The establishment of a municipal management district—which is the special district type associated with both the Honey Creek and Colmena Ranch developments—allows for special financing for infrastructure in large development projects, Republic Property Group Co-CEO Jake Wagner said. The development firm is leading the Honey Creek project.
While a municipal management district, or MMD, has been established for Honey Creek, the developers of the Colmena Ranch project are negotiating with city leaders and considering the possibility of establishing an MMD for the project, according to a presentation at an Oct. 15 McKinney City Council meeting.
As these special districts are planned and proposed, city officials are working to align the projects with existing plans that will supply infrastructure for north McKinney.
The gist
The Colmena Ranch development would span about 2,450 acres, city documents state, which would make it larger than any other existing or planned special district in the city.
An initial land use plan for the site includes nearly 1,400 acres dedicated to single family housing. Other planned uses include amenities, commercial developments and flex use space for land uses such as multifamily housing or office buildings.
The Honey Creek development will span over 1,650 acres and could include as many as 10,500 homes in a mix of housing types, city documents state. Residences to be developed include single-family and multifamily unit types, with both for-sale and rental options, Wagner said. It will also include a minimum of 80 acres of land for commercial uses, as well as land designated for municipal uses and other amenities. The land for the development is located within McKinney city limits.
Republic Property Group has developed a number of large scale projects in the Dallas-Fort Worth area, including Light Farms in Celina and Walsh in Fort Worth. Wagner said the use of special districts in projects like these has become more common due to the costs associated.
“If you're building a large-scale project such as this one ... It's really, really hard to do without a special district,” he said.
Wagner said the Honey Creek project will be north of $2 billion in value once completed. The project, like other communities developed by Republic Property Group, will see elements of McKinney history incorporated into the identity of the project, Wagner said.
“We always really strive to research the history of where we're building and the roots, and be authentic to how we approach the project,” he said. “The intent is to be authentic to the place that you're in, that's been there for decades and decades, but also make it stronger and create value.”
Diving in deeper
Special districts are a financing vehicle that allow developers to pay for large infrastructure improvements.
There are dozens of types of special districts, said Michael Quint, who serves as McKinney’s executive director of Development Services. He noted that some common district types include MMDs, as well as Municipal Utility Districts, or MUDs, and Public Improvement Districts, or PIDs.
“MUDs or PIDs or fresh water supply districts or MMDs, they all have their nuances but they all generally serve that same purpose, which is essentially being able to finance very large, expensive infrastructure that you wouldn't otherwise be able to through levying an assessment or a tax on the property,” Wagner said.
These districts can be formed by various sources depending on the district type. In the case of MMDs, they can be formed two ways—by the state legislature or by the Texas Commission on Environmental Quality.
Since the first special district designation was granted by the organization that preceded the Texas Commission on Environmental Quality, the organization has since granted over 1,800 special district designations, including the Honey Creek MMD, TCEQ Media Relations Specialist Ricky Richter said in an email.
Wagner said Honey Creek project officials initially pursued the MMD designation for the development through the legislature in late 2022, but when the designation was not awarded, they were able to apply through the TCEQ process in early 2024. The designation was granted in September.
The powers granted to a district vary based on the district type, Quint said, noting that MMDs are more flexible than MUDs in regards to assessments and fees for residents.
The city of McKinney has limited interactions with special districts, with most interactions focused on elements such as establishing development agreements and associated zoning, Quint said.
“We really don't have a lot of financial engagement with them,” he said. “Our engagement with the districts [is] more on the development side.”
Also of note
There are two special districts currently in McKinney—McKinney Municipal Utility Districts 1 and 2. Together, these districts comprise the Trinity Falls community in the city’s northeast sector.
The districts were established in 2007 through the 80th Texas Legislature, prior to Johnson Development Corporation acquiring the land that would become Trinity Falls, said Jerry Ulke, vice president and general manager of Trinity Falls, in an emailed statement.
Trinity Falls is not within the city’s corporate boundaries, Quint said, and residents there contribute taxes only to the city’s water and sewer services. Residents of these MUDs also pay taxes to Collin County, McKinney ISD and Collin College, Ulke said.
The impact
The creation of special districts speeds up the development of a portion of the city, Quint said.
While a normal development could be restricted by the market and the limits of traditional financing, special districts are able to finance larger infrastructure, which enables larger development projects.
Special districts can also cause leapfrog development, Quint said, which is what occurs when development jumps away from a contiguously developed area. As a result, additional work to extend utility lines and other infrastructure is required.
“What we thought we would be planning and developing 20 years from now, we're developing now through the introduction of these districts,” Quint said.
Wagner said the infrastructure required within the district will serve both the district and its residents, as well as the region.
“These large projects require pretty significant infrastructure that will serve those projects but ultimately, really are regional projects,” he said. “They serve areas around the project ... [and] open up parts of the city from the traffic [and] utilities standpoint.”
Wagner said it is important to educate homebuyers that are interested in purchasing a home in a special district due to the additional assessments and costs they would be required to pay, but also noted that the district presents a value proposition for buyers that are interested in the large-scale infrastructure, and high-quality neighborhoods and amenities that can be found in special districts.
“If someone is going to pay more for one community versus another, or decide to live in one place versus another, it's [about] creating an environment that people want to be in,” Wagner said.
Quote of note
“If you're looking to buy a new house in a brand new development, make sure that you're very clear in asking, ‘Are there any special assessments in terms of a special financing district? Are there any additional taxes that I need to be aware of?’,” Quint said. “Ask those questions, because what we want is folks ... to love the house and the neighborhood they buy in the city of McKinney. We don't want them to fall out of love with it when they see these unknown prices that are affiliated with it.”’
Looking ahead
City officials are working with developers of the Colmena Ranch project and negotiating an agreement that would see the project annexed into city limits, Quint said.
Details on the development timeline for the Honey Creek project are not yet available, Wagner said. The development agreement for the project outlines deadlines for some elements of infrastructure within the project
The first work on the project will connect Laud Howell Parkway from Lake Forest Drive to roughly US 75, Wagner said, noting that the work is expected to be completed by late 2027.
