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Alabama bond sale for mega prisons falls $200M short

The bond issue is a key funding piece for the $1.2 billion construction price tag

Holman Correctional Facility in Atmore, Ala

A sign reads, “HELP,” in the window of an inmate cell seen during a tour by state officials at Holman Correctional Facility in Atmore, Ala.

AP Photo/Kim Chandler

By Kim Chandler
Associated Press

MONTGOMERY, Ala. — Alabama officials said Thursday that they will move forward with plans to build two supersize prisons despite a bond sale falling more than $200 million short amid a volatile market and pressure from activists.

The Alabama Corrections Institution Finance Authority hoped to sell $725 million in bonds for the construction project, but was only able to sell $509 million. The bond issue is a key funding piece for the $1.2 billion construction price tag.

State Finance Director Bill Poole told reporters that the state had hoped to “sell a little bit more” but officials were pleased with the result. He said the outcome would not impact the construction and the state still anticipated opening the prisons in 2026. He said the state will look at options for the remainder of the money, including seeking additional funding from the Alabama Legislature or conducting another bond issue when conditions are more favorable.

Alabama Gov. Kay Ivey called the bond sale a “significant and positive step forward in our prison construction process.”

“Our job certainly is not done, however, and we will continue to take steps in the coming months and years to ultimately improve Alabama’s criminal justice system,” she said.

While state officials blamed the result on a volatile market, a group of activists and impact investors had urged buyers to stay away from the the bond offering.

“They didn’t just fall short. They fell well, well, well short,” said Eric Glass, an adviser to Justice Capital, an investment fund that joined the call for a boycott. He said the state did face a volatile market but there is also a recognition among investors that prison construction “is not a good thing to be investing in.”

[RELATED: Alabama OKs $725M bond sale to build 2 supersize prisons]

“I think it fell short because this has been a year-plus campaign around, uplifting and centering the idea that building prisons, whether private or public, shows a lack of creativity,” he added. “It shows inhumanity and cruelty, and we need to start thinking broadly and holistically around the things that that lead to incarceration and improve those.”

Alabama officials are pursuing construction of new prisons to replace aging facilities, calling that a partial solution to the state’s longstanding troubles in corrections. The U.S. Department of Justice has an ongoing lawsuit against the state over prison conditions and has cautioned that new buildings will not solve the problems. Critics of the construction plan argue that the state is ignoring the bigger issues — prison staffing levels and leadership — to focus on buildings.

[RELATED: Advocates denounce Ala.'s plan to fund new supersize prisons]

The two prisons would be located in Elmore and Escambia counties and would house up to 4,000 inmates each. The facilities would replace older prisons that would close.

Dana Sweeney, a statewide organizer for Alabama Appleseed, said he was surprised to hear the state isn’t changing plans despite being $200 million short of the amount needed. “There are a lot of things that $200 million can be spent on, and I would be very, very interested to hear how lawmakers would react to being asked for hundreds of millions of dollars more,” he said.

The Alabama Corrections Institution Finance Authority intends to finalize the bond sale on July 12.

The U.S. Department of Justice has sued Alabama over a prison system it says is riddled with prisoner-on-prisoner and guard-on-prisoner violence. The Justice Department noted in an earlier report that dilapidated facilities were a contributing factor to the unconstitutional conditions but wrote “new facilities alone will not resolve” the matter because of problems in culture, management deficiencies, corruption, violence and other problems.

State officials maintain modern facilities will be safer for staff and inmates and help the prison system provide better health and vocational education services. Poole said those services are “very difficult to deliver in dangerous old facilities.”

“We need to have safer facilities for the benefit of both the incarcerated population and for staff. It is very difficult to recruit staff to work in dangerous conditions,” Poole said.

[RELATED: Judge: DOJ suit against Ala. prisons can include staffing levels]