WASHINGTON\u00a0\u2014\u00a0The Department of Homeland Security bought two of the largest immigrant detention facilities in California for $1.5 billion, according to the private prison company that sold them. <\/p>\n
The purchase comes as the department \u2014 flush with cash after President Trump\u2019s One Big Beautiful Bill Act infused the agency with $170 billion \u2014 has moved to scale up its capacity to detain immigrants without relying as heavily on private prison corporations. <\/p>\n
In the 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 on July 2. <\/p>\n
The company said it expects net proceeds of about $1.1 billion after income taxes and transaction expenses. <\/p>\n
Ryan Gustin, public affairs director for CoreCivic, said that such sales are not uncommon and that \u201cthe process was marked with rigor and integrity.\u201d He added that the valuations were established through the federal government\u2019s required appraisal process, using independent appraisers who determined objective fair market value. <\/p>\n
The sale doesn\u2019t immediately change anything at the facilities \u2014 CoreCivic expects to continue managing them under existing contracts with U.S. Immigration and Customs Enforcement, according to the company and a filing with the Securities and Exchange Commission. <\/p>\n
But the terms of those contracts could be modified given the change in ownership, the filing states. The California City facility contract expires in August 2027 and the Otay Mesa facility contract expires in December 2029, with the option to extend for five more years.<\/p>\n
\u201cWe are pleased with the sales of these two mission-critical facilities for the Company\u2019s government partner, which demonstrates the value of the Company\u2019s underlying real estate portfolio, while reflecting our role as a long-term, flexible solutions provider to government,\u201d CoreCivic Chief Executive Patrick Swindle said in the announcement. <\/p>\n
A Homeland Security spokesperson confirmed that the purchase was made possible because of funding from Trump\u2019s big tax law, which \u201callowed ICE to expand detention space to fulfill the President\u2019s promise of mass deportations.\u201d <\/p>\n
\u201cUnlike in states like Florida and Oklahoma, ICE can not rely on local state and county partners for detention space in California,\u201d said the spokesperson, who did not provide their name in the emailed statement. \u201cThe state\u2019s sanctuary politicians continue to push legislation to outlaw or make private prisons financially [unfeasible]. Now, with federal ownership of these detention centers which are crucial to ICE\u2019s detention network on the west coast ICE retains the detention capacity needed to arrest, detain, and remove illegal aliens.\u201d<\/p>\n