Res 098-2021 Tax Abatement Agreement Clayton Homes 2400 Burk Road 09/07/2021 Resolution No. 98-2021
Resolution authorizing the Mayor to execute a Tax Abatement
Agreement with CMH Manufacturing, Inc., related to its project to
invest approximately $15 million into operations to build
manufactured housing and modular homes for the property at 2400
Burkburnett Road in Wichita Falls, Texas, which is owned by the
Wichita Falls Economic Development Corporation and located in the
Clayton Homes Reinvestment Zone
WHEREAS, the City Council finds that the City has complied with the prerequisites
for tax abatement, as provided in Chapter 312 of the Texas Tax Code and the City's
Guidelines and Criteria for Tax Abatement, as adopted on January 21, 2020.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
The Mayor is hereby authorized to execute a Tax Abatement Agreement for a
period of 10 years with CMH Manufacturing, Inc., for the property at 2400 Burkburnett
Road, with such changes to form as approved by the City Attorney.
PASSED AND APPROVED this the 7th day of September, 2021.
MAYOR PRO TEM
ATTEST:
City Clerk
TAX ABATEMENT AGREEMENT
BETWEEN THE CITY OF WICHITA FALLS
AND CMH MANUFACTURING,INC.
This Tax Abatement Agreement (this "Agreement") is entered into by and between the
City of Wichita Falls, Texas (the "City"), duly acting herein by and through its Mayor, and CMH
Manufacturing, Inc., a Tennessee Corporation, authorized to do business in the State of Texas,
acting by and through its duly authorized officers.
Recitals
WHEREAS,on January 21,2020,the City Council of the City(the"City Council")adopted
Resolution No.05-2020(the"Enabling Resolution")establishing certain guidelines and criteria for
the designation of reinvestment zones and the entering into of tax abatement agreements
pursuant to the Texas Property Redevelopment and Tax Abatement Act,as contained in Chapter
312 of the Local Taxation Title of the Tax Code of the State of Texas(the"Code");and
WHEREAS, the Enabling Resolution constitutes appropriate guidelines and criteria
governing tax abatement agreements to be entered into by the City as contemplated by the Code;
and
WHEREAS, the Enabling Resolution included a statement by the City that it elects to be
eligible to participate in tax abatement;and
WHEREAS, on August 3, 2021, the City Council passed Ordinance No. 24-2021 (the
"Ordinance")creating and designating the Clayton Homes Reinvestment Zone(the"Zone")in
the City for commercial-industrial tax abatement as authorized by the Code, and the designation
of the Zone remains in full force and effect;and
WHEREAS,it is in the best interest of the City and its taxpayers, in order to maintain and
enhance the commercial and industrial economic and employment base of the City,to enter into
this Agreement in accordance with the Enabling Resolution, the Ordinance and the Code;and
WHEREAS, the City Council finds that the contemplated use of the Premises (as
hereinafter defined), the contemplated improvements to the Premises in the description and
amount as set forth in this Agreement and the other terms hereof,are consistent with encouraging
development of the Zone in accordance with the purposes for its creation and are in compliance
with the Enabling Resolution,the Ordinance and all applicable law;and
WHEREAS,a copy of this Agreement has been furnished in the manner prescribed by the
Code to the presiding officers of the governing bodies of each of the taxing units in which the
Premises to be subject to this Agreement are located.
NOW,THEREFORE, KNOW ALL MEN BY THESE PRESENTS:
That the City,for good and valuable consideration,the adequacy and receipt of which are
hereby acknowledged, which consideration includes the retention and/or expansion of primary
employment and the attraction of major investment in the Zone,which contributes to the economic
development of the City and the enhancement of the tax base in the City,and the Owner,for good
and valuable consideration,the adequacy and receipt of which are hereby acknowledged,which
consideration includes the tax abatement set forth herein as authorized by the Code,as amended,
do hereby contract, covenant and agree as follows:
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1. General Provisions
1.1: The Owner is the owner of the land known as 2400 Burkburnett Road, Wichita
Falls,Wichita County,Texas,as shown on Exhibits A and A-1,attached hereto and made a part
hereof for all purposes(the"Premises").
1.2: The Premises are located entirely within the city limits of the City and within the
Zone.
1.3: The Premises are not in an improvement project financed by tax increment bonds.
1.4: This Agreement is entered into subject to the rights of the holders of outstanding
bonds of the City.
