Ivey to sign prison lease deal, lawmakers bristle at higher cost revelation

Ivey to sign prison lease deal, lawmakers bristle at higher cost revelation

By TODD STACY and MARY SELL, Alabama Daily News

MONTGOMERY, Ala. – Gov. Kay Ivey is set to sign lease agreements for two new men’s prisons as part of a long-negotiated plan to overhaul Alabama’s dilapidated corrections infrastructure. However, some state lawmakers are unhappy with the project after being told it will cost more each year than originally estimated.

On a call with state lawmakers Friday, Department of Corrections Commissioner Jeff Dunn said Ivey would soon sign contracts with CoreCivic, one of the developers bidding for the massive prison project.

Asked to confirm the news, Ivey Press Secretary Gina Maiola said the contracts are scheduled to be signed on Monday.

“Yes, it is our expectation the governor, on Monday, is expected to sign lease agreements to lease two new men’s correctional facilities to be constructed by Corecivic’s Developer Team,” Maiola told Alabama Daily News.

“We are anticipating her to put pen to paper and as soon as she does, we will be releasing more details. We hoped it would have been sooner, but we are working as quickly as possible to get the best deal as possible for the state.”

In September, Ivey announced that three new men’s prisons would be built in Elmore, Bibb and Escambia counties. Tennessee-based Corecivic was selected for the Elmore and Escambia locations.

BL Harbert was selected to build the third men’s prison in Bibb County. That lease agreement is still in negotiations, sources told Alabama Daily News.

Some in the Legislature have questioned Ivey’s prison plan and asked for more details about the contract negotiations and costs.

Dunn and Ivey have sought to assure lawmakers that the department would be able to pay for the new prison leases with savings left over from closing current dilapidated, crowded prisons that require greater staff and maintenance expenses.

During legislative budget hearings last week, lawmakers asked more detailed financial information in order to plan for any fiscal fallout should costs exceed expectations. Ivey and ADOC have repeatedly said the leases would not cost more than $88 million per year.

However, on a Zoom call with lawmakers Friday afternoon, administration officials shared information that showed the projected total lease payments were expected to be $94 million the first year and increasing each year thereafter. The total cost over 30 years for the three prisons is estimated at slightly more than $3 billion.

Slides shared with lawmakers during a Zoom call Friday

 

 

According to multiple participants on the call, some lawmakers were displeased at the cost revelation.

State Sen. Greg Albritton, R-Range, chairs the Senate General Fund budget committee. He took part in a briefing Friday and, when asked to describe the tone, Albritton said there was “growing frustration” in the legislative branch.

“There were serious challenges made that fell short of accusations,” Albritton said. “There wasn’t animosity, but I’d say it was a grown up discussion about if this is the best Alabama can do.”

Members of ADOC and Ivey’s staffs were on the call, but not the governor herself. Some were surprised to learn of the $94 million lease payments having been repeatedly told they wouldn’t exceed $88 million.

“And we weren’t happy with that,” Albritton said.

Asked if it will impact the legislative session that starts Tuesday, Albritton said, “I would suspect so.”

Rep. Rich Wingo, R-Tuscaloosa, was one of the lawmakers asking Dunn for more information on the leases during last week’s budget hearings. On Friday afternoon, he said wasn’t aware Ivey planned to sign leases Monday until it was reported. He said he’d like to know the developer’s return versus cost.

“I don’t mind them making a profit, but what is his yield, what is his return on cost?” Wingo said. “Everyone should want to know that, every taxpayer should want to know what the return on cost is. We don’t mind paying a fair price, but we don’t even know if it’s fair.”

Wingo and others said that it will be the General Fund budget, appropriated by lawmakers, that’s liable for the leases if they’re above projections, “but we have no say in the matter.”

Ivey on Thursday told ADN she does not plan to show lawmakers the lease agreements before she signs them, and her office said the administration has shared as much information on the ongoing negotiations as possible without disclosing sensitive details that could threaten the deal.

Regions bank confirmed Saturday that it was ending a banking relationship with CoreCivic after a contractual relationship ends in 2023, the Associated Press reported. However, it is not clear if that will have any impact on the Alabama construction project. Regions said executives met with the Black Lives Matter Birmingham Chapter and other organizations Tuesday to receive feedback on the issue of private prisons.