"We also made a big city track, with a castle, and a nice pond, where you got to race around all these different houses and buildings. Unfortunately, it was a very large map, and it took too much time to race through. So we cut it." - Developer interview
The city is a cut Mario Kart 64 track, that was later found in developer files.
The city track's model is located in TOWN_PK within the kimura archive, complete with all the textures. It is referred to as TOWN internally, and seems to match the description by the developers of it being very large. Similar-looking city tracks were later used in Mario Kart Tour.
A minimap for the track was found in image/minimap.c. Oddly, it shows all the roads in it, rather than just the roads that were driveable.
There is also a TOWN_point file which contains data like enemy paths, item paths, and object placement. Oddly, the points for this seem to match up with Luigi Raceway, suggesting that it replaced TOWN eventually.