The $97 Million Utah Warehouse ICE Bought for $145 Million
The empty warehouse on the outskirts of Salt Lake City had a lot of potential but no buyers. Built in 2022, it was one of the largest warehouses in the area, with 833,000 square feet of space—14 football fields under one roof. The surrounding industrial zone had been promoted by the state as “Utah’s Inland Port,” a logistics hub smack-dab in the middle of a desert but only a few minutes to the freeway and the international airport.
Demand for big warehouses had softened, however, and the property remained vacant, a white elephant by the shores of the Great Salt Lake. Then, suddenly, on March 11, the Department of Homeland Security snapped it up for $145.4 million—paying nearly 50 percent more than the property’s 2025 assessed value to a private investment fund controlled by a subsidiary of Germany’s Deutsche Bank.
The deal went through six days after President Trump announced his decision to remove Kristi Noem as DHS secretary. Noem and her team had been racing to buy up industrial properties as part of a $38 billion overhaul of the ICE detention system in an effort to supercharge Trump’s mass-deportation campaign. DHS officials described the acquisitions as a crucial step to meeting the White House’s goal of 1 million deportations a year, after ICE carried out fewer than half that many during Trump’s first year back in office. The warehouses would be reconfigured and remodeled into megajails, with capacity for up to 10,000 detainees each.
Noem’s replacement, former Senator Markwayne Mullin of Oklahoma, took control of the department on March 24 and ordered a pause on conversion plans for the warehouse in Salt Lake City as well as for 10 others scattered across the country, seeking to defuse backlash from local jurisdictions. Many local leaders say that they were blindsided by DHS’s acquisitions and don’t want giant immigration jails in their communities. Some have made clear that they are willing to fight the government’s plans. Lauren Bis, a spokesperson for DHS, characterized the pause as a logical part of Mullin’s transition process, which requires “reviewing agency policies and proposals” and making sure that the department works with community leaders. “We want to be good partners,” Bis told me.
There are also legal challenges. The administration is facing lawsuits across its new portfolio of industrial properties, including in Michigan and New Jersey. In Maryland, a federal judge halted renovation work at a warehouse that ICE purchased in January. In Social Circle, Georgia, where ICE bought a 1-million-square-foot building in a county that Trump won by more than 70 percent, angry local officials have refused to connect the site to water and sewer lines. ICE has already canceled plans for new detention centers in New Hampshire and Mississippi because of opposition from Republican leaders.
Officials at DHS and ICE told me that the administration has been taken aback by opposition from Republicans, whom they expected to be more supportive of the president’s deportation push. It didn’t help that the government conducted its warehouse-shopping spree around the same time that Renee Good and Alex Pretti were killed in Minneapolis—and right at the moment when Americans were seeing daily images of chaos and violent clashes between protesters and immigration agents. The warehouses triggered fears about how immigrants would be treated and possible impacts on nearby communities, along with broader worries that the warehouses could be used to hold U.S. citizens. As one ICE official told me, “People’s heads started going wild with this.”
The warehouse purchases in Utah and other states are now part of an internal investigation at DHS into acquisitions and contracts made by Noem and Corey Lewandowski, her top adviser and alleged lover in an extramarital affair that both have denied. Complaints about Lewandowski’s role in DHS contracts intensified last summer after he implemented a policy requiring Noem’s approval on any expenditure of more than $100,000. The measure, depicted as an extension of DOGE-style cost cutting, came as the administration got a virtual blank check from Congress—$170 billion for immigration enforcement in the One Big Beautiful Bill Act.
DHS officials and contractors told me that the $100,000 requirement created a bureaucratic bottleneck and fueled suspicions that Lewandowski was exploiting his position for personal profit. Lewandowski, who worked as an unpaid “special government employee,” denies those allegations and has claimed that Noem’s added scrutiny helped save billions for taxpayers.
[Read: The first couple of a dysfunctional DHS]
But a bargain-hunting ethos was noticeably absent in DHS’s warehouse acquisitions. The department paid an average of 11 to 13 percent above market value for the first 10 properties it purchased for ICE, according to a report by the commercial-real-estate firm CoStar. The firm published its report prior to the $145 million deal for the Utah building, which tax assessors valued last year at $97 million. It was DHS’s costliest purchase yet, and none of the other DHS acquisitions reviewed by CoStar had a gap that wide between purchase price and comparable properties.
I called commercial-real-estate brokers and appraisers in Salt Lake City to ask whether the transaction seemed like an outlier. Sales of similar warehouse properties in the area suggested that it was: A building with about 1 million square feet built in the same area in 2022 had been acquired by Walmart last March for $112 million, CoStar records show, below its assessed value of $119 million. Another 1-million-square-foot property built in 2023 sold last year for $122 million, roughly the same as its assessed value, even though it sits on a 75-acre plot—larger than the parcel bought by DHS. That property, purchased by an investor, already had a tenant, which generally increases the sale price, according to two brokers and an appraiser I spoke with, who did not want to be quoted by name, because the DHS warehouse purchase is so contentious in Salt Lake City. They cautioned that many industrial properties sell for more than their assessed value, and that owner-occupants—which DHS will be—tend to be willing to pay more than investors. But the sale price, which works out to more than $174 a square foot, is far higher than the going market rate. “It’s just crazy,” one broker told me. Another quipped, “This is not something I would want to stand before a judge and have to defend.”
