Alabama bond sale for mega prisons falls $200 million short

MONTGOMERY, Ala. (AP) — Alabama officials said Thursday that they will move forward with plans to build two supersize prisons despite a bond sale falling more than $200 million short amid a volatile market and pressure from activists.

The Alabama Corrections Institution Finance Authority hoped to sell $725 million in bonds for the construction project, but was only able to sell $509 million. The bond issue is a key funding piece for the $1.2 billion construction price tag.

State Finance Director Bill Poole told reporters that the state had hoped to "sell a little bit more" but officials were pleased with the result. He said the outcome would not impact the construction and the state still anticipated opening the prisons in 2026. He said the state will look at options for the remainder of the money, including seeking additional funding from the Alabama Legislature or conducting another bond issue when conditions are more favorable.

Alabama Gov. Kay Ivey called the bond sale a “significant and positive step forward in our prison construction process.”

“Our job certainly is not done, however, and we will continue to take steps in the coming months and years to ultimately improve Alabama’s criminal justice system,” she said.

While state officials blamed the result on a volatile market, a group of activists and impact investors had urged buyers to stay away from the the bond offering.

“They didn't just fall short. They fell well, well, well short,” said Eric Glass, an adviser to Justice Capital, an investment fund that joined the call for a boycott. He said the state did face a volatile market but there is also a recognition among investors that prison construction "is not a good thing to be investing in.”

“I think it fell short because this has been a year-plus campaign...