Rosemount officials have reached a tentative understanding with Doran Companies to build a new city-owned activities center and an adjacent senior housing building, which Doran would own, on city land near the Steeple Center downtown.

Mayor Bill Droste said the City Council is comfortable with a predevelopment agreement reviewed at a council work session Oct. 10. Droste expects the agreement to be approved at the next City Council meeting.

Doran says it supports the agreement, which caps Doran's profits and administrative overhead at 5 percent of the activities center's cost. The final plans and cost of the center are still to be determined.

The agreement includes no city funding for a pool or fitness area, suggested in August by developer Kelly Doran. Doran had asked the city to pay up to $1.5 million for those amenities in the senior center.

Bill Stoddard, Doran's vice president of development, said he was meeting with city officials to iron out some details, but "from what we have seen so far, it sounds like we are on the same page."

He said Doran is still considering including a pool and fitness area in the 80- to 90-unit senior living building at the corner of 143rd Street and S. Robert Trail. Stoddard said Doran plans to build the activities center -- for use by seniors and other community groups -- for the city next to a three-floor senior housing building that Doran would own and operate. The city would sell the 1.6 acre senior housing site to Doran for $1.

The senior housing, costing more than $10 million, would offer independent living, assisted living and memory care units, Stoddard said.

"We think it's a great location for senior housing," Stoddard said. "We love the fact that they are forward thinkers in having the senior center alongside their beautiful Steeple Center and our proposed senior living community."

The former Church of St. Joseph school on the site will be demolished this month to provide space for the 5,000-square-foot activity center, Droste said. The school is attached to the Steeple Center, which is used for arts programs and other community gatherings. A public library sits just south of Steeple Center.

Nearly a year ago, Rosemount won a $440,000 Metropolitan Council grant for a public plaza, streetlights, sidewalks and benches for the senior housing project. The two senior buildings will sit between Steeple Center and two secondary schools on the north edge of downtown.

The city started looking for a site developer in mid-2011. A study earlier that year found that Rosemount didn't have senior housing that provided assisted living and memory care.

"It's taken a lot longer than we thought to find a developer," Droste said. "But now it looks like we will probably be digging in the ground by next spring and see the project come to fruition in the [following] year."

Jim Adams • 952-746-3283