Dec 07, 2021 Joint Meeting on 2021-12-07 4:00 PM - Joint Meeting of the City Council & McKinney Community Development Corporation (MCDC) and Historic Preservation Advisory Board (HPAB)

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WE'LL CALL OUR MEETING TWITTER.

WE HAVE A JOINT MEETING TODAY WITH THE MCKINNEY COMMUNITY DEVELOPMENT CORPORATION.

TODAY IS TUESDAY, DECEMBER SEVEN, SEVENTH 20 21, 4 0 8 IN THE AFTERNOON.

WE'RE IN CITY COUNCIL CHAMBERS 2 22 NORTH TENNESSEE STREETS IN THE GREAT CITY OF MCKINNEY.

AND WE ARE CALLED TO ORDER HERE.

THANK YOU.

THE MCKENNA COMMUNITY DEVELOPMENT CORPORATION CALLED.

SO THE ORDER IS TUESDAY, DECEMBER THE SEVENTH, 2021.

IT IS 4 0 9 WE'RE IN CITY HALL, CHAMBERS AND MCKINNEY, 2 22 NORTH MCKINNEY STREET, MCKINNEY, TEXAS SEVENTY FIVE OH SIX NINE.

THANK YOU.

CALL FOR PUBLIC COMMENTS ON AGENDA ITEMS, NONE HEARING NONE PUBLIC HEARING ITEMS.

[Conduct a Public Hearing and Consider/Discuss/Act on an Amendment to a Lease Agreement Executed Between McKinney Community Development Corporation (Landlord) and TUPPS Brewery, LLC (Tenant) for Project #20-09, to Increase Funding From MCDC to the Amount of Thirteen Million Three-Hundred Thirty-Three Thousand Two Hundred Sixty-Two and No/100 Dollars ($13,333,262.00) and to Further Include Additional Lease Provisions for Required Direct Tenant Funding, including Funding Originating from the City of McKinney, Texas, to Establish Sufficient Funds to Meet All Eligible Project Costs Contained in the Approved Budget for the Rehabilitation and Revitalization of the Property Located at 402 E. Louisiana Street, McKinney, Texas, to Create a World-Class Cultural and Entertainment Destination to Serve as a Catalyst for Economic Development in McKinney, Texas, Require Approval of Guaranteed Maximum Price for the Project by December 31, 2021, and a Project Completion Date of December 31, 2022.]

LANDLORD.

CAN TUFTS WORRY, LLC TENANT FOR PROJECT TWO ZERO DASH ZERO NINE TO INCREASE FUNDING FROM MTBC TO THE AMOUNT OF $13,333,262.

AND TO FURTHER INCLUDE ADDITIONAL LEASE PROVISIONS FOR REQUIRED DIRECT TENANT FUNDING, INCLUDING FUNDING ORIGINATION ORIGINATING FROM THE CITY OF MCKINNEY, TEXAS, TO ESTABLISH SUFFICIENT FUNDS TO MEET ALL OF THE ELIGIBLE PROJECT COSTS CONTAINED IN AN APPROVED BUDGET FOR THE REHABILITATION AND REVITALIZATION OF THE PROPERTY LOAD LOCATED AT 4 0 2 EAST LOUISIANA STREET, THE COUNTY, TEXAS TO CREATE A WORLD-CLASS CULTURAL AND ENTERTAINER DESTINATION TO SERVE AS A CATALYST FOR ECONOMIC DEVELOPMENT IN MCKINNEY, TEXAS REQUIRE APPROVAL OF GUARANTEED MAXIMUM PRICE FOR THE PROJECT BY DECEMBER 31ST, 2021.

AND THE PROJECT COMPLETION DATE OF DECEMBER 31ST, 2022, WE WOULD LIKE TO RECOGNIZE MR. KEITH LEWIS TO PROVIDE AN UPDATE ON THE PROJECT, COPPER AND COPPER PUBLIC COMMENTS ON PREPARING.

UH, THANK YOU.

UH, KEITH LEWIS, FOUNDER OF TOPS BREWERY, UM, KIND OF WANTED TO START, UM, BY THANKING EVERYBODY HERE, UM, FROM CDC BECAUSE, UM, AS EVERYBODY KNOWS, WE'RE WORKING ON THIS FOR QUITE SOME TIME, UM, LITTLE OVER A YEAR, SO, UH, IT'S BEEN A HECK OF A TEAM EFFORT.

SO I WANTED TO GIVE AN UPDATE ON TWO THINGS.

ONE IS A LITTLE BIT OF AN UPDATE ON TUFTS AND WHERE WE ARE SO FAR.

AND THEN THE OTHER THING WOULD BE A LITTLE BIT A DETAIL ON THE PROJECT OF WHERE WE ARE TODAY, MY QUEUE.

SO I WANTED TO LET EVERYBODY KNOW KIND OF THE REVENUE GROWTH THAT WE HAVE HAD.

UM, WHEN WE STARTED THIS PROJECT, UM, WE WERE IN THE 7,000 BARREL RANGE AND I THINK WE CAME TO EVERYBODY AND WE SAID THAT WE WERE, I THINK THE 16TH LARGEST BREWERY IN THE STATE OF TEXAS FROM A CRAFT PERSPECTIVE.

UH, THE GOOD NEWS IS THAT WHERE WE ARE GOING TO FINISH, UM, THIS YEAR AND ACTUALLY WITH OUR NUMBERS THAT WE REPORTED IN 2020, UM, UH, WE ACHIEVED THE VOLUME OF THE 11TH LARGEST BREWERY IN THE STATE OF TEXAS.

SO WE HAVE GROWN OUR POSITION WITHIN THE STATE.

UM, AND WHEN YOU LOOK AT WHERE WE ARE, UH, WITH OUR PROJECTIONS, WHICH ARE GRAY IN THE 2022 RANGE, UH, WE HAVE THE OPPORTUNITY TO EKE INTO THE TOP FIVE SPOT IN THE STATE.

UM, ONE OF THE THINGS THAT WE ALWAYS HAVE TO KEEP, UH, AND PAY ATTENTION TO IS OUR MARKET GROWTH HAS REALLY COME FROM THE LOGOS THAT YOU SEE ON THIS PAGE.

SO WE ARE IN ALL MAJOR, UH, GROCERY THROUGHOUT THE STATE OF TEXAS.

AND, UM, WE HAVE A LOT OF SUPPORT FROM THOSE PARTNERS.

IF YOU LOOK BACK AND WHAT, WHERE WE'VE BEEN, WE ALL WE OPENED IN 2015, WE WERE SELF DISTRIBUTING.

UH, AT THAT POINT, DRIVING AROUND DALLAS FORT WORTH, TRYING TO DELIVER BEER.

UH, IT WAS A BEATING, BUT IT TAUGHT US A LOT AND WE KIND OF EARNED THE RIGHT, UH, REALLY IN 2016 TO LAND, UH, BENNY KEITH AS OUR DISTRIBUTOR, BENNY KEITH IS THE LARGEST DISTRIBUTOR, UM, IN THE DALLAS FORT WORTH AREA.

AND THAT STRENGTHENED OUR POSITION THERE.

AND THEN IN 2017, WE MOVED INTO SAN ANTONIO IN AUSTIN WITH TWO NEW DISTRIBUTORS.

UH, AND THEN IN 2018 WE STARTED DISTRIBUTING INTO OKLAHOMA.

SO WE ARE DISTRIBUTED TO THE ENTIRE STATE OF OKLAHOMA.

NOW WE PRETTY MUCH SPENT 2019 SHORING UP OUR BASE IN THE MARKETS THAT WERE OUR HOME MARKETS.

HOWEVER, UH, WE'VE GOTTEN

[00:05:01]

WE GOT A LOT OF REQUESTS AND IN 2020 WE HAVE SUCCESSFULLY ADDED HOUSTON TO OUR FOOTPRINT.

HOUSTON IS THE LARGEST MARKET IN THE STATE OF TEXAS.

UM, SO WE HAVE, UM, ADDED THEM AND WE'VE ADDED THEM WITH DRAFT BURGER TODAY.

UH, AND WE GO TO PACKAGE GOODS, UM, IN THE MARKET IN, UM, APRIL OF NEXT YEAR.

UH, WE LANDED SILVER EAGLE DISTRIBUTORS DOWN THERE, WHICH IS SIGNIFICANT.

THEY'RE THE BUDWEISER DISTRIBUTOR, THE CONSTELLATION DISTRIBUTOR, AND THEY ARE THE LARGEST DISTRIBUTOR IN THE UNITED STATES.

SO WE'VE GOT REALLY, REALLY GOOD DISTRIBUTION PARTNERS AS WELL TO HELP PROTECT THE BRAND.

