Chaska officials held a ceremonial groundbreaking last week for a new 54-unit senior apartment building called the Landing.
The four-story structure will be located downtown at the corner of Hwy. 41 and First Street.
City Administrator Matt Podhradsky said the site has been a top priority for redevelopment in Chaska's long-range plans.
"We want to create as much density of population downtown as possible so that more people can support the businesses there," he said.
The project will also create a strong and pleasing southern entrance into the community, Podhradsky said.
Aeon Development Company, the project's builder, has also designed a trail connection from First Street to the top of the levee that borders downtown along the Minnesota River floodplain. The trail will be the first direct connection from downtown to the trail system on the east side of Hwy. 41.
The project is scheduled for completion in late 2013.