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Valley boon: jobs galore may come to the Valley with a new prison approved by Gov. Murkowski. It may come with a construction boon second only to the oil pipeline.

When construction of a new prison in the Matanuska-Susitna Borough begins in 2007, it will be the start of the largest construction project in Alaska since the trans-Alaska oil pipeline. And when work is completed in 2010, the medium-security prison will be the largest building in the state--home for 2,250 offenders and place of work for nearly 600 Alaskans.

"Imagine a large Wal-Mart. Then place six of them side-by-side, and you'll have an idea of the size of the prison complex," said Alaska Department of Corrections Commissioner Marc Antrim. The new prison, he explained, will put up to 20 acres-as much as 800,000 square feet-under one roof.


"Not only will this prison generate 400 to 600 full-time, good-paying jobs for at least 40 years, but the support services and related business outside the prison will provide an additional economic boost," said Matanuska-Susitna Borough Manager John Duffy. "Families of prison employees will be moving here, buying homes and groceries, and generally adding to the economic prosperity of the area."

The new prison is a joint project of the Department of Corrections, the Mat-Su Borough and the Alaska Housing Finance Corp. Under a road map set out by Senate Bill 65, sponsored by Mat-Su Valley Sen. Lyda Green and passed in 2004, the Borough will provide land for the prison, and will finance the approximately $330 million project by issuing bonds that will be paid off through lease payments made by the Department of Corrections over 25 years, after which the state will take ownership. AHFC, with its expertise in a multitude of construction projects around the state, will serve as the project manager.


The project received its formal go-ahead in August when the three parties entered into an agreement with DLR Group and RISE Alaska for both engineering work for site selection and preparation of a technical document to define the department's requirements for the new prison.

This document will lead to a request for bids for design and construction of the prison under a design-build contract. It is expected that the contract will be finalized and approved early in 2007, with groundbreaking set for spring 2007. DLR Group and RISE Alaska will manage the project through completion.

DLR group is an engineering and architecture company based in Seattle; RISE Alaska is an Anchorage project management firm.


Presently, the Department of Corrections holds about 950 inmates in the Corrections' Corporation of America's Red Rock Correctional Center in Eloy, Ariz. It costs $66 a day to house each prisoner at the facility; transportation and medical costs are in addition to that daily rate.

"The department's daily cost per prisoner in-state varies at each facility, from a low of $55 to a high of $190, and overall averages about $105," commissioner Antrim said.

"AHFC analyzed the net-present value of housing 2,250 prisoners in Arizona versus building a facility in Alaska and determined the state would save a tremendous amount of money building a new facility in Alaska," the commissioner added. "We're at the point where the cost of housing inmates out of state begins to rise dramatically. The 950 prisoners we have in Arizona are prisoners with long-term sentences. As overcrowding in our in-state facilities has forced us to send out more prisoners, we are sending prisoners with shorter and shorter sentences. This has had the effect of dramatically increasing our transportation costs. If we put many more prisoners in Arizona, we'll have to have weekly or daily flights back and forth to accommodate prisoners getting released. We've reached the point at which shipping prisoners out of state just isn't practical anymore."


There are other factors that may also impact Alaska's ability to send prisoners to Arizona. "The Arizona Legislature has had a couple of bills introduced barring sex offenders and murderers. While those bills haven't passed yet, you can't count on that not happening. That's critical to us, because sex offenders and murderers make up a large group of inmates we presently house in Arizona," commissioner Antrim said.

Inmates are sent to Arizona because most Alaska correctional facilities are overcrowded-the result of general population increases, aggressive law enforcement efforts, tougher sentences for felony offenders, and diligent prosecution of sexual offenses. Because individuals awaiting trial, sentencing or resolution of an appeal must be housed close to the courthouse, there is often little room for longer-term sentenced offenders.

"Our in-state institutions are designed for a specific mission, so with overcrowding we lose the ability to focus on that mission," Antrim explained. For example, pretrial overflow from the Anchorage Complex often goes to Palmer Correctional Center, a facility designed originally to provide specific programs for sentenced inmates.


Because the new prison will be a medium-custody facility, housing for the most dangerous inmates can be exclusively at the state's Spring Creek Correctional Center in Seward, a facility designed for long-term maximum-custody inmates. Just as important, Alaska inmates in Arizona will be returned to Alaska once the new prison opens.


The economic impact to the Mat-Su Borough will be dramatic-both in the construction phase and in the actual operation of the facility once it opens in 2010.

According to an economic impact assessment prepared for the borough in June 2005, construction of the prison is expected to create 1,570 direct construction jobs and an additional 640 indirect jobs. Output, defined as total sales of goods and services in the region generated by the project, was set at just under $200 million total, with an additional $100 million from labor income, and local and state revenue.

But the long-term economic benefits to the borough will come when the prison opens in 2010.

The demographics for the employees of a prison are very advantageous for the local community, Antrim explained. "A typical correctional officer, for example, has a two-income family with children, good health benefits and time off for recreation. These folks are your volunteer coaches, volunteer firefighters, and they're involved in the schools and community organizations.

"The prison will bring a solid, stable work force into the community, and they are going to be around for a long time. These are people who will have a stake in the community," Antrim said. "In fact our design team is all Valley residents."

Besides providing stable, long-term professional jobs, the new prison will be a major consumer of energy. "This will be a big benefit for the energy sector in the valley," Antrim said. "There is an economy of scale, so with a surplus of electric power, a major user could potentially keep rates lower for homeowners."


The prison will be a major buyer of commodities, Antrim said. "With 2,250 inmates, we'll be serving almost 7,000 meals a day. A lot of the food will be purchased through large contracts with institutional suppliers, but I still anticipate strong demand for produce from the Mat-Su Valley. The prison will be a major, new market for local--and perhaps Interior--growers."

Besides direct employment, the prison will provide long-term steady employment in the service sector. For example, while the prison will employ its own maintenance staff, local businesses will be used to supply cleaning supplies, tools, hardware and other items. The prison will also contract with some medical providers.

A study of the prison's long-term economic impact on the Mat-Su Borough anticipates the creation of close to 1,500 direct and indirect, full- and part-time jobs. This translates to a labor income of just under $50 million annually. Economic output is estimated at just more than $50 million.

Prisons are attractive additions to communities, Antrim explained, because of the nature of their population. "Because the major users of the facility are incarcerated, they have relatively little impact on the community. An inmate population doesn't put a strain on roads, schools or other borough services."

Commissioner Antrim said the new prison would be a responsible neighbor. "If you drove by it, you probably wouldn't even know it was there. Today prisons are designed with grassy berms and wooded perimeters, and low-impact lighting," he explained.

Because the facility is for sentenced inmates, there is little reason to transport prisoners, which means escape risk is extremely low. And state statute requires the department to transport inmates back to the place where they were arrested.

"Gov. Murkowski has worked hard to see this project through its final go-ahead," Antrim said. "The new Valley prison will allow the department to continue its mission of protecting the public from dangerous offenders while providing evidenced-based programs for offenders willing to return to the community as productive members."

Editor's note:

While Gov. Frank Murkowski sponsored the Valley prison project, it could be reviewed by a new governor. The assembly has approved a tripart agreement that contains a provision for bond financing. These are revenue bonds and will not go before the voters.
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Author:Schmitz, Richard F.
Publication:Alaska Business Monthly
Date:Oct 1, 2006
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