|CCA Awarded New Management Contract With Arizona|
NASHVILLE, Tenn., Dec. 17, 2015 (GLOBE NEWSWIRE) — CCA (NYSE:CXW) (the “Company” or “Corrections Corporation of America”), America’s largest owner of partnership correctional, detention, and re-entry facilities, announced today that it received an award from the Arizona Department of Corrections to house up to an additional 1,000 medium-security inmates at CCA’s Red Rock Correctional Center in Arizona.
The new management contract contains an initial term of ten years, with two 5-year renewal options, and was awarded pursuant to a Request for Proposal issued by the Arizona Department of Corrections, which included an occupancy guarantee of 90 percent of the contracted beds once the 90 percent occupancy rate is achieved. ; The Red Rock Correctional Center currently has a design capacity of 1,596 beds and is housing up to 1,000 Arizona inmates under a pre-existing, multi-year contract with the Arizona Department of Corrections, in addition to a temporary agreement with the state of Arizona to house approximately 560 inmates which commenced in July 2015 that we expect to end December 30, 2015. ;
In connection with the new award, CCA will expand its Red Rock Correctional Center to a design capacity of 2,024 beds and add additional space for inmate re-entry programming at a total cost of approximately $40.0 million. ; CCA expects it will begin receiving inmates from Arizona under the new contract beginning late in the third quarter or early fourth quarter of 2016, at which time the new contract will commence. ; However, a definitive ramp schedule has yet to be determined. ; The new contract is expected to generate approximately $22.0 million to $25.0 million of annual revenue.
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