Earlier this year, a KPBS investigation revealed that a federal immigrant detention center in Imperial County has avoided paying a large share of its property taxes through a state exemption typically reserved for charities.
Now, that arrangement is likely coming to an end.
Late last week, California lawmakers approved new legislation that would strip those tax breaks from the Imperial Regional Detention Facility and ban other for-profit detention facilities in the state from trying to claim the credit in the future.
KPBS reported in May that state and local officials had excused the detention center’s owner — a local nonprofit called the Brawley Community Foundation — from paying at least $6 million in taxes. Democratic State Sen. Steve Padilla authored the legislation, known as Senate Bill 420, in response to KPBS’ reporting.
The Imperial County facility is the sole immigrant detention center in California to receive this tax break, according to state tax officials. Padilla, whose district includes Imperial County, called the arrangement a “gross abuse” of state tax laws.
“Californians should not be forced to subsidize private immigration detention centers,” Padilla said in a statement last week. “We have to close this loophole.”
Imperial County immigrants’ rights advocates celebrated the news this week. Kristian Salgado, an organizer with the Imperial Liberation Collaborative, has been following the detention center’s ownership structure and operations for months.
“This is really clarifying to everyone,” Salgado told KPBS this week. “I think it was addressing a very clear misuse of the welfare exemption — an outrageous misuse.”
Gov. Gavin Newsom has until the end of September to sign the bill into law.
‘A gross abuse’
The Imperial Regional Detention Facility began operations in 2014.
The U.S. Immigration and Customs Enforcement (ICE) detention center sits on county land to the east of the city of Calexico. A private prison contractor, Utah-based Management and Training Corporation (MTC), oversees operations at the facility.
In 2022, ICE reported spending over $44 million on the facility, which holds a maximum of 782 people.
In May, KPBS reported that the Brawley Community Foundation had also been deeply involved in the detention center’s operations for over a decade.
Records obtained by KPBS showed the nonprofit owns the building and the land beneath it through a subsidiary company. Back in 2013, it played a key role in securing financing for and building the detention center.
Since 2016, the foundation has also used its nonprofit status to secure millions in property tax breaks through a special state credit called the Welfare Exemption. These are benefits typically reserved for charities, hospitals, scientific institutions and faith organizations.
The Brawley Community Foundation is well-connected locally through Timothy Kelley, one of its founders.
Kelley is a city councilmember in the city of Brawley and a board member of the local Republican Party. He also serves as president and CEO of the influential Imperial Valley Economic Development Corporation (IVEDC).
IVEDC lists the Brawley Community Foundation as their top sponsor.
Reform bill draws bipartisan support
Padilla’s effort to end what he described as a tax “loophole” has drawn support from across the political spectrum.
Other Democratic lawmakers slammed the arrangement. In a series of searing remarks on the Assembly floor last month, Sharon Quirk-Silva of Fullerton said detention centers were part of an effort to hunt down people “because their skin is brown.”
“It is the furthest that you can imagine of being a charitable institution,” Quirk-Silva said.
The bill has also drawn support from Republican lawmakers like Assemblymember Jeff Gonzalez, who represents Imperial County and the Coachella Valley.
“This isn't about whether we agree or disagree on the underlying issues,” Gonzalez said last month. “It's about making sure our tax code is applied fairly.”
A slate of immigrants’ rights groups have endorsed the bill, including the Oakland-based Ella Baker Center For Human Rights, the Immigrant Defenders Law Center in Los Angeles and the Imperial County nonprofit Los Amigos de la Comunidad.
A number of nonpartisan organizations have also backed SB 420, including the state association of county tax officials and the California Association of Nonprofits.
Notably, in the final weeks of the legislative session, the Brawley Community Foundation also signed on as a supporter of the bill. Kelley did not respond to a request for comment this week as to why.
An unsettled moment for detention in California
The bill’s approval comes at a moment of upheaval for the federal detention system in California.
As President Donald Trump continues his increasingly deadly mass deportation campaign, California lawmakers have moved to strengthen local oversight powers and impose higher costs on contractors that profit from their work for ICE.
The Trump administration has responded. In July, the U.S. Department of Homeland Security spent $1.5 billion to buy two privately-owned detention centers, including the Otay Mesa Detention Center in San Diego.
The move will likely shield the facilities from oversight measures like county health inspections, CalMatters reported.
Federal properties are also immune from state and local taxes. If Homeland Security officials bought the Imperial Regional Detention Facility too, it would be exempt from paying property taxes again, according to a state legislative analysis.
Salgado, the immigrants rights organizer, said she was concerned about that possibility.
“It is very frightening,” she said. “It’s very upsetting that the federal government is trying to bypass any oversight by the counties.”
Kelley, the Brawley Community Foundation founder, has suggested that the facility could be at risk of closing as a result of SB 420. Earlier this year, he warned that the MTC, the ICE contractor, has slim profit margins at best.
“MTC cannot operate at a loss and has other options in Arizona and New Mexico that have less risk,” Kelley told KPBS in an email this summer. “I am trying to retain them as they have been a great partner.”