UM, IF WE GO ONTO THE SITE, UH, WHAT THIS SHOWS IS ON THE LEFT SIDE, OUR TEAM IN 2020, UH, WE REALLY ESTABLISHED A TEAM.

WE ESTABLISHED A, AN OWNER'S REP, UH, WITH MATADOR.

UH, WE SIGNED OUR LEASE, UM, WITH CDC IN, UH, SEPTEMBER OF 2020, UH, ON THE, ON THE 25TH.

UM, WE HIRED OUR ARCHITECT FIRM, UH, THAT YEAR.

AND THEN WE ALSO WENT THROUGH THE BIDDING PROCESS AND SELECTED OUR GENERAL CONTRACTOR, UH, SPYGLASS.

AND THEN WE PRETTY MUCH SPENT THE ENTIRE YEAR OF 2021 DEALING WITH ALL THE DYSFUNCTIONALITY IN THE MARKETS, UM, BASED ON COVID AND PANDEMIC.

UH, WE WENT OUT TO THE MARKET WITH AN ESTIMATE FOR THE PROJECT AND IT CAME IN AT 15 THREE, WHICH WAS SIGNIFICANTLY OVER OUR BUDGET.

UH, WE HAD A STRATEGY SESSION OF HOW COULD WE MANAGE THAT DOWN? SO WE WENT OUT AND WE GOT 50% CONSTRUCTION DOCUMENTS.

AND WHEN WE WENT OUT AND GOT A QUOTE, IT WENT UP TO 16, EIGHT.

SO IT WENT THE WRONG WAY WE WENT AND WE WAITED A COUPLE MORE MONTHS UNTIL WE COULD GET 95% CDS.

WE THOUGHT THAT WOULD SETTLE IT OUT.

IT WENT UP A LITTLE MORE.

SO IT SEEMS LIKE EVERY TIME WE WENT OUT TO LOOK AT THE PROJECT, IT GOT MORE EXPENSIVE.

SO WHAT WE DID IS WE WENT IN AND WE HAD SOME MEETINGS.

WE WERE MEETING EVERY TWO WEEKS WITH CDC AND THEIR TEAM, AND WE MADE SOME CUTS TO THE PROJECT.

I'LL S I'LL SHOW YOU SOME OF THOSE VISUALLY HOW THEY WORK OUT, BUT WE GOT IT DOWN NOW TO WHERE WE'VE GOT 95% CDS WITH A NARRATIVE FROM THE GENERAL CONTRACTOR.

AND THE PROJECT HAS SETTLED INTO 16, SIX, I GUESS I'LL GO BACK HERE AND I'LL SHOW YOU THE CONSTRUCTION TIMELINE.

I'M SURE THIS WILL BE SOMETHING THAT WILL INTEREST EVERYBODY IS, UM, WE WILL START MOBILIZING ON SITE IN JANUARY EARLY JANUARY.

WE'LL SPEND THE MONTH OF DECEMBER ORDERING RAW MATERIALS.

UH, WE'RE GOING TO TRY TO BRING THE BREWERY BUILDING UP IN OCTOBER OF 2022 AND THE FINAL SITE COMPLETION IN THE FIRST WEEK OF DECEMBER.

SO THIS IS A LOOK AT HOW THE PROJECT HAS TRANSITIONED OVER TIME.

UM, YOU'LL SEE, ON THE LEFT OF THIS, THIS IS A RENDERING ACTUALLY THAT THE CITY PULLED TOGETHER TO SHOW HOW THE TUFTS, UM, SITE WOULD INTEGRATE INTO, UH, THE MCKINNEY GRAIN SITE.

AND SO WE PLACED, UM, OUR TAPROOM, WE PLACED THE BREWERY BUILDING ON THE SITE AND THAT GOT US TO WHERE WE REALLY FELT GOOD ABOUT THIS.

AND WE LOVE THAT, UM, MCKINNEY GRAIN SITE, WHICH WILL BE OUR TAPROOM WITH ALL THE REALLY NEAT, GNARLY STUFF ON TOP OF THE BUILDING.

SO THEN IN JULY, WE GOT KIND OF A FIRST RENDERING FROM OUR ARCHITECTS.

SO YOU CAN SEE HOW IT CHANGED.

WE ACTUALLY TOOK THE BREWERY BUILDING.

WE MOVED IT TO THE SOUTH END OF THE SITE.

UH, WE'VE GOT THE, UM, THE BARREL AGING ROOM, WHICH IS THE L-SHAPED BUILDING.

THAT WAS, UH, THAT WAS A WAREHOUSE.

IT WAS ONSITE THAT WE DECIDED TO KEEP BECAUSE IT WAS ALREADY THERE.

AND THEN AS WE MOVED OVER INTO NOVEMBER, UM, YOU CAN SEE, WE ACTUALLY TOOK 6,000 SQUARE FEET OFF OF THE BREWERY BUILDING AND WE LOWERED THE ROOF EIGHT FEET.

SO TO MAKE IT A MORE COST-EFFECTIVE AND THEN WE REMOVED A PRIVATE PARTY ROOM AND WE REMOVED A COMMERCIAL KITCHEN FROM THE SITE, WHICH SAVED US ABOUT $1.2 MILLION NET.

AND THAT'S REALLY HOW WE GOT TO THE, THE 16 SIX, UH, AREA YOU CAN SEE, WE STARTED WITH 38,000 SQUARE FEET.

WE WENT TO 48.

WE'VE NOT TRIMMED IT DOWN TO 42.

SO THAT IS NOW WHAT THE SITE LOOKS LIKE, UM, TODAY FROM THE ARCHITECT.

AND THEN THIS IS WHAT THE, UM, THE WHOLE PROGRAM WILL LOOK LIKE.

UH, TODAY IT'S PRETTY CLOSE TO WHERE IT'LL, IT'LL END UP BEING.

UM, BUT WE FEEL EVEN WITH THE CUTS THAT WE HAVE MADE TO THE PROJECT, UH, WE DON'T FEEL THAT THE INTEGRITY OF THE VISUAL OF EVERYTHING AND THE, AND THE CUSTOMER EXPERIENCE, UH, HAS CHANGED DRAMATICALLY ON THE EAST SIDE OF THE BREWERY BUILDING, WHERE WE ELIMINATED THAT SPACE.

WE DO HAVE THE ROOM NOW TO GROW.

WE COULD EXPAND AS, AS WE MIGHT NEED TO IN THE FUTURE.

UH, AND IF WE NEED TO ADD THE COMMERCIAL KITCHEN BACK, WE ALSO HAVE SOME SPACE FOR THAT.

THAT'S THE UPDATE I'LL TO STAND FOR ANY QUESTIONS

[00:10:02]

ONE OF THE THINGS THAT I'VE BEEN CONCERNED WITH THROUGH ALL THESE CHANGES HAS BEEN THE, UM, HAS BEEN YOUR BUSINESS.

I MEAN, MY CONCERN IS, IS THAT, UH, EVERYTHING IS GOING UP AND, AND, AND, AND WHAT YOU'VE GIVEN UP AND, AND WHAT YOUR COST WILL BE GOING FORWARD.

UM, HOW SURE ARE WE THAT YOU'RE GOING TO BE STILL AROUND HERE IN FIVE YEARS? THAT, THAT, THAT THIS JUST DOESN'T, I MEAN, YOU, YOU BUILD IT THEN ALL OF A SUDDEN YOU REALIZE, MAN, THAT WE'VE WE BIT OFF, MORE THAN WE CAN CHEW AND, AND, UH, WHAT, THAT'S MY CONCERN, RIGHT.

RIGHT.

WELL, ONE OF THE UPLIFTS THAT WE HAVE IS A, WE STILL HAVE ROOM TO GROW.

SO HOUSTON WILL BE A BIG GROWTH SPURT FOR US, AND THEY'RE SUPER EXCITED ABOUT IT.

WE ALSO HAVE A PROGRAM THAT WE'RE STARTING IN, UM, IN FLORIDA.

SO THERE'S MORE ROOM TO GROW THERE.

SO THE, THE BEER BUSINESS OUTSIDE OF WHAT WE SEE ON SITE, UM, WILL CONTINUE TO GROW.

WE FEEL REALLY CONFIDENT WITH THAT.

SO REVENUE WILL INCREASE.

WE ALSO FEEL EXTREMELY CONFIDENT THAT THE REVENUE THAT WE WILL GENERATE OFF OF THIS SITE, BECAUSE IT'S SO BIG AND SO EXPANSIVE THAT WE'LL BE ABLE TO INCREASE REVENUE THERE.

