The U.S. Department of Homeland Security paid about $68.2 million for two industrial facilities under construction in Flowery Branch, Georgia, as part of its national push to acquire warehouses to use as detention centers.
The DHS, the parent agency of U.S. Immigration and Customs Enforcement, acquired the adjacent properties from CRP/AI Oakwood Owner on Feb. 18, according to public records. The seller is a venture between Houston-based Alliance Industrial and funds from Carlyle Group, a Washington, D.C.-based private equity firm that is one of the largest investment firms in the world, records show. Alliance Industrial and Carlyle Group did not immediately respond to email requests to comment from CoStar News.
The two facilities total about 540,400 square feet on Atlanta Highway, near the city of Oakwood and about 50 miles northeast of Atlanta.
The going rate for industrial properties in the Gainesville, Georgia, market, which includes Flowery Branch, is about $111 per square foot, according to CoStar data. ICE paid about $126 per square foot for the properties, a 13.6% premium over the average, according to CoStar.
An ICE spokesperson confirmed the agency acquired the properties and plans to convert them into detention facilities. The larger of the two properties is about 426,870 square feet, and the other is roughly 113,530 square feet, according to CoStar.
"These will be very well-structured detention facilities meeting our regular detention standards," the ICE spokesperson said in an emailed 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 spokesperson added that ICE estimates the Flowery Branch facilities will generate $34.3 million in local tax revenue over an undisclosed period.
Buying spree
ICE has been acquiring warehouses across the country as it ramps up hiring of law enforcement officers and expands its detention space to detain immigrants that ICE agents deem to be in the country illegally.
The ICE property expansion has raised concerns among lawmakers from both parties. The agency's tactics have drawn criticism in Congress from Democrats, who have held up funding after ICE's role in the shooting deaths of two U.S. citizens in Minneapolis last month.
The agency is known to have bought industrial properties in Arizona, Maryland, New Jersey, Texas and other states and has said it expects to spend $38.3 billion on what it is calling the ICE Detention Reengineering Initiative, according to government records.
In early February, it bought another property in Georgia, a newly built facility totaling more than 1 million square feet, for $128.6 million. The warehouse is located in Social Circle, a municipality about 50 miles east of Atlanta.
Elected officials and community groups, representing both Republicans and Democrats, voiced opposition to ICE's purchase of a 470,000-square-foot vacant warehouse in Roxbury, New Jersey.
A group of Democratic lawmakers in Congress this week introduced legislation to require that ICE solicit public comments and receive written approval from state and local officials before acquiring or building detention centers. Anthony Brown, the Democratic attorney general of Maryland, this week filed a lawsuit against ICE to stop construction of a proposed detention center near Hagerstown.
Meanwhile, proposals for ICE detention facilities have been scrapped in Mississippi, New Hampshire and Tennessee after Republican lawmakers intervened.
However, ICE has said that its spending for industrial properties is needed because of the large number of immigrants it expects to apprehend.
"ICE will be making arrests in states across the U.S. and is actively working to expand detention space," a spokesperson told CoStar News this week.
For the record
Alston & Bird was legal counsel on the property sale in Flowery Branch.