Erick's Bar in St. Paul's Dayton's Bluff neighborhood was always the very definition of a hole-in-the-wall place, at a tiny 2,000 square feet.

But the scruffy little building — for decades a popular watering hole for workers on their way home from bustling Whirlpool, Hamm's and a 3M plant — represented a large obstacle to the St. Paul Port Authority. The city development agency is now trying to transform those properties that were abandoned one after another.

Now, with a $483,840 state grant, the Port Authority will complete the purchase and demolition of the bar by the end of November, said Monte Hilleman, the agency's vice president for redevelopment. The bar property is the last piece in the Beacon Bluff development project on the city's East Side, an ambitious effort to revitalize those former factory buildings.

The grant is one of seven announced for projects statewide by the Minnesota Department of Employment and Economic Development (DEED). Two projects in St. Paul received the bulk of the $2.7 million awarded in the latest round: the Beacon Bluff project and $1 million for public infrastructure — things like streets and sewer work — at the Lowertown Saints ballpark site. City bonds will cover matching costs.

Money for DEED's Redevelopment Grant Program was approved by the 2013 Legislature, and it is set aside for helping communities leverage private investment and spur job creation statewide.

The Port Authority already owns the land surrounding Erick's, a triangle bound by E. 7th and N. Forest streets and Bush Avenue. The plan is to vacate the small portion of Bush Avenue and create a larger triangular lot that extends to Phalen Boulevard.

"This is a really big issue, bringing jobs back to this neighborhood," said state Rep. Tim Mahoney, DFL-St. Paul, who grew up on the East Side.

"Erick's has been a concern of the neighborhood for many, many years — and that's being kind," he added, recalling that his father 40 years ago remarked that the bar should be torn down after seeing it packed with motorcycle gang members.

St. Paul City Council Member Dan Bostrom recounted the round-the-clock activity at the 3M plant where his father worked, and said Beacon Bluff holds promise to make that happen again. The bar property is right at the development's entry point.

"I'm a guy who believes in handsome gateways," Bostrom said. "This puts a fabulous piece of developable land right at our fingertips."