BARSTOW � The city�s hopes for creating some 250 new jobs by bringing a minimum-security prison to Lenwood were dashed in the wake of the federal government�s decision to scrap the entire project.
The Federal Bureau of Prisons announced Friday it canceled plans to hire a private correctional company to build and run minimum-security federal prisons in Arizona or California.
Traci Billingsley, spokeswoman for the Federal Bureau of Prisons, said its latest projections show a decline in its population growth rate. So, after crunching the numbers, the bureau realized there was no need for the 4,500 new beds this project called for.
�This is the most prudent use of taxpayer dollars,� Billingsley said.
She said the decision has �absolutely nothing� to do with California�s recent decision to stop contracting with private prison companies.
City officials were disheartened by the news.
�We are disappointed but there is nothing we can do,� said Councilman Paul Luellig. � It�s a decision based on needs and they are saying the need no longer exists.�
City officials were looking to this project to give Barstow�s economy a shot in the arm.
�It would have created jobs that would pay a substantial wage with benefits,� Mayor Lawrence Dale said. � It is a substantial loss.�
Two companies submitted bids to open a facility in Lenwood. About 20 sites were being considered by the bureau, with a decision expected in the fall.
Executives with Wackenhut and Cornell Corrections companies predicted the prison would create 250 to 300 new jobs, with first preference given to local workers.
Cornell's proposed site would have occupied about 79 acres on the west side of Lenwood Road between Jasper and Agate roads, while Wackenhut's covered about 64 acres in the same location.
Billingsley said it is �not common� for the bureau to cancel a project just months before it is slated to award a contract.
The bureau�s action bears a striking resemblance to a state decision to cancel a prison project in December 1999. Just three months before it was slated to award a contract, the California Department of Corrections decided it did not need four 550-bed medium-security prisons for which it had accepted bid proposals. Three different companies were bidding to build a prison in the Lenwood area.
At that time, the department said in the state�s �best interest to cancel this biding process because of the changes in projected and actual inmate populations.�
Wait'll you see what the states are gonna do. Arizona alone has a $1 billion + shortfall in this current fiscal year. Suburbanites and the inner city are gonna want their programs to continue. They're not going to want to house more sheeple. McPrison is going down.
Can I infer that the latest decline in the stock price was due to the perception that the growth rate in prison populations is declining? Or are people unsure of the recent merger announcement by Group 4? I note the First Analysis mentioned a few weeks ago, "US prisons were 20% overcrowded in recent years were now close to 100% capacity."
I owned this stock for several months, selling on the merger announcement because i) I thought the stock was fully priced at near $17 and ii) merger uncertainty. I would like to buy back again, given that the stock has traded down while the small cap values have traded up.
Should we buy, sell, or hold, and what is this thing worth? Thanks in advance.