It's pretty hideous, Eric Foster said, as he stared at the boarded-up building with peeling beige and brown paint that he is buying from the city of St. Paul. Then, he started picking out interesting architectural details.

"I don't know. Maybe I'm weird, but I see the potential. … There's beauty here," Foster said of the four-unit building in Dayton's Bluff that once had a storefront on the bottom level and housing above.

Similar small mixed-use buildings, with a commercial space on the bottom level and an apartment or two up top, can be found all over St. Paul's older neighborhoods. But many are aging and in need of an update or new use, said Carol Carey, executive director of Historic St. Paul, the nonprofit partnering with Foster to overhaul the property at 208 and 210 Bates Av. She hopes it can provide an example for what could be done elsewhere in the city.

"The community grew up with small, locally owned businesses that were adjacent to the residential properties," Carey said. "Finding some of these opportunities and transforming these into uses that fit our contemporary lifestyle is an important demonstration."

A year ago, St. Paul was looking at tearing down the building and a number of others in Dayton's Bluff. But, urged by neighborhood residents, the city gave the decrepit, empty buildings one more marketing push — and it worked. The city's Housing and Redevelopment Authority has signed off on the sales of five of the six properties it showcased and is considering an offer on the sixth.

This week the housing authority approved the sale of the Bates Avenue building for $1 and agreed to a cash subsidy of $600,000 to help Foster and Historic St. Paul redevelop it.

They plan to turn it into four units of affordable housing, but they want to retain a sense of the original commercial use. So they are looking for artists or craftspeople to live in the first-floor units. They could use the area as a live-work space and hold pop-up galleries to show their work there, Carey said.

Those kind of events would help connect the community, said Foster, who lives nearby. He has rehabilitated another mixed-use property — the building that houses his restaurant, Ward 6, on Payne Avenue.

It's hard to retain an old building's mix of commercial and residential uses with today's fire codes and insurance policies, Foster said. And at the Bates Avenue building, he said a fully commercial space on the ground floor no longer makes sense because of the neighborhood's evolution.

When the building was constructed in 1885, the area was a commercial hub, said Jonathan Sage-Martinson, St. Paul's planning and economic development director. Now it is a residential neighborhood.

New roles for old buildings

"There's going to have to be a rethinking about the reuse of these kind of properties," he said of the small mixed-use buildings.

When St. Paul bought the Bates Avenue building more than a decade ago, it was a "seriously terrible problem property," Council Member Jane Prince said, and it has fallen further into disrepair.

The gutting and renovation of the building is expected to cost $952,407, according to city documents. It would likely cost more than that to tear down the building and build four new housing units there, Prince said. The city's $600,000 subsidy will come from federal grant money and city dollars allocated to the Invest St. Paul initiative, which targets certain neighborhoods, including Dayton's Bluff.

The subsidy is in line with what the city has offered other people renovating houses in the targeted neighborhoods — generally $150,000 for each housing unit created.

When city officials approved the funding Wednesday, Prince said the project was important because it "really keeps alive the history of our working class in St. Paul."

The final Dayton's Bluff property that the city intends to sell, called the Schornstein Garage, is on the same block as the fourplex. Cory Vandenberghe, a woodworking hobbyist, made an offer on the building. He plans to remodel it and hopes to eventually also sell some of his work out of his home.

While the city has not yet approved Vandenberghe's plan, Foster is excited about the possibility of having several live-work spaces clustered together.

"I think there's a chance for kind of a synergy and kind of a revitalization," Foster said.

Jessie Van Berkel • 612-673-4649