Prison has risks

July 25, 2006

By DARRELL L. BREESE

Frontiersman

MAT-SU - Before allowing the Mat-Su Borough Assembly to authorize the next step toward building a new prison in the area, manager John Duffy explained the potential risks.

&#8220We could end up losing between $1 million and $3 million,” he said. &#8220Should there be a new governor elected who doesn't support the joint plan between the borough and state Department of Corrections, we risk not being reimbursed for any money spent before bonds are sold.”

The prison, which could house up to 2,251 inmates and would cost nearly $330 million to build, is a lease-purchase arrangement between the borough and state Department of Corrections.

Despite the risks, the assembly voted unanimously Tuesday to allow Duffy to enter into a memorandum of understanding with the state.

Borough Finance Director Tammy Clayton called the risk well-calculated.

&#8220We've got a letter of commitment from the current governor,” Clayton said. &#8220Plus, we plan to poll the candidates for the office to determine if they support the project as well.”

Neither Duffy nor Clayton expect the next governor, if it is not Murkowski, to turn away from the deal.

&#8220There is a slim chance that the worst could happen and the project be stopped, leaving the borough holding the bag,” Duffy said. &#8220But I've spoken with Sen. Lyda Green, and she indicated she would work in the Legislature to reimburse the borough for any expenses if we get to that point.”

The memorandum of understanding allows the borough to move forward in the site-selection process and to begin spending funds for the preliminary design and finance work required for the proposed medium-security prison.

The planned facility would take up about 100 acres, including patrol areas, roads and fencing.

Department of Corrections Director Mark Antrim likened the size of the prison to 10 Wal-Marts in one building.

Five borough-owned parcels have been identified for the possible location of the facility. One site plan calls for the expansion of the Palmer Correctional Center in Sutton. The other sites are two locations in Houston, one in the Meadow Lakes area and another in the Point MacKenzie region of the Valley.

&#8220The Houston City Council passed a resolution supporting the prison being located in their area,” Duffy said. &#8220I've also had a productive meeting with the Meadow Lakes Community Council.”

The prison would bring about 1,500 construction jobs to the Valley.

When completed, it would employ between 400 and 600 people.

&#8220That's a real shot in the arm for the Valley,” said Dave Hanson, borough director of economic development.

&#8220Anytime you can create that many new jobs, you can also expect a boom in the support services and local businesses.”

With the assembly's vote Tuesday, the borough administration can begin the work necessary to issue revenue bonds to fund the project.

While there is a risk for the borough before the bonds are sold, once the sale is complete, the bond repayment would be backed by the lease-purchase agreement with the state. The borough would own the facility until the state paid the full amount of the bond debt.

Contact Darrell L. Breese at 352-2267 or at darrell.breese@

frontiersman.com.