A KPBS investigation found state and county officials have given millions in tax breaks to a local nonprofit that owns the Imperial Regional Detention Facility.
The theater had sat mostly empty for years, and it felt that way. Many of the walls were bare. Dust and pigeon droppings coated the floor. At the back of the building, part of the ceiling was missing, revealing a band of blue sky.
Within months though, Timothy Kelley promised, his voice echoing between the walls, the historic building would be renovated and operational.
Kelley is a founder and board member of the Brawley Community Foundation, a registered nonprofit organization based in the northern Imperial Valley city of Brawley. On a recent morning, he stood inside the half-finished theater in the city center, explaining the group’s work.
The foundation, Kelley said, was created to improve downtown Brawley by investing in old buildings, improving them and using the money to buy up other properties — a common strategy among community development nonprofits.
“Most people would not invest in that type of property,” he said. “We would.”
But the Brawley Community Foundation has invested in more than just downtown buildings.
The nonprofit, a KPBS investigation found, is also the owner of the Imperial Regional Detention Facility, one of eight immigrant jails that U.S. Customs and Immigration Enforcement operates in California.
For over a decade, the foundation has been deeply involved in the operations of the detention center, according to hundreds of pages of tax records and other documents obtained by KPBS through public records requests.
The nonprofit owns the building and the land beneath it through a subsidiary company, Imperial Valley Gateway Center LLC. Years ago, it played a key role in securing financing for and constructing the detention center near the city of Calexico, 20 miles south of Brawley.
The foundation has used its nonprofit status to secure at least $6 million in special property tax breaks on the detention center since 2016, public tax records show. These are benefits typically reserved for charities, hospitals, scientific institutions and faith organizations.
State and county tax officials both signed off on those tax breaks. The state Board of Equalization granted the foundation’s initial application in 2015, and the county assessor has issued the tax breaks for every year since.
Most of the foundation’s roughly $40 million in annual revenue comes from “detention center fees” paid by ICE and Management and Training Corporation (MTC), the Utah-based contractor that runs the facility. That’s according to Kelley and a 2018 audit filed with the California attorney general’s office.
The foundation says their arrangement with the detention center is a sign of the nonprofit’s resourcefulness and wide-ranging effort to bring jobs and growth to the Valley — a rural county where 87% of residents identify as Latino and well-paying jobs are hard to come by.
But the idea that an ICE detention center could serve as a community benefit is, to say the least, in dispute.
In the years since the Imperial Regional Detention Facility began holding immigrants, MTC has been accused of not providing adequate medical care, violating detainees’ civil rights and using solitary confinement in retaliation.
Now, amid President Donald Trump’s increasingly deadly mass deportation effort, two immigrants have died after experiencing health crises at the facility. State and federal lawmakers have proposed various measures cracking down on federal immigration jails, including raising taxes on for-profit contractors.
Kristian Salgado, an organizer with the Imperial Valley-based immigrant rights group Imperial Liberation Collaborative, said the foundation’s involvement with the detention facility is deeply upsetting.
“I don't see the detention center as a community benefit at all,” Salgado said. “I don't think the jobs that come out of it really outweigh the harm that it creates.”
Experts on nonprofit policy and the U.S. detention system said the arrangement was unusual. One said it raised questions about whether the foundation should be receiving those tax breaks at all.
“I can give you a personal opinion,” said Geoff Green, who leads the California Association of Nonprofits. “That does not, to me, sound like a charitable purpose.”
‘We had to find a nonprofit’
In May 2013, the Imperial County Board of Supervisors gathered at the county’s sand-colored administration building in downtown El Centro. They were there to hold a public hearing on the financing arrangement for the detention center.
The meeting was sparsely attended. Tom DuBose, a consultant on the project, outlined their plans for the facility. (DuBose did not respond to requests for comment for this story.)
The detention center, DuBose said, was proposed by a Texas-based construction firm, Hale-Mills Construction. It would be built in the Gateway district, the 1,800-acre area surrounding the new border crossing between the small U.S. city of Calexico and the sprawling Mexican metropolis of Mexicali.
The money to build the facility would come from tax-exempt municipal bonds acquired through an arrangement with the neighboring county of La Paz, Arizona.
“There’s going to be some very good-paying jobs out there,” DuBose said. “And we hope that, in the future, we’ll see more of this.”
Everyone in the room already understood what jobs meant to Imperial County.
