By R.J. Morales | TX3DNews
A Travis County lawsuit tied to McKinney National Airport financing is drawing in the City of McKinney, the Texas Attorney General’s Office, and residents questioning how airport-related debt is being refinanced and validated through the courts.
Refinancing Case Tied to Existing Airport Debt
Court records show the City of McKinney and the McKinney Community Development Corporation (MCDC) filed a lawsuit in April seeking court approval for roughly $30 million in airport-related refunding bonds tied to prior improvements at McKinney National Airport.
The case, filed in the 200th District Court under Cause No. D-1-GN-26-003109, centers on what filings describe as “Sales Tax Revenue Refunding Bonds, Taxable Series 2026 (TIFIA).”
Filing previews reviewed by TX3DNews state the refinancing would replace bonds issued in 2025 “to finance improvements to the McKinney National Airport.”
Former McKinney Mayor George Fuller told TX3DNews via email “The refinancing is intended to replace already-authorized and already-issued debt, not create a new borrowing authorization,”
Fuller added the refinancing is expected to save taxpayers roughly $15 million over the life of the debt.
“This figure relates to the delta between current debt interest expense over the life of that debt, and the interest expense over the life of the current MCDC-issued debt through the federal TIFIA program being considered,” Fuller said.
He added that final amortization schedules and maturity comparisons would ultimately come from the financing team and bond counsel.
Airport Debate Continues After Prior Bond Elections
McKinney National Airport has remained a political flashpoint for years, especially after voters rejected airport-related bond propositions in 2015 and 2023.
The 2023 measure asked voters to approve $200 million in general obligation bonds for airport facilities backed by property taxes.
Fuller argued the current refinancing should not be confused with that election.
“In short, the vast majority of residents read this proposition to mean that there would be additional taxes levied upon them,” Fuller said. “Although they may have supported passenger service, they did not support an increase in taxes to get there.”
He also said the current case involves “debt already issued for airport-related infrastructure and facilities,” not a new borrowing authorization.
“Reasonable people can certainly disagree on airport policy,” Fuller said, “but I think it is important that the public discussion distinguish between new debt authorizations and refinancing existing obligations intended to reduce interest expense to taxpayers.”
Residents Question Scope of Validation Process
The case was filed under Chapter 1205 of Texas law, a legal process commonly used to validate public financing and bond obligations through the courts. Critics of the filing argue the process could limit future legal challenges tied to the airport project.
One filing submitted by “Interested Party” Jeremiah Hammer argues the City and MCDC are seeking “the extraordinary benefit of a Chapter 1205 judgment that may bind McKinney residents, taxpayers, and property owners and permanently preclude later challenges.”
Hammer’s filing also stated the objections were limited and were not intended to delay public financing “for political objection.”
Court notices tied to the case state the proceeding applies to “all residents, property owners, rate payers, and taxpayers of the City,” language commonly seen in statewide bond-validation cases.
Fuller disputed claims circulating online that the lawsuit amounts to legal action “against citizens.”
“Chapter 1205 exists under Texas law specifically to provide certainty in public financing matters,” Fuller told TX3DNews. “It is a legal mechanism used throughout Texas by governmental entities to confirm the legality of bonds and related obligations.”
He also said the proceeding “does not create new powers that did not already exist.”
Attorney General Challenges Part of the Case
Texas Attorney General Ken Paxton filed both an “Original Answer and Plea to the Jurisdiction” and an amended version in response to the lawsuit.
Public filing previews indicate the Attorney General’s office argued portions of the relief requested by the City and MCDC were “defective,” though the full filings and exhibits were not immediately available through free public court access.
Court records also show the City and MCDC filed a motion seeking to consolidate related Collin County litigation into the Travis County proceeding.
“Importantly, the Attorney General’s filing did not challenge the underlying merits or legality of the refinancing itself,” Fuller said. “Rather, the plea addressed procedural and jurisdictional questions concerning the scope of the Chapter 1205 proceeding.”
Some residents have also questioned why the case was filed in Travis County instead of Collin County, where the airport and related disputes are based.
Fuller said Chapter 1205 expressly allows venue in Travis County and that many statewide bond disputes are handled there because state agencies and the Attorney General’s office are located in Austin.
“My understanding is that the effort to consolidate related litigation was largely intended to avoid conflicting rulings and duplicative litigation involving substantially overlapping issues,” Fuller said.
What Happens Next
The Travis County case remains active, and additional filings, hearings, and financial exhibits are expected as the court reviews the Chapter 1205 proceeding.
Questions also remain about whether the related Collin County litigation will ultimately be consolidated into the Travis County case and how the court will respond to the Attorney General’s jurisdictional challenge.
TX3DNews contacted the City of McKinney seeking comment regarding the Chapter 1205 filing and refinancing structure, but the City had not responded before publication.
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