For the picturesque Lake Minnetonka community of Excelsior, development constantly poses an identity crisis.

Last year, plans were killed for a scaled-down hotel after the city was divided over its size. Two years ago, the city nixed modern glass-and-steel designs for its new library, opting instead for a traditional brick structure more akin to its historic character.

Now, on Monday, the city will grapple with the same issue of compatibility for the Waters of Excelsior, a proposed senior apartment project.

The City Council will consider the general plan for the Waters project, which was rejected by the Planning Commission based on the scale and mass of what would be Excelsior's first four-story building.

Developers since then have reduced the building's proposed height and are now pitching a building with either 3½ or 4 stories, and 94 to 110 units. Anything smaller than that, they say, wouldn't be financially feasible.

"The biggest challenge we have is fear of change," said Jay Jensen, senior vice president of development for Minnetonka-based the Waters Senior Living Management LLC, adding that the developer picked the city for its small-town feel.

A rendering shows the Waters of Excelsior, which would have up to 110 units.

"Seniors who live in Excelsior want to stay in Excelsior, and they can't do it" now, he said.

The company met similar opposition in 2010 in another west metro suburb, Edina, when residents of the Countryside neighborhood protested a 139-unit, three-story building, saying it was too big for the site and would create too much traffic. A divided City Council approved it.

In Excelsior, three City Council members favor the Waters project while two are opposed, according to Mayor Mark Gaylord. But because it's a planned unit development, which allows for design flexibility, it needs four votes to pass.

Gaylord, who supports it, said the development would bring a "dramatic" increase of about 10 times the property taxes compared to the buildings currently on the 1.8-acre site.

If approved, the Waters would be Excelsior's only independent senior living facility and the Waters' ninth facility in Minnesota. It would replace the closed Excelsior Grill and a 1960s-era apartment building off Hwy. 7 and Water Street.

While the unsuccessful hotel development was planned for the center of town, Jensen said this project would be at the edge, "in the hinterland. It's a different feel and different location."

But in a town with an area of only 1 square mile, Council Member Jennifer Caron said she and others remain concerned about the project's size. As you drive down Hwy. 7, she said, you should recognize Excelsior by its small scale.

"This is a significant exception to be looking at something this large," she said.

The development would require the city to annex 1.3 acres of Shorewood because it straddles the Excelsior-Shorewood border. In exchange, Excelsior would split the site's property taxes, with Shorewood getting 60 percent and Excelsior getting 40 percent indefinitely.

If approved, the Waters could break ground as early as late fall. If the council denies it, Jensen said the company will withdraw its plans.

"It does remove a lot of blight," Jensen said of the plans. "It's currently the western gateway to Excelsior."

Kelly Smith • 612-673-4141