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Gainesville gets chance to bid on old jail
Development Authority delays sale to private corrections company
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The Gainesville-Hall Redevelopment Authority has postponed a decision on the sale of the midtown jail to CCA, giving Gainesville time to come up with a written offer. - photo by Scott Rogers | The Times

The old Hall County jail doesn't belong to a private corrections company just yet.

The Gainesville-Hall Development Authority put on hold Friday one of the final steps in the sale of the midtown jail to Corrections Corporation of America, giving Gainesville time to make an offer on the property.

Verbally, Gainesville has offered to pay $6.5 million for the property, currently the North Georgia Detention Center.

City officials have been given a flexible deadline to make a written offer. That deadline is noon Tuesday, but Hall Commission Chairman Tom Oliver said if the city asks for an extension, the county would grant it.

It isn't certain if the written offer would be accepted. Oliver has defended the county's plan to sell the Main Street property to CCA as a business decision.

Friday's move was the first public demonstration of cooperation between the city and county governments on the midtown jail since the county leased it to CCA in 2008.

CCA houses detainees for the Immigrations and Customs Enforcement in the old jail, a use the city sees as an impediment to the future of midtown's redevelopment.

The development authority originally met Friday morning to consider CCA's offer to acquire the jail in a $7.2 million lease-purchase agreement.

County officials have pitched the sale as a guarantee of five years of revenue from the jail. The county's current lease agreement allows the private detention company to pull out if its financial conditions change.

The number of detainees housed in the jail has declined in the last year. Due to the company's changing economic conditions, the county and CCA have been negotiating a new lease agreement since fall. Until they reach one, CCA will not pay its rent for 2012.

Before the sale with CCA is final, the county will have to transfer ownership of the jail to the authority, which will then sell the property.

As the authority considered the property transfer Friday morning, the small meeting room in the basement of the Greater Hall Chamber of Commerce was packed with city and county officials, CCA representatives and two local attorneys.

Gainesville Mayor Danny Dunagan asked the development authority to refuse to accept the property transfer.

Board members, too, questioned the county's decision to sell the jail to the private company.

Gainesville real estate executive Frank Norton Jr. questioned whether proceeds from the sale would be spent on county salaries, since the proceeds likely will be transferred to the general fund. Hall officials responded that they have not yet determined how the money would be spent, but Assistant County Administrator Marty Nix said it might supplement the cost of a new sheriff's office headquarters.

The new sheriff's administration building is supposed to be built with Special Purpose Local Option Sales Tax funds, but those revenues have come in below original expectations. Gainesville City Manager Kip Padgett, in his pitch to the authority, said the city is willing to pay $6.5 million in cash and offer the Sheriff's Office free rent at the jail facility.

City officials also asked that if the authority approved the sale, it mandate that the city gets first right of refusal if CCA decides to sell the property.

The current agreement gives the city second right of refusal if CCA decides to sell the property, but Padgett told authority members that privilege serves the city "no purpose."

The city also asked that the authority restrict the use of the detention center so that it could only house ICE detainees. The jail is seen as an impediment to Gainesville's plan to redevelop its midtown district.

Currently, the city is constructing a greenway through the area, and has a special tax district set up in the area to spur redevelopment projects.

Padgett said private investment has already started in the area, but those investments are occurring with the "faith" that the city is committed to getting rid of the Main Street jail.

"It is a big impediment to Midtown," he said.

Nix said if the county took the city up on its proposal, 160 people who work at the facility would be without a job. CCA officials say about 145 people work in the detention center. County Administrator Randy Knighton called the company an "excellent" community and corporate partner, pointing to some $281,000 the company spent locally in 2011 and its charitable works.

CCA attorney Dan Lee said the deal was a way to get the property on the tax digest, bringing in tax revenue to the budget-starved governments. County tax records show the property is worth about $8.76 million.

Under the current agreement with the county and the corporation, the property wouldn't become taxable until 2018.

"CCA prides itself on being a taxpayer," he said.

But two Gainesville attorneys at Friday's meeting expressed their displeasure with the deal. Wyc Orr said the sale could take the decision of how long a jail would be operated in the city's central district out of the public's hands. Julius Hulsey warned board members that the sale may not withstand legal challenges.

The development authority's attorney, Tread Syfan, disagreed.

Norton initially made a motion to accept the transfer, but he added stipulations to the agreement that city officials requested. And his motion to approve did not come without a rebuke of the Hall County Board of Commission's actions.

"I'm disappointed in my county for signing a month-to-month lease for 20 years," Norton said, noting the county's 2008 agreement that allowed CCA to cancel with 30 days notice. "I'm disappointed in the county for planning to spend my children's legacy on salaries."

Authority member Jimmy Adams, owner of Adams Transfer and Storage, called the jail an "open wound" in the middle of midtown.

He, too, criticized what he said were short-term plans from the county and an inability for the governments to agree for the good of their constituents.

"We don't elect y'all to make decisions for tomorrow," he said. "We elect y'all to set a course (for the future) ... I am extremely disappointed that we're here at a urinating contest."

"That's why we're here, because y'all can't get along."
The discussion then turned to how it might be possible for the city to purchase the jail in a way to meet both CCA's and the county's needs.

The discussion came to an abrupt halt after Commissioner Billy Powell said the onsite negotiation was putting everybody at an unfair advantage.

Powell offered to give the city until noon Tuesday to come up with a written proposal.

He said commissioners could then consider it at their 3 p.m. work session that day. One unresolved issue with the city's proposal to buy the property Friday was what consequence it would have for CCA.

The company operates under a contract the county has with ICE to house immigration detainees. If the county transfers the property to the city, it may also have to transfer the agreement with ICE to the city.

CCA senior director Tommy Alsup said it could mean that ICE suspends its operations at the detention center until the new agreement is reached, meaning the company could lose at least two months of revenue.

CCA, he said, would consider that revenue interruption as the county's decision to terminate its lease. Under the county and CCA's current agreement, the county has to pay some $2 million if it terminates the lease early.

Until the county, the city and CCA work out any details, the development authority has tabled its discussion of the issue.

Adams said he feels the governments have the potential to reach a workable solution.

 

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