The rural farming region has among the highest unemployment rates in California. Local government agencies, prisons and other law enforcement agencies offer the largest share of work, with agriculture coming up second, according to a 2021 analysis by the San Diego-Imperial Center of Excellence for Labor Market Research.
Then, however, DuBose said something else. He said the developers needed a nonprofit organization to take part.
“The type of project it is, and the way it's funded, needs to have a nonprofit involved,” he said.
It’s not unusual for private companies to play a role in running federal detention centers.
Privatization has become more common in recent decades as the U.S. government has detained growing numbers of immigrants, said Colleen Putzel-Kavanaugh, an analyst with the Migration Policy Institute, a Washington, D.C.-based think tank.
Another example is the Otay Mesa Detention Center in San Diego, which is run by CoreCivic, a Tennessee-based private prison company. In Imperial County, the plan from the beginning was for MTC to run the facility.
But what made the Imperial County case notable was the effort by the developers to get a nonprofit involved. That would give them broad access to tax-exempt bonds through the municipal bond market, said Todd Ely, the director of the Center for Local Government at University of Colorado Denver.
Municipal bonds allow state and local governments to quickly borrow money for major infrastructure projects, Ely said. Private developers can only access that bond market by going through certain government agencies, which is why the developers needed to acquire their financing through an Arizona county.
Ely said it makes sense that the detention center’s developers would want tax-exempt bonds, which have lower interest rates. He also said that nonprofit organizations are able to avoid certain limits on the amount they can borrow.
But Ely said the overall arrangement stands out as somewhat strange.
“It is, kind of, a setup that I haven’t seen before, personally,” Ely said. “Where you can kind of see this ecosystem of this effort to develop this detention center.”
Putzel-Kavanaugh said she wasn’t aware of any similar arrangements either.
“I am intrigued that it's a nonprofit,” she said. “I haven't heard of that before.”
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The Welfare Exemption
As the morning wore on at that hearing back in May 2013, Imperial County officials were facing more pointed questions. One resident, a nearby landowner named Eric Rice, asked whether the project would be receiving any tax breaks.
“We are hearing rumors consistently that it will be exempt from paying property taxes,” Rice said. “And, of course, that obviously means an increase for all the rest of us.”
Property taxes are an important source of revenue for the Imperial County government, which often struggles to find the money for basic infrastructure. In 2024, the most recent year available, property taxes were about 10% of the county’s income, according to the state controller’s Office.
Then-Imperial County CEO Ralph Cordova responded sharply to Rice’s question.
Cordova’s office had supported plans for the detention center, and even helped scour state law to look for ways the county government could be involved, according to statements from DuBose that day. (Cordova did not respond to a request for comment.)
Yet, the county executive told Rice his government didn’t have any power over the detention center’s taxes.
“I’m not, nor is the county, in the position to waive any kind of property tax,” Cordova said. “We don’t have the authority to do so.”
But that wasn’t true.
One county office, the Imperial County Assessor, did have the authority to waive property taxes through certain exemptions — including a special state tax break called a Welfare Exemption.
And just seven months after that supervisors’ meeting, Timothy Kelley submitted his first application for that exemption to the assessor’s office.
California voters first adopted the Welfare Exemption in the 1940s.
In the beginning, it was meant to support hospitals, faith organizations and charities, which can include community foundations. Since then, the state legislature has also expanded it to include scientific research and certain types of affordable housing.
Green, the California Association of Nonprofits leader, said the vision was to excuse organizations that already serve the public from paying certain taxes.
“The idea behind any tax exempt organization is that the very existence of the organization is at least as valuable as any tax that would be paid into the public trust,” he said. “Since the services, the purposes of the organization themselves, are public-serving.”
Getting the tax break is a two-step process.
First, groups have to apply for a special certificate called an Organizational Clearance Certificate (OCC) from the California Board of Equalization, which oversees the state’s property tax system. Then they have to make their case to their local county assessor.
The Brawley Community Foundation — and Kelley in particular — began that process just months after the supervisors’ vote, records obtained by KPBS show.
At first, the Board of Equalization balked at the idea. In May 2014, state officials issued a finding sheet stating the foundation’s claim was “incomplete.” They pointed out that the subsidiary LLC’s stated purpose was to build and operate a 781-bed detention facility.
“Please be advised that… the primary activity of the LLC does not qualify for the welfare exemption,” the Board’s finding sheet read.
