The city has been working since February 2015 to create a new mixed-use development on a 9-acre plot of land one block south of the square in downtown McKinney. On Oct. 18, McKinney City Council approved final plans for a $45 million development that site developer Columbus Realty Partners said will break ground on Phase 1 Jan. 23 and begin leasing 11 months later.
The development consists of 20,000 square feet of retail and restaurant space, 45,000 square feet of office space and 330 multifamily apartments. Phase 1 of the project includes two four-story buildings with retail and restaurant space on the first floor and 266 residential units above, a three-story building with 64 apartments, a parking lot and a 5 1/2-story parking garage containing more than 500 parking spaces.
“The 9-acre site is a huge redevelopment project for the SH 5 corridor and will expand pedestrian traffic in an already active and thriving downtown,” Council Member Tracy Rath said. “The residential units alone will add more than 300 people that will dine and shop downtown. Other essential service providers take notice when this kind of redevelopment occurs, and they want to invest and be a part of it.”
As of Oct. 28, developers said the project has one major tenant for some office space planned for the site, adding that the tenant hopes to eventually expand to fill 100,000 square feet and bring in more than 400 employees.
However, the remaining restaurant and retail portion will be built as speculative space, meaning it will be built without first having a committed tenant.
“It is uncommon to build a large amount of retail [speculative] space if it were a large development standing on its own,” said Robert Shaw, site developer. “However, since this is a mix of retail, residential and office, it is not that uncommon. We will be bringing a large amount of employees to downtown with this site along with the residential aspects, so I think that retail space will fill in with no problem.”
In February 2015, McKinney City Council sent a request looking for qualified developers.
Several applications were received, and CRP, controlled by former Dallas Cowboys team members Shaw and Roger Staubach, was selected in November 2015.
A development agreement was reached in February 2016. Deputy City Manager Barry Shelton said the terms of the agreement stated CRP would purchase and own the land for Phase 1, which features the residential and retail portion of the project as well as the parking structure.
Once development is complete, the city will then return the land purchase funds for Phase 1 back to CRP in return for public parking infrastructure developed with the site. The second phase of the project will take place the same way.
Once the project is complete, the developer will own the property and the development, and the city will have use of 320 public parking spaces spread between the on-site parking structure and city streets built in Phase 1 and another 125 spaces that will be built in Phase 2.
“Upon completion of the public components of the infrastructure for Phase 1, including construction of the parking garage and the issuance of a certificate of occupancy for Phase 1 of retail and residential improvements, the city will give the developer $1.25 million,” Shelton said. “Upon completion of Phase 2, the city will give the developer an additional $250,000. In addition to the total $1.5 million in cash incentives, the city will also waive all roadway, water and sewer impact fees due on the project.”
The project takes a formerly tax-exempt, city-owned property and adds it back to the tax rolls. Shelton said the estimated value of the project will bring in roughly $250,000 in property taxes paid to the city each year. McKinney ISD and Collin County will also benefit from the project as each is estimated to receive $729,000 and $93,000, respectively.
The interiors of the apartments mirror what Shaw said he and his team are building now in Legacy West, which is a large, mixed-use development under construction in Plano. He said rents for the new apartments will be $1,000-$2,000 a month.
“We’re going after people that are going to be working for J.P. Morgan, Toyota and Liberty Mutual,” Shaw said. “[Some of] those people working there are going to be willing to drive a little farther to live in a place that has an authentic, real downtown. And that’s what’s driving us to have the interest to respond to the [city’s development proposal request] and be here, because to be honest with you, there’s not a lot of market comps to support what we’re doing.”
Shaw compared the 9-acre development to the Uptown Dallas project he completed in the late 1990s with the construction of three apartment buildings that sparked a boom of development in the area.
Shaw said no one was living in Uptown at the time he constructed the apartments. The area is now home to roughly 25,000 residents, according to city-data.com, which studies area demographics.