The historic Schmidt Brewery site in St. Paul is one significant step closer to coming back to life.

The City of St. Paul, acting as the Housing and Redevelopment Authority, on Wednesday approved a $1.9 million loan to the West 7th/Fort Road Federation, Inc., a nonprofit neighborhood development organization.

The organization plans to acquire and redevelop a portion of the former brewery-including the “Rathskeller” office building, the former keg and case storage building, and several ancillary parking lots-located at 822 West Seventh Street in St. Paul. The sale is expected to close on April 15.

The five City Council members present on Wednesday voted unanimously in favor of the redevelopment plan. Two members were absent.

After closing on the property, West 7th/Fort Road Federation will be required to begin replacing the building's roof by July 1, according to Janelle Tummel of the city's planning and economic development department.

West 7th/Fort Road Federation is redeveloping the property for commercial use, and it will work to attract tenants. Planning documents indicate that the group has “already shown the building to several interested users, including several restaurant operations,” and it has a goal of completing the redevelopment project within the next four years.

The $1.9 million loan will finance the initial phase of the two-step redevelopment process. For the second part of the development, Plymouth-based Dominium Development & Acquisition, LLC, will transform the remainder of the former brewery into affordable rental housing.

According to planning documents, the development company has signed an agreement to acquire 7.8 acres that includes the former bottle house and brew house buildings, which it plans to convert into 220 housing units “using a variety of financing sources.” Dominium expects to close on its project financing by the end of 2011. Altogether, the two-phase redevelopment project carries an estimated price tag of $79 million, according to a description of the project on the city's Web site.

Tummel told Twin Cities Business on Thursday that the housing portion of the proposed project will go before the Housing and Redevelopment Authority sometime before the end of this year.

Dominium and West 7th/Fort Road Federation are working together to obtain historic designation for the entire site, which would help the buildings qualify for federal and state historic tax credits. The groups will also use cleanup funds from the Minnesota Department of Employment and Economic Development and the Metropolitan Council.

The St. Paul Housing and Redevelopment Authority in September adopted a spending plan that allocated funds to a variety of development projects, including the Schmidt Brewery project, as part of the Rebuild Saint Paul initiative.