SUMMARY: Originally scheduled to open in 2003, this facility is scheduled to receive its first 450 prisoners in August 2004. The project is expected to be completed in April 2005 and will house 1,400 prisoners at full capacity. The $55.1 million bond sale for the facility was completed in April 2004. The terms and conditions of the contract between Management Training Corporation (MTC), the private operator, and the state were finalized in March 2004. Republican legislators have been blaming Governor Janet Napolitano for stalling the project. Dennis Burke, Napolitano's co-chief of staff, denied the criticisms, saying that despite her opposition to private prisons, the Governor supported the Kingman prison for budgetary reasons. The main problem cited by Napolitano was that the private vendor which had been awarded the contract was not able to meet the terms of the contract. The Governor has also opposed plans by Republican lawmakers to increase the number of permanent beds at private prisons under an expected prison expansion plan, saying that "the Mohave County project exemplifies why putting your prison future in the hands of private prison companies is and can be very problematic."¹

DETAILS: In May 2003 Management Training Corp.  won a contract to build and operate a new low-to-medium security prison in Kingman, Arizona for housing people convicted of driving under the influence. Construction of the facility would be financed with bonds. The facility was authorized by the state legislature in 2002 and was originally scheduled to open in 2003. Dominion Correctional Properties, an Oklahoma company, is building the project under contract with MTC.

 

Republican legislators have been blaming Governor Janet Napolitano for stalling the project. At a prison bill hearing in November, Mohave County Supervisor Buster Johnson said that he was frustrated by the delaying tactics that had been going on for two years. Dennis Burke, Napolitano's co-chief of staff, denied the criticisms, saying that despite her opposition to private prisons, the governor supported the Kingman prison for budgetary reasons. The governor also denied the allegations at one of her weekly news briefings in November saying that, "the prison raised questions and issues typical of major construction projects."²

 

The main problem cited by Napolitano was that the private vendor which had been awarded the contract was not able to meet the terms of the contract. Other reasons that had contributed to delays earlier in the contracting process included a review requested by House Speaker Jake Flake to see if a competing bidder had been treated unfairly.

 

After winning the contract, MTC told the state that it could not execute the project under the existing terms of the contract because of changes in the bond market. The company's marketing director justified the company's position by saying that interest rates had increased during the summer of 2003 while the Department of Corrections was waiting for current Director Dora Schriro to take office and sign off on the project. Napolitano alleged that, "MTC wanted to restructure the deal, increase the per diem (payment) per inmate per bed per day by a substantial amount. In other words, have the state of Arizona bail them out of a contract that they had bid on." The Governor has also opposed plans by Republican lawmakers to increase the number of permanent beds at private prisons under an expected prison expansion plan, saying that "the Mohave County project exemplifies why putting your prison future in the hands of private prison companies is and can be very problematic."

 

State officials have said that the state and MTC were trying to negotiate new terms for the contract. Options that were being considered included converting it to a lease/purchase arrangement or using federal prison dollars for building the project. The Legislature approved the project during a special session at the end of 2003. At the special session, legislators also passed a bill that waived a statutory requirement that the state could allow a private prison to be built only if it was proved to be cheaper.³

 

In February 2004 the chairman of the Senate Appropriations Committee, Senator Robert Burns, demanded an explanation from Corrections Director Dora Schriro for not acting on the legislative directives given two months earlier at the special session to finalize the contract with MTC. Schriro said that, after the special session, MTC had informed the Corrections Department that instead of the 10-year contract as specified by the Legislature, it needed an 11-year contract. She cited this change as one of the main reasons for the delay.⁴

The terms and conditions of the contract between MTC, the private operator, and the state were eventually finalized in March 2003. Under the contract, MTC will operate the prison until 2115, or until the state pays off the bonds. The state will then have the option to purchase the facility for $1.⁵ The $55.1 million bond sale for the facility was completed in April 2004. Construction is on schedule and the first 450 prisoners are due to arrive in August 2004. The project is scheduled to be completed in April 2005 and will house 1,400 prisoners at full capacity.

Activist Groups Involved:

 

The American Friends Service Committee : http://www.afsc.org/az/default.htm

The Arizona Advocacy Network: http://www.azadvocacy.org/

Not With Our Money/Grassroots Leadership: http://www.notwithourmoney.org/, http://www.grassrootsleadership.org/

NOTES

 

1. Paul Davenport, "Napolitano denies delaying private prison," Associated Press, November 14, 2003.

2. ibid.