Wednesday , 20 June 2018

Angie’s Insights: Red Flags Present as Council Prepares to Address Gateway Project and Proposed Changes to Adriatica

By Angie Bado, TSB Publisher

Focus on Election Day, volleyball playoffs and other aspects of our busy lives may cause the public to miss a couple of important public hearing items that are on the agenda for tonight’s regular meeting of McKinney’s City Council.


First, of particular importance to residents of Stonebridge Ranch, the Council will address two public hearing items on the agenda regarding requests for changes in the planned development of Adriatica submitted by IBG Adriatica Holdings Inc.

The struggling Adriatica development was purchased by IBG in late 2011. The development is still subject to following the governing PD that was formulated in 2005. Councilmember David Brooks (At-Large) is a partner in IBG.

The developer is proposing a significantly different layout and design than what was originally proposed in the in the general development plan (GDP) submitted in 2005. The GDP depicts the general layout of buildings, parking areas, and landscaping on the property, and does not concern land use, but I wonder, is this the first step in setting the stage for big changes in what is in store for Adriatica?

The applicant is also requesting approval of a site plan for St. Paul’s Square lofts within Adriatica Town Center.  This application was submitted earlier this year, and as recently as Oct. 16, as an application for St. Paul’s Square “apartments.”

The proposed site plan includes an application for 211 units. Under the governing PD, a maximum of 258 residential units would be allowed within the Town Center, as long as 120,000 square feet of commercial office and retail use is constructed in the area.  Under the proposed site plan, one of St. Paul’s Square Lofts buildings would consist of three stories of residential above the one story retail and a second building would consist of four stories of residential placed over one level of commercial properties.

Per the original PD, apartments are prohibited in the Adriatica Town Center. Approved residential uses are listed as townhomes, patio homes, (or zero lot line homes), condominium/loft above the 1st floor, single family detached and retirement/nursing homes. The section of the original PD which addresses condominium/loft (Attachment H) makes it clear that the plan is to be of medium density attached residential environment above-ground units, designed and constructed for individual sale and characterized by buildings/structures of varying smaller scale and more open space.

From my experience, if it quacks like a duck and walks like a duck, it is a duck, so if the proposed St. Paul’s Lofts are not for individual sale, are we really talking apartments here?

I have covered numerous council meetings where Mayor Loughmiller has asked city staff if they had conducted interviews with, or held a meeting with, residents surrounding properties which had applied for site plan or zoning changes. I would hope he would do the same in this case. I have not, to date, been aware of any such effort with regard to city staff gathering input on these requested changes in Adriatica.

City staff is recommending that council approve the changes, so if you have questions or concerns, email members of city council, or attend the meetings tonight and plan to speak about your concerns.

Of further concern is the very recent posting of signage within Adriatica that alerts area residents to proposed zoning changes. This makes me wonder if the applicant is so sure that the requested changes that are on tonight’s council agenda will be approved, that the notices of zoning changes have already gone up.


In other business tonight, Gateway is back on the agenda. (Please see PDF attachment) Council will be discussing, and acting on, the city manager’s request to enter into a development agreement for the hotel and event center, which includes the 100 percent Ad Valorem tax abatement for 10 years. Council, and the public, will also hear plans for the economic development agreement, hotel ground lease agreement and the event center lease and management agreement as part of this agenda item.

The project would be at an estimated cost of about $25 million, including $18 million in public funds. The McKinney Community Development Corporation (MCDC) has committed $6.1 million and Gray said the remaining $11 plus million to be made up in other cash, possibly from the city’s reserve fund, or in bond money. McKinney Community Dev. Corporation purchased the current structure, parking area, and land for approximately $ 4 million.

Local hotel owners have been vocal about expressing their doubts that the Gateway plan will succeed, also saying that it is unfair of the city to pour public funds into a project that could potentially put some of them out of business.

If this project goes forward as proposed, is the city setting a precedent that could end up backfiring? Is it good practice to set a precedent of using public funds to essentially compete with the private business sector?  Will we be inadvertently sending a message that would discourage economic development by the private sector within McKinney because we are so willing, as a city, to compete?

Several other questions and thoughts come to my mind as well. 

1. If the private sector is not beating down the doors of McKinney Economic Development Corporation or the city manager’s office with requests to build an upscale hotel on that property, should we be concerned about moving forward in the previously planned direction? If we have a conference center/hotel, what are the projections for recouping our investment?

2.  The Beck group appears to only have $3 million of their money invested in the plan. They are working on obtaining an additional loan of $17 million. Is this enough “skin” in the game to prevent the company from walking away if the project does not go according to plan?

3. If the city commits $25 million to a project at Gateway, what is the expected rate of return on that investment? How would we get those funds for commitment of this magnitude? What do you base your projected occupancy rates on? What hotels are you using for comparisons?

3. Given that access to this location is now more difficult since the completion of the Sam Rayburn Tollway, is a hotel/convention center the best use for this location?

4. Would it be more practical, and financially prudent, to raze the site completely and start over with a new concept such as a business park now that Emerson is constructing their headquarters in that vicinity? 

5. The Collin College Higher Education building is also in the vicinity. If Collin College is holding us over a barrel with threats of leaving McKinney, etc., why not take the risk of bringing in another higher education facility?  Given that we are the second best place to live in the country according to Money Magazine, surely we can attract other educational entities to come to McKinney. No one every guaranteed Collin College the right to be the sole resource for higher education in McKinney. 

6.  My understanding is that the City will own the event center. If this is the case, would the hotel have as much incentive to work dilligently to see that space? If the event center does not end up performing well, does that mean that the City is responsible for taking it over? Last time I checked, we weren’t in the conference center business. 

I just need to be convinced, council, that this is in the best interest of our city – that this is the best way to spend a huge amount of our city dollars. Convince me that the numbers are there, that this is the best use of the land and I’ll be on board.

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