Private Prison Expects to Lose U.S. Marshals Contract

YOUNGSTOWN, Ohio – The Northeast Ohio Correctional Center, the private prison that has operated here since the mid-1990s, does not expect to renew its contract with the United States Marshals Service, according to its parent company.

CoreCivic, a Tennessee-based real estate investment trust that owns and operates NEOCC, said Feb. 25 it had signed a 90-day extension with the U.S. Marshals effective today.

However, the Marshals Service has informed the company that it would not renew its agreement to house inmates at the private lockup once the extension expires, CoreCivic said. 

“While the company is not currently aware of alternative locations where the USMS can house the approximately 800 federal detainees currently located at the northeastern Ohio facility, President Biden recently issued an executive order directing the U.S. Department of Justice not to renew contracts with privately operated criminal detention facilities,” the company said in a statement. 

The Northeast Ohio Correctional Center is a 2,016-bed strong facility located on the city’s East Side.  It opened in May 1997.

CoreCivic’s share price has steadily declined over the last four years. In February of 2017, CoreCivic’s stock stood at more than $35 per share. On Friday, the stock closed at $7.18.

“We do not believe the USMS currently has sufficient capacity that satisfies their current needs without the private sector, and we are not currently aware of an alternative solution for the USMS,” CoreCivic said in a Securities and Exchange Commission document filed Feb. 22.  

“We currently have eight detention facilities that have separate contracts where the USMS is the primary customer that all expire at various times over the next several years, with the exception of two contracts that have indefinite terms. Non-renewal of these contracts would have a material adverse effect on our business, financial condition, and results of operations,” the SEC filing says. 

Copyright 2022 The Business Journal, Youngstown, Ohio.