The city of McKinney, the McKinney Economic Development Corp. and the McKinney Community Development Corp. have been working for over a decade to develop the Gateway property—located near the intersection of SH 121 and US 75—into the grand entrance of the city, complete with a mix of hotels, retail, restaurants, entertainment and residential developments.

After failed development agreements throughout that stretch of time, city officials said the site is getting a fresh start with responses from five prominent development teams following a December 2016 request for qualifications, or RFQ, from the city.

McKinney City Manager Paul Grimes said the hub of development activity happening in North Plano and Frisco benefits McKinney because it drives lease prices up in those cities, making McKinney more appealing to businesses.

“This is a really hot market, and that makes us pretty attractive because businesses are looking for areas where they can do greenfield development or find locations more affordable than Frisco and Plano,” he said. “We think there is a place for us now because it seems to be the natural progression of the office market, and that seems to be the feedback we have received recently.”

Changes in Development vision

Changes in city leadership, including a new city manager, MEDC president and an almost entirely new City Council, coupled with a population increase of more than 120,000 people since the project began, have caused an evolution in the city’s approach to Gateway.

“The current RFQ will allow us to partner with a developer on a master development with more flexibility to allow the market to drive development with a general plan as opposed to the more specific plans we have tried to adopt in the past,” Mayor Brian Loughmiller said.

Loughmiller said there is a market for the project as development moves north from Dallas up the SH 121 corridor and as the Dallas North Tollway continues to develop.

However, he said the city needs to be open-minded to the type of development that could occur to prevent missing an opportunity, adding it is important to remember the site will have a major impact on the impression of McKinney to those driving past.

"What we have been very careful to do—and what we have advised the City Council and the MEDC to do—is to let the marketplace tell us what can be done,” he said. “We set forth some guiding principles, which are very clearly enunciated in the RFQ. Within those parameters, all bets are off. We want developers to tell us what they can do. That’s how we get the marketplace to work for us.”

The guiding principles seek to have the site serve as a major employment center, allow the city and MEDC to recover their investments, serve as a source of community pride, convey urban vibrancy and quality, create interesting skyline elements and scale, and spur complementary uses and amenities.

MEDC President Darrell Auterson said interest began to mount after a business event at the Sheraton Hotel & Conference Center on the Gateway site last summer.

“That got me very excited about reaching out very aggressively to the development community across the Metroplex to find out what people think about McKinney and the Gateway property specifically,” Auterson said. “What I found was about two dozen developers with varying degrees of interest in McKinney and at Gateway. I came to Paul [Grimes] and told him the interest was strong.”

Council Member Travis Ussery said now is the opportune time to develop the site given the list of developers who responded to the RFQ.

“I am impressed with the interest we have received recently; it indicates the private market is good and viable,” he said. “It appears that the market is ripe for this development. I hope we can move forward on this site in a positive way that benefits everyone in the city of McKinney.”

Interest in completing the project

The RFQ was issued Dec. 2. By Jan. 17, five development teams responded, including Trammell Crow Co.; Lincoln Property Co.; Team McKinney Gateway, which consists of KDC, Corinth Properties and Columbus Realty Partners; Flaherty & Collins Properties; and Harwood International.

Trammell Crow is one of the country’s oldest developers and investors in commercial real estate. Projects include Legacy Tower at Plano’s Shops at Legacy.

Lincoln was selected in May 2015 to develop the remaining Gateway land, but in March 2016, the company withdrew from the project, citing its inability to meet the requirements. The company is working to master-plan, develop and lease mixed-use space at the Dallas Cowboys world headquarters in Frisco.

Team McKinney consists of KDC, which is currently working on the new headquarters for Liberty Mutual and Toyota in Plano as well as State Farm in Richardson; Corinth Properties, which is responsible for Eldorado Plaza at US 75 and Eldorado Parkway in McKinney; and Columbus Realty Partners, which is currently developing the 9-acre site in downtown McKinney.

Flaherty & Collins Properties is responsible for developing a mixed-use development in Orland Park, Illinois, and other retail and multifamily developments. Harwood International has experience with mixed-use development in Dallas’ Uptown District.

City officials will identify a top candidate and begin a period of exclusive negotiations without turning down the other respondents. Grimes said this would allow the city to have other options should negotiations fall through. Vetting will begin this spring with plans to name finalists in the summer or fall.

City officials said they are willing to wait for the right developer and the right development.

“We are going to be as patient as we need to be,” Auterson said. “I would love for this thing to be platted and laid out with every structure happening simultaneously, but the reality is that we may find ourselves phasing this in over time and that’s OK.”

Grimes and Auterson said the details of how the public-private partnership will work will depend upon what is submitted by the developers.
Auterson said he hopes the project is successful, which he said could lead to more public-private partnerships across the city.