Friday, 29 July 2011

Prison up for auction.

Debt-burdened Texas town puts its prison on the market


The Dallas Morning News

Newly renovated complex on 30 acres. Almost 95,000 square feet. Concrete block housing, with brick veneer and pitch-seamed metal roofs. Includes a gymnasium and armory, along with furniture, computers, kitchen supplies. And complete with plenty of bars.

Prison bars.

Billed by the auction house as a "unique opportunity to acquire a turn-key medium security detention center," the facility in Littlefield, Texas - empty but with room for 373 inmates - will go to the highest bidder above the $5 million minimum.

While a jail auction is rare and has raised eyebrows, Littlefield's effort to free itself of the Bill Clayton Denton Center is a tale of speculation and ideas gone wrong.

The farming town northwest of Lubbock got into the jail business with expectations that states would pay to store their prisoners in the privately run jail, giving the economy a much-needed boost.

What they got was a slew of operational and financial headaches. The jail was built with an $11 million bond on which the city still owes millions that it is struggling to pay.

Littlefield is just one of a dozen towns across the state under financial duress because the hopeful predictions about bond-financed prisons fell short.

The best thing for Littlefield, said City Manager Danny Davis, "is to get out from under this debt so we can get back to some sort of normalcy."

And it's been a lesson learned, he said.

"Anytime we are signing up for a long-term agreement that looks good right now, we'll know we need to look further down the road," he said.

The market for a 30-acre prison might seem limited, but Jeff Conn, a Lubbock realtor who specializes in detention center facilities, said there is interest from other municipalities needing more space for inmates as well as private detention centers.

He said he knows of about six potential buyers and is confident the city will get the money it needs.

The property is posted on the website of the auctioneers, Williams & Williams Worldwide Real Estate Auctions based in Tulsa.

If the prison goes for $5 million, Littlefield will still owe about $4 million on the property. Davis said that would cut the city's annual bond payments by more than half.

Littlefield officials, hoping to bring jobs and revenue to the area, used bonds in 2000 to build the prison in an old cotton field just outside of town. They hired a private company, GEO Group, to run the jail and find prisoners, believing those contracts would repay the bonds and provide the city with extra revenue.

The center originally was built for juvenile offenders but converted to an adult facility with out-of-state inmates. But trouble abounded over the years, with guards helping prisoners escape and riots resulting in a facility lockdown. Then an inmate suicide two years ago was followed by a lawsuit.

The largest client - the state of Idaho - had enough. It pulled all of its inmates out, citing a budget crunch back home.

Not long after, the GEO Group announced it was leaving. With the prison population declining nationwide, the city wasn't able to find any inmates to fill the cells of the 5-pod detention center.

Since then, the city's bond rating has plunged, and it faces a $65,000-a-month payment. The cotton-growing town has raised property taxes, cut jobs and is running the city on a "bare bones budget" to get some of the money needed, Davis said.

"Nobody's happy when you have to cut services and raise taxes," he said. "It's not a good situation to be in."

Littlefield is not alone. Several other Texas towns that build prisons to be run by private companies have found the prisons to be financial drains.

Grassroots Leadership, a group that works to end for-profit private incarceration, said the Littlefield situation is another sign that for-profit prisons don't work.
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