UM, AND THEN, YOU KNOW, I THINK THAT, THAT WHAT WE'VE WORKED WITH CDC IN, IN SCHEDULING OUT A VERY FAIR, UH, RENT FOR THE PROPERTY, UH, IS DEFINITELY SOMETHING THAT WE CAN, WE CAN DIGEST.

SO I FEEL REALLY CONFIDENT THAT THE, THE PROGRAM THAT WE'VE GOT ON THE PLATE, WE WILL BE ABLE TO COVER AND DIGEST AND GROW THE BUSINESS IN A VERY PROFITABLE WAY.

HAS THE CDC GIVEN YOU ANY MONEY? NO.

CDC HAS NOT GIVEN US ANY MONEY.

THAT'S ALL.

I WANT TO MAKE SURE THAT PEOPLE UNDERSTAND THAT WE'RE NOT GIVING YOU MONEY.

NO, WE ARE SIGNING UP FOR DEBT.

RIGHT.

AND, UM, BUT THE TERMS OF THAT DEBT, WE FEEL VERY COMFORTABLE THAT WE CAN, UH, WE CAN DIGEST THAT AND IT FITS IN OUR BUSINESS PLAN.

AS WE GROW IS THE CITY OF MCKINNEY GIVEN YOU ANY MONEY? NO.

AS MAYOR FULLER, GIVEN YOU ANY MONEY, I BOUGHT COFFEE, OR MAYBE I BOUGHT A COAT.

THANK YOU.

YEAH.

I'D LIKE TO MAKE A COUPLE OF COMMENTS, JUST THERE, THE COMMENTS THAT HOPEFULLY ADDRESS SOME OF THE QUESTIONS.

AND AS I'VE GOTTEN ASKED THESE QUESTIONS, I'VE ANSWERED THEM.

SAME AS THAT.

UM, PEOPLE HAVE UNDERSTOOD AS I DON'T SEE A ROOM FULL OF PEOPLE TO, TO BRING THOSE SAME QUESTIONS TODAY.

HOPEFULLY THEY'VE BEEN ANSWERED SATISFACTORY, BUT, UM, YOU KNOW, A COUPLE OF THINGS YOU, YOU SAID THAT YOU REDUCED THE SIZE.

OF COURSE IT HAS BEEN REDUCED FROM ITS LARGEST SIZE, BUT IT IT'S ACTUALLY STILL GOING TO BE ABOUT 10% BIGGER THAN INITIALLY TALKED YEAR AGO.

IT WAS 38,000 FEET.

UM, AND SO WHEN WE TALK ABOUT THE INCREASE IN THIS PROJECT, IT'S IMPORTANT FOR PEOPLE TO UNDERSTAND THAT THERE'S AN INCREASE IN THE PROJECT.

THE PROJECT OF COURSE HAS, HAS GOTTEN A LITTLE BIT LARGER IN, IN WITH THAT LARGER PROJECT IS LARGER VALUE THAT THE MCDC WILL HAVE IN AN ASSET.

THE ENTIRE WORLD HAS EXPERIENCED THESE PRICE INCREASES OVER THE LAST YEAR.

THIS IS NOT INDIGENOUS TO MCKINNEY OR INDIGENOUS TO TUFTS OR INDIGENOUS AS PROJECT.

THIS IS A WORLD CRISIS THAT WE'VE ALL SEEN AND EXPERIENCED.

UM, AND AT THE END OF THE DAY, ALTHOUGH MORE MONEY WILL BE INVESTED BY MCDC IN THIS STRUCTURE, THIS ASSET THAT THEY WILL OWN, THE VALUE ALSO HAS INCREASED.

WE'RE NOT, WE'RE NOT INVESTING MORE MONEY FOR A VALUE THAT REMAINED THE SAME.

IT HAS, IT HAS TRACKED, UH PRO-RATA WITH THE INCREASE IN COST.

UM, THERE HAS BEEN CONCESSIONS THAT YOU GUYS HAVE MADE SIGNIFICANT CONCESSIONS, UM, WHERE WE'VE TALKED IN THE PAST OF, OF WHAT THE REVENUE, UM, SHARE IF YOU WILL, WITH THE CITY OF MCKINNEY HAS NOW INCREASED TO 2% FOR THE FIRST 20 YEARS.

AND THAT'S GROSS SALES WORLDWIDE, NOT JUST HERE ON THE SITE WORLDWIDE.

IT'S ALSO IMPORTANT TO NOTE IN MY MIND THAT YOU'VE, ALTHOUGH AS YOU POINTED OUT IN THE PRESENTATION, YOU HAD SELF DISTRIBUTION IN THE HOUSTON MARKET.

YOU NOW, AS YOU ALSO STATED, YOU HAVE THE LARGEST DISTRIBUTOR, WHICH IS NOW TAKING YOU INTO THE HOUSTON MARKET.

AND I BELIEVE THAT WILL FOLLOW IN SAN ANTONIO AND OTHER MARKETS.

UM, YOU'VE ADDED A, ANOTHER LINE, UH, OVER THE LAST YEAR BLUR.

THAT IS SOMETHING THAT WE ARE ALSO PARTICIPATING ON AS A CITY.

SO ALTHOUGH THE PROJECT HAS GROWN IN SOME SCOPE, THE ASSET ITSELF, WHICH AT THE END OF THE DAY, AS POINTED OUT BY MAYOR PRO TEM, THERE'S THIS ISN'T MONEY THAT'S BEEN GIVEN TO TUFTS.

THIS IS MONEY THAT THE CITY IS INVESTING IN.

MCDC IS INVESTING IN AN ASSET THAT IN THIS VALUE ITSELF HAS GROWN PROPORTIONALLY WITH THAT INVESTMENT INCREASE AND THE RETURN THAT WE HAVE IN THE UPSIDE FOR THE CITY OF MCKINNEY, WHICH WE SHARE WITH YOU THAT WITH TUFTS SUCCESS OF TUFTS, TO SUCCESS FOR THE CITY THAT HAS GROWN TREMENDOUSLY IN BOTH ADDITIONAL PRODUCT, PRODUCT MARKETS AND REVENUE SHARING THAT WE ARE NOW GOING TO PARTICIPATE IN.

UM, I

[00:15:01]

AND NONE OF THAT BEGINS TO EVEN DISCUSS THE, THE CATALYST, UH, NATURE OF THAT THIS PROJECT BRINGS THAT IS GOING TO BE, UM, TREMENDOUSLY SIGNIFICANT IN WHAT WE'RE DOING ON THE EAST SIDE IN GENERAL.

SO FOR THE, YOU KNOW, THERE'S BEEN SOME THAT LATCH ONTO LITTLE SOUNDBITES AND, AND TAKE THINGS OUT OF CONTEXT AND USE WORDS LIKE GIVEN, UH, TO TUFTS AND WHATNOT, ALL INACCURATE.

UM, BUT I JUST LAID OUT ARE, ARE FACTS THAT, UM, MAKE ME EXCITED AND PROUD TO BE DOING THIS, THIS PROJECT IN THE CITY OF MCKINNEY AND WITH, UH, WITH A PARTNER LIKE, LIKE TUFTS, ANYONE ELSE HAVE A QUESTION OR COMMENT? IT SAYS, UH, OH, I'LL JUST MAKE A COUPLE OF COMMENTS.

SO I JUST WOULD LIKE TO SAY, THANK YOU TO KEITH AND YOUR TEAM FOR LISTENING TO THE CONCERNS THAT THE MCDC HAS HAD.

WE HAVE WORKED DILIGENTLY IN THE LAST FEW MONTHS AND IN TRYING TO ENSURE THAT THE THINGS THAT ARE IMPORTANT TO US, THE QUALITY OF LIFE PROJECTS, THE OPEN SPACES, THE COMMUNITY SPACES THAT THEY ARE THERE AND GOING TO BE AVAILABLE TO THE COMMUNITY.

SO I KNOW THAT WE ARE VERY PASSIONATE ABOUT WHAT WE WANT TO DO, BECAUSE THIS IS FOR OUR COMMUNITY AND FOR THE CITY.

SO I THANK YOU AND YOUR TEAM FOR CONSTANTLY LISTENING TO US AND ENSURING THAT THOSE THINGS WERE PUT IN PLACE.

UH, I'D LIKE TO THANK MY BOARD FOR ALWAYS BEING THE SOUND AND BEING THE EAR, UH, THINGS THAT CAUSE WE WORK COLLABORATIVELY COLLABORATIVELY TO ENSURE THAT WE ARE REPRESENTING WHAT WE FEEL THE COMMUNITY AND WHAT THIS BOARD IS TASKED TO DO.

