politics
U.S. Government Buys Two California Immigration Detention Centers from CoreCivic for $1.5 Billion
The private prison operator completed the sale of the Otay Mesa and California City facilities on July 2. CoreCivic will continue operating both sites under existing ICE contracts.
CalMattersAudio version
Tap play to generate a narrated version.
Developing·Limited corroboration so far. This page will refresh as more sources emerge.
CoreCivic sold the Otay Mesa Detention Center in San Diego County and the California City Detention Facility in Kern County to the U.S. Department of Homeland Security for a total of $1.5 billion, CalMatters reported. The transaction closed on July 2, with the federal government paying $739.
CoreCivic anticipates net proceeds of approximately $1.1 billion after taxes and transaction costs. The company plans to apply those funds to pay down bank credit and retire $238.5 million in senior notes due in 2027, with any remainder directed toward additional debt reduction or possible stock buybacks.
Immigration and Customs Enforcement. The California City contract runs through August 2027, while the Otay Mesa contract extends through December 2029 with a five-year extension option. The company noted in its SEC filing that the contracts could be renegotiated now that the federal government owns the properties.
Patrick Swindle, president of CoreCivic, said the sales reflect the company's role as a long-term, flexible solutions provider to government. The company is in early-stage discussions with ICE about selling additional detention facilities. Eight ICE detention centers currently operate in California.
CalMatters reported that the Otay Mesa facility has been the subject of a legal dispute over local health inspections, while the California City site opened last year on the grounds of a former state prison.
