The city of St. Paul will not have to pay back a $1 million loan from the Metropolitan Council for a long-anticipated urban renewal project off University Avenue and Galtier Street, about three blocks west of the state Capitol building.

The city received the zero-interest “Land Acquisition for Affordable New Development” loan in 2008 to help acquire the former site of the Saxon Ford car dealership, with the expectation that funding or financing for new real estate there would cover loan costs.

Construction on a project has yet to move forward. Current proposals call for a 50-unit assisted living facility with memory care on the northern part of the property near Sherburne Avenue, as well as a separate two-story commercial building.

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The Met Council’s $4 million LAAND loan program ran from 2008 to 2011 before being discontinued after failing to draw sufficient applicants. A loan to the city of Minneapolis in the Seward neighborhood was repaid, but most others were devoted to affordable housing and forgiven.

The St. Paul loan, the last one outstanding, allowed the city to acquire five parcels of land between University and Sherburne avenues, west of Galtier Street, that had been associated with the Saxon Ford dealership.

On Wednesday, the 17-member Met Council voted to forgive the loan entirely.