SO I JUST WANT TO SAY THANK YOU FOR YOUR PATIENCE WITH US.

UM, BECAUSE YOU KNOW, W WE WANT TO SEE THIS PROJECT HAPPEN.

WE DEFINITELY THINK IT IS A CATALYST PROJECT FOR EAST MCKINNEY FOR THE CITY AND FOR WHEN THE CITY HALL COMES.

SO WE'RE JUST EXCITED THAT WE ARE ABLE, THAT YOU WANT IT TO STAY HERE.

WE KNOW YOU HAD SOME OPTIONS, BUT WE ARE GRATEFUL THAT YOU CHOSE HERE TO RENDER YOUR PROJECT.

IT'S GOING TO BE A WIN-WIN.

ARE THERE ANY BOARDS? CAN YOU, CAN YOU JUST CLARIFY THE KITCHEN? IF YOU TALK ABOUT REMOVING KITCHEN, IT'S ACTUALLY, IT'S STILL GOT A KITCHEN AND IT'S JUST SMALLER THAN THE ORIGINAL PLAN WITH ROOM TO EXPAND.

I JUST WANT TO MAKE SURE YOU CLARIFY THAT.

YEAH.

YEAH.

THE, THE KITCHEN THAT WE HAVE TODAY ON THE CURRENT PLANS WILL TAKE CARE OF FOOD FOR THE SITE.

UM, WE WERE PLANNING A COMMERCIAL KITCHEN AS WELL, WHICH IS MUCH LARGER THAN IF THERE WERE EVENTS THAT WERE OFFSITE.

WE COULD PREPARE FOOD FOR THAT.

AND, UM, WE ELIMINATED THAT AS PART OF THE BUDGET CUTS, BUT HAVE SPACE TO ADD IT IN THE FUTURE BASED ON, YOU KNOW, BUSINESS GROWTH.

BUT YEAH, WE'LL HAVE IT, WE'LL HAVE FOOD AND WE'LL HAVE HEAT AND WE'LL HAVE AIR AND WE WILL HAVE SHAVED BEER.

DAVID, I KNOW YOU SIT ON THIS STUFF.

DO YOU HAVE ANY, MY PRIMARY COMMENT WOULD JUST BE THANKS TO KEITH, UM, AND THE SUBCOMMITTEE, UH, KEITH AND YOUR TEAM, YOU HAVE BEEN, UM, VERY UPFRONT, VERY HONEST, VERY DIRECT AND STRAIGHT FORWARD WITH US THE ENTIRE TIME YOU HAVE, UM, I THINK DONE AS GOOD A JOB AS YOU COULD TO INCLUDE EVERYTHING THAT WE WANTED IN THE PROJECT AND, UM, TO NOT TAKE IT OUT WHEN THE CUTS HAD TO COME.

UM, AND SO WE I'M HAPPY THAT, UM, LIKE ANGIE SAID, THE COMMUNITY SPACES AND, UM, THE THINGS THAT WE WANTED HAVE STAYED IN, UM, THANKS VERY MUCH TO YOU AND YOUR TEAM FOR, UH, THE WORK YOU'VE DONE.

AND, UH, IT'S BEEN A LONG, LONG PROCESS AND WE HAVE, UH, GONE THROUGH A LOT TOGETHER.

SO WE'VE GOTTEN TO KNOW EACH OTHER VERY WELL.

UM, AND, UH, YOU GUYS HAVE GONE THROUGH A LOT OF CHALLENGES ON THIS.

UM, AND SO THANK YOU TO YOU AND YOUR TEAM, UH, FOR STICKING WITH US.

AND, UH, AND FOR FRANKLY, FOR MAKING THE CONCESSIONS THAT, UH, GEORGE TALKED ABOUT, UM, THAT WAS IMPORTANT, UM, FOR US TO CONTINUE ON THIS PATH, UM, WE NEEDED YOUR SKIN IN THE GAME TO INCREASE PROPORTIONATE TO HOURS, UM, AND YOU WERE WILLING TO MAKE THOSE CHANGES.

AND, UM, I AGREE WITH, UH, THE MAYOR THAT, UM, THIS IS A GOOD DEAL FOR MCKINNEY.

UM, 2% OF TUFTS, UM, ACROSS THE BOARD FOR 20 YEARS, THAT'S A BIG DEAL, GROSS REVENUE.

SO THIS IS A GOOD DEAL FOR THE CITY AND, UM, A GOOD DEAL FOR HIM TO DC.

SO THANK YOU.

THIS IS A PUBLIC HEARING ITEM.

ARE THERE ANY COMMENTS

[00:20:01]

SECOND SECOND BY DAVID KELLY.

OKAY.

ANY OPPOSED? OKAY.

AT THIS POINT, MCDC BOARD AND COUNCIL WERE RECESSED TO AN EXECUTIVE SESSION TO RECONVENE TO EXECUTIVE SESSION IN ACCORDANCE WITH THE TEXAS GOVERNMENT SECTION 5 5 1 DASH 0 7 1 2.

THE CONSULTATION OF ATTORNEY WORK SESSION, SPECIAL SESSION JOIN SESSION OR REGULAR SESSION AGENDA ITEMS WERE CRYING, CONFIDENTIAL.

ATTORNEY, CLIENT ADVICE, NECESSITATED BY THE DELIBERATION OR DISCUSSION OF SET ITEMS AS NEEDED SECTIONS 5 1 5 5 1 DASH 0 7 1 8 PENDING CONTINUAL AND TEMPLATED LITIGATION.

SECTION FIVE FIVE, THAT 0 7 2 DELIBERATIONS ABOUT REAL PROPERTY SECTION 5.1074 PERSONNEL MATTERS.

SECTION 5, 5 1 DASH 0 8 7 DELIBERATION REGARDING ECONOMIC DEVELOPMENT ITEMS AND PROJECT TWO ZERO DASH ZERO NINE.

TUFTS BREWERY AND ENTERTAINMENT DESTINATION YUP.

YUP.

SO HOPING THAT IT'S ANSWER, READ IT.

I WAS GOING TO BE OFF THE HOOK IF YOU YOU'RE SUPPOSED TO DO THAT FROM YES, YES.

WHAT SHE SAID, THE COURT IS TEXAS GOVERNMENT CODE SECTION 5 5, 107 1, UH, TWO CONSULTATIONS WITH THE ATTORNEY AND ANY WORD SESSIONS, SPECIAL SESSION JOINT SESSION, A REGULAR SESSION AGENDA.

I DON'T REQUIRE AND CONFIDENTIAL ATTORNEY CLIENT ADVICE AND SAYS STATED BY THE DELIBERATION DISCUSSION PROJECT, SECTION 5, 5, 1 0 8, 7 DELIBERATION REGARDING ECONOMIC DEVELOPMENT MATTERS.

PROJECT 2 0, 0 9, TUFTS BREWERY AND ENTERTAINMENT DESTINATION.

WHEN WE COME BACK, THERE WILL BE ACTION FROM CITY COUNCIL ON BOTH BOARDS.

ACTUALLY WE WILL ADJOURN INTO EXECUTIVE SESSION.

QUICKLY NOTE, I'M STEPPING DOWN FROM THE ACTION SHE WILL.

UM, COUNCILMAN BELLER WILL STEP DOWN, UH, ON THE, UH, MOTION WHEN WE COME BACK JUST IN THE EXECUTIVE SESSION EXECUTIVE SESSION AS WELL, JUST DUE TO A EMPLOYMENT, POTENTIAL CONFLICT.

WE BACK IN SESSION ON CITY COUNCIL.

WE LIKE TO MAKE A MOTION.

WE GOT TO GET IT BACK.

I THINK THEY'LL HAVE A COUPLE OF MOTIONS.

FIRST RECONVENE THE PUBLIC MEETING.

IT IS 4 59, AND WE WOULD LIKE TO REQUEST AND APPROVE AGENDA ITEM TWO, ONE DASH 0 1 0 6 5.

VOTE FROM MTP REQUEST, A MOTION TO APPROVE AGENDA ITEM TWO, ONE DASH 1 0 6 5 MOTION TO APPROVE.

SO MOVED BY JACKIE SECOND BY RICK I'LL VOTE.

ANY NAYS, NO NAMES.

OKAY.