1.5: The Premises are not owned or leased by any member of the City Council or by a
member of any zoning or planning board or commission of the City or by any member of the
governing body of any taxing unit joining in or adopting this Agreement.
1.6 The term of this Agreement shall begin on September 7, 2021,and shall continue
until December 31 of the calendar year following the expiration of the last tax abatement provided
hereunder unless earlier terminated in accordance with the terms of this Agreement.
2. Development
2.1: The Owner will cause the construction of a facility where it will build manufactured
housing and modular homes on the Premises. The Owner plans to make a capital investment of
at least $15 million toward the construction and operation of such manufacturing facility. As a
result of this investment, the Owner anticipates creating approximately 181 new full-time
positions.
Prior to July 1,2022,Owner shall furnish to the City a detailed description of the proposed
improvements, including the kind and number of the proposed personal property additions,all of
which will be located on the Premises. Owner shall have the right to make alterations and/or
substitutions to the project, and the equipment included therein, so long as the cost, scope and
projected economic impact of the project is not substantially reduced.
3. Rate and Duration of Tax Abatement
3.1: (a) The period of tax abatement for the improvements pursuant to this
Agreement shall commence on January 1, 2023, and shall continue for a period of 10 years
thereafter.
(b) Subject to the terms and conditions set forth in this Agreement,the tangible
personal property and other improvements located on the Premises shall be exempt from taxation
by the City in accordance with this Section 3.1, provided, however, in accordance with Section
312.204(a) of the Code, the tax abatement set forth herein is subject to the following: (i) with
respect to real property,the abatement shall only be applicable to the extent the value of the real
property, including the improvements described herein, exceeds its value for the year in which
this Agreement is executed;and(ii)with respect to tangible personal property located on the real
property covered by this Agreement, the abatement shall be applicable to all tangible personal
property, including inventory, located on such real property constituting a part of the
improvements described herein other than tangible personal property located on the real property
prior to the commencement of the improvements described herein.
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(c) The percentage of the increased value of the Premises and the appraised
value of tangible personal property which will be exempt from ad valorem taxes during each year
of the applicable tax abatement period pursuant to this Agreement is as follows:
Year Percentage
1 100%
2 90%
3 80%
4 70%
5 60%
6 -7 50%
7 40%
8 30%
9 20%
10 10% J
3.2: Notwithstanding anything in this Agreement which might be deemed to be to the
contrary, the Owner shall have the right to protest and contest any appraisal or assessment of
the Premises, or any improvements or tangible personal property or both located thereon, and
the tax abatement provided for herein for such improvements and/or tangible personal property
shall be applied to the amount of taxes finally determined,as a result of such protest or contest,
to be due for such property.
4. Records and Cost
4.1: The kind, number and location of all proposed improvements are described in
Section 2.1. Prior to April 1, 2023, Owner shall furnish to the City a certificate signed by a duly
authorized representative of the Owner setting forth a general description and cost of the personal
property and improvements added to the Premises, since the date of the commencement of the
improvements. The Owner shall at all times cooperate with representatives of the City so as to
enable such representatives to verify the addition of improvements to the Premises and the cost
thereof.
4.2: At all times during the term of this Agreement,the City and/or the Wichita Appraisal
District (the "Appraisal District") shall have access to the Premises by City or Appraisal District
employees or other representatives for the purpose of inspecting the Premises to verify the
addition of equipment and improvements as contemplated by this Agreement;provided,however,
that the City or the Appraisal District, as applicable, shall notify the Owner at least 2 days in
advance of any such inspection and such inspections shall not interfere with the business
operations and/or safety policies of the Owner with respect to the Premises.
4.3: The Premises and the tangible personal property additions and improvements
thereto shall at all times during the term of this Agreement be used in a manner that is consistent
with the City's general purpose of encouraging development of the Zone.
4.4: No later than February 28, 2023, Owner shall provide the City and the Appraisal
District with a final report setting forth the status of the improvements, including the description,
historical cost of the tangible personal property and other improvements added to the Premises
as of January 1,2023,for which Owner is claiming tax abatement pursuant to this Agreement.
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4.5: Throughout the term of this Agreement, Owner shall furnish the City and the
Appraisal District with such additional records and information as the City and/or the Appraisal
District may reasonably request to support Owner's tax abatement.This information shall include,
but is not necessarily limited to, information regarding improvements for which Owner has
received tax abatement and which has been replaced at the Premises. At a minimum, this
information shall include a property description,an asset number(if applicable),and the date such
property was removed or replaced.
