McKinney approves $30 million TIFIA loan to refinance airport debt after resident raises service, cost questions

McKinney officials on March 29 approved resolutions allowing the McKinney Community Development Corporation (MCDC) to issue sales‑tax revenue refunding bonds and authorized the acceptance of a $30 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan to refinance existing airport debt and support construction of a new passenger terminal at McKinney National Airport.

Mark Holloway, chief financial officer for the city of McKinney, told the joint session that three agenda items were tied to securing the TIFIA loan and that the loan is intended to replace interim financing with long‑term federal financing. Dave Gordon, the city’s financial adviser with Estrada Hennessy and TRB Capital Markets, said the loan has been structured as a taxable sales‑tax revenue bond with federal placement and noted the CDC’s debt rating was raised during the process.

"We did get confirmation today that the CDC's rating on its debt, including these obligations, was raised from AA- to AA," Gordon said, describing the upgraded investment‑grade credit and the projected long‑term debt service profile. Gordon said the illustration fixes the loan at $30,000,000, expects principal to start in 2028 and described a range of transaction costs including an illustrative cost of issuance of $350,000 and an example CDC contribution of about $1,150,000 in the current illustration.

Councilmember Cloutier pressed officials for a clear comparison with the existing interim financing from Truist. Gordon estimated that converting to the advertised rural TIFIA rate (roughly 2.35% in the presentation) versus the short‑term interim financing could yield about $15 million in savings over a 30‑year term—"probably a little over a half $1,000,000 a year," he said—while noting differences in amortization schedules between the two financings.

The joint meeting included one public commentator. Resident Chuck Van Zandt told the council he was concerned the public had not been given key details about airline service, saying, "No mention of destination and no carrier identified." He asked whether the city would supply police or fire staffing for new commercial service and questioned the accuracy of touted job‑creation numbers, listing possible ground‑service equipment costs he estimated at roughly $1.5 million.

"Do we have police and fire, and are the city of McKinney employees from their respective disciplines going to man those positions? Do we have ARFF station ARFF equipment and facilities?" Van Zandt asked, urging clarity on operational responsibilities and the degree of any public subsidy the city might need to provide.

Council and CDC members framed the action as a refunding and payoff of existing obligations rather than new borrowing. The MCDC moved and unanimously passed a resolution authorizing the issuance of sales‑tax revenue refunding bonds, taxable series 2026. The City Council then approved a related resolution and authorized the MCDC chairman or designee to accept the TIFIA loan from the U.S. Department of Transportation Build America Bureau.

The financial presentation noted a prepayment "make‑whole" calculation on the interim debt that will affect final pay‑off amounts and that reserve funding could be provided via a surety policy rather than a cash deposit. Officials said several transaction mechanics remained to be finalized—including final make‑whole numbers, surety bids and required notices to the interim bond holder—before closing. The council and CDC delegated authority to staff and advisors to finalize documents and complete the sale.

The meeting adjourned after votes were taken. The record shows the bodies approved the financing steps discussed; staff and advisers were authorized to complete the transactions and return with final closing details.