Benzinga | Jan 10, 2022 08:41AM EST

CoreCivic Awarded New Contract With State Of Arizona At La Palma Correctional Center; Contract Has Value Of ~$75M-$85M

CoreCivic, Inc. (NYSE:CXW) (the Company) announced today that it has been awarded a new contract with the State of Arizona for up to 2,706 adult male inmates on behalf of the Arizona Department of Corrections, Rehabilitation & Reentry (ADCRR) at the Company's 3,060-bed La Palma Correctional Center in Eloy, Arizona.

The new management contract has an initial term of five years, with one extension option for up to five years thereafter upon mutual agreement. The Company and ADCRR are currently working on a ramp plan that is expected to begin late in the first or early in the second quarter of 2022. Upon full utilization of the new contract the Company expects to generate approximately $75 million to $85 million in annualized revenue.

"We are delighted to have again been selected by the Arizona Department of Corrections, Rehabilitation & Reentry to provide them modern correctional facility capacity and services as they transition away from and close the outdated Arizona State Prison Complex - Florence," said Damon Hininger, CoreCivic's President and Chief Executive Officer. "The new contract is the largest prison contract awarded to the private sector by any state in over a decade. However, it is only a small representation of the serious correctional infrastructure challenges facing state and local government around the country and the flexible solutions we can provide."

The La Palma Correctional Center currently supports the mission of Immigration and Customs Enforcement (ICE) by caring for approximately 1,900 detainees. As the new contract with Arizona commences and state inmates are accepted at the facility, the Company expects to work closely with ICE to transfer their detainee populations to other facilities within the region.