The Department of Homeland Security has bought two of the largest immigrant detention centers in California from CoreCivic for $1.5 billion, converting more than 4,500 beds to federal ownership as the Trump administration expands its detention footprint in a state that has spent years trying to squeeze private operators out.

CoreCivic announced Monday that the July 2 closing covered the 2,560-bed California City Detention Facility for $732.6 million and the 1,994-bed Otay Mesa Detention Center in San Diego for $739.2 million.

The Tennessee-based company said it expects roughly $1.1 billion in net proceeds after taxes and transaction costs, and plans to keep operating both sites under existing management contracts with U.S. Immigration and Customs Enforcement.

Those contract terms, the company disclosed to the Securities and Exchange Commission, could be renegotiated now that the buildings are federally owned.

DHS told reporters the purchase was funded through President Donald Trump's One Big Beautiful Bill Act, the tax and spending package signed last summer, which the department said "allowed ICE to expand detention space to fulfill the president's promise of mass deportations."

An agency spokesperson pointed to California's political posture as the rationale: "Unlike in states like Florida and Oklahoma, ICE cannot rely on local state and county partners for detention space in California." Federal ownership, the spokesperson said, preserves capacity ICE considers essential on the West Coast.

The move sidesteps a decade of California policy aimed at pushing for-profit detention out of the state.

Assembly Bill 32, signed in 2019, would have banned private immigration detention, but the 9th U.S. Circuit Court of Appeals, sitting en banc, struck it down in 2022 as preempted by federal law and barred by intergovernmental immunity.

State lawmakers responded with narrower oversight statutes letting the state attorney general and county health authorities inspect facilities, tools now complicated by the shift to federal ownership.

GEO Group Chief Executive George Zoley, whose company is in similar talks with ICE, told investors in May that federal ownership offers "more protections from unwarranted litigation that infringes upon the activities of the ICE processing centers," calling state-level oversight of medical care, food and sanitation "fundamentally unconstitutional."

CoreCivic Chief Executive Patrick Swindle called Otay Mesa and California City "mission-critical facilities" for the company's government partner.

Sen. Alex Padilla, D-Calif., said his oversight visits to CoreCivic sites have found detainees held in "unacceptable conditions" and said federal ownership does not change what he expects.

"I will continue demanding transparency, accountability, and humane conditions that respect the dignity and rights of every person in immigration detention," he said.

Eight ICE detention centers now operate in California with combined capacity for nearly 9,000 people, and CoreCivic said it is in early talks with ICE about selling more.