The state bought the hospital in 2022 from a for-profit provider as an investment in the state’s continuum of care for mental and behavioral health. In 2023, the state decided it would also build a new youth detention facility alongside the hospital on the same campus. After facing criticism and safety concerns with a prior contractor, the state inked a deal this year with Dartmouth Health to provide clinical services at the hospital.

Current employees at Hampstead Hospital are working in temporary positions set to expire at the end of June, unless extended. Some councilors told WMUR last month they worry the temporary status could contribute to high turnover.

Under the proposed deal with Dartmouth Health’s Mary Hitchcock Memorial Hospital, however, current non-union employees of Hampstead Hospital would be offered jobs with the nonprofit. Employees who are currently covered by a union contract or collective bargaining agreement would continue to be employed by the state.

In explaining the proposal to the executive councilors, New Hampshire Department of Health and Human Services Commissioner Lori A. Weaver wrote that the transaction is expected “to strengthen the facility’s ability to attract, retain, and train a robust workforce.”

Weaver said the $34 million operating budget that her agency recently submitted for Hampstead Hospital in the coming biennium “would be greatly reduced” if this deal takes effect.

The proposal calls for Mary Hitchcock Memorial Hospital to buy Hampstead Hospital’s operational assets for $631,000, then lease the 89,000-square-foot facility from the state as part of a joint operating agreement. The rent would start at nearly $1.2 million per year and increase 2.5 percent per year thereafter.

The facility offers more than 40 beds for children and adolescents, including a 23-bed secure acute psychiatric unit, according to the state.

Following an initial seven-year lease period, Dartmouth Health would have the option to re-up for three five-year extensions, according to the terms of the proposed contract. Whenever the lease expires or is terminated, the state would have the right to re-purchase Hampstead Hospital’s operational assets to keep running the facility.

Not everyone was immediately on board with the Sununu-backed deal. State Representative Erica Layon, a Republican from Derry who is sponsoring legislation to establish permanent state jobs for Hampstead Hospital staff, said on social media that leaders “should have a vibrant discussion” about which operational model would be best for the facility. Layon urged the councilors to table the contract until their final meeting on Dec. 18.

A version of this story first appeared in Globe NH | Morning Report, our free newsletter focused on the news you need to know about New Hampshire, including great coverage from the Boston Globe and links to interesting articles from other places. If you’d like to receive it via e-mail Monday through Friday, you can sign up here.

Steven Porter can be reached at steven.porter@globe.com. Follow him @reporterporter. Amanda Gokee can be reached at amanda.gokee@globe.com. Follow her @amanda_gokee.