By the early 1950s, it was apparent that the lumber industry was not sustainable. Efforts had begun to attract other industries. In 1953 an unlikely bedfellow appeared as a promising new industry—a state penitentiary. In the summer of 1953, the California Department of Corrections began a 35-county search for the possible location of a medium-security prison. On July 3, 1953 Lassen County submitted an application to the state that met many of the criteria. A movement to get a prison was born. After all, if the State decided to build a prison at/near Susanville, it was estimated that it would result in the creation of 400 jobs with an annual payroll of $1.25 million.
By mid-July, it was announced that the State had reduced the selection to sites to four counties—Sonoma, Butte, Merced and Lassen. A site had been selected by the State near Leavitt Lake.
While the business community embraced the concept of becoming home to a prison, it was not well received in the agricultural community. It was a hotly debated topic. Whatever the case may be, in the spring of 1954, the State informed Lassen County that at this time it would become home of a State prison.