhood Grant Program, part of the Investing in America initiative, for this project. This grant is not for the yearly costs to the city. 

The commercial airport is another example of taxpayer input being ignored in Mckinney. The city just held a secret airport groundbreaking for a commercial airport that was voted down twice by taxpayers. This was not an invitation-only, groundbreaking event that taxpayers knew about, but required limited attendance due to security. This groundbreaking was held in secret, only to be disclosed after the event took place. 

McKinney leadership's Citizen Survey ratings have declined over the years in key metrics, including honesty, transparency, treating residents fairly, and acting in the best interests of the community. Nevertheless, it does not appear that leadership is pausing to understand what caused the decline that began in 2021. 

Click to enlarge, results of the last citizen survey

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

Special Interests Finance McKinney’s Pro-Prop A PAC

PAC finance reports for and against the city council-driven term extension charter amendment on the ballot this November are posted on the city of McKinney’s website. 

So far, the pro-Prop A PAC, Citizens for McKinney, has brought in about $47,000 in individual, corporate, and in-kind donations to finance the campaign to pass city council term extensions. The corporate and business interest owners resemble those who donated to the recently failed $200M airport bond.

The top individual donors of $3,500 each were David Craig (of Craig Ranch, etc.), David Brooks (of Independent Bank and an earlier investor in TUPPS), David Johnson (?), and William Darling (Darling Homes and ManeGate). The PAC also received $500 each from Roeder & Hullett, two law firm members in town representing many apartment builders and companies with special planning needs. Two real estate company owners/brokers donated $2,000 each: McKissick and Franklin.

The top corporation donors totaled about $18,000:

Ashton Commercial Construction gave $3,000.
Tradition Homes gave $3,500 (a Bill Darling company).
South Beach Interests, LTD gave $1,000.
Burress Law gave $1,000.
DFW Law Office in Dallas gave $5,000.
SKRS Investments based in Addision gave $2,500.
Presidium Group based in Dallas gave $2,500 (multifamily real estate investment firm).

The anti-Prop A PAC, Keep McKinney Unique, was financed by mostly smaller donations from individuals, including a collaboration with a GoFundMe.com sign drive. In total, the majority of the donations ranged from $14 for one sign to $200 to help buy signs or pay for an education campaign. As of the 10/28 filing, about $6,000 was donated to the anti-term extension PAC.

There will most likely be one more filing for each PAC after the election is over on Tuesday. 

McKinney’s Community Development Corporation Changes Focus

The current mayor and council members have slowly refocused the McKinney Community Development Corporation’s (MCDC) focus in what it funds and doesn’t fund. At MCDC’s recent strategic planning meeting held July 9^th, the president of the MCDC, Cindy Schneible, said the following about the changing priorities:

“…I think our projects have that economic development cast, so we really need to think about how we want to report this out going forward. The larger percentage of our grants are outside of parks...It used to be a lot going to non-profit organizations for museum and entertainment, Heard Wildlife Museum, or Heard Craig, or Chestnut Square, and those are a smaller percentage of our overall grants that are being awarded. The big ones are airport and things like City Hall Plaza, Tupps, so…”

Three members of the City Council, Mayor Fuller, Pro Tem Feltus, and At Large Jones, were present and participated in the strategic planning process. This was an audio-only meeting that lasted over two and a half hours. I listened to the meeting and had it transcribed by an AI transcription service. 

Here are the key discussions and decisions from the meeting:

1. Airport–According to the Mayor, the airport will continue to get some funding from the MCDC. The recent $3.6M given to the airport for infrastructure was not a one-off.

2. Tunnel Park—The MCDC will also be asked to fund the underground tunnel park under Highway 5.

3. City Parks Funding—the ten-year requirement or directive for the MCDC to fund city parks a certain amount every year ($5.5M or so) will be ending soon. The directive will not be renewed; MCDC will just continue to fund it. A lack of a directive or requirement means that city leadership can decide at a future time to stop financing city parks. If the MCDC stops, citizens will have to cover the cost through their taxes.

