DALLAS - A privately operated South Texas detention center financed with $78 million of bonds is "uninhabitable" after a riot by federal inmates caused severe damage, officials said.
Federal officials were in the process of evacuating 2,800 inmates from the center in Raymondville on Feb. 23 after regaining control of the facility the day before. Inmates who were being held for immigration violations and criminal offenses while allegedly in the country illegally were transferred by bus to other, unnamed private prisons in the area, officials said.
The uprising at the prison known locally as "Tent City" because of the tent-like structures that house inmates was reportedly prompted by complaints of poor healthcare. The prison has been the subject of numerous complaints of physical abuse and was featured in a Public Broadcasting Service Frontline documentary that quoted inmates complaining about conditions.
The for-profit prison operator Management Training Corp. issued a statement that "inmates continue to be fully cooperative with the relocation process."
The condition of the prison after the riot was described as serious, including damage to plumbing, electrical and heating and ventilation systems.
Willacy County is responsible for maintaining insurance on the facility, according to the official statement for a 2011 bond issue from the Willacy County Local Government Corporation for $78 million.
The insurance can be used to repair the facility or to redeem bonds, according to the document. One section of the OS describes redemption as obligatory.
"Upon certain events of damage, destruction or condemnation, the Issuer must, within 365 days following the occurrence of any such event (or, later at the option of the Issuer within 60 days following the receipt of any proceeds relating to such event), redeem the Series 2011 Bonds at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date," the offering document states.
The Willacy LGC is one of two issuers for the project. The other is the Willacy County Facility Corp., which issued revenue bonds of almost $24 million in 2002. The final maturity of those bonds comes at the end of 2022.
Standard & Poor's rates the LGC bonds BBB. The Willacy PFC bonds are a notch higher at BBB-plus with outlooks stable on both ratings.
The LGC has filed a $65 million lawsuit against Management Training Corp. and the architectural and construction firm of Hale-Mills of Houston, claiming substandard work on the Raymondville prison.
Despite the lawsuit, MTC is considering building a more permanent facility on 50 acres the city of Raymondville is offering to sell for $300,000.
The detention center has been in operation since 2007 but was previously used under a contract with Immigration and Customs Enforcement. The new contract with Federal Bureau of Prisons repurposed the facility for the new inmate population in September 2011. The new population includes undocumented aliens who have been convicted of a criminal offense.
According to Standard & Poor's, demand for the facility's 3,000 beds has remained high. The detention center has about 400 employees.
