During Tuesday's McKinney City Council meeting, Janay Tieken, housing and community development manager, presented a community revitalization plan that could realize the redevelopment of Merritt Homes.
The 86-unit Merritt Homes, located on North Tennessee Street north of downtown McKinney, was built in the 1960s and has severe infrastructure issues, according to McKinney Housing Authority officials.
Newsome Homes is a similar MHA property that experienced aging and deteriorating infrastructure. Located south of downtown on SH 5, Newsome Homes is currently being redeveloped thanks to a 4 percent tax credit from the state and a $1.7 million contribution from the city.
Tax credits are distributed by the U.S. Department of Housing and Urban Development to the Texas Department of Housing and Community Affairs then distributed to MHA.
There are two types of tax credits available: a 4 percent tax credit and a 9 percent tax credit. Both have specific requirements and represent either 4 percent or 9 percent of the present value of the eligible costs of a low-income housing project.
According to Tieken, a redevelopment similar to Newsome Homes can be accomplished for Merritt Homes and could cost the city even less.
The Community Revitalization Plan, which will be brought back to Council for further consideration before Jan. 1, outlines a plan that would include naming an area around downtown McKinney as a revitalization area.
Without the Community Revitalization Plan approval, Merritt Homes will not qualify for 9 percent tax credits. This would leave the 4 percent tax credit option similar to Newsome Homes and would cause the potential redevelopment project to see a funding gap of more than $2 million.
Should the city pass the proposed Community Revitalization Plan, Merritt could be eligible for a 9 percent tax credit and only be short roughly $1,500.