This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Rural Ky. Town Readies For Private Prison Closure

BRETT BARROUQUERE

After a sex scandal at a privately run prison in rural Kentucky, the state cut off the institution's funding and now it's shutting down â¿¿ and that worries town officials in an impoverished Appalachian community where incarceration meant jobs and economic survival.

With Otter Creek Correctional Center set to close in the coming months, Mike Goeing, who runs Family Drugs of Wheelwright, sees pain ahead for his store and the other few remaining businesses in the town of about 1,200.

"It's definitely going to hurt," he said.

The prison, run by Nashville, Tenn.-based Corrections Corporation of America, is set to close by this summer as Kentucky pulls its inmates out of the facility that was at the center of a sex scandal. It broke in 2009 when inmates accused prison staff of forcing them to trade sexual favors for privileges.

The prison became a casualty of budget cuts and a renewed effort by the state to push more non-violent drug offenders into rehabilitation instead of incarceration.

Kentucky paid CCA $21 million in fiscal 2010 to operate Otter Creek, along with the Marion Adjustment Center, which has roughly 800 Kentucky inmates and Lee Adjustment Center, which no longer houses Kentucky inmates.

Kentucky opted not to renew its contract with CCA as part of an ambitious plan to cut costs, reduce the number of small-time, non-violent drug offenders in prison and refocus efforts on rehabilitation. The men currently held at Otter Creek are being moved to Northpoint Training Center in Burgin.

People in Wheelwright are hoping for word that another state will step in with a new batch of inmates, reopen the facility and rehire the employees.

"There aren't a large number of businesses here anyway," Goeing told The Associated Press.

Initially, the local jobs came from coal.

Elk Horn Coal Company founded the city in 1916 about 150 miles southeast of Lexington near the Kentucky-Virginia border, and named it for the company's then-president, Jere H. Wheelwright.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs