In my experiance location does matter in real estate, but only in regards to price. The saying in the industry is their is an a** for every seat. We have sold houses across the street from train tracks and industrial buildings. Insted of getting $350k-$360k for them we get $310k-$320k. Its simply a numbers game.
Figuring out how the prison affects the value is hard to do without a lot of experiance in the area. This is where your real estate agent earns their money, they should be able to help you put a number on it.
I'd knock on a few neighbors doors and see what they say.
As for security against break outs, I would recomend an insurance policy:
