A detention center in Rhode Island used to house detainees of Immigrations and Customs Enforcement and the U.S. Marshals Service has filed for bankruptcy, claiming it cannot afford to pay off the debt it used to fund its expansion.
The Central Falls Detention Facility Corporation was created through a nonprofit ownership structure. Intended as an economic development vehicle for Central Falls, it hit financial difficulties due to the COVID-19 pandemic, a ransomware attack, and ICE's alleged abuse of a detainee.
The Chapter 11 bankruptcy filing seeks to eliminate roughly $102 million of the corporation's $167 million outstanding debt. The plan is supported by the bondholders and the city of Central Falls.
"Although the Debtor is on solid financial footing from a cashflow perspective as it relates to its current liabilities, its more than $167 million of bond debt …
The corporation operates the Donald W. Wyatt Detention Facility. The facility was created in 1993 as the first
Central Falls, facing a fiscal crisis in the early 1990s, created the CFDFC in hopes that the prison would generate revenue. Rhode Island had passed a law allowing municipalities to create or acquire correctional facilities as an
The CFDFC's board is appointed by the city's mayor. The facility paid local impact fees to the city, totaling $5.4 million from 1994 to 2009.
The CFDFC issued bonds in 2005 to fund an expansion from 300 beds to 782 beds. It began a contract with ICE in 2005.
Operational and
In 2008, ICE detainee Hiu Lui "Jason" Ng died of terminal cancer. His family and the ACLU
Wyatt went into receivership and stopped paying local impact fees in 2009.
The city of Central Falls itself went through a
Without ICE's detainees, the facility struggled to fill its beds, and held just 437 people in 2018, according to local news reports.
In 2019, the facility renewed its contract with ICE and resumed housing ICE's detainees. The move spurred passionate local protests and condemnation from city officials in Central Falls, where the population is more than two-thirds Hispanic or Latino, according
Bondholders also sought control over the facility in the 2019 lawsuit. The city
Wyatt couldn't operate at full capacity during COVID-19 pandemic and incurred new costs after a ransomware attack in 2023. A former
Under the
Wyatt paid Central Falls a $250,000 local impact fee in April, and would resume the payments annually under the bankruptcy restructuring agreement. The restructuring would also include a one-time payment of $400,000 to the city and an annual charitable donation of $25,000.
Although many Central Falls politicians had pushed Wyatt to end its ICE contract or close altogether, the Chapter 11 plan drew support from city and state officials. That included Mayor Maria Rivera, who was one of the officials who filed the 2019 counter-lawsuit.
"For the first time in many years, Central Falls is finally receiving impact fees from the Wyatt, something Central Falls taxpayers have deserved all along,"