The foundation’s lawyers pushed back. In letters obtained by KPBS, they argued that operating a detention center was a charitable cause because it reduced strain on government agencies. They said the foundation would prioritize working with state authorities, but added that their only written proposal was for working with ICE.
The lawyers also cited the Brawley theater and other renovations in the city’s downtown as evidence of work to improve the community.
The foundation’s lawyers said the benefit was important to the future of the detention center project. In a September 2014 white paper outlining the “policy benefits” of granting the tax break, they said the facility would provide nearly 200 full-time jobs and $13 million in total annual salaries.
“To keep this economic development moving forward in the second poorest County in the California (sic), the foundation needs to know whether the state will honor the property tax exemption and treat the foundation like hospitals and other nonprofits that reduce the burdens on government,” the white paper read.
A year later, state officials responded. They had approved the foundation’s application.
A decade of tax breaks
Since then, Kelley has applied every year to the Imperial County Assessor’s office for the Welfare Exemption. And every year since 2016, county officials have granted it.
That has dramatically reduced the taxable value of the detention center, excusing the foundation from paying at least $6 million in property taxes over the past decade.
Last year, for example, the detention center and the land beneath it were worth over $75 million, according to the assessor’s office. But thanks to the exemption, the nonprofit only had to pay property taxes on $14 million of that total value.
The exemption has also significantly reduced the amount the foundation has paid into local bonds for the Calexico Unified School District and Imperial Valley College.
According to the 2018 audit filed with the California attorney general’s office, the foundation created its subsidiary company for “the purpose of constructing, owning and operating a detention facility in Imperial County.” The foundation’s primary revenue stream, the audit found, is from detainees held at the facility.
To Green, the association of nonprofits leader, the overall arrangement raises numerous questions about whether the foundation should be receiving those tax breaks.
It would be one thing if the foundation was founded 20 years ago to improve the lives of residents of Brawley by renovating old buildings and that they later decided to include the detention center in that strategy, he said. It would be another thing if the foundation’s primary purpose was to build and operate a detention facility exclusively funded through government contracts.
“There's a public support test that comes with (nonprofit) status,” Green said. “There's a couple other things that would seem to violate.”
He emphasized that it would take a careful examination of how the foundation was incorporated and funded over the years to determine either way.
More broadly, Green said, the Welfare Exemption can look very different from county to county. That’s because local assessors have wide power over whether to actually issue the tax breaks.
“For better or for worse, that goes into local politics,” Green said. “You might get a different answer from county to county in some cases for what is essentially the same request.”
Green said this is the only state tax exemption he is aware of that is comanaged in this way.
‘They’re profiting off of this’
Local immigrants rights activists are confused and unsettled by the idea that a public charity could own the detention center.
Salgado’s organization, the Imperial Liberation Collaborative, has previously raised the alarm about conditions inside the facility as part of its efforts to visit people being held inside the facility and connect them with friends or family members.
In a 2022 letter to the U.S. Department of Homeland Security’s Office of Civil Rights, five men said they were being held in "torturous conditions.” One person said he was served undercooked chicken and that a guard watched him while he showered. Another said he was denied treatment for back pain that turned out to be a major spinal condition.
In 2021, Carlos Murillo Vega, who grew up in Imperial County, sued MTC for allegedly holding him in solitary confinement for over a year. Murillo and MTC reached a confidential settlement in late 2023.
Since President Donald Trump took office last year and began his mass deportation effort, two men from China and Honduras have died after having health emergencies at the facility. In follow-up reports, ICE investigators said they both experienced sudden heart complications.
Salgado, the Imperial Liberation Collaborative advocate, pointed out that the ICE contractor that runs the facility is a for-profit company.
“The extension of that would be MTC, you know,” she said. “They're profiting off of this.”
In a statement to KPBS, ICE spokesperson Jason Sweeney denied any use of solitary confinement at the facility. He called the allegations of poor medical care and undercooked food “recycled claims” by immigrants’ rights advocates who oppose the federal government’s detention of immigrants.
“ICE provides comprehensive support services to all individuals in custody,” Sweeney wrote. “Any death in ICE custody is taken seriously and is thoroughly reviewed in accordance with established policy.”
Sweeney referred questions about the detention center’s financial arrangements to its contractors.
MTC spokesperson Emily Lawhead declined KPBS’ request for comment, referring questions back to ICE.
State and county tax officials, reached for comment by KPBS, have tried to shift responsibility for the tax breaks onto one another.