NEXT AGENDA ITEM

[Consider/Discuss/Act on a Request by TUPPS Brewery, LLC to Execute a Construction Contract for Construction Manager at Risk (CMAR) Services with SpawGlass Contractors, Inc. of Fort Worth, Texas for a Guaranteed Maximum Price (GMP) in the Amount of Eleven Million, Three Hundred Twenty-Seven Thousand One Hundred Seventy-One and No/100 Dollars ($11,327,171.00) for Construction Related to Project #20-09, Rehabilitation and Revitalization of the Property Located at 402 E. Louisiana Street, McKinney Texas to Create a World-Class Cultural and Entertainment Destination in McKinney, Texas]

DISCUSS, CONSIDER DISCUSS ACT ON THE REQUEST BY TUFTS BREWERY, LLC, TO EXECUTE A CONSTRUCTION CONTRACT FOR CONSTRUCTION MANAGER AT RISK SERVICES AND SPYGLASS CONTRACTORS INCORPORATED, UH, FORT WORTH TEXAS FOR THE GUARANTEED MAXIMUM PRICE AND THE AMOUNT OF 11 MILLION 327, 20 $7,171 IN NO SENSE FOR CONSTRUCTION RELATED TO THE PROJECT DASH TWO ZERO DASH ZERO NINE, REHABILITATION AND REVITALIZATION OF THE PROPERTY LOCATED AT 4 0 2 EAST LOUISIANA STREET, THE KENNY TEXAS TO CREATE WORLD-CLASS CULTURAL ENTERTAINMENT DESTINATION IN MCKINNEY, TEXAS.

ARE THERE ANY QUESTIONS OF THE TUFTS TEAM THEY ARE HERE? IS THERE ANY DISCUSSION FOR THIS AGENDA ITEM? I REQUEST A MOTION TO APPROVE THE ITEM.

SECOND MOVED BY RAPE SECOND BY CATHERINE BOAT BY HAND SHOW OF HANDS, ANY OPPOSED MOTION APPROVED.

AND I DO WANT TO MAKE IT A IN AND I'M SORRY FOR BEING OUT OF ORDER.

WE DO HAVE TO RESHAPE ULTIMATELY, WHO IS HERE TODAY, SITTING IN A DIFFERENT BRADFORD.

SO HE REPRESENTS TODAY.

[00:25:04]

I'VE BEEN SUFFICIENTLY SCOLDED.

I WOULD MAKE A MOTION THAT WE APPROVED THE THREE 80 AGREEMENT AS DISCUSSED IN EXECUTIVE SESSION REGARDING TUFTS FOR OH SECOND.

ALL IN FAVOR.

AYE.

ANY OPPOSED? OKAY.

ALREADY GOT INTO EXECUTIVE SESSION.

WE ARE, WE'RE NOT GOING TO ADJOURN ON OUR END, BUT YOU ALL OKAY.

I ASKED FOR, I ASKED FOR A MOTION TO ADJOURN THE MCDC MOVE BY DAVID KELLY.

SECOND SECOND BY MERE TILLY BARNES, KINDA HAVE A BOAT SHOW OF HANDS ANY, AND I WANT TO SAY THANK YOU, NANCY.

UM, IT WILL STAY IN SESSION, BUT WE WILL PAUSE FOR AFTERNOON.

IT IS FIVE 11 AND WE ARE IN COUNCIL CHAMBERS 2 22 NORTH TENNESSEE STREET.

WE ARE IN SESSION.

WE ARE NOW MEETING WITH THE HISTORIC PRESERVATION ADVISORY BOARD

[Consider/Discuss Potential Updates to the McKinney Historic Neighborhood Improvement Zone (HNIZ) Program]

H N I Z PROGRAM COUNCIL MEMBERS, CITY MANAGER, WHICH MAYBE MORE GOOD EVENING.

IT'S NICE TO SEE YOU ALL, UH, PAUL AND ASKED US PLANNING.

UH, WE ARE GOING TO TALK ABOUT, UM, SOME OPTIONS FOR REVISING THE HISTORIC NEIGHBORHOOD IMPROVEMENT ZONE TAX EXEMPTION PROGRAM TONIGHT.

UH, WE CAME BACK TO SEE OR CAME TO THE BOARD AND THE COUNCIL, UH, AT DIFFERENT TIMES IN THE END OF OCTOBER AND NOVEMBER, BEGINNING OF NOVEMBER, UH, TO GIVE YOU SOME UPDATES ON WHERE THE PROGRAM, UH, IS AT THIS POINT IN THE YEAR, AND WE'VE NOW GONE BACK AND LOOKED AT SOME OPTIONS, UH, TO BRING BEFORE BOTH OF YOU, UH, AS OPPORTUNITIES FOR REVISING THE PROGRAM TO KIND OF UPDATE IT AND, AND KEEP IT MOVING THROUGH THE NEXT FEW YEARS.

UM, WE'VE ALL TALKED ABOUT WHAT THE PURPOSE OF THE HISTORIC, JUST THE HISTORIC NEIGHBORHOOD IMPROVEMENT ZONE IS BEFORE, UH, TO REALLY FOSTER THE DEVELOPMENT AND GROWTH AND ENCOURAGE PROPERTY OWNERS HERE, UH, TO REHABILITATE AND MAINTAIN THEIR RESIDENCES.

UH, WE HAVE, UH, CURRENTLY IN THE PROGRAM, AS YOU MAY REMEMBER, WE HAVE THREE LEVELS OF TAX EXEMPTION.

UH, THE LEVEL ONE EXEMPTION, WHICH IS A HUNDRED PERCENT, A ONE TIME EXEMPTION ON PROPERTY TAXES, UH, FROM THE CITY, UH, WE HAVE THE LEVEL TWO EXEMPTION, WHICH, UH, IS A 50% EXEMPTION FOR 15 YEARS OF BASED ON A $10,000 INVESTMENT OF ELIGIBLE WORK.

AND THE LEVEL THREE EXEMPTION, WHICH IS A $5,000 INVESTMENT OF ELIGIBLE WORK, UM, THAT IS ALSO LESS 15 YEARS.

AND YOU CAN SEE FROM THESE THREE THAT, UH, LEVEL ONES ARE APPROVED BY THE HISTORIC PRESERVATION ADVISORY BOARD AND LEVEL TWOS AND THREES ARE APPROVED BY THE BUILDINGS AND STANDARDS COMMISSION.

UH, WE'VE LOOKED AT THIS SLIDE BEFORE.

THIS IS JUST KIND OF A REMINDER.

UH, WE STARTED IN 2008, UH, WITH THE BEGINNING OF THE PROGRAM, WE HAD THREE HOMES, UH, IN 2013, WE HAD SUCH OF A NUMBER OF HOMES COUNTRY, UH, PARTICIPATE IN THE PROGRAM THAT WE, UH, CAME BACK AND ASKED FOR A CAP INCREASE IN AGGREGATE CAP, INCREASED FROM THE A HUNDRED THOUSAND, UH, EXCUSE ME, FROM THE $50,000 TO A HUNDRED THOUSAND DOLLARS.

UH, THEN WE WENT TO $150,000 CAP, UH, IN 2015.

AND THEN IN FINALLY IN 2018, UH, WE CAME BACK AND RAISED THE AGGREGATE CAP AGAIN, UH, TO 250,000, BECAUSE AGAIN, WE WERE REACHING, UH, GETTING CLOSE TO THOSE NUMBERS AND EXCEEDING THE PREVIOUS YEAR'S CAPS.

SO, UH, RIGHT NOW WE'RE ESTIMATING TO BE AT ABOUT $190,000.

AND THAT'S BECAUSE NOT ALL OF THE HOMES THAT WERE ELIGIBLE PARTICIPATED THIS YEAR.

UH, AT OUR LAST FEW MEETINGS, WE IDENTIFIED SOME PROGRAM OPPORTUNITIES.

UH, SOME PLACES THAT WE COULD IMPROVE THE PROGRAM, UH, WE NOTICED THAT WE NEEDED TO KIND OF GROW THE PROGRAM TO FILL OR TO PROMOTE THE OPPORTUNITY AS IT WILL BE, UH, ACROSS THE ENTIRE HNIC AREA.

CAUSE WE SAW THAT KIND OF CLUSTER HERE IN THE, IN THE HISTORIC DISTRICT.

UH, WE LOOKED OR TALKED ABOUT THE IDEA OF MAYBE RAISING THE AGGREGATE CAP.

UH, THERE WERE SOME COMMENTS FROM COUNCIL TO THAT EFFECT AT OUR LAST WORK SESSION, UH, MEETING, UH, AGAIN, EXPANDING THE EDUCATIONAL POTENTIAL OF THE THERE'S THE MARKER PROGRAM WITH THE LEVEL ONES.

AND HOW CAN WE MAKE THAT MORE AVAILABLE TO THE GENERAL PUBLIC, THAT INFORMATION, UH, AND THEN SOME OPPORTUNITIES TO IMPROVE KIND OF THE LONG-TERM FUNCTION, FUNCTIONALITY AND VIABILITY OF THE PROGRAM, KEEP IT MOVING FOR YEARS TO COME.

