McKinney Westin Hotel developer might have funds within 120 days to finish project at US 75 and Spur 399, according to city officials

City of McKinney spends an estimated $1.6 million in legal fees pertaining to Bridge Street development, JDN Real Estate condemnation law suit

By Brandi Hart

Almost one year ago city leaders were filled with hope at the Bridge Street Town Centre official groundbreaking ceremony held Feb. 28, 2008 where the much anticipated McKinney Westin Hotel is slated to be built near the city's southern gateway near State Highway 121 and US 75.

Now, a three to four story unfinished building that is supposed to eventually become the 221 room Westin Hotel sits on a quiet work site where as the developer of the hotel, O & S Holdings, Inc. has still not secured funding to finish the construction of the hotel. The large crane that loomed high above the site for months has also slowly been taken down as construction ceased on the hotel in mid-October, 2008.

The stalled McKinney Westin Hotel remains unfinished as its developer is still seeking funding to complete project amid turmoltous national economy. The groundbreaking ceremony for the hotel was held almost one year ago on Feb. 28, 2008. Photo by Brandi Hart / McKinneyUpdate.com.

City leaders and staff on various levels have worked on planning the 90-acre Bridge Street Town Centre site for at least the last four years, and a press conference was held in early 2007 to promote the more than 60 retail stores and restaurants, hotel and McKinney Convention Center that would be included in the development. . Whether that work has all been in vain depends on if O & S Holdings, Inc., a national shopping center development company based near Beverly Hills, Calif. can find the funding to finish the project.

McKinney City Manager Frank Ragan said on Feb. 21 that O & S Holdings could secure the needed funding for the hotel project within the next 120 days.

"They (O & S Holdings) are still on the hook to develop the hotel and conference center. They still need to shore up financing and about $16 million to $15 million to complete the hotel, and they believe they can do it in 120 days," Ragan said.

Ragan said that O & S Holdings is currently out of the picture for the retail, or commercial portion of the Bridge Street project.

Ragan, along with David Pitstick, CEO and President of the McKinney Economic Development Corporation, and City Attorney Mark Houser have been speaking to O & S Holdings officials since mid-October, 2008 to ensure the project is completed.

Chris Shane, Vice President of Acquisitions for O & S Holdings did not return a message left on his office phone about the status of the financing for the project. As previously published on McKinneyUpdate.com, Shane told the McKinney Community Development Corporation's Board of Directors at a special meeting on Oct. 16, 2008 that O & S Holdings did not have the funding needed to finish the project due to the continual national economic downtown, and banks being weary of issuing loans.

O & S Holdings also missed the Dec. 15, 2008 deadline to accept an additional $5.5 million incentive from the MCDC as O & S Holdings did not meet the criteria for the incentive. The MCDC Board required O & S Holdings to meet the following criteria to receive the incentive: secure a loan covering the full costs of the hotel and convention, or center and to repay MCDC the loan with interest if the hotel and center aren't completed by June 30, 2010. The MCDC originally gave O & S Holdings until Feb. 28, 2010, two years after the groundbreaking ceremony, to complete the project, but later extended the deadline until June 30, 2010.The MCDC Board has previously voted to spend $16 million to construct the 2,000 seat convention center that was originally slated to be built next to and to connect to the Westin Hotel. For more information about the MCDC Oct. 16, 2008 meeting, click here .

According to a response to a public information request filed about the total amount of legal fees associated with the Bridge Street site, City Attorney Mark Houser said the city has also spent approximately $1.6 million since 2005 on legal fees pertaining to the Bridge Street project. The $1.6 million figure includes $1.2 million in legal fees accrued by the city for legal representation for a law suit the city filed in January, 2007 against JDN Real Estate, a national shopping center developer like O & S Holdings, who owns approximately 9 acres of undeveloped land just north of the proposed Bridge Street site.

The city asked that JDN's land be condemned and be used for additional parking for the retail aspect of the Bridge Street site, according to the city's petition for suit. According to various site plans filed with the city, a small commercial building was originally proposed on the JDN property and a later site plan included the JDN land to only be used for parking. The suit has not been closed, or settled and is still listed as active.

Condemnation suits are typically filed for land that is easily condemnable, such as blighted property in economically disadvantaged areas, or that has a low property value, and not usually for commercial real estate on US 75. The JDN Real Estate property at US 75 is valued at $4,784,916. according to the Collin Central Appraisal District's Web site www.collincad.org/list.php .

More information about the suit can be found on Collin County's Web site www.collincounty.gov and by clicking here . The case number for the suit is 3660022307. According to the county Web site a hearing date, is not scheduled anytime in the next three to four months. The $1.2 million fees are for work by the Brown and Hofmeister Law Firm in Richardson, of which Houser works for, and the Thompson and Knight Law Firm for the JDN Real Estate suit.

The remaining estimated $400,000 of the estimated $1.6 million in legal fees the city has spent is for work the Brown and Hofmeister Law Firm has done to represent the city and the MEDC for the Bridge Street project since 2004, Houser said.

The legal fees for the suit could still be accruing as the suit has not been resolved despite the fact that the city has a $5.2 million budget shortfall for the current fiscal year.

O & S Holdings has successfully developed a similar retail site in Huntsville, Ala., which is also named the Bridge Street Town

The Alabama Bridge Street Town Centre also includes a Monaco Pictures movie theater, which was originally planned to be included in the retail side of the McKinney Bridge Street project.

Work begins on Collin College Higher Education Center at Bridge Street site

Not all plans have been put on hold for the Bridge Street site as preliminary construction of the Collin College Higher Education Center site is currently underway. Collin College is moving ahead with constructing its Higher Education Center at the northeast corner of the Bridge Street site. The campus, which will front Spur 399,will be the second Collin College campus to be built in McKinney.The original campus of Collin College, the Central Park Campus is the first one to be built in McKinney and for the Collin County Community College District. The new campus will also house all of the college's administrative staff and a parking garage that will hold at least 300 parking spaces will also be built near the campus. The MEDC Board of Directors also donated $2 million to help construct the garage and donated land for the college campus to be built in McKinney.

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