Canterbury Park's $400 million redevelopment project overcame its last remaining hurdle Wednesday, as the Shakopee City Council passed a hefty tax-increment financing package to fund new roads and other infrastructure improvements.
Construction of Canterbury Commons, a gated luxury housing complex at the popular Shakopee racetrack, is expected to begin this fall.
The council formally approved a tax-increment financing (TIF) district around Canterbury to fund up to $33 million in public infrastructure improvements.
It also agreed to issue $10.5 million in general obligation TIF bonds to cover a portion of the road work up front, including the rebuilding of 12th Avenue and a new roundabout at Vierling Drive and Eagle Creek Boulevard.
And it approved a contract with Bloomington-based developer Doran Cos., which plans to build 596 upscale apartments with amenities on the track's west side.
The area eventually will have about 100 owner-occupied townhouses and senior condominiums, plus a boutique hotel. Once completed, the project will become the largest mixed-use development in Shakopee's history.
"The benefits Canterbury Commons will offer our community are tremendous," said Canterbury Park President Randy Sampson.
Officials hope for a bustling hub of specialty retail shops, restaurants and office space, as well as high-wage jobs and improved traffic flow on adjacent streets.
A recent traffic study determined that 12th Avenue — which partly falls outside the TIF district — needed immediate repairs. As a result, Canterbury officials permitted the city to use tax-increment proceeds to repay the bonds.
Michael Kerski, the city's planning and development director, assured council members that the city retains minimal risk because of built-in safeguards.
Canterbury is required to complete two connecting roads; if it fails to do so, the city can terminate the redevelopment contract. Should the project stall for more than four years, the city can hire a new developer to complete the urban section.
"If anything goes awry … they have to pay for it," Kerski said.
The racetrack itself plans to invest upward of $20 million to build private roads, relocate horse barns and demolish old structures.
"I'm risk-averse," said Mayor Bill Mars. "We've had a lot of TIF districts and none of them have failed. I don't think this one will either."
Future tax revenue from the district would reimburse Canterbury Park for costs related to repairing public roads, walkways and utilities over the next 25 years or until the note is repaid.
Council Member Matt Lehman, who opposes most high-density projects, was the lone dissenter. "There are too many inconsistencies," he said.
Doran's first phase will include construction of 295 apartments, a posh clubhouse and a gatehouse on a nearly 24-acre parcel. The second phase calls for an additional 304 units.
Council Member Mike Luce praised the design plans, which include a parking ramp hidden at the center of the four-story complex where residents can drive right up to their floor.
"I think it's something sorely needed here," Luce said of the luxury lodging. "Some of our bigger companies — Entrust Datacard, Emerson — they've been long awaiting something like this."