The newly created categories could allow for funding to be given to a Build Your Own Business initiative at Tupps Brewery, according to a presentation at the meeting.
The gist
A TIRZ is an economic development tool that is used to direct a portion of taxes collected in a specific geographic area into a reserve that is earmarked for projects in that same area, Assistant City Manager Barry Shelton told Community Impact. McKinney has two designated zones.
The project plan for McKinney’s TIRZ 1, which encompasses the downtown area as well as other areas along SH 5, outlined goals for the collected funding to be used for catalyst projects, projects that create linkages across SH 5 and street projects.
The plan included three eligible project types that could receive funding collected from tax revenue collected in the zone, according to a presentation at a Sept. 30 meeting of the TIRZ 1 board. According to the presentation, the project types allowed in the plan include:
- Catalyst projects, which are “significant projects” totaling $5 million or more
- Vacant and underutilized sites and buildings, which total less than $5 million
- Mixed-income housing, including the creation of affordable and workforce housing
- Environmental remediation
- Facade improvements
- Fire safety and suppression improvements
- Street and utility improvements
- Land acquisition
- Critical maintenance
- An innovation and pilot project category, to provide funding to incubator and pilot projects that support “unique development concepts”
- A district enhancement projects category, to provide funding for municipal programs and infrastructure improvements in the zone
The TIRZ 1 board approved the proposed changes to the project plan in a 5-1 vote, with board member and councilman Justin Beller voting against the item. McKinney City Council also voted unanimously to approve the project plan update at a meeting on Sept. 30.
The TIRZ 1 board also unanimously approved increasing some funding caps in the TIRZ funding policy for select eligible expenses.
What they’re saying
Beller voiced opposition to the change, saying it would support businesses in the downtown core area that may have already received TIRZ funding rather than supporting businesses throughout the TIRZ 1 zone, which extends to the north and south of downtown along SH 5.
“This TIRZ was supposed to benefit everybody, and we need to find ways to make sure the businesses along [SH 5] have the same opportunities that the businesses in downtown do,” Beller said.
George Fuller, McKinney mayor and TIRZ 1 board member, said he supported the two eligible project category additions to the project plan, but noted his agreement with Beller’s sentiment to create a strategy for directing TIRZ funds.
“We need to create a strategy and figure out ways that we, as a board, can be proactive and go out and not wait on [the] private sector to come in, but us go out as stewards of this money and determine how to improve this reinvestment zone,” he said.
Arnold said city staff is expected to continue evaluations of the TIRZ project plan, including how TIRZ funds are allocated, into early 2025.
Diving in deeper
The first applicant to apply for funding through one of the new eligible project categories is Keith Lewis, founder and president of Tupps Brewery.
Lewis applied for $120,000 in funding under the innovation and pilot project category to assist in launching a Build Your Own Business program at Tupps Brewery. The project includes finishing out six grain bins located on the site that would be rented to small businesses to establish as a retail space, according to the presentation at the meeting.
The process is estimated to cost $20,000 per bin. The grain bins are expected to be rented to small business owners at $750 per month, Lewis said.
Lewis noted that the business owners would begin their business in a grain bin at Tupps Brewery, with the longer term goal of expanding or opening more locations over time. Some potential businesses for the space include a cigar shop and a simple syrup business.
“We do think it's a unique opportunity to support an existing noteworthy project already in the downtown area,” Arnold said of the funding request.
While city staff did not evaluate the potential economic impact of the various businesses once operational, Fuller said the businesses would create “synergy” with the activity already at Tupps Brewery and in the area.
Board members expressed concerns related to the economic impact the businesses will have, as well as the funding mechanism for the request, with some recommending that the funding request be presented to the McKinney Community Development Corporation. The board opted to table the item indefinitely while more information on the project is gathered.
Learn more
For more information on McKinney’s TIRZ 1, visit www.mckinneytexas.org/1216/downtown-development#TIRZ1.