The state Board of Equalization did an extensive analysis of the foundation’s documents, records show.
John Taylor, a spokesperson for the Board of Equalization, declined repeated interview requests. In an email, he said staff had reviewed a wide range of the nonprofit’s records, including founding documents, financial statements, an operating agreement and a tax exemption letter from the IRS.
Taylor did not say whether the board had taken any steps to audit or verify the foundation’s activities. He refused to elaborate on why the agency changed course after their first finding, instead referring KPBS to the board’s finding sheets.
Instead, he said the Imperial County Assessor was responsible for deciding whether an organization’s actual use of the property was eligible for the exemption.
Imperial County officials said they had raised doubts about the tax breaks with the state.
“Originally the assessor’s office had doubts about whether or not this concept or proposal would quality (sic) for the exemption,” wrote Jack Dunnam, the county’s current assistant assessor, in an email. “The former Assessor, Roy Buckner had it submitted to the BOE for analysis and direction.”
Dunnam shared with KPBS a 2015 analysis by the Board of Equalization that supported issuing the tax breaks.
“The Assessor’s Office based their decision soley (sic) on the analysis and findings,” Dunnam wrote in an email to KPBS. “We don’t make these decisions in a vacuum, especially one like this.”
‘A real win for everybody’
Kelley said it was never his plan to own an ICE detention center. But he said he has no regrets.
The foundation board member comes from one of the Imperial Valley’s powerful farming families, who historians say continue to hold great sway over the region. Although 87% of the county identifies as Latino, most of its land and wealth are concentrated in the hands of those farmers — a small group of wealthy, mostly white families.
(In a follow-up phone call, Kelley said he identifies as ethnically Irish and Mexican American.)
Kelley is a current board member of the local Republican Party and a recently-elected member of the Brawley City Council. He serves as president of the Imperial Valley Economic Development Corporation, which was closely involved in the development of the detention center.
In interviews with KPBS, Kelley said they created the Brawley Community Foundation well before the proposal for a detention center arrived. He and other economic development officials looked to other local nonprofits first, but the foundation was the first one willing to take on the project.
The facility, Kelley said, was originally supposed to be for the U.S. Marshals Service, not ICE. It was only partway through the approval process, he said, that they began working with ICE instead. In their 2014 letters to the Board of Equalization, the foundation does mention previous meetings with the U.S. Marshals.
But Kelley said he didn’t see any daylight between the operations of a public charity and the operation of a federal immigrant detention center. He argued that many institutions, like major banks, also have nonprofit organizations attached.
The foundation leader said no one on the foundation’s board of directors, including himself, receives any financial benefit from the activities of the detention center. That’s supported by the foundation’s federal tax records, which list no salary for any board member.
Kelley said he viewed the detention facility as a remarkable achievement when it came to strengthening the valley’s economy. He said he would consider building more detention centers if the opportunity arose.
“We never thought that we'd be in an opportunity to create as many jobs that we did,” he said. “From a foundation standpoint, I think it’s a real success — a real win for everybody.”
Kelley defended the decision to pursue tax breaks on the facility, arguing they allow the foundation to charge less for their services and better compete for contracts.
Ultimately, Kelley said he was also proud of the standard of care provided at the facility. He said they had given detainees access to art supplies, workforce classes and religious accommodations for meals.
“When I go in there, I see people under the most difficult circumstances,” Kelley said. “But under these conditions, I think that we're providing the best service that we can.”
(In a follow-up phone call, Kelley clarified that by “difficult circumstances,” he was referring to people being in the U.S. without legal status, not conditions inside the facility.)
Kelley said he’s had conversations with other private developers about bringing more immigrant detention centers to the Valley.
This past March, a small group of activists met outside the detention center.
They were there to remember the two people who have died after being held at the facility since last January. The event was part of the Imperial Liberation Collaborative’s larger effort to urge county health officials to inspect the facility.
In the crowd, Salgado stood with her family and listened as other activists read their names aloud: Huabing Xie and Luis Beltrán Yañez Cruz.
For Salgado, the knowledge of the foundation’s involvement with the detention center has also raised deeper questions.
The third-generation Calexico resident has been trying to understand the foundation’s connections with the detention center since last year. Salgado wonders why there was so little resistance to the detention center back in 2014, the year she graduated from college. Through the haze of memory, she said, it felt like no one even knew the facility was being built.
“It felt like the detention center was snuck into our county,” Salgado said.
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