The private prison company CoreCivic has sold two of the largest immigration detention facilities in California to the U.S. Department of Homeland Security in a deal worth $1.5 billion, the company announced Monday. CoreCivic said it anticipates that the sale of the Otay Mesa Detention Center in San Diego County and the California City Detention Facility in Kern County will bring the company an estimated net proceeds of approximately $1.1 billion. The sale closed on July 2, according to a recent filing with the U.S. Securities and Exchange Commission, with the federal government paying $739.2 million for the 1,994-bed Otay Mesa facility and $732.6 million for the newly-opened 2,560-bed California City facility.CoreCivic said in a news release that it expects to continue running the day-to-day operations of both facilities under existing management contracts with the U.S. Immigration and Customs Enforcement. The company acknowledged in its filing that the terms of those contracts could be renegotiated now that the federal government owns both properties outright.
They also might not be renewed. CoreCivic’s contract in California City contract runs through August 2027, and its Otay Mesa contract is in effect through December 2029, with an option to extend for five more years.