4. The MCDC board made it clear that the relationship with MISD is broken. MISD makes it very difficult to rent space. MISD will also kick out those who rent space on short notice to make room for a school group. 

5. MCDC got the green light to pursue economic development deals, just like the MEDC. They will issue requests for proposals for what city leaders decide are priorities.

6. City leadership wants the MCDC to pursue convention space when that has traditionally been the job of the MEDC.

7. Leadership seems to want a luxury hotel. 
 
8. They want a community gathering place that is also a development of some sort.

Mayor Fuller spoke about a resort/hotel/convention space and the airport both being top priorities for the MEDC and MCDC. This audio was captured around the 1:30 range.

At Large Jones stressed the need to prioritize the following:

“I think, honestly, the airport, and just remember what the D stands for, whether it's EDC or CDC, it's development. Development. So when we talk about community development, what are we lacking? We lack hotel space. We lack entertainment venues. That's key. We can mow a lawn for parks all day long, but it's community development and economic development. So that should be the key priorities always. And it should be...You don't have a number on this. You just kind of list them out. Development.”

Mayor Pro Tem Feltus wanted to make clear that the MCDC should seek out developments to fund:

“I would definitely say I would like to see us be a little more proactive about finding the developments that are really right for McKinney. I think a lot of times, and this is not just CDC, but we kind of wait for things to come to us instead of us going to look for what really fits for us. How many of you guys have flown somewhere else, looked at a development, looked at an entertainment venue, a hotel, anybody on this board?”

MCDC’s current $35M fund balance reflects a clear change in funding priorities. Clearly, less money is going to community-type causes, and more money is being saved for development-type causes.

Because CDCs have such broad legal provisions governing how sales tax funds can be spent, city leaders can tailor goals at will. The MCDC board members are all appointed by the City Council. The City Council tells the MCDC what priorities should be pursued. 

Last February, the City Council voted 6-1 to ask the MEDC and the MCDC to fund the cost of infrastructure needed for a commercial airport (or maybe the expansion of the general aviation airport if the commercial airport does not pan out). This vote came nearly a year after the citizens of McKinney decisively voted down a $200M bond election to fully fund a commercial airport.

City officials spent nearly a year trying to figure out how to pay for a commercial airport without bonding through the citizens before finally settling on these two revenue streams. This city council resolution was for $3.6M from the MCDC.

The city council meeting was heated. Many in the community sent emails and spoke in person. They feared this one-time diversion of money to the airport would become the norm. They wondered what community events and non-profits would miss out on funding if the MCDC started paying for the airport as well as the MEDC. City Council chastised citizens from the dais for believing that the MCDC's commitment to the community would be changed.

Unfortunately, city residents' fears turned out to be reasonable. The MCDC's priorities have changed at the behest of city leadership.

Please see this past article regarding MCDC's funding denial of McKinney's own Heard Natural Science Museum & Wildlife Sanctuary here.

 

 

The Airport Bond Postmortem – Were There Warning Signs?

A lot of taxpayer money was wasted on the idea and execution of the airport bond from the moment the first consultant was hired in 2019. Were there signs that the city council would go on to spend $4M on consultants alone? Did we just miss the signs?

Were public hearings missed? Are there even public hearings for consultants? If not, would there be a total amount that might trigger a public hearing? Are there explicit wording requirements for the spending that can be seen on agenda items that aren’t public hearing items? Does the secret nature of this kind of economic development actually prevent public input and involvement?

The good news is that Mr. Grimes, the city manager, helped answer my questions. The bad news is that there was really no way for us to know what was coming. I know that when looked into the agenda items they were vague. Nor were there any ways we could have gotten involved in the decision-making process. That must change, or we’ll end up in this situation again.

