Can a new prison save a town?

Many California towns welcome new correctional facilities — and the jobs that come with them — hoping they'll revive the local economy. But the results can be disappointing.

By Alana Semuels

Los Angeles Times

May 3, 2010

http://www.latimes.com/business/la-fi-0503-prisons-20100503,0,7858370.story

Reporting from Mendota, Calif.

Wanda Leung sits at her restaurant's cash register, flipping through a newspaper. It's lunchtime, but the turquoise stools at the counter are empty.

Drought has stripped the area of farm jobs. Men in cowboy hats wander the dusty streets looking for work. Every month, Leung takes $1,000 out of her bank account to pay the bills and keep her Lucky Restaurant open.

"This town is dead already," said the Chinese immigrant, who once earned enough from her business to put her two children through college.

Like other merchants in this town 35 miles west of Fresno, Leung is hoping her fortunes will change when the federal government opens a 1,100-inmate prison just down the road, bringing jobs and paying customers to the area.

"That's what we're waiting for," Leung said. "People aren't going to last much longer."

Never mind the prospect of guard towers, razor wire and even the occasional jailbreak — small towns in many parts of California are welcoming prisons, and the jobs that come with them, with open arms.

At least six counties and two cities have approved measures to allow new prisons in their jurisdictions, according to the state Department of Corrections, which is overseeing a $6-billion prison expansion program that includes construction of at least 35 new facilities.

But while prisons often do bring more customers to local restaurants, gas stations and other businesses, the overall economic benefits are mixed, some experts say.

Well-paid prison employees usually live some distance from the low-income areas that tend to attract prisons, and usually don't spend their salaries in town, said Ruth Wilson Gilmore, a USC professor who has studied how prisons affect California towns. Employers also avoid setting up shop anywhere near prison walls.

"Prisons do not provide the kind of economic stimulus that so many towns thought they were going to get when they agreed to have one," she said. "I'm not going to pretend a job isn't a job, but another development path would have produced a more robust set of jobs."

What's more, real estate values typically decline near prisons because people don't want to live near them, said Terry Besser, a professor at Iowa State. Her research found that unemployment rose 16% between 1990 and 2000 in towns with new state prisons but fell 5% in towns without. Retail sales grew 84% in the same time period in towns with the new prisons, she found, but they grew 128% in those without.

Small towns want prisons because "they're struggling and they think this is a home run," Besser said. "But when prisons locate there, the unemployment rate goes up, the percentage of people in poverty goes up, and the average wages go down across the board."

In Mendota, however, city leaders are confident they made the right call in pushing federal officials to build the massive gray-block structure along State Route 33, on land where farmers once grew crops. The agricultural slowdown has made the town seek a new economic driver.

"We kept going to D.C. with all these different people pleading our case, saying this area needs something, and they finally got tired of us," said Mayor Robert Silva, standing in a field outside the prison. "Although it's a sad thing to say we have to rely on a prison for economic development."

Construction was completed in April, and although the opening date has not yet been set, hiring is well underway.

Fliers around town advertise career opportunities for secretaries, sheet metal mechanics and dental officers. The prison will eventually employ 359 workers, many of whom will make more than $80,000 a year. That's nearly double Fresno County's median household income of $43,534, according to the U.S. Census Bureau.

Merchants in this sleepy town of 10,000 think the prison will spark an economic turnaround.

"We need some sort of presence that's positive," said Joseph Riofrio, a onetime Mendota mayor who owns a local grocery store. The town has problems with public drunkenness and fights that Riofrio says will disappear once the town is crawling with correctional officers.

More people coming through Mendota has to be good for business, even if they're coming to the prison, said Gil Ramirez, a floral designer at Los Amadores, which sells flowers and trinkets for special occasions.

"There are going to be a lot of people coming to town now, and they'll buy more flowers," he said.

Mendota also tried to get a state prison, without success. But other towns will get a chance as the state implements AB 900, the law signed by Gov. Arnold Schwarzenegger in 2007. It allocates $2.6 billion to build secure re-entry facilities for people serving the last year of their terms and $1.2 billion for jail construction, said Deborah Hysen, chief deputy secretary of facility planning and construction for the state Department of Corrections and Rehabilitation.

Hysen said Folsom, which already has two prisons, has agreed to host another facility, as have cities such as Fairfield and Apple Valley. The counties of Kern, Madera, San Bernardino and San Diego are in final negotiations to sell land to the state for the construction of prison facilities.

That local governments are eager to get prisons is not surprising to the Corrections Corp. of America, which runs 65 prison facilities around the country. It has found that for every 450 people employed by a prison, about 180 spinoff jobs are created for local businesses.

"Communities that have a focus on economic development are increasingly realizing that a prison brings a number of benefits," said company spokeswoman Louise Grant.

There are few signs of that in Delano, Calif., home to 10,160 inmates in two state prisons, North Kern and Kern Valley. The latter, completed in 2005, is the latest addition to the California prison system.

Bill Hylton, a retired city employee who owns a coffee shop in Delano, said the prison hasn't brought many jobs or economic benefits to the town of 50,000. Farmworkers who make up a large portion of the local workforce lack the education and proof of legal residency needed to get hired at the facilities. The city's unemployment rate is still high, at 41.9%.

Most of the guards live outside Delano, Hylton said, so they don't spend much money at his place or with other merchants in town.

"The Department of Corrections tells you all these good things that will come to town when it's all completed, but the things they tell you aren't there," he said, sitting at a table with a red-and-white checkered cloth in his coffee shop, where he says business is "lousy."

Delano City Manager Abdel Salem said that the economic impact of the prison has been a hot topic in town, but no one has been able to quantify whether it's been a positive presence.

"Overall, I'm leaning towards the prison having a benefit to the community, but no one ever really proved it," he said.

New prisons also bring a rise in nearby crime, or at least the expectation of it.

Blandina Nuno, who owns a flower shop on Delano's Main Street, says she moved her family to nearby Allensworth because she didn't like the looks of some of the relatives and friends of inmates who were hanging around town once the prison opened.

"It's brought more crime to town, and it hasn't helped the economy," said Laura Hernandez, a Delano resident and worker at Delano Sporting Goods, which has looms that embroider sportswear in the middle of the shop.

In Mendota, some are also skeptical about the new prison's benefits — including migrant workers who can't imagine getting hired for a government job.

"There isn't work there — they want people who have papers," said Herman Alfaro, a 37-year-old father of three hanging out in one of the town's pool halls, where dozens of men chatted in Spanish.

Older workers are largely excluded too: Applicants for most of the jobs must be 37 or younger, under federal rules designed to prevent people from qualifying for lucrative government pensions after a relatively short career.

Juan Luis Trejo, 28, who lost his job at a peach cannery a few weeks ago, said he wouldn't bother applying for a prison job because he lacks the education required. He was sitting in the small Employment Development Department office in Mendota on a slow afternoon, looking for a job to help support his wife and 6-month-old son, who live in Mexico. Though fliers advertising prison jobs are stacked on a counter nearby, he isn't optimistic.

"This town has lots of unemployment," he said. "It's very difficult to find anything."