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Governor signs lease agreements for the Alabama Prison Program

MONTGOMERY, ALA. – Governor Kay Ivey and the Alabama Department of Corrections (ADOC) today signed agreements to lease two new men’s correctional facilities to be constructed by CoreCivic’s Developer Team (CoreCivic; Caddell Construction; DLR Group; and R&N Systems Design).

The State signed one lease agreement with Government Real Estate Solutions of Central Alabama, LLC, a CoreCivic entity, for Facility Two (Elmore County Facility), which will be constructed on Rifle Range Road in Tallassee, Alabama, and will specialize in the inmate population’s medical and mental health needs. The State signed a second lease agreement with Government Real Estate Solutions of South Alabama, LLC, a CoreCivic entity, for Facility Three (Escambia County Facility), which will be constructed on Bell Fork Road near Atmore, Alabama. The term of each lease agreement is 30 years. The agreements are not subject to annual renegotiation; however, options to negotiate occupancy extensions beyond the 30-year lease term are available to the State.

The binding agreements are subject to the terms and conditions set forth in the respective agreements. The signed lease agreements may be viewed here (Elmore County Facility) and here (Escambia County Facility). A fact sheet that provides supplemental information about this announcement may be viewed here. Please note that trade secrets and security-related information will not be disclosed. Final lease costs, which are subject to the overall project affordability limit of $88.6 million in fiscal year 2022 dollars, will become available once financial close is achieved with CoreCivic.

“I am pleased that we have reached this important milestone in the Alabama Prison Program, the cornerstone of a multifaceted strategy to address the ADOC’s longstanding challenges and failing prison infrastructure,” Governor Ivey said. “ADOC’s existing dilapidated infrastructure is failing at a rate of one facility every two years, exorbitant deferred maintenance costs are rising by the day, and the Courts may act imminently if real progress is not made soon – given all these risks, there is not one minute to spare.”

“Leasing and operating new, modern correctional facilities without raising taxes or incurring debt is without question the most fiscally responsible decision for our State, and the driving force behind our Alabama Solution to an Alabama Problem. We are improving public safety, providing better living and working conditions, and accommodating inmate rehabilitation all while protecting the immediate and long-term interests of the taxpayers. This is simply the best path forward,” Governor Ivey added.

The lease agreements were signed after engaging in confidential negotiations with CoreCivic to ensure the State secures the best possible value. Negotiations with Alabama Prison Transformation Partners (Star America; BL Harbert International; Butler-Cohen; Arrington Watkins Architects; and Johnson Controls, Inc.) for the lease of Facility One, proposed to be built at a site located near AL-139/CR-2 in Bibb County, are progressing, and the State continues its diligent work on this component of the process.

“It is no secret that, due to decades of inaction and a lack of resources, our correctional system is at a crossroads. Thanks to Governor Ivey’s vision, tenacity, and leadership, we have reached an important step in our continued work to chart a transformative new course for the Department,” said ADOC Commissioner Jeff Dunn. “Leasing, staffing, and operating modernized prison infrastructure that is owned and strictly maintained by the private sector minimizes our short- and long-term risk for an initiative of this necessary magnitude. These facilities will provide a safer, more secure environment in which our heroic staff can better deliver effective, evidence-based rehabilitative programming to our inmate population.”

The ADOC anticipates construction of the Elmore County Facility and the Escambia County Facility to begin in 2021. The two facilities will provide approximately 7,000 beds and are expected to be ready for occupancy in fiscal year 2025 once construction is completed. While the ADOC will operate and staff the facilities, CoreCivic will provide ongoing facility and infrastructure maintenance and is responsible for life-cycle replacement costs through the duration of the lease term.

Governor Ivey and ADOC leadership have met with legislators and provided public updates throughout the procurement process, beginning with the Expressions of Interest phase in early 2019. The ADOC posted a request for Expression of Interest (EOI) to improve the state’s prison infrastructure on March 27, 2019, and announced the Developer Teams who submitted EOIs on April 18, 2019.

The ADOC issued a Request for Qualifications (RFQ) on June 27, 2019. Participation in the RFQ process was mandatory and required interested Developer Teams to respond and submit a Statement of Qualifications (SOQ) by August 26, 2019, to demonstrate the team’s financial capacity and technical expertise. An Evaluation Committee, comprised of stakeholders from the ADOC and Department of Finance, including the Division of Construction Management,  evaluated the SOQs to identify the developer teams qualified to receive the Request for Proposal (RFP).

The Evaluation Committee identified qualified Developer Teams based on the experience and qualifications of the team lead, equity partners, design and construction teams, and service providers, as well as their ability to adequately meet the financial needs of the Alabama Prison Program. In November 2019, Governor Ivey and the ADOC announced the four developer teams that qualified to receive the RFP in December 2019. An addendum to the RFP was issued on April 3, 2020, extending the proposal submission deadline due to the impact of COVID-19.

The proposals were due to the ADOC on May 14, 2020, and were opened on May 15, 2020. The public opening was held virtually out of an abundance of caution and in line with Centers for Disease Control and Prevention (CDC) recommendations on COVID-19 as it relates to large public gatherings in enclosed spaces.

The Evaluation Committee conducted a thorough evaluation of the proposals submitted by pre-qualified Developer Teams, and subsequently made award recommendations to ADOC Commissioner Jeff Dunn. In September 2020, Governor Ivey and the ADOC announced their intent to enter into negotiations with the successful developer teams.