4.6: The City and/or the Appraisal District shall have the right to review and audit at its
expense the books and records of the Owner relating to the Premises and the improvements
thereon. The City and/or the Appraisal District shall notify the Owner in advance in writing of its
intent to review and/or audit such records in order to allow the Owner adequate time to make such
books and records available on the Premises.
4.7: On or before April 15 each year, the Owner shall render all of Owner's personal
property located thereon to the Appraisal District, to include the cost, date, and year acquired for
ad valorem tax purposes in accordance with applicable law.
4.8: On or before April 15 each year during the term of this Agreement, Owner shall
certify to the governing body of the City that the Owner is in material compliance with each
applicable term of this Agreement
4.9: In accordance with the requirements of Section 11.43 of the Texas Property
Tax Code, in order to qualify for tax abatement pursuant to this Agreement, the Owner
must apply for the applicable exemption prior to May 1 each year. The applicable
completed exemption application form with all supporting documentation must be filed
with the Chief Appraiser for the Appraisal District.
4.10: In the event that:(a)the improvements for which an abatement has been granted
herein are not completed in accordance with this Agreement;or(b)Owner(and its affiliates)fails
to create and maintain at least 90 new jobs at the Premises by December 31, 2024(which jobs
shall be maintained until the earlier of(i)the expiration of this Agreement or(ii) so long as the
equipment and improvements associated with such jobs as described on Exhibit B remains in
place and operational); or (c) Owner allows its ad valorem taxes owed to the City to become
delinquent and fails to timely and properly follow the legal procedures for protest and/or contest
of such ad valorem taxes;or(d)Owner materially breaches any of the terms or conditions of this
Agreement; or(e)Owner materially defaults in Owner's obligations pursuant to any agreements
that the Owner has entered with the City of Wichita Falls or the Wichita Falls 4B Sales Tax
Corporation; or (f) Owner fails to timely pay any of its debts as they become due, then this
Agreement shall be in default. In the event that Owner defaults in its performance of(a), (b),(c),
(d),(e),and/or(f)above,then the City shall give Owner written notice of such default,and if Owner
has not cured such default within 60 days after receipt of said written notice, despite diligent
efforts, the Owner shall have an additional 30 days. If such default is not cured within such 90-
day period, or if such default cannot be cured by the payment of money and cannot with due
diligence be cured within a 90-day period owing to any cause beyond the control of Owner, this
Agreement may be terminated by the City. As liquidated damages in the event of default,all taxes
which otherwise would have been paid to the City in the previous twelve(12)months without the
benefit of abatement pursuant to this Agreement(together with interest charged at the statutory
rate for delinquent taxes as determined by Section 33.01 of the Property Tax Code of the State
of Texas, but without the addition of a penalty)will be reinstated and will become a debt to the
City and shall be due,owing and paid by Owner to the City within 60 days of the expiration of the
above described cure period as a sole remedy of the City, subject to any and all lawful offsets,
settlements,deductions or credits to which Owner may be entitled. The parties acknowledge that
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06058214.2
actual damages in the event of default and termination would be speculative and difficult to
determine.
5. Sale,Assignment or Lease of Property
5.1: The tax abatement provided for herein shall vest in the Owner upon completion of
the real property and personal property additions and improvements described in Section 2.1,
but, except as hereinafter provided, such tax abatement is not assignable to any new owner or
lessee of all or any portion of the Premises without the prior written approval of the City, which
approval will not be unreasonably withheld, conditioned or delayed. Notwithstanding the
foregoing,the tax abatement provided for herein shall be assignable without prior approval by the
City:(i)to n/a,which has been pre-approved by the City,(ii)to any parent, affiliate, subsidiary or
other entity in which the Owner has direct or indirect control or(iii)in connection with any sale of
the Premises,or a portion thereof,which are then leased back(for a period at least equal to the
remaining term of this Agreement)by the Owner or a parent,affiliate,subsidiary or other entity in
which the Owner is in control. For purposes of this Article 5, the term"control"means either:(i)
the ownership of 50% or more of the beneficial or economic interest or voting power of the
appropriate entity or(ii)the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled entity.
