DHS buys two California immigrant detention centers for $1.5 billion
WASHINGTON— The Department of Homeland Security has purchased two of the largest immigrant detention facilities in California for $1.5 billion, according to the private prison company selling them.
The purchase comes as the department, flush with cash after Trump’s One Big Good Bill Act provided $170 billion for the agency, has begun to expand its capacity to detain immigrants without relying heavily on private prison companies.
In an announcement Monday, Tennessee-based CoreCivic said the sale of the 2,560-bed California City Detention Facility and the 1,994-bed Otay Mesa Detention Center in San Diego closed July 2.
The company said it expects net income of approximately $1.1 billion after income taxes and transaction expenses.
Ryan Gustin, CoreCivic’s director of public relations, said such sales are not uncommon and “the process is marked by rigor and honesty.” He added that appraisals are created using independent appraisers who determine objective fair market value through the federal government’s required appraisal process.
The sale changes virtually nothing at the facilities — CoreCivic expects to continue managing the facilities under existing contracts with U.S. Immigration and Customs Enforcement, according to the company and a filing with the Securities and Exchange Commission.
However, according to what is stated in the application, the terms of these agreements may be changed considering the change of ownership. The California City facility contract expires in August 2027, and the Otay Mesa facility contract expires in December 2029, with an option to extend for another five years.
“We are pleased with the sale of these two mission-critical facilities for the Company’s government partner, which demonstrates the value of the Company’s core real estate portfolio and also reflects our role as a long-term, flexible solutions provider to government,” CoreCivic CEO Patrick Swindle said in the announcement.
The Department of Homeland Security did not immediately respond to a request for comment.
during a quarterly earnings call In May, George Zoley, CEO of GEO Group, another major private prison company, said the company was in discussions with ICE “regarding the potential sale of multiple facilities.”
Critics of the detention center purchases say the Trump administration is trying to avoid state and local oversight by placing the facilities under federal ownership. This issue came up during the GEO Group earnings call when an attendee later asked why the federal government wanted to own the facilities rather than contracting with third parties.
Zoley said that if the facilities were federally owned, “there would be greater protection against unwarranted lawsuits that infringe on the operations of ICE processing centers.”
Zoley said federal ownership would bolster the facilities’ legal defense and support the argument that “states can only have very limited involvement.”
“There were cases related to oversight of medical services, food services, general cleanliness,” Zoley continued. “This is truly unprecedented, and I believe it is fundamentally unconstitutional. While some blue states are considering taking a more active role in overseeing the facilities, I think the logical solution for most of these is federal ownership of the facilities.”
California tried to kick private detention operators out of the state, but the 2020 law was overturned in the Ninth Circuit Court of Appeals. State leaders have since established oversight mechanisms through legislation that allow detention centers to be monitored and investigated by the California Department of Justice and local health officials.
Asked to comment on the sale, Sen. Alex Padilla (D-Calif.) said his congressional oversight visits to facilities operated by CoreCivic showed immigrants who posed no public safety threat were being held in “unacceptable conditions.”
“Whether these facilities are operated by a private contractor or owned by the federal government, my expectations remain the same,” he said. “I will continue to demand transparency, accountability and humane conditions that respect the dignity and rights of every person in immigration detention.”
Eight ICE detention facilities currently operate in California, with a combined capacity to house approximately 9,000 people.
California City and Otay Mesa facilities have been the subject of lawsuits from detainees alleging mistreatment of detainees. CoreCivic says such allegations are false and says it complies with all regulations regarding the treatment of detainees.
In Monday’s announcement, CoreCivic said the company is in talks with ICE about potentially selling additional detention facilities, but those talks are in various stages and it’s unclear whether the sales will go through.
