One of the country’s largest for-profit prison corporations has closed two of the three Oklahoma facilities it recently purchased in a deal allowing it to acquire its biggest competitor here for state-contracted prisoner reentry services, The Frontier has learned.
The closure of two facilities in Tulsa — Center Point Tulsa women’s facility and Center Point Osage men’s facility — follows the purchase of halfway house facilities in Oklahoma owned by the California-based nonprofit Center Point Inc. by CoreCivic, formerly known as Corrections Corporation of America. The third Center Point halfway house facility that was part of the purchase, located in Oklahoma City, remains open.
Prisoner halfway house facilities contract with the Oklahoma Department of Corrections to help offenders who are nearing release find jobs, get drug or alcohol addiction treatment and gradually re-enter society rather than being released directly onto the street. Prisoners are allowed to leave the facility to work or seek work, but they must report back to the halfway house afterward and staff members are required to constantly monitor the prisoner’s whereabouts.
The closure of the two facilities reduces the total number of available state-contracted halfway house beds in the state from 1,527 to 1,420, or seven percent, according to Department of Corrections records.
It also means that nearly 70 percent of all state-contracted prisoner halfway house beds in Oklahoma are now owned by CoreCivic. Until the purchase of the facilities on June 1, Center Point was CoreCivic’s biggest competitor in terms of number of halfway house beds provided to the Oklahoma Department of Corrections.
Of the current 1,420 halfway house beds in the state, CoreCivic owns 980.
In late 2015, CoreCivic (which changed its name from Corrections Corporation of America in late 2016) purchased Avalon Correctional Services, giving it ownership of the two largest men’s halfway house facilities in the state located in Tulsa and Oklahoma City and the largest women’s halfway house facility located in Turley.
CoreCivic also owns four prison facilities in the state — two of which are contracted to hold state prisoners. Another, the North Fork Correctional Facility, is being leased and staffed by the Oklahoma Department of Corrections.
Prior to the purchase of Center Point being finalized, corrections officials expressed several concerns about CoreCivic’s plans, including the plan to close the 75-bed Center Point Osage — one of the state’s best-performing halfway houses and sending the prisoners there to the Tulsa Transitional Center, which is one of the worst-performing halfway houses that contract with DOC.
According to a Nov. 29, 2016 letter from Greg Williams, a regional manager for the Department of Corrections, to CoreCivic senior director Dan Kaman, prisoners at the Tulsa Transitional Center had a 33 percent “failure rate,” meaning they were transferred back up to higher security facilities because of rule violations or failure to find employment.
“This is 12 percentage points higher than our best performing facility, which is Center Point Osage,” Williams wrote. “The agencies (sic) concern is that moving these inmates from Osage to TTC will increase the returns to higher security.”
In addition, Tulsa Transitional Center had one of the lowest rates for inmate employment and one of the highest rates of inmates walking away from the facility among all halfway houses in the state, Williams wrote.
“The Osage facility is consistently among the better performing facilities,” Williams wrote. “Again the agency is concerned that adding the additional inmates to the TTC location will have an overall negative impact on the employment rates for the inmate population.”
All 35 of the Center Point Tulsa women’s beds available to the Department of Corrections were considered “treatment beds,” which allowed women with addiction problems to get some form of treatment. However, Williams wrote, though CoreCivic offered to continue to the program at the Turley facility after closing Center Point Tulsa, it was unclear whether the department would require treatment beds in its new contract with the halfway houses.
In both the Nov. 29 letter and an Oct. 10 letter to CoreCivic, Williams wrote that the Department of Corrections was planning to no longer require treatment beds to be available at the 200-bed Oklahoma City Center Point facility in its new contract, but that there should be staffing changes and changes to the buildings at the facility if the deal were to go through.
In its plan to address the issues raised by corrections officials in October, CoreCivic’s Kaman sent a letter to Williams on Nov. 3, saying the company it would spend more than $1 million at the Oklahoma City facility to renovate the facility and and evaluate the existing camera system, and would also add security staff to improve staff to resident ratios.
However, Department of Corrections weekly prisoner counts at each facility show that the number of prisoners being held at the Tulsa Transitional Center and the women’s Turley Halfway House did not increase after the two Center Point facilities closed. Rather, in the months leading up to the closures, the populations at both Turley and the Tulsa Transitional Center began to decline noticeably before returning to their normal levels immediately following the closings, Department of Corrections records show.
However, weekly inmate counts for each facility issued by the Oklahoma Department of Corrections show that Center Point Osage and Center Point Tulsa were both removed from the list of facilities holding state prisoners during the first full week of June.
Core Civic paid $4 million for of Center Point’s Oklahoma properties, the property records show. While the Tulsa property was purchased by CoreCivic for $275,000, the Oklahoma City facility property was purchased for $3.7 million, according to county land records. Center Point did not own the land the Osage County facility was on, and that land has not been sold recently, according to the Osage County Assessor’s office.
It is unclear whether CoreCivic also purchased the multiple Center Point facilities in California and Texas as part of a broader deal.
Multiple calls from The Frontier seeking comment from Center Point executives were not returned. Phone calls and emails to a CoreCivic spokesman were not returned Friday afternoon.
However, in a Feb. 9 conference call to investors, Damon Hiniger, CoreCivic president and CEO, said the company re-branding itself from Corrections Corporation of America to CoreCivic in late 2016 was the culmination of a strategy to diversify beyond incarceration.
Part of that strategy, Hiniger told investors, includes reentry services. In addition to acquiring Avalon Correctional Services in 2015, CoreCivic had also acquired other companies specializing in prisoner reentry in locations such as Colorado and California, Hiniger said in February.
In CoreCivic’s most recent conference call to investors on May 4, Hiniger said the company continues to look at acquiring smaller companies that provide prisoner reentry services to states governments.
In April, one of CoreCivic’s largest rival private prison companies — Florida-based Geo Group — made a power play into the business of prisoner reentry services after it purchased the New Jersey-based Community Education Centers for approximately $360 million.
Community Education Centers contracted with numerous state and local governments throughout the country to provide services to prisoners, including 7,000 community reentry beds for prisoners close to being freed. The purchase gave Geo Group more than two-thirds of its current stock of reentry beds.
With Community Education Centers going to Geo Group, CoreCivic is looking to use a “roll up” strategy to scoop up many of the smaller reentry bed providers, Hiniger said during the call.
“So unfortunately, there’s not a lot of large portfolios to acquire,” Hiniger said according to an edited transcript of the call posted online. “But the ones we are finding, we are finding very attractive and very accretive even though they are small dollar amounts and show our efforts to try to consolidate and acquire as many as we can at the attractive prices.”
During the first quarter of 2017, Hiniger said CoreCivic acquired two reentry facilities for $7 million — an 835 bed facility in Colorado and a 100 bed facility in California. The company was pursuing the purchase of other facilities ranging in value from $5 million to $50 million as well, according to the conference call transcript.
During the Feb. 9 call, company officials also said CoreCivic was in talks with the Oklahoma Department of Corrections about leasing CoreCivic’s vacant Diamondback Correctional Facility in Watonga in a potential deal similar to the one the state has for lease of the North Fork Correctional Facility. The state has a 5-year $37.5 million agreement with CoreCivic to lease the North Fork facility, and CoreCivic is now seeking similar agreements in other states.
In the most recent conference call, Hiniger updated investors on where the negotiations stood, saying that CoreCivic continues “to hear great interest from the State of Oklahoma” about possibly leasing the Diamondback facility.