When a prison closes, what happens to the prison town?

This fall, a sports village called The Yard opened on 36 acres in this rural community a few hours north of New York City. Athletes of all ages come to practice and play on the facility's indoor and outdoor turf fields.

But an unusual sight greets patrons at the entrance to the property: The main gate is crowned with sparkling razor wire, while an empty guard tower rises at its side.

No, it isn’t a prison. But it was.

"When people come here, that's the uniqueness of The Yard," says Tony Abbatine, who bought the property in late 2014.

Mid-Orange Correctional Facility closed here in 2011. It’s one of 15 prisons that New York State has shuttered in the past four years. In all, at least 17 states have reduced their prison capacity since 2011, resulting in 35,000 fewer beds at a minimum, according to The Sentencing Project.

The prison closures have been driven by a growing bipartisan push to curtail mass incarceration. Policymakers at all levels of government have been discussing how to craft a criminal justice system that treats imprisonment more as a last resort.

But what happens to prison properties after they close – as well as the towns that were economically dependent on them – has been largely absent from those policy discussions.

That needs to change, says Marc Mauer, executive director of The Sentencing Project. "Towns need to start thinking about this, but it would also behoove relevant states to begin thinking about this, too," he says.

Some are hailing the efforts in New York as a model for how communities can survive – and even benefit from – the economic blow of a prison closure. In Warwick, the town’s local development corporation bought part of the prison property from the state and marketed the real estate to potential redevelopers itself. Several other communities have also seen new enterprises spring up on former prison grounds.

"If they're going to continue to depopulate the [national] prison system, yes, they have to be paying attention to those communities when they close," says Tracy Huling, an expert on rural prisons who curates the website YesInMyBackyard.org, which is about reusing correctional facilities. "And they've got a model now in New York."

'Company towns'

Thirty years ago, attracting a prison seemed like one of the soundest financial decisions that a rural community, in particular, could make. Thanks to tough-on-crime policies, a prison-building boom was under way. Rural areas could offer large but secluded property in exchange for the kind of large, stable employer that such communities often struggle to attract.

The number of state prison facilities rose from 600 in the mid-1970s to more than 1,000 by 2000, according to a 2004 report from the Urban Institute, a think tank in Washington. By the 1990s, 25 prisons were being built in rural areas every year, up from four a year during the '70s, according to research by Ms. Huling.

As prisons rose up in small communities, they soon became the only game in town, akin to single-industry "company towns."

"There's a greater reliance on these industries in more rural areas that tend to have more underdeveloped economies and fewer economic alternatives than their urban counterparts," says Rebecca Thorpe, an assistant professor of political science at the University of Washington in Seattle who has researched rural prison towns.

But then, for a variety of reasons, including concerns about mass incarceration, the tough-on-crime approach began to lose some steam.

America's prison population has started to plateau. Between 1999 and 2013, the state and federal prison population decreased 2.4 percent, according to The Sentencing Project.

New York State's prison population has dropped even more, from a high of 72,649 in 1999 to 52,587 in December, according to the state Department of Corrections and Community Supervision (DOCCS). New York closed nine correctional facilities in 2011 – including Mid-Orange – two in 2013, and four more in 2014.

"Prisons have become a major part of the local economies in these small towns," says Mr. Mauer of The Sentencing Project. "So if [a] state is going to close some institutions, it should be thinking of some transitional support for the towns."

And New York has been trying to do just that.

The state’s facility closures have resulted in about $162 million in overall annual savings, according to DOCCS, and that money is being reinvested in former prison towns through a multimillion-dollar economic development program.

But the results have been mixed when it comes to finding buyers for the properties. Although Warwick is considered a success story, other rural areas have proved a tough sell. At least a third of the 15 shuttered facilities – including the four closed in 2014 – have yet to be sold.

Most of the other success stories are in urban areas, where demand for the properties is often much higher. Arthur Kill Correctional Facility in Staten Island sold for $7 million last year and is being converted into a movie backlot. And recently, NoVo Foundation signed a lease with the state, valued at up to $200 million, to turn Bayview Correctional Facility – which was a women's prison in Manhattan – into a "Women's Building" to provide space for women-focused businesses and activities.

For sale: prison, with lakeside views

It was around the Fourth of July in 2011 that the town of Warwick found out its prison was closing.

"[The state] pretty much said, 'Listen, the governor's made a decision, he's not going to change his mind,' " recalls Town Supervisor Michael Sweeton. "It came as a shock to us."

The medium-security prison had served Warwick well for decades. At its height, Mid-Orange had employed close to 450 people (and incarcerated 740) in a village of 6,700. About half the employees lived in Warwick and paid taxes, according to Mr. Sweeton.

"People didn't really want the prison to close," he says. "[The employees] were good citizens. So people weren't happy about that."

Sweeton attributes Warwick’s eventual success to the unusual route it took: After lengthy negotiations, the Warwick Valley Local Development Corp. bought 150 acres of the 730-acre property for $3.1 million in March 2014. The rest was sold to the town for $1, under the condition it remain undeveloped for environmental preservation and recreation.

Now, the first new tenant in the old prison property – The Yard – has opened its doors.

Right next to The Yard, the town has built a park on the shores of Wickham Lake – an area that was off limits to the public when the prison was operating. Now it is a popular spot for joggers, dog walkers, and cyclists.

The rest of the 150 acres that the development corporation bought could soon be taken as well, Sweeton says. In one deal to be closed in January, a company plans to turn some of the old prison buildings into a banquet hall and country inn. He is optimistic that another nine lots, totaling almost 50 acres, can be sold within the next two years.

But Sweeton knows it isn’t easy. "I don't know too many other success stories," he says. "Upstate, it's definitely more of a challenge."

Each town dealing with a prison closure has it own set of circumstances. While Warwick benefited from having a prison near a lake, Rome’s Oneida Correctional – located next to another prison – has proved harder to sell since it closed in 2011.

Downsizing the US prison system is something the country has never done before, notes Vincent Schiraldi, a senior research fellow at Harvard Kennedy School’s program in criminal justice and a former juvenile corrections administrator in Washington.

"This is new territory for all of us," he says. "Prison populations have been increasing for 40 years, and we're all just trying to figure out now what it's going to look like when they start to decline."

The important thing, experts say, is that towns – and states – start planning for possible closures as soon as possible.

"People need to do a good job at this," Mr. Schiraldi says, "or it'll catch them off guard and they'll hurt."

Communities like Warwick, says Huling, are helping show that a prison closure can be an opportunity for rural communities.

"I know five years ago the first couple articles that came out in national media said, 'Oh you can't do anything with these places,' and now the story has changed," she says. "The reality has proven people have taken the bull by the horns and they've done something with them."