U.S. Immigration and Customs Enforcement is on a nationwide buying spree of warehouses to use as detention centers, now picking up one in Northern New Jersey in a deal that's drawn criticism from local and federal officials.
ICE confirmed it purchased a 470,000-square-foot vacant industrial property, the Roxbury Logistics Center, at 1879 Route 46 in Roxbury. The building was sold by DG Roxbury Property Owner, an entity that includes a Goldman Sachs asset management fund and Dallas-based Dalfen Industrial, which said it is a minority owner.
The purchase price wasn't disclosed, and the broker, JLL, didn't respond to an email from CoStar News on Monday seeking comment.
ICE's plans to buy the warehouse had drawn objections for weeks at meetings of the Township Council. The concern crosses political lines: the municipal governing body is made up of Republicans, the same party as the president whose election platform included getting stricter on immigration. ICE tactics have drawn criticism from Democrats in Congress, who have held up some agency funding after its role in the shooting deaths of two U.S. citizens in Minneapolis last month.
The Township Council passed a resolution opposing the sale. There have also been protests by local groups, including the Sussex Visibility Brigade and the No Ice North Jersey Alliance, known as Project NINJA. Over the weekend, there was a demonstration outside Dalfen's headquarters in Texas protesting its sale of the Roxbury property, and a demonstration is slated this weekend in New Jersey.
ICE, part of the Department of Homeland Security, has been acquiring warehouses to convert to sites to house detainees as the federal government steps up its enforcement of immigration laws. ICE has already purchased industrial facilities in states including Texas, Georgia, Maryland and Pennsylvania. In some places, such deals have sparked local opposition as they have in Roxbury.
Pushback has led to some sales and conversions being derailed or the owner taking the property off the market. In other instances, ICE has prevailed. Maryland Attorney General Anthony Brown on Monday filed suit against DHS to stop a Williamsport warehouse from being converted into an ICE detention center, citing environmental and public health concerns.
Expanding its detention footprint
The agency is still widening its brick-and-mortar network.
"Every day, DHS is conducting law enforcement activities across the country to keep Americans safe," ICE said in its statement on Roxbury. "It should not come as news that ICE will be making arrests in states across the U.S. and is actively working to expand detention space."
The once white-hot U.S. industrial market has seen a rise in vacancies, with the rate increasing for nearly three years, reaching 7.5% as of the first quarter, according to CoStar data. In Northern New Jersey, the vacancy rate is 6.7%, a bit below the national figure.
The drop-off in demand for industrial buildings of the size of the one in Roxbury, and its location, reportedly made it difficult to find a tenant or buyer for it.
"This property, which sat vacant for two years, was held in a real estate investment fund that we manage," a Goldman Sachs spokesperson said in an email to CoStar News. "We had a fiduciary obligation to investors in the fund to sell it."
On Monday, Dalfen told CoStar News that it and its majority partner sold the Roxbury warehouse "to the federal government in lieu of the potential of imminent domain." Dalfen added it "has no involvement in the future use of the facility."
New Jersey senators weigh in
In Roxbury, local officials repeated their concerns about the warehouse not being a proper site for a detention center when they announced on Friday that the sale to ICE had been confirmed. The township claimed it was blindsided by the news.
"We must reiterate in the strongest possible terms that this property is not an appropriate location for a facility of this nature in a suburban community and is an unapproved use," Mayor Shawn Potillo and the council said in a joint statement.
"Its placement within a residential area, combined with significant limitations in water and sewer infrastructure, should have been immediate and disqualifying considerations," the township said. "Furthermore, our volunteer fire department and EMS personnel, as well as our 42-member police department, are dedicated to serving the needs of Roxbury residents and are not structured to absorb the demands such a facility would impose."
The township also said it was "also inconceivable and frankly stunning that all of our communications to DHS on issues related to this selection as a detention center were never answered."
News of the sale also drew the ire of several state lawmakers and New Jersey's two Democratic U.S. senators, Cory Booker and Andy Kim. On social media, Booker said ICE's plans "to warehouse human beings ... betrays everything this community stands for and then hands them the bill."
Booker said he had toured the site and met with local leaders and residents.
"And the opposition is unanimous — this is wrong morally, fiscally and for the sake of this community," Booker said. "ICE has ignored every concern."
ICE promises due diligence on site
By contrast, ICE said the detention center will be humane and contribute economically to the township.
"These will not be warehouses — they will be very well-structured detention facilities meeting our regular detention standards," ICE said in its statement. "Sites will undergo community impact studies and a rigorous due diligence process to make sure there is no hardship on local utilities or infrastructure prior to purchase."
The Roxbury facility and its repurposing are expected to bring 1,300 jobs to the area and contribute $161.2 million to the economy, according to ICE. The property is projected to bring in more than $39.2 million in tax revenue.
Local officials and activists said they plan to continue to fight against the warehouse sale and the proposed detention center.
"Let us be clear: Roxbury Township will not passively accept this outcome," the municipality said in its statement. "The Township Council and our legal team have been preparing to pursue all available legal remedies. We are ready to challenge this matter in court and will act swiftly and aggressively to stop the development of a detention center in Roxbury Township. Critical issues — including infrastructure capacity, easements, significant environmental constraints, and intermunicipal agreements — must be fully examined and weighed through the proper legal process."
There are already two ICE detention centers in New Jersey, one at Delaney Hall at 451-479 Doremus Ave. in Newark and another at 625 Evans St. in Elizabeth.
CoStar News reporter Candace Carlisle contributed.