AND SOME GENERAL ADMINISTRATION CHANGES, WE'LL LOOK AT DIFFERENT WAYS TO INCORPORATE THOSE AND SOME OF THE OPTIONS AND THE

[00:30:01]

UH, BEFORE WE CAME TO YOU AT THIS MEETING, UH, WE DID A STUDY OF THE PROGRAMS AROUND THE AREA.

SO WE LOOKED AT A NUMBER OF PROGRAMS ACROSS THE STATE.

UH, WE FOCUS MAINLY ON PLANO FRISCO, DENTON, AND DALLAS, BECAUSE THOSE ARE OUR KIND OF SISTER CITIES HERE IN THE AREA.

AND IT GAVE US A KIND OF A, A GOOD, A SWATH OF, OF CITIES TO COMPARE IT TO, UH, IF YOU LOOK AT THIS NOTE HERE, THIS TABLE HERE, YOU CAN SEE THAT ALL OF US HAVE LIMITATIONS IN THE PROGRAM.

UH, WE ALL HAVE SOME LEVEL OF INVESTMENT REQUIREMENT.

UH, THERE'S KIND OF A VARIATION IN RANGE OF EXEMPTIONS ON CITY TAXES.

UM, SOME OF US, UH, THE KIDNEY AND DALLAS SPECIFICALLY, UH, HAVE OFFERED THEIR TAX EXEMPTION ON THE LAND AND STRUCTURE VALUE OF THE PROPERTY.

NOW THAT BEING THE ASSESSED VALUE BY THE APPRAISAL DISTRICT EACH YEAR, UH, PLANO FRISCO IN DENTON, UH, HAVE SLIGHTLY DIFFERENT STRUCTURES WHERE THEY, UM, ACTUALLY ONLY HAVE THE EXEMPTION OFFERED ON THE STRUCTURE OF THE HOUSE.

UH, THERE ARE, UH, THERE'S ONE RATHER, UH, OF FRISCO'S THREE CATEGORIES THAT INCLUDES THE LAND AS WELL AS THE STRUCTURE, BUT TWO OF THEIR THREE DO NOT.

UH, AND THERE IS A VARIATION IN THE LENGTH OF TIME THAT EACH EXEMPTION TAKES PLACE.

UH, HERE IN MCKINNEY, WE HAVE SEVEN YEARS FOR THE LEVEL ONE EXEMPTION IN 15 YEARS FOR THE OTHER TWO, UH, PLANO FRISCO, DENTON, AND DALLAS ALL HAVE VERY VARIED, UH, TERMS THAT KIND OF GO IN THAT SAME TIMEFRAME OF ABOUT 10, 15 YEARS, UH, DEPENDING ON THE CITY.

UM, AND YOU'LL NOTICE HERE MOST, MOST SIGNIFICANTLY THE NO ACROSS THE BOTTOM BOARD IS THAT AGGREGATE CAP NUMBER.

UH, WE HAVE AN AGGREGATE CAP NOW, PLANO AND DENTON, UM, DON'T NECESSARILY HAVE AN AGGREGATE CAP, BUT THEY HAVE A DIFFERENT SYSTEM WHERE EACH YEAR ALL OF THE EXEMPTIONS THAT THEY OFFER HAVE TO GO BY COUNCIL.

AND SO COUNCIL WOULD APPROVE THE EXEMPTIONS AS A KIND OF A GENERAL LIST EVERY YEAR.

SO THEY'RE GETTING THAT KIND OF UPDATE TO WHAT THE VALUE OF THE EXEMPTIONS WOULD BE.

UM, AND FRISCO DOESN'T HAVE AN AGGREGATE CAP, BUT THEY ONLY HAVE ABOUT 107 HOMES THAT ARE ELIGIBLE FOR THE TAX EXEMPTION BECAUSE THEY HAVE A MUCH SMALLER, MORE FINITE AREA THAT IS, UM, UH, ELIGIBLE FOR ANY TAX EXEMPTION.

SO, UH, AND THEN AGAIN, DALLAS ALSO DOESN'T HAVE AN AGGREGATE CAP, UM, BUT THEY HAVE THE OPPORTUNITY TO HAVE SOME LARGER STRUCTURES THAT CAN HAVE, UH, EXEMPTED TAXES OVER THAT $50,000 RANGE BECAUSE IT'S SUCH A LARGE CITY WITH LARGE BUILDINGS.

UM, AND WHEN THEY GET TO BE THAT, THAT LARGER NUMBER, THAT $50,000 IN SAVINGS OR FORGONE TAXES, THOSE HAVE TO GO BEFORE THEIR COUNSEL AND THEIR, THEIR BOARDS TOO.

SO, SO NO CAPS, BUT SOME CONSTRAINTS TO THOSE GAPS.

SO, UH, WE LOOKED AT, AS I SAID, WE, WE LOOKED AT SOME CHANGES THAT WE RECOMMEND THAT WE WANT TO RECOMMEND.

UM, AND SO WE KIND OF PRESENTED THEM HERE IN THIS TABULAR FORMAT TO GIVE YOU A KIND OF AN IDEA OF WHAT WE HAVE NOW VERSUS WHAT WE HAVE, UH, WHAT WE'RE PROPOSING.

UH, THE FIRST CATEGORY IS APPROVAL REQUIREMENTS RIGHT NOW, AS I'VE MENTIONED AT THE BEGINNING LEVEL ONE APPROVALS GO THROUGH THE HPAP BOARD AND LEVEL TWOS AND THREES GO THROUGH BUILDINGS AND STANDARDS.

SO WE HAVE TWO DIFFERENT BOARDS, UH, ADDRESSING AND ADDRESS, UH, APPROVING THOSE ELIGIBILITIES.

UM, AND SO WE'RE PROPOSING THAT IT WOULD ALL BE HOUSED WITHIN THE HISTORIC PRESERVATION ADVISORY BOARD, UM, INVESTMENT REQUIREMENTS RIGHT NOW, OUR LEVEL ONE DOESN'T HAVE A SIGNIFICANT DOLLAR AMOUNT ATTACHED TO IT.

IT'S JUST LISTED AS A VERIFIED INVESTMENT.

UH, WE FEEL THAT WITH THE LEVEL OF EXEMPTION THAT YOU'RE GETTING WITH A LEVEL, ONE EXEMPTION WE'D WANT, UH, AT LEAST A LITTLE BIT OF INVESTMENT IN THAT.

AND WE HEARD SOME COMMENTS TO THAT EFFECT AT SOME OF OUR PREVIOUS MEETINGS, UH, WITH, WITH BOTH OF YOUR GROUPS.

AND SO, UH, WE'RE PROPOSING TO ADD A MINIMUM DOLLAR AMOUNT ON LEVEL ONE INVESTMENTS OF $10,000.

SO, UM, THAT WOULD BE THAT PARTICULAR ONE.

AND YOU CAN SEE IT IN LEVEL TWO AND LEVEL THREE.

WE LEFT THEM AT THAT SAME $10,000 AND $5,000 MARK.

UM, WE ARE RECOMMENDING KEEPING THE RANGES OF EXEMPTIONS THE SAME 30, 50, AND A HUNDRED PERCENT, NO CHANGE THERE.

UM, WE ARE RECOMMENDING THE CHANGE OF THE ASSESSED VALUE CALCULATOR.

SO RATHER THAN ASSESSING IT ON THE LAND AND THE STRUCTURE COST COMBINED, UH, ASSESSING IT ON THE STRUCTURE ONLY, UH, THAT WOULD AGAIN REDUCE THE AMOUNT OF TAXES THAT WE WOULD FOR GO EVERY YEAR AND MAKE HELP US, UH, INVOLVE MORE PROGRAM, MORE PROPERTIES IN THE PROGRAM, UH, BEFORE WE REACH OUR AGGREGATE GAPS.

UM, WE ALSO ARE PROPOSING, UH, DOING A CONSISTENT EXEMPTION PERIOD OF 10 YEARS, RATHER THAN THE SEVEN AND 15, UH, THAT'S TO HELP BOTH FROM A KIND OF ADMINISTRATIVE PERSPECTIVE, UH, AND FROM THE, THE DURATION OF OWNERS, KNOWING WHAT THEIR TIMEFRAME IS, BECAUSE WE'VE KIND OF SHIFTED IT AROUND, UH, DEPENDING ON WHICH TYPE OF EXEMPTION YOU HAVE.

UM, RIGHT NOW WE HAVE AN AGE QUALIFIER FOR LEVEL ONES

[00:35:01]

UH, SO WE'RE PROPOSING THE, UH, AGE OF 40 YEARS OLD.

