diff --git a/management/server/store/sql_store.go b/management/server/store/sql_store.go
index 593199b0f..d2d197a03 100644
--- a/management/server/store/sql_store.go
+++ b/management/server/store/sql_store.go
@@ -3154,7 +3154,12 @@ func NewMysqlStore(ctx context.Context, dsn string, metrics telemetry.AppMetrics
 		return nil, err
 	}
 
-	return NewSqlStore(ctx, db, types.MysqlStoreEngine, metrics, skipMigration)
+	store, err := NewSqlStore(ctx, db, types.MysqlStoreEngine, metrics, skipMigration)
+	if err != nil {
+		closeGormDB(db)
+		return nil, err
+	}
+	return store, nil
 }
 
 func getGormConfig() *gorm.Config {
@@ -3238,11 +3243,14 @@ func NewPostgresqlStoreForTests(ctx context.Context, dsn string, metrics telemet
 	}
 	pool, err := connectToPgDbForTests(context.Background(), dsn)
 	if err != nil {
+		closeGormDB(db)
 		return nil, err
 	}
 	store, err := NewSqlStore(ctx, db, types.PostgresStoreEngine, metrics, skipMigration)
 	if err != nil {
+		// Release the sessions, or the caller cannot drop the database.
 		pool.Close()
+		closeGormDB(db)
 		return nil, err
 	}
 	store.pool = pool
diff --git a/management/server/store/store.go b/management/server/store/store.go
index a3dea2582..9dde911a4 100644
--- a/management/server/store/store.go
+++ b/management/server/store/store.go
@@ -1063,9 +1063,12 @@ func cloneMysqlSchema(ctx context.Context, dsn string, tableDDL []string) error
 
 // dropDatabase removes a template that never became usable, so a failed setup
 // does not leave it behind on a shared server.
+// dropDatabase removes a template database that failed to migrate. The server
+// may still be tearing down the sessions the failed migration held, so the
+// drop retries while Postgres reports the database as in use.
 func dropDatabase(admin *gorm.DB, name string) {
-	if err := admin.Exec(fmt.Sprintf("DROP DATABASE IF EXISTS %s", name)).Error; err != nil {
-		log.Debugf("failed to drop template database %s: %v", name, err)
+	if err := execWithTemplateRetry(admin, fmt.Sprintf("DROP DATABASE IF EXISTS %s", name)); err != nil {
+		log.Warnf("failed to drop template database %s: %v", name, err)
 	}
 }