McKinney EDC files suit against Bridge Street developer over repayment of loan and land ownership

The McKinney EDC filed suit against O & S Holdings, Inc. in the 296th District Court of Collin County on April 7 seeking to remove an improper cloud on the MEDC's title to land at the Bridge Street developement at the northest corner of US 75 and Spur 399, where constuction has ceased on what was to be the Westin Hotel and the city owned McKinney Convention Center, or conference center.

The MEDC and the city of McKinney terminated the master development agreement for the retail development of what is known as the Bridge Street Towne Center, where the hotel, conference center and 66 retail stores and restaurant, and a 14-screen movie theater were slated to be built, early this year. The MEDC’s attempts to pay off two loans that are owed to the developer were not honored by McKinney Shores Properties, Inc., an entity controlled by O & S Holdings, who was trying to develop the Bridge Street site, said David Pitstick, MEDC Board President and CEO.

The MEDC's petition for suit asks the court to declare that the developer, O & S Holdings, and McKinney Shores must accept the loan repayments, remove all liens on the property, and further declare that the master development agreement, which was originally signed in 2006, is terminated.  

The master development agreement required the developer to meet specific requirements for commencing the retail construction at the Bridge Street project prior to the end of 2008. When the developer failed to honor the requirements, the city and the MEDC terminated the agreement. A second agreement governs the construction of the Westin Hotel and convention center, Pistick said. Although not part of the lawsuit, a separate O&S Holdings entity, McKinney Shores Hotel Partners, Inc., that is constructing the Westin Hotel, has yet to obtain construction financing it has stated is necessary to complete the hotel project.

Pitstick commented on the necessity of bringing the lawsuit. "We performed under our agreement, and the developer did not. We are honoring our obligation to pay off the loans, and they are refusing to accept our payments. To finish the development, we are forced to take these steps,”  Pitstick said.

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