UH, THAT'S NOT QUITE HISTORIC AS FAR AS WE CONSIDER HISTORIC PROPERTIES IN TOWN AND ACROSS THE STATE.

UM, BUT 40 GIVES YOU THAT KIND OF TEN-YEAR BUFFER BECAUSE THOSE ARE PROPERTIES THAT ARE AGING UP TO HISTORIC BUILDINGS AND TEND TO BE A LITTLE OLDER.

SO, UH, 40 GIVES US THAT KIND OF BUFFER THERE.

UH, AND WE'RE ALSO RECOMMENDING RAISING THE AGGREGATE CAP TO $500,000.

UH, THERE WAS SOME DISCUSSION, UH, PREVIOUS AT THE WORK SESSION ABOUT, YOU KNOW, MAYBE WE ELIMINATE THE CAPITAL TOGETHER.

THAT'S ALWAYS A POSSIBILITY.

UM, BUT $5,000, UH, WE ARRIVED AT AS GIVING US SEVERAL YEARS DOWN THE ROAD BEFORE WE WOULD HIT THAT.

UM, AS I MENTIONED, WE ARE AT TWO 50 THIS YEAR BECAUSE WE HAVE 137 PROPERTIES IN THE PROGRAM OVER THE NEXT FIVE YEARS.

WE'LL DROP OFF ABOUT 40 PROPERTIES FROM THAT LIST, UH, BASED ON ONES THAT WILL TIME OUT, THEY'LL REACH THEIR EXPERT EXPIRY POINTS.

UM, WE ONLY AVERAGE ABOUT 10 A YEAR.

UH, SO WE'D STILL BE AHEAD OF THE GAME THREE YEARS FROM NOW, IF WE LOST, YOU KNOW, THOSE 40 DROP OFF AND WE ONLY GET 20 MORE.

SO THAT'S KIND OF WHERE THAT NUMBER COMES FROM, UH, TO GIVE YOU AN EXAMPLE, JUST TO KIND OF RETURN TO THIS CHART.

YOU'VE ALL SEEN IT BEFORE.

UH, THIS WAS THE EXAMPLE OF THE CURRENT PROGRAM AND HOW MUCH, UH, HOW MANY TAXES ARE FORGOTTEN OR EXEMPTED, UH, FOR EACH OF THE DIFFERENT PROPERTY LEVELS.

UH, AGAIN, LOOKING AT THAT $350,000 ASSESSED VALUE OF HOUSE, UH, YOU CAN SEE WHAT THE SEVEN YEAR WE'RE AT, EXCUSE ME, $12,000, UH, FOR THE LEVEL ONE, UH, 15, $13,000 FOR THE 15 YEAR LEVEL TWO, AND JUST UNDER $8,000 FOR THE, UH, 30% LEVEL THREE UNDER THE PROPOSED CHANGES, UH, WHICH CHANGED THE EXEMPTION YEARS, EXCUSE ME, EXEMPTION PERIODS, UH, AND THE INVESTMENTS, UM, AND THE VALUE GOING TO THE STRUCTURE ONLY, RATHER THAN THE LAND.

UH, YOU CAN SEE WHAT THE LEVEL ONE AT 10 YEARS, WE'RE HITTING $13,000.

SO THAT'S A LITTLE HIGHER THAN WE WERE HITTING BEFORE.

UM, BUT WITH THE LEVEL TWO AND LEVEL THREES, WE'VE DROPPED DOWN A LITTLE BIT.

UM, AND SO YOU'RE NOT GETTING BACK QUITE AS MUCH AS YOU WOULD'VE MADE BEFORE.

UM, IN THE, CURRENTLY WITH THE, IN THIS EXAMPLE WITH THE LEVEL TWO AT 50%, UH, AFTER 15 YEARS, THEY WERE MAKING $13,000 OR SAVING $13,000 IN TAXES, THIS DROPS TO EIGHT.

SO THERE'S A LITTLE BIT OF REDUCTION HERE.

UM, AND SO THAT KIND OF CHANGES OUR FOREGONE TAX CAP THAT WE BREACH.

SO, UM, THAT'S KIND OF A SUMMARY OF THE CHANGES THAT WE ARE PROPOSING.

AND THEN WE'RE LOOKING FOR COMMENT FROM, FROM EACH OF Y'ALL ON, UM, UH, WE'D LIKE TO TRY TO GET THIS WRAPPED UP SO THAT WE CAN BRING IT BACK TO COUNCIL FOR CONSIDERATION ON PROPOSED ORDINANCE AMENDMENTS IN JANUARY.

UM, AND THEN IN THE SPRING OF 2020 TO WORK ON INCUR, UH, IMPROVING OUR OUTREACH CAMPAIGN.

SO WE CAN REALLY GET THE WORD OUT TO WHAT THE CHANGES ARE, UH, MAKE CHANGES TO OUR WEBSITE, UH, WORK WITH, UH, GROUPS LIKE THE IMPACT TEAM, THE EASTSIDE MCKINNEY, UH, TEAM TO TRY TO GET THE WORD OUT TO THE LARGER SWATH OF THE HNIC AREA, UH, REACH OUT TO DIFFERENT COMMUNITY GROUPS, UH, WORK WITH THE LIBRARY TO DO PRESENTATIONS, THOSE KINDS OF THINGS, TO JUST REALLY GET THE WORD OUT AND KIND OF HELP DEVELOP AND SPREAD THE PROGRAM BEYOND THAT HISTORIC DISTRICT AREA.

SO, ANY QUESTIONS, AND YOU CLARIFY FOR ME ONE MORE TIME, UM, HISTORIC QUALIFIERS ON YOUR PROPOSED, UM, PLAN LEVEL TWO AND THREE FOR AGE 40 AND NOT 50.

WHY? UM, THE LEVEL TWO AND WHOOPS, I WENT, WENT TOO FAR, THE LEVEL TWO, AND THE LEVEL THREE, UM, PROGRAMS ARE DESIGNED REALLY TO IMPROVE, TO PROVIDE KIND OF A, A RESOURCE OR A, AN INCENTIVE RATHER TO DO MAINTENANCE, UH, TO THE PROJECTS.

AND SO BY, UM, TO, TO BASICALLY KEEP THEM ALIVE AND KEEP THEM GOING.

AND SO BY STARTING AT A LEVEL 40, EXCUSE ME, AT 40 YEARS, RATHER THAN 50 YEARS, IT GIVES PROPERTIES THAT ARE RIGHT AT THAT CUSP OF THE AGE OF THE, OF THE HISTORIC TIMEFRAME, UM, TO TAKE THE OPPORTUNITY TO DO SOME REPAIRS TO THEIR HOUSE BEFORE THEY HIT THAT 50 POINT, UM, REALLY TO TRY TO KEEP, JUST TO TRY TO GET THOSE OLDER HOMES, THE ASSISTANCE THAT THEY NEED.

UM, A LITTLE BIT SOONER, WE HAVE AN IDEA OF THE TOTAL NUMBER OF HOMES IN THIS DISTRICT, THEN THAT WOULD QUALIFY UNDER THE, I DON'T HAVE IT.

DON'T HAVE A GOOD NUMBER ON THAT RIGHT NOW.

UM, I'D HAVE TO GO BACK AND DOUBLE CHECK THAT WE'RE SEEING A SIMILAR MINIMUM MAJORS

[00:40:01]

SOME OF OUR NEIGHBORING CITIES, UH, IN OUR NEIGHBORING CITIES, MOST OF THEM ARE, UM, EITHER, WELL, IT KIND OF VARIES.

SOME OF THEM ARE, THEY HAVE TO BE ELIGIBLE, UH, IN CONTRIBUTING, NO MATTER WHAT.

UM, SO CONTRIBUTING WOULD MEAN THAT THEY'RE ALREADY 50, UH, 50 YEARS OLD, NUMBER 1550 IS THE AVERAGE NUMBER, BECAUSE THAT'S THE GENERAL NUMBER THAT YOU USE FOR DESERT DESIGNATING, SOMETHING AS HISTORIC.

UM, AS FAR AS THE 40 NUMBER, WE DON'T SEE THAT A LOT IN OUR SISTER CITIES.

UH, BUT NATIONALLY, THAT IS A NUMBER THAT IS USED BY SOME OTHER CITIES TO KIND OF USE, TO DO THE SAME THING, TO TRY TO ENCOURAGE PROPERTIES, TO MAKE IT TO THAT 50 YEAR.

MARK.

IT DOES, ESPECIALLY WHEN YOU LOOK AT THE FACT THAT 50 IS 1971, SO, BUT 50, IT LOOKS AWFULLY YOUNG FROM THAT PERSPECTIVE, AT LEAST FROM MY PERSPECTIVE.

