Key facts
- CoreCivic sold two California immigrant detention centers to the U.S. Department of Homeland Security for $1.5 billion.
- The Otay Mesa Detention Center was sold for $739.2 million and the California City Detention Facility for $732.6 million.
- CoreCivic will continue to operate both facilities under existing management contracts with ICE.
- The Department of Homeland Security has substantial funding for expanding immigration detention capacity.
- The federal government's plan aims to reduce reliance on large private prison contractors for detention services.
CoreCivic, a private prison company, has sold two significant immigrant detention facilities in California—the Otay Mesa Detention Center and the California City Detention Facility—to the U.S. Department of Homeland Security (DHS) for a combined $1.5 billion. The sale, which closed on July 2, is expected to yield CoreCivic approximately $1.1 billion in net proceeds.
Despite the change in ownership, CoreCivic anticipates continuing to manage the day-to-day operations of both facilities under existing contracts with U.S. Immigration and Customs Enforcement (ICE). However, the terms of these contracts are subject to renegotiation or potential non-renewal, with the California City contract extending through August 2027 and the Otay Mesa contract through December 2029, each with extension options.
The acquisition aligns with the federal government's strategy to expand its immigration detention capacity, reducing reliance on major private prison contractors. This initiative, described as the "ICE Detention Reengineering Initiative," aims to create a more efficient detention network by consolidating facilities and increasing bed capacity. The DHS has secured substantial funding for this expansion, with $45 billion earmarked for detention capacity growth through fiscal year 2029.
The sale has not resolved ongoing legal disputes concerning the facilities. Local officials in San Diego County sued the federal government and CoreCivic over access for health inspections at the Otay Mesa facility, though a federal judge later granted inspectors access. Concerns also persist regarding the opening of the California City facility without proper permits, with advocacy groups like the Immigrant Legal Resource Center urging its closure.