"We think he would be a top-five player if he was in the draft," GM Tim Bezbatchenko said.
Chapman officially signed as a homegrown player the day of the Jan. 15 draft and was in Philadelphia with the team to savour the moment.
"Growing up in Toronto and playing for the academy, I kind of fell in love with the city," said Chapman. "It's an honour to be able to say that I'm a professional soccer player playing for the city that kind of made me. So it's a great feeling."
Chapman, 21, describes himself as a hard-working box-to-box midfielder who can play both defensive and attacking roles.
He joins goalkeeper Quillan Roberts, defender Ashtone Morgan, midfielders Manny Aparacio and Chris Mannella and forward Jordan Hamilton as Toronto homegrown players.
MLS clubs can sign a player to their first pro contract without having to go through the draft if the player has trained for at least one year in the club’s youth development program and has trained 80 days with the academy during that year.
A member of Canada's team at the 2011 U-17 FIFA World Cup in Mexico, Chapman spent two years at Toronto's academy prior to Michigan State.
The six-foot 157-pound Chapman enjoyed a stellar collegiate career, starting 62 of his 63 games in three seasons with 12 goals and 15 assists.
In 2014, the native of Campbellford, Ont., became the first Spartan to be named a semifinalist for the Missouri Athletic Club's Hermann Trophy awarded annually to the top NCAA player. He was also the first Michigan State player to be named Big Ten Midfielder of the Year.
In addition he was named a first-team All-American — the first Spartan to do so since 1970 — and won first-team NSCAA All-Region and first-team All-Big Ten honours.
"I think Jay is a very skilled, technical player," Spartans head coach Damon Rensing told the MSU website. "He proved he was one of the best players in college soccer this year.
"Again, I think he's in a great fit with Toronto. It's neat to see him come up through an organization and then play for a hometown team."
Chapman finished last season with five goals and five assists, four of which came on winning goals.
Michigan state reached the Elite Eight of the NCAA tournament with a 12-5-6 record.
Two other Spartans went in the draft. The San Jose Earthquakes took midfielder Fatai Alashe fourth overall while forward Adam Montague went in the third round (58th overall) to the Vancouver Whitecaps.
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