Gainesville is now grappling with fallout from the sudden news that a corrections company is closing the North Georgia Detention Center, a large employer and substantial source of financial support for the city.
At one point this year, Corrections Corporation of America employed more than 130 people at the immigration detention center with a payroll of $7 million. The Nashville-based company has also been paying the city $825,000 in annual rent, money the city needs to help pay off $8.9 million in bonds it issued partly to buy the former jail last year.
CCA plans to shut down the center by the end of this month.
“Obviously, it is a blow to our employment here,” said Gainesville Mayor Pro-Tem Bob Hamrick, who said city officials first learned about CCA’s plans Monday. “But, hopefully, we can come up with some way to not only absorb the employees that will be laid off but also to find some use for that facility.”
Gainesville’s problem illustrates the risks municipalities take when they link themselves to the private corrections industry, said experts who study the issue.
“I definitely see it as a cautionary tale,” said Byron Price, who teaches public policy at the City University of New York and has written books about the industry.
Michele Deitch, who teaches criminal justice policy at the University of Texas at Austin, said it “is poor public policy for any government body to tie its hopes for economic development to the fortunes of a private corrections company.”
“Time and time again, we see examples around the country of promised immigrant detainees or prisoners who don’t materialize, leaving the municipality in a financial lurch,” she said.
In announcing its decision Monday, CCA cited a dwindling number of detainees. The 502-bed facility was recently holding only about 150 detainees.
CCA referred questions about numbers of detainees to U.S. Immigration and Customs Enforcement. An ICE spokesman said his agency wasn’t able to respond to questions about that issue Tuesday.
Any detainees remaining in Gainesville will be transferred to other detention centers in Irwin and Stewart counties, according to ICE. Such moves could place some detainees farther away from their families and attorneys. A spokesman for CCA, which also operates the Stewart Detention Center, said the company “works closely with our government partners to facilitate access to family and other support systems such as legal and consular services.”
Just as the CCA decision has tossed Gainesville into uncertainty, the privately run detention center in Irwin has in the past been the source of financial troubles for local governments. Last year, the facility, the county’s largest employer, narrowly avoided being auctioned off at a county tax sale after creditors forced its owner, Municipal Corrections LLC, into bankruptcy proceedings. The city of Ocilla and Irwin County were trying to collect $1.6 million in back taxes on the property, a big blow to a county with an annual operating budget of $4.2 million.
Now, Gainesville faces bond payments that are scheduled to continue until 2027. The bonds helped finance the city’s $7.2 million acquisition of the detention center from Hall County, and to help fund those bonds, the city entered into a lease with CCA to operate the facility.
CCA spokesman Steven Owen said the company is committed to paying its annual rent to the city for 2014. Gainesville officials must figure out how they will pay off the remaining debt on the former jail after that. Gainesville does not plan to cover the gap with tax increases, Mayor-elect Danny Dunagan said.
“That is just something we are working on,” Dunagan said about coming up with funding sources. “Our options are open. We will look at it and see.”
As for what the city will do with the site once CCA shuts down the detention center, Dunagan said: “That is just something that the city will have to work out. We don’t know. We just absolutely do not know at this point.”
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