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 Tuesday night, the five-member body garnered the supermajority required to pass an amendment to the site’s comprehensive plan. Current zoning law designates 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 own the land 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 as 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. Canterbury 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, envisioning Doran’s proposed apartments as “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. “I believe it is time to unlock Canterbury’s full potential for the betterment of our community.”

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. “What happens if we oversaturate the market?” Lehman asked.

In a written statement, Luce said he feared rejecting the proposal would send a message to developers that Shakopee has become a “closed city” that doesn’t welcome growth. “I am unwilling to bring that amount of negativity to our city over some personal differences,” he wrote.

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.