A legislative fight over buying an empty West Texas prison for $19.5 million shifted focus Wednesday, as officials suggested that private bondholders — not a small Texas county — could benefit most from the controversial bailout.
One Senate leader hinted that if the state buys the prison it doesn’t now need, state troopers and correctional officers may not get the raises they do need.
At issue is an unused 1,100-bed lockup in Anson, near Abilene, built by Jones County in 2010 with the expectation that the state would fill it with prisoners on contract. Faced with a declining prisoner population, the state canceled the contract before the lockup ever opened and it has sat idle ever since.
Local officials are asking Texas to buy the empty center, even though the state’s prison system currently has about 12,000 empty beds.
The Senate doesn’t want to, and is also pushing to close two existing privately run prisons. The House wants to let prison officials decide whether to close any prisons, and has voted to spend $19.5 million to buy the empty prison and mothball it for future use.
Closed-door negotiations on the issue continued Wednesday.
“I’m told the people who will benefit from the state buying the Jones County lockup are bondholders from New York and other places out of state,” said Senate Criminal Justice Committee Chairman John Whitmire, D-Houston, an outspoken critic of the purchase. “We don’t need it. Why we would want to bail out bondholders from New York who knew they were taking a risk, when we need that money for public safety here in Texas, is crazy.”
In recent weeks, officials confirmed Wednesday, representatives of the undisclosed bondholders on the Jones County project have been pressing for the state to buy the lockup, which cost $35 million to build. By some reports, they indicated they want at least $23 million.
Names of the private bondholders are not public. A Senate briefing document identified one of the investors or an adviser as Hamlin Capital Management of New York City. Representatives of that firm could not be reached.
Bondholders are the ones whose money is at stake in the deal, said Senate State Affairs Committee Chairman Robert Duncan, R-Lubbock, whose district includes Jones County and who has been involved in the legislative discussions on the issue.
“I believe they are the ones who will be out the money,” he said. “The debate here is what do we want to do. We got this facility and could it be a useful facility to the state.”
Public records show the lockup was built by a public facility corporation formed by Jones County after the Texas Department of Criminal Justice signed a contract with the county to send convicts. The lockup was to be a program-oriented, lower-security, pre-release center — not a maximum-security lockup for hardened felons.
That contract included a clause noting that the state could cancel the deal at any time if it did not have prisoners to put there, officials said.
Additionally, bond documents from the deal show that the state and county had no obligation if the felons never showed up — and that bondholders knew the risk that went with the deal.
Duncan and Whitmire said it is their understanding that Jones County got a new county jail out of the arrangement, a separate lockup that was refinanced after the prisoner deal fell through. That facility is now being paid off through a separate bond issue by the county, records show.
“The state asked us to build it, and my view is that if we can use it, then I would support buying it,” Duncan said. “If we can’t justify using it, then no. But it doesn’t seem to be a bad thing to negotiate, to see whether there is a need.”
Whitmire said there is no need. Spending $19.5 million to buy the lockup, and not closing the two privately run prisons in Dallas and Mineral Wells that cost $97 million a year to operate, “will mean we won’t have money in the budget for more pay for state troopers, correctional officers and other state employees, and for mental health services that everyone knows are important for public safety.”
And local officials eager to sell the lockup might be less enthusiastic if the state does buy it, then uses it to house sex offenders, Whitmire said.
For their part, House leaders said they were reviewing the new details about the Jones County lockup. House Corrections Committee Chairman Tan Parker, R-Denton, said he supports closing at least two prisons because of the declining prisoner population.