During the Sept. 20 City Council meeting, Janay Tieken, city housing and community development manager, presented a Community Revitalization Plan that could realize the redevelopment of Merritt Homes.
The 86-unit Merritt Homes complex, located on North Tennessee Street north of downtown McKinney, was built in the 1960s and has infrastructure issues, according to McKinney Housing Authority officials.
Newsome Homes is a similar MHA property that experienced aging issues and deteriorating infrastructure. Located south of downtown on SH 5, Newsome Homes is 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 before they are 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 project 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 the council for further consideration before Jan. 1, outlines a plan that would include naming an area around downtown McKinney as a revitalization area.
The plan would require no upfront funding from the city and would simply designate the area as one where future improvements could be made or are currently being made.
Should the city pass the proposed plan, Merritt could be eligible for a 9 percent tax credit and be short roughly $1,500 in funding for the remodeling project.
Without the council’s approval of the plan, Merritt Homes will not qualify for 9 percent tax credits. This would leave the 4 percent tax credit option and would cause the potential redevelopment project to see a funding gap of more than $2 million.