The bondholders for the Wyatt Detention Facility are suing the City of Central Falls’ mayoral administration, as well as members of the city council and the board that governs the jail for more than $130 million.
The lawsuit, filed by UMB Bank based in Kansas City Missouri in federal court Wednesday, is in response to weeks of public criticism by city leaders of the facility, and calls for its closure.
The recent outcry over the Wyatt followed the news that the facility had begun holding detainees in mid-March for Immigration and Customs Enforcement as part of the federal Southwest Border Zero Tolerance Initiative.
Members of the city council, and Central Falls Mayor James Diossa along with Representative Shelby Maldonado held a press conference two weeks ago, where they each demanded the facility end its agreement with ICE, and ultimately shut its doors.
In the following days, the City Council voted to rescind the 1991 resolution that brought the Wyatt project to the city, bills were introduced in the Statehouse to give the city power to close the facility, and the Wyatt Board voted to suspend its agreement with ICE.
Now the bondholders are pushing back. In a 300-plus-page lawsuit, lawyers for UMB Bank accuse the city’s elected officials of violating the state statute that incorporated Wyatt, by publicly criticizing the facility and seeking its closure.
If the Wyatt closed, UMB Bank could be out about $130 million in outstanding bonds. The lawsuit not only seeks monetary damages, but also to preserve the ICE agreement and place the facility under the care of a receiver, typically appointed by a judge to protect the facility.
Currently the Wyatt is privately run by a Warden, but overseen by a public board, appointed by the Mayor of Central Falls. The guidelines for running the facility are outlined in state law, adopted in anticipation of the facility in 1991.
A receivership would likely shield the Wyatt from any potential actions by the Central Falls Mayor, City Council, or even the state. Legislation granting the Wyatt Board and the City Council the power to dissolve the facility is pending at the statehouse.
The Wyatt has been a source of controversy for the city over the last decade. In 2008, a Chinese National Detained by ICE and in the custody of Wyatt died. The ACLU alleged neglect in medical care lead to the death. The lawsuit was settled without the Wyatt admitting to wrongdoing, but ICE pulled its detainees from the facility and critics still question conditions for detainees in the facility.
By 2014 the facility, which was meant to provide economic stimulus to the city was teetering on bankruptcy. The Wyatt was forced to re-write the terms of the of its financial agreement with the city. Over the last 25 years the city has received about $5.5 million from the facility.
But according to the lawsuit, the facility was been unable to make local impact fees to the city since 2009. The Wyatt has provided more than $500,000 in payment to the city since 2015, the year the new financial agreement went into effect.
In the meantime, it is unclear if ICE will comply with the Wyatt board’s request to remove its detainees by this Saturday, or if it will honor the suspension now that the agreement is under litigation.
Editor's note: A previous version of this post said that the City of Central Falls did not receive money from the Wyatt Facility since 2009. It has in fact received more than $500,000 since 2015 according to a spokesperson for Wyatt. The post has been changed to reflect the correction.