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Situated on the south bank of the Minnesota River, southwest of downtown Minneapolis, Shakopee is the governmental seat of Scott County, Minnesota.

The Shakopee Mdewakanton Sioux Community, a federally recognized sovereign nation, lies in part within the southern portion of the city limits of Shakopee.

Shakopee is surrounded by the cities of Chaska, Prior Lake, Savage, Bloomington, Eden Prairie, and Chanhassen, as well as unincorporated Marystown, The Shakopee Mdewakanton Sioux Community, and the Prior Lake Indian Reservation.

The historic community of Barden is in northeastern Shakopee, at the northern terminus of Stagecoach Road, southwest of Fisher Lake, and north of the railroad.

The main routes through the city are US Highway 169 and County Highway 101, which serves as a major east-west connector to historic downtown Shakopee. Minnesota State Highway 13 connects Shakopee to the rest of the Minneapolis-Saint Paul region.

Bounded by the Minnesota River to the north, Shakopee contains several lakes and smaller bodies of water, and there are many other lakes in the surrounding area. Lakes within the city include Blue Lake, Dean Lake, Fisher Lake, and Quarry Lake, while O'Dowd Lake and Rice Lake border on Shakopee.

The city's parks and recreational areas include the 17th Avenue Sports Complex, the Community Center, Glacial Park, Greenfield East Park, Greenfield West Park, Hiawatha Park, Holmes Park, Huber Park, the Landing, Lions Park, Memorial Park, Prairie Bend Park, Raceway Park, Riverside Fields Park, Riverview Park, Scenic Heights Park, the Shakopee Ice Arena, Shutrop Park, Southbridge Community Park, Stonebrooke Golf Club, Tahpah Park, Quarry Lake Park, Valleyfair, Whispering Oaks Park, and a large green space surrounding the Minnesota River, Blue Lake, Fisher Lake, and Rice Lake, in northeastern Shakopee, and extending into Bloomington Ferry and Bloomington.

The Shakopee region has been inhabited for thousands of years, as Indian burial mounds have been found that date back about two thousand years. When the first white settlers came to the area, it was inhabited by a Dakota Sioux tribe headed by Chief Shakpay, who settled along the banks of the river in the 1700s. His village, known as Tintonwan, was east of the city's current downtown district.

The first steamboat came as far as Shakopee in 1842, and Oliver and Harriet Faribault built a log cabin along the river in 1844. At the invitation of Chief Shakpay II, a Christian missionary, Samuel W. Pond, came to the area, later founding the First Presbyterian Church in 1855.

The region was officially opened for white settlement in 1851. Thomas A. Holmes opened a trading post near Tintonwan Village, and Shakopee was designated the county seat in 1853.

Shakopee Village was platted by Holmes in 1854, and named for Chief Shakpay II. The village was incorporated as a city in 1857. Its status as a city was shortlived. In October of 1861, the Minnesota Legislature forced the city to surrender its charter and revert to a township form of government.

For several years, the most common mode of transport to and from Shakopee was by steamboat. In 1865, the Hastings and Dakota Railroad extended its tracks to Shakopee, connecting Minnesota to the West Coast. However, the line between Hastings and Shakopee was abandoned in the 1970s.

Shakopee was reincorporated as a city in 1870.

The first bridge across the Minnesota River in Shakopee was built in 1880. This was the Lewis Street Swing Bridge, which encouraged industries to set up shop in Shakopee.

Early industries included the Jacob Ries Bottling Works, Schroeder Limestone Kiln and Brickyards, George F. Strait and Company, and the Minnesota Stove Company, all built in the late 1800s.

Following a large fire in 1879, the Shakopee Fire Department was organized, and a two-story City Hall was constructed at Lewis Street and Second Avenue.

A municipal electric system and a water system was established in the early 1900s, the city's first well serving the community until 1991.

In 1927, the Holmes Street Bridge connected Shakopee to Chaska.

In 1969, a living history museum, known as Murphy's Landing, was established on the site of the original ferry route. This park is operated by the Three Rivers Park District today. The Valleyfair Amusement Park opened in 1976 and is still in operation. In 1985, Canterbury Downs, a horse track, opened, and is also in operation yet today, as Canterbury Park.

The Bloomington Ferry Bridge, built in 1995, has greatly spurred growth, opening the city to new business and residential growth. Its population doubled between 1990 and 2000, and nearly doubled again between 2000 and 2010.

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