Youth prison closing prompts suit from owners, village and township

The operators of the private youth prison near Baldwin sued the state Thursday, claiming wrongful termination of the company's lease.

The village of Baldwin and Webber Township joined The GEO Group, Inc. in filing the suit in Ingham County court against the Michigan Department of Corrections and Michigan Department of Management and Budget.

Inmates at the 480-bed facility have been transferred to other facilities and the facility's nearly 200 employees have been offered other state jobs.

Job loss is only one problem locals face as a result of the prison closing. A water system built in Webber Township for MYCF supplies only one other user, a small office building.

The system has become a costly white elephant.

“It's bad enough that we're losing revenues,” said Township Supervisor Tony Gagliardo. “But it's costing us to keep it open.”

A mechanical failure of a water pump on Nov. 1 is adding to township expenses, but officials aim to keep the system operational to support measures to reopen operations.

“Without it, we're taking a 30-year step backward,” Gagliardo said.

Gov. Jennifer Granholm vetoed money that would have kept the prison open in the budget year that started Oct. 1. The veto saved the state $18 million by ending the state's contract with GEO.

Known as the Michigan Youth Correctional Facility, GEO designed, constructed and operated the prison under two agreements entered into with the state of Michigan. Contracts included a 20-year lease and a four-year operating agreement renewed in 2003.

The company, based in Boca Raton, Fla., said the state can't end the lease because there was no specific prohibition against using appropriated funds to pay the lease in a Department of Corrections budget recently approved by state lawmakers.

The state sent economic development workers to Baldwin to help local officials look for other business opportunities for the city and county, one of the state's poorest. But it didn't appease those opposed to ending the contract.

Local government officials say state officials under former GOP Gov. John Engler made promises to persuade them to allow the prison in their community, including a long-term commitment by the state to use the prison after it opened in 1999.

Republican lawmakers who represent the area said Granholm's decision to end the lease agreement would cost jobs and hurt the economy in Lake County. The lease termination is effective Dec. 2, according to GEO.

GEO is examining alternative uses for the facility.

“We think it's best used in the state system,” said company spokesperson Bill Nowling. “We want to keep the facility active and open.”

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