Rosemount plans partnership with Life Time on new fitness center

A partnership between Rosemount and Life Time could bring a new indoor fitness facility to the south metro suburb, fulfilling a goal the city has pursued for more than a decade.

The city would buy the land and own the $48 million building. Life Time would staff, operate and maintain it. They would share construction costs, with the city contributing $21 million and Life Time paying the remaining $27 million.

"The City Council has consistently heard the community's strong desire for amenities, whether it's parks [or a] recreation center," said Dan Schultz, Rosemount parks and recreation director. "We hear about it all the time."

The 107,000-square-foot fitness center will have an indoor and outdoor pool, a cafe, a spa, space for fitness classes, gyms, a childcare area and pickleball courts.

The city and Life Time signed a letter of intent to pursue the project in April, and Rosemount has signed a purchase agreement to acquire 29 acres of land on the corner of County Road 42 and Akron Avenue for the new building, intending to sell about 15 acres of the parcel for other development.

Aaron Koehler, vice president of real estate and development for Life Time, said the Chanhassen-based company had Rosemount on its radar as a place to build, but figured it would be a decade before the city's population would be high enough to support a facility.

"It's early, but this opportunity allows us to come into Rosemount ahead of the game," Koehler said.

That facility offers gym space, but no pool, and not as many other amenities as Life Time.

In a recent presentation to the City Council, Schultz noted a 2021 community survey found residents ranked having a recreation center as their third-highest priority, behind having more retail spaces and a new police and public works facility.

A detailed study in 2018 that included a concept plan for a $28 million, 87,000-square-foot recreation center, confirmed "strong market demand" for such a facility, Schultz said, but also found the city would lose at least $500,000 a year operating it.

"We pretty quickly abandoned that idea based on council direction," said Logan Martin, city administrator. "The list of pros and cons just starkly stacks up in favor of the private partner."

Under the Life Time partnership, Rosemount residents will receive a deal on memberships — no initiation fee and a $10 discount on individual monthly membership dues, a $15 discount for couples and $20 off for families.

A spokeswoman from Life Time says that pricing at the Rosemount location isn't finalized yet and could change.

Every Rosemount household will get four free guest passes a year for five years. The city and Life Time are working through details of a scholarship program for low-income families.

The city plans to use bonds to finance the construction over 30 years, Martin said.

He said the city will use tipping fees — money paid to the city for hosting a landfill — from SKB Environmental, the landfill's owner, as a funding source to pay off the debt. The city gets about $2 million per year in tipping fees and about $1.4 million of that will go to the Life Time project annually.

Life Time will pay about $250,000 annually in property taxes, Martin said.

Janet Williams, mayor of Savage, said she knows people who live in Savage just because there's a Life Time nearby. The city contributed $3.1 million toward the construction of the aquatic center in 2001, she said, and owns that property. Life Time has the option to buy the land in 2041 for $1 million.

Several steps must be completed for the Rosemount deal to be final, Martin said, including the lease agreement, land sale, securing of bonds by the city and approval of plans by the city and the Life Time board.