UM, SO YEAH, AND THAT, I MEAN, OBVIOUSLY THIS IS A RECOMMENDATION, SO IT'S SOMETHING THAT, YOU KNOW, WE COULD CHANGE RIGHT NOW.

WE HAVE NO RECORD, NO REQUIREMENT FOR THE AGE, MINIMUM AGE ON THOSE TWO PROPERTIES.

I CAN S I COULD SEE YOU GETTING SOME LASH BACK FROM THE FOLKS WHO LIVE OUTSIDE THE HISTORIC DISTRICT IN A HOME THAT WAS BUILT IN 1971 OR EARLIER SAYING, WHY, WHY AM I NOT QUALIFIED FOR THIS EXEMPTION IF I'M WILLING TO IMPROVE.

THAT JUST LEADS ME TO ANOTHER QUESTION, WHICH IS NOT NECESSARILY ON THIS AGENDA ITEM, BUT IT SEEMS LIKE THERE WOULD BE SOME VALUE TO EXTENDING THIS HISTORIC NEIGHBORHOOD ACROSS HIGHWAY FIVE, TO, UM, ENCOURAGE FOLKS TO ENGAGE IN PRESERVATION OF SOME OF THE OLDER HOMES IN MCKINNEY, WHICH ARE ACROSS HIGHWAY FIVE.

AND I'M NOT, I KNOW IT'S NOT PART OF THIS DISCUSSION, BUT SINCE IT'S A WORK SESSION GOING FORWARD, LIKE TO KNOW WHETHER OR NOT THE COUNCIL HAD ANY INTEREST IN EXPLORING THAT AS THAT AREA IS SET TO START TO REDEVELOP WELL, RIGHT NOW THEY ARE ACTUALLY ELIGIBLE FOR THE PROGRAM EVERY WEEK.

SO IT'S THIS WHOLE MAP AREA.

UM, YEAH, THEY'RE ALL ELIGIBLE FOR IT.

WE JUST HAVEN'T SEEN ANYBODY EAST OF HIGHWAY FIVE APPLYING FOR IT YET.

AND SO THAT'S PART OF THAT EDUCATION AND OUTREACH PROGRAM TO TRY TO GET THEM THE KNOWLEDGE THAT THEY CAN PARTICIPATE.

SO WOULD EXTEND BEHIND, BEYOND JUST THE BORDERS OF THE HISTORIC NEIGHBORHOOD DESIGNATION.

YES, YES.

YEAH.

THAT WAS A CONCERN THAT WAS BROUGHT UP AT OUR LAST MEETING IS THAT WHEN YOU LOOK UP THERE AND YOU SEE HOW CONCENTRATED IT IS IN THAT ONE AREA, THAT WE NEED TO GET THE WORD OUT, THAT, THAT IT'S JUST NOT FOR THIS AREA, THAT IT'S A LARGER AREA.

SO WE DID NOTICE THAT, IS IT JUST NOT GOING TO BE FEASIBLE TO KEEP THE DIRT VALUE EXEMPT THE BLEED, THE PROGRAM THAT'S, ESPECIALLY THE WAY THE APPRAISALS ARE GOING.

THEY'RE STARTING TO LEAN AWAY FROM IMPROVEMENTS TOWARDS THE DIRT AND THE PRISON DISTRICT LEVEL.

IT SEEMS TO ME, WELL, WHAT WE W WHAT WE'VE SEEN FROM LOOKING AT THE OTHER CITIES IS THAT THEY'VE KEPT THEIR NUMBERS DOWN BY USING THE STRUCTURE ONLY, RATHER THAN INCLUDE INCREASING INCREASE, RIGHT? SPREAD YOUR, SPREAD, YOUR RANGE OF PROPERTIES THAT YOU CAN REACH A LITTLE BIT.

UM, THERE'S REALLY NOT A WHOLE LOT OF US IN THE HISTORIC DISTRICT THAT HAVE BIG LOTS OR LOTS OF LAND.

AND I, I DON'T UNDERSTAND THE, THE CHANGE OF TAKING THE LAND OUT IN THE STRUCTURE.

YOU KNOW, I THINK IT SHOULD STAY THE SAME LAND ON STRUCTURE.

SO THEN THERE'S, SO THAT'S GOING TO PENALIZE THE FOLKS THAT HAVE HIS STROKE STORAGE PROPERTIES THAT JUST HAVE EXTRA LAND.

THAT DIDN'T SOUND WAY.

THERE'S NOT MANY, RIGHT.

OH, YOU MEAN LIKE THE LARGER PARCELS VERSUS THE SMALLER PARCELS? I MEAN, I DON'T WANT TO BE PENALIZED JUST BECAUSE I HAVE A BIG LOT THAT I'VE KEPT THE SAME SINCE THE 18 HUNDREDS, AND YOU'RE SEEING SMALLER LOTS GOING FOR $200,000 ON THE MARKET.

IT MAY STOP NOT AT ALL.

WELL, AND THEY DON'T.

YEAH.

THEY DON'T ACTUALLY GET THE EXEMPTION UNTIL THEY BUILD SOMETHING.

ANYWAY, IT'S STILL VALUABLE DIRT.

NO PEOPLE'S PROPERTIES.

IT'S GOING TO DRIVE UP THE STREET.

IT COULD BE GOOD.

WE WE'VE SEEN, I MEAN, WE'VE SEEN A 26% INCREASE IN THE RATE AND THE PROPERTY VALUES IN THE LAST FEW YEARS AS IT WERE SO WELL, I DON'T FEEL LIKE, I MEAN, I'D LIKE FIND OUT WHY WE DO HAVE TO HAVE A CAP.

I WOULD LIKE TO SEE US NOT HAVE A CAP.

UM, LIKE THOSE OTHER STUDIES.

I MEAN, THERE WERE SOME OF US THAT FELT THAT WAY IN THE BEGINNING.

SO I WAS HOPING YOU COULD SHARE WITH US WHY WE SHOULD NOT TRY THAT OR WHY WE SHOULDN'T.

AND THEN, UM, I LIKED THE 50 YEARS VERSUS THE 40.

AND, UM, I GUESS THAT'S ALL I WOULD LIKE TO SAY.

I LIKE CAB, UH,

[00:45:01]

THERE'S A LITTLE SPOOKY NOT TO HAVE THE CAPITAL.

WELL, WE DID, WE DID RUN SOME NUMBERS TO TRY TO SEE IF WE, WHEN WE WOULD HIT THAT $500,000 CAP.

AND SO, BECAUSE OF THOSE 40 PROPERTIES THAT DROP OFF, WE WERE ONLY IN, IN FIVE YEARS WHEN THOSE 40 PROPERTIES DROPPED OFF, WE WERE STILL, IF PROPERTY VALUES ONLY STAYED THE SAME.

IF THEY STAYED THE SAME, WE WOULDN'T, WE WOULD ONLY BE ABOUT $300,000.

AND SO THAT WOULD HAVE TO GO UP.

NOW, WE DID NOT DO THE CALCULUS TO AMORTIZE THE CA THE INCREASE IN COSTS OVER THAT FIVE YEARS, BECAUSE IT'S SO HARD TO TELL WHERE THE MARKET'S GOING TO GO OVER THE NEXT FIVE YEARS, WE WERE GOING PRETTY STEADY AT ABOUT 10%.

AND THEN THE LAST FEW YEARS WE'VE DUMPED BUMPED UP TO TWENTIES, THE TWENTIES.

AND SO THAT'S A LITTLE HARDER TO TELL THE IDEA BEHIND THE 500,000 IS IT GAVE US THAT BUFFER.

WE STILL, YOU KNOW, WITH THE 300,000 BENCHMARK, WE STILL HAD SOME ROOM TO GROW IN THERE.

AND IT GAVE US KIND OF A, A FRAMEWORK TO ESTIMATE WHAT THE TAXES AND YES.

YEAH.

BUT HOPEFULLY NOT REVISIT IT ONLY THREE YEARS FROM NOW, HOPEFULLY TO GET US ABOUT FIVE YEARS, FIVE TO SIX YEARS OUT, UH, LIKE WE WERE DOING IN THE EARLY DAYS OF THIS PROGRAM.

WHEREAS, YOU KNOW, IN THE LAST FEW YEARS WE DID WHAT, 20 13, 20 15, AND THEN NOW 2021.

SO THAT WAS EVERY THREE YEARS.

SO TRIED TO GET A LITTLE LONGEVITY.

YEAH.

THIS IS SUCH A SMALL LITTLE EDB, TEENY WEENY FOOTPRINT OF THE CITY OF MCKINNEY.