Officials with Hall County and a private company charged with housing immigration detainees in Gainesville say the market conditions have changed.
Four years ago, the two made a 20-year deal: Corrections Corp. of America would rent the county's old jail, housing detainees for the federal Immigration and Customs Enforcement agency, and pay about $2 million a year for it.
Today, the Hall County Board of Commissioners is scheduled to decide whether to just sell the property, now called the North Georgia Detention Center, to CCA for $7.2 million.
County tax records show the property is worth about $8.76 million.
Commission Chairman Tom Oliver calls it a county "business decision." And while it seems the county might lose millions of dollars by changing the deal, Oliver said private jails housing immigration detainees were experiencing a "soft market."
And the county's 2008 agreement gave CCA an out if its financial conditions changed, Assistant County Administrator Marty Nix said.
Originally, CCA expected to be at full capacity most of the time, but Nix said the jail keeps about 350 inmates on average. A spokesman for the company confirmed that the population in the jail has declined in the last year, for reasons he left to ICE to explain.
ICE did not respond to requests for information on the detention center's population by press time Wednesday.
"For that reason ... they're able to come to us and say ‘we're going to close this place down unless we renegotiate a new lease,'" Nix said.
The county and CCA have been negotiating since fall on a new agreement. Until they reach one, CCA will not pay its rent for 2012.
County officials say they have until the end of the month to come to new terms.
County Administrator Randy Knighton said the proposal to sell the jail on Gainesville's Main Street is one that promises to get rid of the "high degree of uncertainty" of the current agreement with CCA.
"There is a guarantee with the new arrangement," Knighton said. "We are trying to move toward a degree of certainty."
North Georgia Detention Center is one of 66 facilities CCA operates.
Though the private company has "ramped down" some of its facilities in other areas of the country, CCA's Senior Director of Public Affairs Steve Owen said the company wants to buy the Gainesville property because the company wants "to be long-term partners" with the Hall County community.
News of today's vote disappointed members of the Gainesville City Council, who have plans to redevelop the city's midtown area.
The city once announced plans to buy the jail for $4 million. Those plans called for the county to generate more than $4 million in revenue on the property, leasing the jail for seven years before the city gained control.
Those plans never materialized. And while city officials were upset by news of the 2008 lease, they still had hope they might get eventual control of the midtown property.
When news broke Tuesday of the commission vote to sell the jail, many council members seemed surprised.
"They made a decision without contacting any of us," said Mayor Danny Dunagan. "I'm disappointed. We don't want a prison downtown, period."
Oliver chalks up the disappointment to a need to make smart business decisions in a time of fiscal uncertainty.
"We're doing what we think, in the long run, is making the best decision ..." Oliver said. "The climate has changed. The economy has softened in that market and I think the commission is (being) proactive."
He will likely have the support of a majority of the remaining commissioners at today's commission meeting. Commissioner Scott Gibbs has said he supports the sale.
Commissioner Billy Powell told The Times he will agree to the sale unless he sees an offer today that might be better for Hall County.
There was some indication late Wednesday from Commissioner Ashley Bell that Gainesville may buy the building from the county, then lease it to CCA, but Dunagan said the deal fell through.
In the tentative deal Dunagan said he and Bell worked out over lunch Wednesday, the city would purchase the Main Street property, paying the county in installments.
But CCA wasn't interested in another lease, according to Dunagan.
"They want to buy it," said Dunagan. "It's not open for discussion, so I guess they're going to buy it."
The city cannot afford the county's $7.2 million asking price for the jail, Dunagan said. The mayor said he didn't think Gainesville residents wanted the council to pay that much for the property.
"As much as we'd like to,t's not in the cards right now," Dunagan said.
Commissioner Craig Lutz refused comment for this report.