I will just cut and paste his emailed answer because it is inclusive of all my questions:

"I have reviewed the approvals you reference below.  The consent agenda is where you will find many of our ordinances amending the budget and resolutions authorizing the City Manager to sign contracts.  While there is not a set contract amount threshold that, when crossed, requires an item to be moved to the regular agenda, larger contracts sometimes do get placed on the regular agenda to allow for a staff presentation.  Consent items are still on the public agenda, and the City Council can always request that a consent agenda item be pulled down for discussion.  If a member of the public wished for an item to be pulled down from consent and be considered individually, they can certainly speak at the public comment period and/or send a note to the council in advance requesting so.  My hunch is that at least one member of the council would grant such request, and every council member has the ability to exercise that discretion.

 

Below are the agenda items relating to the east side EA and the east side programming documents.  Of these items, the only public hearing was held during the TIRZ 2 Board meeting where $2 million was approved towards the programming document process.  Airport Director Ken Carley presented during this meeting and explained the request for TIRZ funding.

 

12/7/21 City Council Meeting – Agenda Item #21-1072 (consent) – Ordinance amending budget providing $550,000 for East Side Environmental Assessment

12/7/21 City Council Meeting – Agenda Item #21-1080 (consent) – Resolution approving contract with Garver for East Side Environmental Assessment

 

1/4/22 TIRZ 2 Board Meeting – Agenda Item #21-1183 (public hearing) – Resolution authorizing $2.0 million in TIRZ funds for East Side Programing Documents

1/4/22 City Council Meeting – Agenda Item #21-1170 (consent) Ordinance amending budget providing $1.5 million from Airport Operating Fund Balance and $2.0 million from TIRZ 2 Fund Balance for East Side Programming Documents.

1/4/22 City Council Meeting – Agenda Item #21-1173 (consent) – Resolution approving contract with Garver for East Side Programming Documents

 

3/7/23 City Council Meeting – Agenda Item #21-0166 (consent) – Ordinance amending budget appropriating $234,000 from the Airport Construction Fund balance to Airport Long Range Planning"

How many people would know what "East Side Programming Documents" meant? I know I thought they were talking about the runway extension that we already knew about.

If we asked our city council members what was going on at the time of the first or second consultant authorization, how many would have told us that they were in the planning stages of another airport bond, especially if they considered the airport an economic development that possibly included secret negotiations? It would be interesting to get their thoughts on this question. 

Transparency must be improved, especially in the case of consultants—any consultants.

McKinney’s Independent Bank and its CRA Obligations

Independent Bank’s decision to bring a Federally Qualified Health Center (FQHC) to McKinney in 2017 was heavily influenced by its Community Reinvestment Act (CRA) obligations. Banks and their CRA obligations are reviewed by the FDIC often and those evaluations have an impact on whether banks are allowed to expand or close branches in certain areas, for example.

According to the U.S. Department of Treasury’s website, banks can use investment in FQHCs to satisfy their CRA obligations:

The partnership is mutually beneficial [for banks and FQHCs]. Because demand for health centers has doubled since 2002 and is predicted to double again by 2020 to more than 32 million patients, the industry needs bank financing to expand. Banks looking to expand their lending and fulfill Community Reinvestment Act (CRA) commitments may achieve both objectives by helping finance the more than $8.5 billion needed by 2020 to finance the necessary expansion.

The website page goes on to add:

Banks have an obligation under the CRA to help meet the credit and deposit service needs of the communities where they are chartered to do business. In general, such communities are where a bank has at least one deposit-taking automated teller machine or branch. To help meet community needs, banks that meet certain asset thresholds must also provide community development loans, qualified investments, or community development services, or some combination thereof. The OCC is required to evaluate whether each bank is meeting its obligation, consistent with the safe and sound operation of the institution.The CRA definition of community development includes community services targeted to low- and moderate-income (LMI) individuals.

For the purposes of CRA evaluations, Independent Bank is considered a large bank because it has over $1.252 billion in assets (IB has over $8B). Since it is a large bank, it must be evaluated with a Lending Test, Investment Test, and Service Test to ensure it is meeting the needs of their low- and moderate-income neighborhoods in a manner that is matched to their resources and capabilities as a large bank. 

