The federal government’s decision to purchase two of California’s largest immigration detention facilities marks a significant shift in strategy for U.S. Immigration and Customs Enforcement — one that appears designed to sidestep the state’s persistent legal and political resistance to private detention operations.
The Department of Homeland Security has agreed to buy the Otay Mesa Detention Center in San Diego County and the California City Detention Center in Kern County from CoreCivic, the private prison company that has operated both sites, in a deal valued at $1.5 billion. According to federal officials, the purchase is a direct response to years of pushback from Sacramento aimed at curbing the expansion — and even the existence — of ICE detention facilities within state lines.
ICE spokesperson Jason Sweeney said the two facilities are essential to maintaining the agency’s detention network along the West Coast. Unlike states such as Florida and Oklahoma, he said, California offers ICE little cooperation from state and local governments in securing detention space.
“Politicians who champion the state’s sanctuary stance keep pushing laws to ban or financially cripple private prisons,” Sweeney said.
The standoff dates back to Trump’s first term, when Democratic lawmakers in Sacramento moved quickly to blunt the administration’s immigration enforcement push. In 2019, Gov. Gavin Newsom signed legislation intended to phase out private, for-profit prisons and immigration detention centers in California by 2028. CoreCivic rival GEO Group, along with the federal government, sued, arguing the law violated the Constitution’s Supremacy Clause by improperly interfering with federal authority. They won, and in 2022 the 9th U.S. Circuit Court of Appeals struck down the state’s ban on privately run immigration detention centers.
Since then, state lawmakers have tried other approaches, including proposals to impose steep taxes on private detention operators to make them financially unsustainable.
The property sale comes as California Attorney General Rob Bonta continues to battle the Trump administration over a separate, contested ICE facility being built near Gilroy, a onetime farming community south of San Jose that has grown into a city of about 60,000 surrounded by garlic fields and vineyards. The state contends the land has been zoned exclusively for agricultural use since 1967.
“ICE’s plans to build a facility near Gilroy violate multiple federal laws,” Bonta said, arguing the agency failed to conduct required environmental reviews before construction began.
Federal contracting records show the U.S. General Services Administration signed a 20-year lease in 2025 with Beverly Hills-based ECG 6 LLC for the Gilroy property, valued at $26.5 million. In July, federal officials agreed to pause construction on the 26-acre site while litigation proceeds.
California officials, meanwhile, have leaned on another law from Trump’s first term to demand access to inspect detention facilities. In December, Bonta sent a letter to the Department of Homeland Security citing “dangerous and inadequate living conditions” at the California City facility. In San Diego County, local health inspectors remain locked in a legal dispute with CoreCivic over access to inspect the Otay Mesa center.
Claire Trickler-McNulty, a former senior ICE official during the Biden administration, said selling the properties outright to the federal government will likely shield them from California’s health and safety inspection authority.
“It gives them protection from state and local laws, especially when it comes to zoning rules and environmental requirements,” Trickler-McNulty said.
A shift in strategy
A year ago, President Trump signed a sweeping spending package that dramatically boosted funding for immigration enforcement, allocating $45 billion to ICE for detention capacity. The agency initially planned to build new detention centers across the country.
According to Aaron Reichlin-Melnick, a senior researcher with the American Immigration Council, the purchase of Otay Mesa and California City signals a notable departure from that earlier plan, known as the ICE Detention Facility Reengineering Initiative. Unveiled in early 2026, that blueprint called for converting warehouses into massive detention complexes capable of holding between 7,500 and 10,000 people each — facilities larger than any built in the United States since the internment of Japanese Americans during World War II.
Reichlin-Melnick described the overall detention system as one that was never carefully designed. Todd Lyons, ICE’s then-acting director, told attendees at the 2025 Border Security Expo in Phoenix that he wanted deportations to run “like Amazon Prime, but with human beings.”
“At no point did anyone sit down and thoughtfully design the ‘Amazon Prime for human beings,’” Reichlin-Melnick said.
