$950 Million: DHS Buys Two Immigrant Detention Centers in California
The Department of Homeland Security purchased two immigrant detention facilities in Adelanto for $950 million. The purchase by the federal government follows an initial $1.5-billion sale over the summer of two other California detention facilities by CoreCivic of Tennessee.
Federal Spending Reaches Billions in California
The latest transaction involves the GEO Group, a Florida-based government contractor that sold the properties to the federal government. Among the properties held by GEO Group are the 704-bed Desert View Annex and the two-building, 1,940-bed Adelanto ICE Processing Center.
With this $950 million acquisition, the federal government has now spent nearly $3.2 billion on detention facility purchases. The majority of these purchases are concentrated in California.
The sales were made possible by an infusion last year of $45 billion for immigration detention from the One Big Beautiful Bill Act signed by President Trump. In August, CoreCivic sold off two other facilities in Minnesota and Kansas.
Operations Under Long-Term ICE Contracts
GEO Group announced it will continue managing daily operations at the Adelanto and Desert View facilities under the company’s existing contract with U.S. Immigration and Customs Enforcement. That contract remains effective through Dec. 19, 2034.
Furthermore, the firm mentioned it is currently in discussions with Homeland Security regarding the possible divestment of several additional properties. Those sales hinge on GEO Group’s ability to continue managing those facilities under long-term contracts.
George C. Zoley, CEO of the GEO Group, addressed the strategy during a shareholder call in August. Zoley stated that ICE was contemplating buying more than 10 facilities, and that number could continue to grow.
We believe we have two types of assets: the buildings and the businesses of providing support services. We are pursuing a potential sale of the buildings, but we want to retain the business. We consider ourselves primarily a support services operator, and will place particular importance on our ability to continue our support services at any facility sold to ICE.
Zoley added that the company is pleased with the completion of these important asset sales to the U.S. federal government and looks forward to continuing to provide secure support services.
GEO Group Uses Sale Proceeds to Reduce Debt
GEO Group anticipates receiving $705 million in proceeds from the sales after taxes and transaction fees. The company reported that the net proceeds will reduce corporate debt and facilitate the repurchase of company shares.