Colorado May Use Part of Mortgage Deal on Prison

CBS
A prison in southeast Colorado that closed earlier this year wasn't a victim of the national mortgage crisis. But it could find new life because of it.

Colorado might use part of its share of a national mortgage settlement to repurpose a closed prison as transitional housing for veterans. If it sends money to remodel the former Fort Lyon Correctional Facility in Bent County, it will join other states eyeing projects that have no connection to the mortgage crisis.

The prison was shuttered to save some $8 million next year and help balance the state budget. Colorado officials were scrambling to find a use for the former prison when the sweeping $25 billion mortgage settlement was announced in February.

Most that settlement goes directly to homeowners affected by the mortgage crisis. But states were given $2.7 billion to spend as they wish.

Colorado is getting some $51 million to be spent by Attorney General John Suthers, who has legal authority to decide how settlements are spent. A spokesman for the attorney general said Suthers is considering many proposals for spending the money.

Suthers' spokesman, Mike Saccone, said the Fort Lyon idea came from the governor's office in public meetings about how to spend the mortgage settlement.

"We've had a healthy public process," he said.

Saccone said the prison was among several ideas from the governor's office. Suthers is also considering beefing up foreclosure counseling funds and consumer education efforts more closely related to the housing crisis.

Not everyone likes the prison idea, though. Democratic Rep. Claire Levy said that because the mortgage settlement is a one-time windfall, it shouldn't be used on something the state would have to maintain in future years.

"I don't think that's a viable use of the money," Levy said. She questioned Colorado's practice of leaving most settlement money at the sole discretion of the state attorney general.