6. Miscellaneous Provisions
6.1: All notices or other communications required or permitted by this Agreement shall
be in writing and shall be deemed to be properly given when delivered personally to any of the
hereinafter designated addressees or the named representatives thereof, or when mailed by
prepaid certified mail, return receipt requested, addressed to such party at the respective
addresses set forth below:
If to the City: City Manager
City of Wichita Falls
P.O. Box 1431
Wichita Falls, TX 76307-1431
If to the Owner:
CMH Manufacturing, Inc.
5000 Clayton Road
Maryville, Tennessee 37804
Attn:Jim Stariha
E-mail:Jim.Stariha@ClaytonHomes.com
6.2: This Agreement was authorized by an order of the City Council adopted at its
meeting on September 7,2021,authorizing the Mayor to execute this Agreement on behalf of the
City.
6.3: This Agreement was entered into by the Owner acting through one or more duly
authorized officers of the Owner.
6.4: In the event any section,subsection, paragraph,sentence, phrase or word herein
is held invalid, illegal or unconstitutional, the balance of this Agreement shall stand, shall be
enforceable and shall be read as if the parties intended at all times to delete said invalid section,
subsection, paragraph,sentence, phrase or word.
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6.5: Any party hereto may request an estoppel certificate from another party hereto so
long as the certificate is requested in connection with a bona fide business purpose. The
certificate shall include, but not necessarily be limited to,statements that this Agreement is in full
force and effect without default if such is the case, the remaining term of this Agreement, the
levels of tax abatement then in effect,and such other matters reasonably requested by the parties
to receive the certificate.
6.6: The Owner,as a party to this Agreement,shall be deemed a proper and necessary
party in any litigation questioning or challenging the validity of this Agreement or any part hereof
or any of the underlying ordinances, resolutions, or City Council actions authorizing the same,
and the Owner shall be entitled to intervene in any such litigation.
6.7: After the Owner has satisfied the conditions set forth in this Agreement, the tax
abatement provided for herein shall continue for the duration of this Agreement and shall not be
lost through force majeure events such as acts of God,fire, tornado, earthquake or other events
or circumstances beyond the Owner's reasonable control.
6.8: This Agreement shall be governed by and construed in accordance with the laws
of the State of Texas. Venue for any action pursuant to this Agreement shall be in a state district
court in Wichita County,Texas. This Agreement is fully performable in Wichita County,Texas.
6.9: An executed copy of this Agreement in recordable form shall be recorded in the
Real Property Records of Wichita County,Texas.
6.10: Other taxing units in which the Premises are located may join in the execution of
this Agreement by executing a signatory page acknowledging the joinder of such taxing unit and
granting tax abatement by such taxing unit in accordance with the terms and conditions hereof;
an executed and acknowledged copy of each such signatory page shall be attached to this
Agreement.
6.11: This Agreement may be executed in multiple counterparts,none of which must be
signed by all of the parties hereto, but all of which, taken together, shall constitute one and the
same agreement.
(signature page follows)
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CITY OF VVICHITA FALLS
By:S °' Se.cxrculn.c.
Stephen Santellana, Mayor
Date: St—fi r7)
ATTEST:
By:
a e Balthrop, City Clerk
Approv s F m:
By'
i•A
R. ley hiegg J C ney
CMH MANUFACTURING,INC.
By
Jim ariha, Chie Financial Officer
Date: 11,5c21
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THE STATE OF TEXAS §
COUNTY OF WICHITA §
BEFORE ME,the undersigned authority,a notary public in and for the State of Texas,on this day
personally appeared DeAndra Chenault, Mayor Pro Tern of Wichita Falls, Texas, known to me to
be the person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said Wichita Falls, Texas, that he was
duly authorized to perform the same by appropriate order of the City of Wichita Falls,and that he
executed the same as the act of the said city for the purpose and consideration therein expressed
and in the capacity therein stated.
EN UNDER MY D AND SEAL OF OFFICE this day of,A,U , , , „ 202
Notary Pu tic
aa''Poa,, CHRSTAI.ASHCRAFT
•` ' Public,State of Texas
t*C1CY
Ntomm.Expres 08 13-2023
THE STATE OF TENNESSEE § �ii0tta`' Notary ID 132172021
COUNTY OF §
BEFORE ME, the undersigned authority, a notary public in and for the State of Tennessee, on
this day personally appeared Jim Stariha, Chief Financial Officer of CMH Manufacturing, Inc.,a
Tennessee corporation,known to me to be the person and officer whose name is subscribed to
the foregoing instrument and acknowledged to me that the same was the act of the said limited
liability company and that he executed the same as the act of said limited liability company for the
purpose and consideration therein expressed and in the capacity therein stated.
