A federal watchdog says U.S. Immigration and Customs Enforcement obligated $313 million to renovate a Surprise warehouse for immigration detention, but the conversion remained largely on hold in September because of Arizona’s legal challenge.
The finding appears in a Government Accountability Office report released Sept. 24. It provides the clearest federal accounting yet of the 418,000-square-foot project at 13290 W. Sweetwater Ave., near Dysart Road, and places it among four warehouse properties ICE still intends to use.
The report does not establish an opening date or a final operating capacity for the Surprise facility. The building is not operating as a detention center.
Surprise is one of four warehouses ICE kept
ICE bought 11 warehouses nationwide between January and April for about $1.07 billion, according to the GAO. By June, the agency was working with the General Services Administration to sell seven of them after the Department of Homeland Security concluded that the warehouse program had moved forward without adequate planning and due diligence.
The seven properties marked for sale cost $707 million. ICE had also spent about $20.5 million on costs it cannot recover, including title insurance, zoning reviews, utilities and security, the report said.
Surprise is among the four warehouse sites ICE plans to retain. The GAO said ICE awarded renovation and operating contracts in March for facilities in Surprise and Hagerstown, Maryland. The obligations were $313 million for Surprise and $113 million for Hagerstown.
That $313 million figure covers renovation work, according to the report. It is separate from the roughly $70 million purchase price reported from Maricopa County property records by Arizona’s Family.
Legal agreement blocks conversion for now
Arizona Attorney General Kris Mayes sued DHS and ICE in April, alleging the agencies had not completed the environmental review required by the National Environmental Policy Act before moving toward conversion.
Under a stipulated agreement announced July 1, federal officials agreed not to detain anyone at the Surprise property or begin construction, demolition or retrofitting until they complete an environmental assessment and issue a final decision document. If the assessment finds that more study is needed, a full environmental impact statement could follow.
The GAO’s September report says renovation plans in Surprise and Hagerstown were “largely on hold” because of legal challenges. The report does not say that ICE abandoned the Surprise project.
The environmental review is the next decisive milestone. Arizona reserved the right to challenge its adequacy, and the underlying lawsuit is paused while that work proceeds.
Capacity remains unsettled
Early federal documents described a processing center with room for as many as 1,500 people. In March, Surprise Mayor Kevin Sartor said DHS had reduced the plan to a maximum of 542 occupied beds. Neither the GAO report nor the state’s July agreement sets a final capacity.
The city identifies the property as a proposed ICE processing center, but Surprise officials have said the federal government acquired the industrial building without advance notice to the city.
The state’s lawsuit raised questions about water and wastewater demand, emergency response, traffic and the property’s proximity to a chemical storage facility. Those issues are expected to be considered in the federal environmental review.
GAO calls for a broader plan
The Surprise project is part of a larger detention expansion that the GAO found lacked consistent goals, cost analysis and a comprehensive strategy. ICE’s detained population rose from 39,314 people on Jan. 20, 2025, to 67,180 on July 30, 2026, while the number of authorized detention facilities roughly doubled.
The watchdog recommended that ICE develop a strategic plan covering goals, activities and resource needs. DHS agreed, but said the plan would not be finished until Aug. 31, 2027. The GAO said a faster timetable may be warranted because of the scale of funding and the risk of additional waste.
For Surprise residents, the immediate status is narrower: the federal government still owns the Sweetwater Avenue warehouse and still lists it among the sites it intends to use, but conversion and detention operations cannot proceed under the current agreement until the environmental review is complete.
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