Hamilton County commissioners award build-operate-transfer agreement for shelter project amid questions over scope

Hamilton County commissioners on May 27 approved a build-operate-transfer (BOT) construction agreement for a shelter project, awarding the contract to HC Shelter LLC (also described in materials as TW Consulting). The decision followed a public hearing at which no members of the public spoke and a discussion among commissioners and county staff about the project's final scope and future operating agreement.

The BOT agreement approved on May 27 covers construction work only; staff said a separate operating agreement will govern day-to-day shelter operations. County staff described a forthcoming Guaranteed Maximum Price (GMAX) addendum that will define final costs and whether the project will function as emergency shelter, transitional housing, or a combination.

County staff explained the BOT award was made after a scoping period and that HC Shelter LLC was the developer selected through the county's RFQ process. Connor (staff member) told the board the original RFQ invited proposals for both emergency and transitional shelter configurations and that HC Shelter’s proposal included both options with Prevail as a proposed operator. Connor said the GMAX has not been set and "it is not penciled in whether it's transitional or emergency or some combination of the either 2," and that work begun under the BOT would be needed regardless of the final operating model.

Commissioner Altman questioned whether the county's advertisement, which he said described emergency shelter, had been substantially different from the proposal the vendor described. Altman said the county "did not anticipate a full thousands of square foot office building" in proposals and expressed concern that operator payments would not cover debt service for such an expansion. Connor and other staff answered that the RFQ was intentionally broad to allow private-sector proposers to present options and that Prevail appeared to have moved away from an emergency-shelter model in recent conversations. Staff said clarifications about office size, payment expectations and the operating agreement would be resolved separately from the BOT construction contract.

County staff said the BOT contract will enable contractor work on site immediately while staff, developer and the proposed operator finalize the operating agreement and the GMAX. The board voted to approve the BOT agreement and award; the action was recorded as passing with a 2–1 tally.

The BOT award does not finalize whether the facility will be run as emergency shelter or transitional housing, nor does it set the final project cost; staff said the GMAX addendum and the operating agreement will set those details and that the operator’s payments likely will not cover debt service in full. Commissioners requested further documentation on the RFQ response, proposed office square footage, and the anticipated GMAX when available.

Next steps identified in the discussion include continued negotiation of the operating agreement and a forthcoming GMAX addendum. Staff said they will provide a term sheet and more details on financing and responsibilities as the project moves into construction and the county and operator finalize operational terms.