There are, of course, many options and opportunities for banks to score well on their CRA evaluations in each of the three test areas. However, the CRA evaluations seem to favor community involvement as a means of doing so in their reports, as the evaluation report will show.

Independent Bank was last evaluated in August of 2017. The entire Community Reinvestment Act Performance Evaluation report for Independent Bank details the criteria used and the complete results. Here's how Independent Bank scored on all three tests: 

From Independent Bank's CRA Performance Evaluation, 2017

Independent Bank was found to be low satisfactory in two areas: Lending Test and Service Test. Below are quotes from the report about Independent Bank that demonstrate what is expected of large banks and how well those expectations were met expectations:

Lending Test
· The bank demonstrated good performance regarding its lending activity.
· The institution originated a high percentage of loans in its designated assessment areas.
· The bank established an adequate record regarding its borrower profile loan distribution.
· The institution achieved an adequate record regarding its geographic loan distribution.
· The bank proved a leader in granting community development loans and demonstrated excellent responsiveness to community needs.
· The institution made occasional use of innovative and flexible lending practices.  

And:

Service Test
· The bank demonstrated a reasonably accessible level of delivery systems and tailored retail bank services.
· Changes to Independent Bank’s branch network were generally not adverse to low- and moderate-income individuals.
· The bank’s hours and services offered do not inconvenience low- and moderate-income individuals.
· The institution provided an adequate level of community development services.

For the Lending Test, these 5 bank activities were listed as positive steps toward CRA goals in the report. 

Affordable Housing – In 2015, the bank funded a $2.7 million dollar loan to purchases a 50-unit apartment complex located in a low-income tract. The property provides housing for low- and moderate-income tenants. 

Affordable Housing – In 2017, Independent Bank funded five loans to construct low-income housing in the Waco MSA AA totaling $420,000. The borrower is a non-profit organization 31 whose mission is to “build stronger neighborhoods through homeownership, quality rental housing, and community building initiatives”. 

Community Service – In 2016, Independent Bank extended a loan totaling $5.9 million. The funds supported the purchase and renovation of a four-story building. The primary tenant, a Federally Qualified Health Clinic, serves the medically underserved population consisting primarily of low- or moderate-income individuals. This business operates in a moderate-income census tract. 

Economic Development – In 2017, the bank granted a $2.9 million dollar loan to provide financing of a convenience store consisting of a gas station and restaurant. The store will create new jobs for low- and moderate-income individuals. The business is located in a moderate income geography. 

Revitalize and Stabilize – In 2016, the bank provided a loan totaling $4.4 million for the acquisition of a foreclosed office building/warehouse located in a moderate-income census tract.

For the Service Test, these 3 activities of Independent Bank were seen as positive steps toward fulfilling CRA obligations:

Community Services – Multiple employees and officers participated in the planning and development of The Family Health Center at Virginia Parkway, a Federally Qualified Health Clinic. The bank identified a need for a clinic that services the medically underserved population of McKinney and Collin County, coordinated stakeholders to design and implement the clinic, and identified and coordinated various financial resources to fund the clinic. 

Affordable Housing – One officer served as a Board Member for the Houston Housing Finance Corporation, which finances low- and moderate-income housing projects in the Houston area through the issuance of single-family mortgage revenue bonds. 

Economic Development – A bank officer served as a Director for the McKinney Community Development Corporation and another officer served as a Director for the City of McKinney Economic Development Corporation. Both organizations work to revitalize the moderate-income areas in McKinney by bringing new business in and expanding current businesses using grants and tax incentives.

If Independent Bank is meeting its CRA banking obligation with this FQHC, why is Independent Bank asking the city and City Council to help pay for the cost of the clinic's relocation and expansion? 

Please go to FDIC for more information on Independent Bank.