GIVEN UND R MY HAND AND SEAL OF OFFICE thiso?s !ay of Aliofra,T ,202/
f�iL} (seal) a..
••�
Notary Public '9 .. �'0
My Commission ..STATE' 9y
June 26,2023 '•:`TFNN F
oG C .
tiT COU��•
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Exhibit A
Real Property Description
Tract 1:
Field Notes of 31.01 acres being all of Block 4 and Block 5, Unit Two,
Arrowhead Industrial District, and known as 2400 Burkburnett Road, Wichita
Falls, Wichita County, Texas, and described as follows:
BEGINNING at a 3/8-inch iron rod found at the Northwest corner of Block 4, Unit Two,
Arrowhead Industrial District, as shown on the plat of record in Volume 21, Pages 21-22,
Wichita County Plat Records, a fire hydrant on the East line of the Old Burk Road bears on
foot West from this iron rod;
THENCE N 72° 01' E 299.55 feet to a two-inch pipe for a corner, a three-inch pipe fence
corner bears North nine-tenths of a foot and East three-tenths of a foot;
THENCE N 17°57'W 201.42 feet to a three-inch pipe fence corner post for a corner;
THENCE N 71° 51' E 826.76 feet (824.07 feet record) to a 3/8-inch iron rod found on the
West line of Burkburnett Road(State Highway 240),a three-inch pipe fence corner post bears
South 71° 51'West 7/10 of a foot;
THENCE S 23°30'24"E 1,114.04 feet along the West line of the Burkburnett Road to an iron
rod set at the beginning of a curve to the right, a power pole with an aluminum tag marked
7,980 bears South 30° East 18.4 feet;
THENCE in a Southeasterly direction with the curve to the right having an arc length of 290.66
feet, a radius of 2,666.71 feet, a central angle of 6° 14' 42", the chord bears S 20° 23' E
290.52 feet to a 1/2-inch iron rod set for the Southeast corner of Block 5, Unit Two Arrowhead
Industrial District, as shown on the Plat of Record in Volume 27, Pages 326-327, Wichita
County Plat Records;
THENCE N 89°45'W 1,310.20 feet(1,317.98 feet record)along the South line of Block 5 to
a%-inch iron rod found on the East line of the Old Burk Road for the Southwest corner of this
tract;
THENCE N 18° 05' W along the East line of the Old Burk Road at 264.1 feet pass a three-
inch pipe fence corner post,in all a total distance of 785.36 feet to the Place of Beginning and
containing 31.01 acres of land.The bearings in these Field Notes are NAD 83 Grid from Solar
Observations.
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06058214.2
Tract 2:
Field Notes of 1.11 acres out of the M. Carbajal Survey, Abstract 44, Wichita
County,Texas,and described as follows:
BEGINNING at a 1/2-inch iron rod found on the West line of the Old Burk Road, said iron rod
bears S 18°05' E 915.49 feet to the intersection of the North line of Pleasant View Road and
the West line of the Old Burk Road,also a 3/8-inch iron rod at the Northwest corner of Block
4, Unit Two Arrowhead Industrial District bears N 18°05'W 338.67 feet and N 71°55' E 70.0
feet;
THENCE S 18°05'E 270.0 feet along the West line of the road to a 1/2-inch iron rod found for
the Southwest corner of this tract, a 3/8-inch iron rod found on the North side of a gravel
driveway bears South 19.3 feet and East 2.1 feet;
THENCE with a curve to the right in a Northwesterly direction having an arc length of 421.42
feet, a radius of 790.31 feet, a central angle of 30° 33' 09", the chord bears N 52°29'42"W
416.45 feet to a bridge spike found on the East line of the Wichita, Tillman and Jackson
Railroad;
THENCE N 16°28'W 126.58 feet along the East line of the Railroad to a'/2-inch iron rod set
for the Northwest corner of this tract;
THENCE with a curve to the left in a southeasterly direction having an arc length of 313.98
feet, a radius of 405.66 feet, a central angle of 44° 20' 51", the chord bears S 67° 16' 54" E
306.20 feet to the Place of Beginning and containing 1.11 acres of land.The bearings in these
field notes are NAD 83 Grid bearings from Solar Observations.
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06058214.2
Exhibit A-1
Tract 411
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