That warehouse-conversion initiative has largely stalled, undone by lawsuits, an unrealistic timeline, and a nationwide shortage of correctional staff and medical workers, he said. But the billions in earmarked funding still need to be spent before it expires.
“We expect them to buy other facilities,” Reichlin-Melnick said.
A former senior Homeland Security official suggested conditions for detainees could actually improve under direct federal ownership.
“It might be better for ICE to take over a proper facility than to use warehouses, house people in makeshift facilities, or rely on centers run by private companies,” the former official said.
Purchase prices far exceed assessed value
County assessor records show the federal government paid well above market value for both properties. In San Diego County, the Otay Mesa facility carries an assessed value of $164.9 million for the current fiscal year — yet DHS paid $739.2 million, roughly 4.5 times that figure. In Kern County, the California City facility was assessed at $171.5 million, while DHS paid $732.6 million, about 4.3 times its assessed worth.
A former senior ICE official, speaking on condition of anonymity because they were not authorized to discuss the matter publicly, questioned whether the price tag matches actual security needs. “$1.5 billion just for the facilities? How many migrants who pose a real threat to national and public safety are going to move through there? And what about the people we actually need to keep off the streets?” the former official asked.
Anthony Martinez, a spokesperson for Gov. Newsom, called the administration’s deportation agenda “a reckless and cruel use of taxpayer money,” accusing federal officials of funneling billions to private contractors while avoiding transparency about conditions inside the facilities.
San Diego County Supervisor Paloma Aguirre drew a direct line between the sale and CoreCivic’s political spending, pointing to the company’s $500,000 donation to Trump’s inaugural committee. That contribution, she said, preceded what she called a “multibillion-dollar taxpayer-funded windfall” that will help the company pay down debt while allowing it to continue operating the facilities. She argued the arrangement treats detained immigrants as a revenue stream rather than as people.
CoreCivic said the facilities’ valuations were determined through the federally mandated appraisal process, which is designed to establish fair market value.
“CoreCivic has contributed to presidential inaugural events across multiple administrations, including Democratic ones. The federal appraisal process is conducted independently of any political contributions,” said Steven Owen, the company’s vice president of communications.
Owen added that California’s property tax system, shaped by Proposition 13, often causes assessed values to diverge significantly from market value over time, since the law limits annual increases in assessed value outside of a sale. He said the two figures “are not directly comparable.”
Securities filings show CoreCivic expects to generate roughly $130 million annually from managing the California City detention center going forward.
Will more federal purchases follow?
Trickler-McNulty said an earlier, since-abandoned plan to purchase two dozen warehouse facilities under former Homeland Security Secretary Kristi Noem may offer clues about what current Secretary Markwayne Mullin’s agency has in mind next. An internal roadmap obtained last year by the Washington Post identified at least 10 “turnkey” facilities originally targeted for purchase under Noem, including the California City site — though not Otay Mesa. The rest of those properties are located in Texas and Oklahoma.
Buying up detention facilities outright removes financial risk for both private prison operators and the administration’s deportation program, said R. Andrew Free, an immigration attorney and writer. He pointed to the 2019 divestment from CoreCivic and GEO Group by California’s two largest public pension funds, which contributed to a liquidity crunch and a steep drop in both companies’ stock prices five years ago.
If private prison investment becomes politically untenable on a national scale, Free said, federal ownership shields the companies — and the detention system itself — from further divestment pressure and from the kind of environmental reviews that have derailed similar projects in other states.
“This is a significant amount of money the federal government is handing over up front,” Free said.
He added that local and state governments will largely be locked out of oversight at these facilities, though they will still have some contact with people held there. Detention centers “will still need police and fire services, they’ll still need coroners,” Free said, but he noted that most traditional state inspection authority has likely already ended.
Free said there are two ways to interpret the expansion of ICE’s detention footprint. One is relatively benign — simply favors from a friendly administration to valued contractors. The other is more troubling.
“The cynical view is that this will definitely be used to hold people who aren’t migrants,” Free said. “That it will be used to detain American citizens.”
Original source: CalMatters
