The challenge: Transform an unfinished lower level into a multifunctional living space that "didn't look like a basement."

The designers: Homeowners Dan and Bridget Smith, Shakopee

Project goals: The Smiths, who built their house in 2004, had never gotten around to finishing the 1,100-square-foot lower level. "We wanted a good-sized exercise room, so we wouldn't have to drive back and forth to the gym every day," Dan Smith said. "We wanted an entertainment area with a full-scale bar. And we wanted a large, easy-access bathroom."

What goes where: Space planning was one of the trickiest parts of the project, Dan said. "We wanted to use the space as well as we could, but it wasn't really set up for what we wanted."

A bathroom had already been roughed in where the Smiths wanted the bar. The hallway was too big -- 10 feet square. To fit the shower into the bathroom, they had to make it triangular-shaped. And there were three support columns to work around. "One is in the bar post. One is buried in a half wall and one is in an archway that separates the hall and the main room," Dan said. "We went through 100 sheets of squared paper" before finalizing the design.

Professional help: The Smiths did the overall design for their project, but they turned to a general contractor, Ashland Building & Design, and Shaughnessy Cabinets to help turn their design into reality.

Power of the palette: Dan, who works at Hirshfield's, did a lot of tinkering with stain and paint colors. The bar is made of cherry, but the doors and trim are poplar, stained to match the bar. As for paint, there are nine different colors on display. For the main room, they chose Rattan from Benjamin Moore. "It's an orange-y brown that looks almost green sometimes; it's a chameleon color that depends on lighting," he said. The exercise room was painted red, to stimulate energetic workouts. "We wanted hot colors for inspiration."

The result: The Smiths' lower level is now the functional and inviting gathering spot they always wanted. "It's so open that there's room for plenty of people," he said. "We entertain more. We have a lot more neighborhood gatherings. It's a walk-out basement, so people wander in. And our daughter has sleepovers more often now."

Kim Palmer • 612-673-4784