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| Private prison operator ready to grow anew |
| By The Tennessean |
| Published: 10/13/2003 |
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Three years ago, Corrections Corporation of America stopped work on a new 1,524-bed Georgia prison, even though the complex was about 70% complete. It had started the building before it had a contract to house prisoners there - a sign of the optimism it felt about its growing business. The inmates never came, however. And the Nashville-based prison operator found itself facing a falloff in new state contracts. Last month, CCA announced it would finish the Lumpkin, Ga., prison plus expand a prison it bought in Colorado in January. The $41 million in new spending puts CCA back in the expansion mode. ''It was absolutely a signal from management that they're ready to resume opportunistic growth,'' said Andy May, associate research director at Jefferies & Co. in Nashville. So what's different between now and three years ago? For one, state governments - in budget crunches - have not built new prison space, which some say is prompting renewed reliance on the private prison sector. At the same time, the prison population has begun to grow slightly. In 2002, the number of state and federal prisoners expanded by 2.6%. The industry also points to underlying demographics: Many children of baby boomers are in the 18-24 age group, which is most likely to commit crimes. CCA has the supply: 6,800 empty beds in its 59 prisons around the country. And after a debt refinancing, it has more financial flexibility to expand and build as it sees fit. John Ferguson, CCA's chief executive, said he expects the 2,000-plus new beds that will go online in Georgia and Olney, Colo., will be filled by demand in those regions. |
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