The Shakopee City Council narrowly approved a land-use measure that allows for high-density housing at Canterbury Park, overcoming a crucial hurdle for the racetrack's $400 million redevelopment project.

In a hotly debated 4-1 vote, the five-member body garnered the supermajority required to pass an amendment to the site's comprehensive plan. Current zoning laws designate Canterbury and Valleyfair amusement park as entertainment districts, which do not permit residential housing.

"I tried hard and I can't find fault with it," said Council Member Mike Luce, who earlier this month expressed serious doubt about the project. "If you're a landowner and you're not stepping on anyone's toes, then you should be able to do what you want."

An overflow crowd erupted in applause once Luce cast the decisive vote.

The proposed upscale-living complex on the track's west side, dubbed Canterbury Commons, includes more than 600 apartments, 100 townhouses, senior housing and a 120-room boutique hotel.

Doran Cos. signed on to build the luxury apartments, which would be the first domino of a much larger mixed-use development for specialty retail, eateries and office space. Doran CEO Randy Sampson estimates the finished product would generate $7 million in property taxes, compared to the current $800,000.

Before the vote, Sampson made one last impassioned plea for the project, calling Doran's proposed apartments "the best residential community development south of the river."

Mayor Bill Mars said he hopes Canterbury Commons will help alleviate a housing crunch and attract more young professionals to town. "People want to be close to the action," he said.

Councilman Matt Lehman, who opposes high-density housing at the site, was the lone dissenting vote. Lehman and Luce repeatedly have expressed concerns over traffic congestion, tax-increment financing and public infrastructure costs needed to support the development.

The council must still sign off on key components of the project, including preliminary and final plat approval, and the creation of a tax-increment-financing district.

For more than 10 years, Canterbury executives have dreamed of a neighborhood with multifamily housing, commercial and office space. The recession stalled those ideas (including moving the park's stables to make room for the developments). Instead, owners shifted their focus to housing, with the hope that retail would soon follow.

The new developments will build on the "River South" branding effort, which touts such amenities as Canterbury Park, Mystic Lake Casino, Valleyfair and the annual Renaissance Festival.