The St. Paul Housing and Redevelopment Authority on Wednesday approved $1.3 million in forgivable loans to businesses along University Avenue for fixing up parking lots in anticipation of the Central Corridor light-rail line.

It's expected that 85 percent of on-street parking spaces will disappear for good when the 11-mile line is built between the downtowns of St. Paul and Minneapolis.

That fact has stirred up business owners along the avenue, and city officials have been trying to figure out ways to expand off-street parking. The Metropolitan Council, which is leading the $957 million project, has said there isn't money in the budget to replace the parking.

The city came up with about $2.3 million for the loan program, which will help business repave and restripe lots or upgrade lighting. City officials had encouraged businesses to work together on sharing the lots.

City Council Member Russ Stark, whose ward includes part of University Avenue, said the loan awards are a sign that the city is committed to helping business stay afloat. He also noted that work can begin this year, ahead of heavy construction that's expected on University in 2011.

There are 25,000 off-street spots on University, but most are private.

The money will go toward 24 projects between Rice Street and the city's western limit. Awards range between $25,000 and $250,000, and about 50 businesses will benefit. The projects will need to start by Oct. 15.

About 50 applications totaling $2 million came in.

The loan terms are seven years with no interest, and one-seventh of the amount will be forgiven each year if parking is maintained and shared parking continues to be shared.

Jack Mcann, president of the University Avenue Business Association, praised the city for its effort and said the loan program will help regain some lost parking and improve the look of parts of the avenue.

Still, he said, it's not going to help businesses that don't have parking lots or aren't close to any. His group has been pushing for the city to buy vacant lots on the avenue and use them for parking.

"We really want every business to succeed," Mcann said.

If the program works well, it will be used in other commercial districts of the city where parking is a challenge.

In other action

HRA commissioners approved a $1 million grant to the Community Housing Development Corp. to help it acquire and renovate the 150-unit Redeemers Arms apartment building. It serves disabled people who are homeless or at risk of becoming homeless.

Chris Havens • 612-673-4148