The Next Real Estate Boom: Prison Cells?

San Quentin. The name evokes thoughts of iron bars, hardened criminals and the gas chamber.

But if one California lawmaker has his way, the site of the state's oldest prison could one day be home to waterfront mansions and luxury condos with spectacular views of the San Francisco skyline.

In what might be called the worst real estate blunder in California's history, in 1851 San Quentin State Prison was built on a then-remote peninsula at the northern end of San Francisco Bay. Today, that 432-acre spit of land is surrounded by some of the area's best real estate with breathtaking views.

Click Here for More Photos of San Quentin State Prison

"Quite frankly, our inmates just don't need ocean views," said state Sen. Jeff Denham, who has been pushing to auction the 5,300-inmate prison complex to private developers. "It's one of the oldest and most inefficient prisons in the entire nation. We could sell this one and build four others at less expensive places in the state."

Denham said California could get as much as $2 billion for the property, money much needed as the state struggles with a tanking economy and major budget problems.

But don't go picking out that new living room furniture just yet. Denham's dream is far from a reality and many in the state say it is just that: a dream.

"We very much disagree with the idea that you can sell this property for $2 billion," said Seth Unger, press secretary for the California Department of Corrections and Rehabilitation. "Furthermore, the cost to build a new prison with 5,300 beds would likely be over $2 billion and there's not any identified site in California that has open arms to housing the next death row."

Denham has introduced his legislation to sell the prison for several years but it has never made it to a vote on the Senate floor. A committee hearing on it this year is scheduled for March 31.

Unger said it's really not "a viable plan at this point," especially given the system's massive overcrowding.

Prison Overcrowding

A federal judge has a tentative ruling that would force the state to release 57,000 inmates early because of overcrowding. Gov. Arnold Schwarzenegger has declared a state of emergency in the prisons, allowing the government to transfer inmates to out-of-state facilities.

"The idea that we should be discussing closing prisons in this context would not be good for public safety and it would not be good for the state of California," he said.

Schwarzenegger has not taken a formal position on the legislation but spokeswoman Lisa Page said: "There are a lot of issues that would have to be resolved."

To start with, a brand new $125 million hospital for inmates is scheduled to open in the complex this year. Then there are the plans for a new death row. The legislature originally approved the new facility in 2003 and gave additional support in last year's budget for the $360-million addition.

"If you were [to] start over today, it's the last place that you would put a massive prison. It's a pretty remarkable property and anyone who proposed putting a prison there today would probably be laughed out of the room," said state Rep. Jared Huffman, who represents the area. "But the truth is we've got a lot of investment and a lot of sunk costs into the main environment of San Quentin."

That doesn't mean that people can't dream.

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