State sells Lake Erie Prison for $72.7 million

The Ohio Department of Rehabilitation and Correction (DRC) Thursday announced changes in ownership and operation of five Ohio prisons designed to help improve staff and inmate safety, reduce daily operating expenses and reduce the state's long-term budget costs. Altogether, the changes are expected to provide an estimated $13 million in annual savings and 702 additional beds throughout Ohio's prison system to help ease overcrowding.

Details of the Announcement:

  • The Lake Erie Correctional Institution in Ashtabula County will be sold to the Corrections Corporation of America for $72.7 million, which will also operate the prison. The company's operating costs will be 8 percent less than estimated state operational costs, generating a projected $3 million in annual savings for Ohio taxpayers compared to similar state facilities. In addition, the facility will add 304 prison beds;
  • Marion County's North Central Correctional Institution (NCCI) and the vacant Marion Juvenile Correctional Facility will be operated by Management and Training Corporation for 6 percent less than estimated state operational costs, generating a $3 million projected annual savings. Reopening the vacant Marion juvenile facility, converting it to an adult prison and combining it with NCCI will provide 398 new beds.
  • The North Coast Correctional Treatment Facility in Lorain County, currently operated by Management Training Corporation, will become a state operation and be merged with the state-operated Grafton Correctional Institution. The merger will provide an estimated savings of more than $7 million.

"The safety of prison staff and effective rehabilitative programs are the top priority," said DRC Director Gary Mohr. "Reducing our costs and bringing in new innovative management allows us to better achieve those priorities. Ohio taxpayers were well served by the input of the more than 30 officials who participated in writing the request for proposals, and the seven-member team, from three state agencies, who managed this evaluation and selection process. Our prisons will now provide the taxpayers a greater value, while remaining safe for the communities in which they are located."

The recently-passed state budget authorized the administration to sell six prisons to private operators for a projected $75 million in revenue: $50 million for five DRC facilities and $25 million for a Department of Youth Services facility. Based on the proposals DRC received, officials decided it was not in Ohio taxpayers' best interest to sell additional prisons at this time. Officials determined DRC's budget needs could be effectively met by selling the Lake Erie Correctional Institution, privatizing the Marion Correctional Complex, and reorganizing the Grafton facilities under public management.

Ohio law requires privately run prisons to yield at least a five percent annual savings over the cost of similar publicly run facilities. The announced agreements of 8 percent annual savings at Lake Erie and 6 percent annual savings in Marion exceed this legal requirement.

Privately operated facilities are subject to the same high level of training and standards as state-operated prisons. Private operators are required to staff the same security posts as comparable state facilities, and they must train their staff alongside state correctional employees at the operators' expense.

Bids were received from CCA, MTC and GEO Group. The state's bid evaluation and award team consisted of officials from DRC, the Department of Administrative Services and Office of Budget and Management. The team operated under state laws and guidelines mandated under the "competitive sealed proposal" process. Under the law, vendor proposals, scoring evaluations and other documentation cannot be released until a contract is awarded. All records are now available for release upon request with the Department of Administrative Services.  Mohr previously worked for CCA and was excluded from the process entirely.