The DHS and ICE officials I asked about the purchase told me that they had little insight into the transaction, but they described the Utah site as a key addition to their broader makeover of the immigration detention system. The Utah warehouse would give the government a large detention facility in the Rocky Mountain region, which would allow ICE to send detainees there from Colorado, Idaho, and other western states, officials with knowledge of the plans told me. Most immigration detention sites are in the South—especially Texas and Louisiana—and the goal of the ICE overhaul is to have fewer locations but with a more even distribution across the country. ICE officials said last year that they want to build a “hub and spoke” system modeled after e-commerce retailers such as Amazon. The process has been guided more by logistical considerations than by worries about political backlash, according to officials familiar with the plans at DHS and ICE.
One person with knowledge of the Utah purchase told me that the warehouse had been appraised prior to the sale at roughly $130 million—more than 30 percent above its tax assessment. The seller had added office space and made about $10 million in improvements to the site, and the rest of the amount went to closing costs and fees, the person said. DHS was a motivated buyer and eager to close the deal quickly. DHS public-affairs officials did not respond to my questions about the appraisal and the company that conducted it.
As a reliably red state in the American West, Utah may look like a perfect place for an ICE megajail. But the politics of immigration enforcement are fraught there too, local officials and real-estate brokers told me. The Church of Latter-Day Saints (which provided much of the original scrubland for the Inland Port) is welcoming of immigrants and has helped settle generations of refugees and international converts to the Mormon faith. Like other affluent cities in Rocky Mountain states, Salt Lake City is a blue island in a sparsely populated red sea.
Salt Lake City Mayor Erin Mendenhall, a Democrat, has said that the city’s opposition is currently focused on ICE’s potential utility consumption and strain on local services. City officials said yesterday that the government hasn’t told them what it projects its needs will be but that a facility constructed to hold goods would need “significant” upgrades, including new sewage lines and pumping capacity, to hold large numbers of people. One city official I spoke with, who was not authorized to discuss preliminary negotiations with ICE, told me that a detention center for 7,500 to 10,000 people has a projected water use of 1 to 2 million gallons a day. The city’s entire daily consumption is about 40 million gallons, the official said, and the broader Salt Lake area is bracing for worsening drought after a winter of meager snowfall. The state of Utah opened a new prison with space for about 3,000 inmates not far from the ICE-warehouse site, the official said, and the facility consumes about 450,000 gallons daily.
Brigham Daniels, a land-use expert at the University of Utah, told me that local jurisdictions are not obligated to accommodate the federal government’s water-use plans if scarce resources are threatened. But, he said, the government could find alternative methods for supplying large volumes of water to the site by purchasing water rights from the state or from a different jurisdiction. The city would be on shakier legal ground if it refused to allow that water to reach the warehouse. “It’s one thing to say, We don’t have that water for you,” Daniels said. “It’s another thing to say, We won’t deliver it.”
The city has also raised concerns about the potential threat to the Great Salt Lake, which already competes for water against farms, lawns, and golf courses. The dry bed at the edges of the shrinking lake periodically swirls up into clouds of toxic dust laced with heavy metals. The Trump administration included $1 billion in the president’s budget request to Congress this week to improve management of the lake and route more water into the basin. “This is an Environmental hazard that must be worked on, IMMEDIATELY—It is of tremendous interest to me,” the president wrote on social media in February. Daniels said that the ICE warehouse would not necessarily be in a zero-sum competition with the lake, because most water that is used indoors can be treated and safely discharged.
[Read: Kristi Noem is gone. Now mass deportations can really begin.]
The urgent need that drove Noem and Lewandowski to acquire the warehouses has faded somewhat lately. In the two months since the “border czar” Tom Homan announced a more “targeted” approach to ICE enforcement, with a clearer focus on criminals, the average daily number of detainees in ICE custody has declined from 70,000 to about 60,000, two ICE officials told me. Even so, expanding the detention system remains a priority for the department. Homan has repeatedly said that ICE needs capacity for at least 100,000 detainees if it’s going to achieve Trump’s 1-million-deportations goal.
During his confirmation hearing, Mullin was asked whether he would commit to making sure that ICE had local support before it opened a large detention center in a community. Mullin said that he wanted to “build relationships and work in that manner.” He has also said that he wants a quieter, less confrontational approach than the one Noem and Lewandowski promoted. But the money for mass deportation has already been appropriated by Congress. ICE is in the process of doubling the number of immigration officers on U.S. streets, and recent federal-court rulings have backed the administration’s push to hold far more immigrants in custody while they fight deportation. Trump’s removal campaign may be regrouping and seeking a lower profile to allow the ICE workforce to catch its breath. But the administration now owns more than 7.5 million square feet of new detention space, and it has all the money it needs to fill it.
Marie-Rose Sheinerman contributed reporting.