PRISONS : Town Thrives on Economy Tied to Crime : Leavenworth is happy to be site of first privately owned federal penal institution.

LEAVENWORTH, Kan. —  Following the lead of several states, the U.S. Marshals Service will finance a privately owned and operated detention center here next year in the first such arrangement with the federal government.

The detention center, to house up to 440 inmates awaiting trial or sentencing in federal courts, will be built by Correctional Development Corp. of St. Louis and operated by Corrections Corp. of America of Nashville, Tenn.

Both are for-profit companies. “Think of us as a landlord,” said Bruce Rich, president of Correctional Development. “We have a building managed by Corrections Corp. of America; our tenant happens to be the U.S. Marshals Service.”

Although the Marshals Service may be trying something new with the detention center concept, it stuck to the tried and true in its choice of a site. Leavenworth, a pioneer-era town of 40,636 on the Missouri River bluffs, is already home to a U.S. Army prison housing 1,478 inmates, a federal penitentiary housing about 2,000 and Kansas’ largest state prison, with 1,940--not to speak of the Leavenworth County jail.

This town, best known as the home of Ft. Leavenworth, oldest Army outpost west of the Mississippi in continuous operation, has made a profitable second career of hospitality to the criminal classes. What Detroit is to cars, Leavenworth is to incarceration.

There is “a high comfort level” with having prisons as an economic mainstay, Leavenworth City Manager Mark Pentz said. “There are very few problems associated with their presence.”

The detention center will add about 100 jobs to the 2,186 already on prison payrolls. It will also be taxable in a community where a large federal presence makes 47% of all property tax exempt.

And, crime being a growth industry, the outlook for the confinement business is nothing if not bright.

Correctional Development got started about five years ago when it built a 500-bed maximum-security prison for the state of Missouri.

“That was the first in the country that incorporated total project development,” Rich said. “I like to think of it as a public-private partnership. We provided design, financing, construction and selected the site.”

Correctional Development also chose, purchased and installed the equipment and furniture, all for a set price.

The contract with the Marshals Service is the company’s first with a federal agency. The service wanted a facility within an hour’s drive of the federal courthouse in Kansas City, Mo. Usually, the agency rents cell space from cities and counties around the country on a contract basis.

Although this is the Marshals Service’s first such detention center, the arrangement isn’t much different from any other rental contract. For each prisoner--including food, utilities, maintenance, staff payroll and amortization of building cost, the Marshals Service will pay $71 a day.

Groundbreaking is scheduled for next spring. The facility will cost $20 million to $30 million and should be operational by early 1992, Rich said.

Developers interested in bidding on the project contacted several other towns in the region. Most of them said “no way, no how” to the idea of having a prison nearby, Rich said, but Leavenworth actively recruited the detention center.

“I suppose in a community where there isn’t a prison there’s a fear,” Leavenworth Mayor Carolyn Tillotson said. “That’s lacking here, because we’ve had them so long. People have lived with it all their lives.”

City Manager Pentz called the fear of problems caused by proximity to prisons “really an unfounded fear. The people here in Leavenworth realize that and find the issue somewhat amusing.”