Ivey signs leases for 2 new prisons; costs not released

Alabama Gov. Kay Ivey signed 30-year lease agreements today on two new men’s prisons to be built and owned by private developers in Escambia and Elmore counties.

The agreements come after more than two years of planning by the Ivey administration and the Alabama Department of Corrections to build a total of three men’s new prisons. Negotiations continue on the third prison, which will be in Bibb County.

The first two prisons, to be built on Bell Fork Road near Atmore and on Rifle Range Road in Tallassee, will be financed, built, owned and maintained by a developer team led by CoreCivic, a national private prison firm. The state will staff and operate the prisons.

The Ivey administration did not release final costs of the leases in a press release this morning and said that information would be available after “financial close,” which will be on June 1, according to the lease agreements.

But the total annual cost of the three leases will exceed an $88 million “affordablity limit” the Ivey administration included in its request for proposals to developers.

“Final lease costs, which are subject to the overall project affordability limit of $88.6 million in fiscal year 2022 dollars, will become available once financial close is achieved with CoreCivic,” the governor’s office said.

The leases are not subject to annual renegotiations. The state will have options to extend them beyond 30 years, Ivey’s office said.

The governor’s office released copies of the lease agreements for the Elmore prison and the Escambia prison.

Parts of the documents were withheld as confidential. The governor’s office said trade secrets and security information would not be disclosed.

Construction is expected to start this year on the prisons near Atmore and in Tallassee. The prisons, which will hold a total of about 7,000 inmates, are scheduled to be ready for occupancy in 2025, the governor’s office said. Alabama had about 18,000 prison inmates as of November.

Ivey said the lease agreements are the best way for Alabama to replace its aging prisons. She noted that Alabama faces potential consequences from federal courts if it does not improve its prisons. In December, the U.S. Department of Justice sued the state, alleging unconstitutional conditions in men’s prisons.

“I am pleased that we have reached this important milestone in the Alabama Prison Program, the cornerstone of a multifaceted strategy to address the ADOC’s longstanding challenges and failing prison infrastructure,” Ivey said in this morning’s press release. “ADOC’s existing dilapidated infrastructure is failing at a rate of one facility every two years, exorbitant deferred maintenance costs are rising by the day, and the Courts may act imminently if real progress is not made soon – given all these risks, there is not one minute to spare.”

“Leasing and operating new, modern correctional facilities without raising taxes or incurring debt is without question the most fiscally responsible decision for our State, and the driving force behind our Alabama solution to an Alabama problem. We are improving public safety, providing better living and working conditions, and accommodating inmate rehabilitation all while protecting the immediate and long-term interests of the taxpayers. This is simply the best path forward.”

On Friday, 13 groups of advocates signed a letter to legislators urging them to try to block the prison leases.

The groups said new prisons won’t fix the problems the Department of Justice found it its investigation of Alabama prisons. The DOJ lawsuit says the constitutional violations are failing to prevent prisoner-on-prisoner violence and sexual abuse, failing to prevent excessive use of force by correctional officers, and failing to provide safe conditions.

“We demand the legislature do everything in their power to intervene in this process and stop Governor Ivey from trapping us into a 30-year mistake,” the letter said.

The groups included Alabama Students Against Prisons, The Ordinary Peoples Society, Prodigal Child Project, Alabama Justice Initiative, Auburn Students and Community for Change, Emerge at Auburn University, Fight Toxic Prisons, ACLU of Alabama, Black Lives Matter Alabama, Faith and Works Collective, and Alabama Appleseed Center for Law and Justice, Block the Brierfield Prison and No Prison for Tallassee.

The total cost of the three leases has been projected at $94 million the first year and to gradually rise to $108 million by the final year of the 30-year agreements, according to a report by Alabama Daily News.

The administration shared the charts on projected lease costs with legislators on a Zoom call Friday, ADN reported. The higher payments will bring the total cost of the leases over 30 years to more than $3 billion, up from the earlier projection of $2.6 billion.

Sen. Greg Albritton, R-Atmore, who was on the call, said today it was his understanding the projections in the charts were not final costs on the leases because negotiations on the third prison are continuing.

The CoreCivic development includes CoreCivic, Caddell Construction; DLR Group; and R&N Systems Design. The leases are with Government Real Estate Solutions of Central Alabama (the Elmore prison) and Government Real Estate Solutions of South Alabama (the Escambia prison). Both are identified by the governor’s office as “a CoreCivic entity.”

Ivey and ADOC Commissioner Jeff Dunn said new prisons are needed to replace aging, overcrowded, and understaffed prisons.

“It is no secret that, due to decades of inaction and a lack of resources, our correctional system is at a crossroads,” Dunn said in the press release. “Thanks to Governor Ivey’s vision, tenacity, and leadership, we have reached an important step in our continued work to chart a transformative new course for the Department.

“Leasing, staffing, and operating modernized prison infrastructure that is owned and strictly maintained by the private sector minimizes our short- and long-term risk for an initiative of this necessary magnitude. These facilities will provide a safer, more secure environment in which our heroic staff can better deliver effective, evidence-based rehabilitative programming to our inmate population.”

The plan for prisons financed and built by private developers does not require approval by the Legislature, which begins its annual session on Tuesday.

Some lawmakers asked Dunn for more information about the plan last week, but the negotiations with the developer team, led by CoreCivic, a national private prison firm, have been confidential. The governor’s office said it would release more information after the leases are signed.

On Saturday, Regions Bank announced it would not provide banking services for CoreCivic after it finishes the contracts in effect now, which will be in 2023. Regions was not involved in helping to finance the Alabama prisons even before the statement, Regions spokesman Jeremy D. King said.

“Regions provides some banking services to CoreCivic, and our contractual obligation to deliver these services lasts until 2023,” the company said. “We are not extending additional credit services to CoreCivic, and we are specifically not providing CoreCivic with financing for the construction of the prisons to be built in Alabama.

“To be clear, Regions Bank is 100% committed to creating more inclusive prosperity and advancing racial equity. This past Tuesday, Jan. 26, we met with the Black Lives Matter Birmingham Chapter and other organizations to receive feedback on the issue of private prisons. We listened closely to concerns that were shared, and we appreciate the candid feedback we received.“

On the Bibb County prison, which will be in the Brierfield community near Montevallo, the ADOC is negotiating with Alabama Prison Transformation Partners, which includes Star America; BL Harbert International; Butler-Cohen; Arrington Watkins Architects; and Johnson Controls, Inc. The prison will be near the intersection of Alabama 139 and Bibb County 2.

Updated at 9:35 a.m. to include full statement from Regions and to say that Regions was not involved in financing the Alabama prisons before the statement. Updated about 11 a.m. to say that the governor signed the leases. Updated at 12:11 p.m. to include links to the lease agreements. Updated at 1:25 p.m. to say that costs reported in Alabama Daily News story are projections and might change because negotiations are ongoing on the third prisons. Updated at 6:18 to rearrange some of the information, replace a missing word and fix a couple of grammatical mistakes.

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