BERLIN, N.H. (AP) – The federal Bureau of Prisons is one step closer to building a medium-security federal prison in the state.

The prison bureau said it prefers a 700-acre site near the state prison in Berlin’s northeast corner, bordering Milan and Success, according to a draft environmental impact statement.

The land is owned by T.R. Dillon Logging Inc. of Madison, Maine, as are two of the other three sites under consideration. It is near the city’s industrial park, a sawmill and a hospital.

City officials were relieved that the Bureau of Prisons agreed with their site preference and didn’t choose one of two potential sites close to a new ATV park the state plans to open near Jericho Lake, said Pamela Laflamme, city planner.

“It keeps what we think of as traditional and nontraditional industrial uses in the northeast part of our community, and allows the western part of our community to grow and expand as this recreation-tourism base,” she said.

Former mayor Dick Huot, who is chairman of the Berlin Industrial Development and Park Authority, said it makes sense to locate the federal facility near the existing state prison, which also is slated for expansion.

Isaac Gaston, the site selection specialist for the Bureau of Prisons who worked on the project, said the site choice is not final. The public has until May 8 to comment and the bureau will host a public hearing in Berlin on April 19.

The agency will then issue a final report and accept comments for another 30 days, Gaston said.

A summary of the draft report says the prison will house about 1,230 medium-security inmates. A satellite minimum-security prison camp for another 128 inmates also is planned for the site.

The Bureau of Prisons said it needs more beds to relieve overcrowding at other federal prisons and to meet anticipated growth in the inmate population, especially in the Northeast. In New England, only Massachusetts and Connecticut have federal prisons.

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