Your strategy would be just fine if it weren't for residence time distribution. You need a minimum residence time of 10 minutes, so designing a tank with a mean residence time of 15 minutes is a decent first guess- but I doubt that your baffle sections will even approximately give you the residence time distribution of plug flow. For that, you need fully-developed turbulence in all parts of the tank, with no opportunity for short-circuiting or back mixing. A tank of the sort you're describing will definitely permit some water to sneak through without being there for the full ten minutes. In my experience, baffle tanks can have very complex residence time distributions, and their effective mean residence times are far shorter than what you might expect. If you have to use a baffle tank, I doubt that 15 minutes mean RT will be nearly enough.
The good news is that at 200 gpm and 85 C for water, fully developed turbulence is relatively easy to come by in pipe, at surprisingly low velocities. Just for fun, calculate the size of pipe which will give you a Reynold's number of 10,000 at 200 gpm- and make sure you use the actual viscosity of water at 85 C (it's lower than at room temperature, which helps). Then consider making an accordion-type tank (i.e. lengths of pipe with mitred bends) with a mean residence time of 15 minutes. If that won't fit in your allotted floor space, consider doing some slightly more detailed calcs to account for the elbows etc. (see Levenspiel's omnibook or his text for more details) and you may be able to get away with a slightly smaller tank- but probably not by much if you want 90% of the water to be in there for at least 10 minutes. You'll have to meaure the added fabrication cost of this type of design against the savings in floor space that it may provide to you. The worst option, though, would be to build something which doesn't suit the intended purpose (i.e. lets incompletely sterilized water go through)