Just east of downtown St. Paul and in the shadow of the State Capitol, one of the city's most historic neighborhoods sometimes seems hidden and forgotten in plain sight.

E. Seventh Street on Dayton's Bluff once bustled with business from thousands of 3M employees. A Mercedes dealership sold cars to the well-heeled. Now massive vacant lots anchor both ends of a seven-block stretch of road that includes the Mexican Consulate, restaurants, a liquor store, nail and hair salons, a thrift shop and grocery stores.

The corridor has seen more prosperous times, but supporters say the area is on the precipice of a comeback with an effort called "Make it Happen on East 7th Street Initiative."

The Dayton's Bluff Community Council initiative just won a $500,000 St. Paul neighborhood grant from City Hall. The money will go for a coordinated push to raise the profile of some 40 existing businesses, bring in new ones and spiff up East Seventh.

"It's one of those things when all the stars align and you know it; it feels like that right now," said City Council President Kathy Lantry of the initiative.

On the evening of Aug. 17, the Dayton's Bluff Community Council is playing host to an event aimed at generating enthusiasm and attention for the planned transformation. Businesses along the seven-block stretch are participating with specials and giveaways. Drawings will be held for those who visit a series of stores. The event is kid-friendly with face-painting and games.

"Make it Happen is going to bring to the surface the vibrancy of the neighborhood that is already there," said Tabitha Benci DeRango, the coordinator of the effort who has lived in the neighborhood with her husband and two children for nine years. "I'm hoping the general public will see what a walkable street it is."

Before the housing market cratered, Dayton's Bluff stood out for property prices that stayed affordable in the historic urban core with proximity to not just downtown St. Paul, but major arteries in all directions. Housing stock in the neighborhood is a mix of multi-unit rentals with mansions on the bluff and Victorians in various states of restoration.

Despite destination spots such as Swede Hollow Cafe and the Strip Club restaurant, Dayton's Bluff hasn't been able to shake a reputation as a neighborhood in transition with rough edges.

Change is now visible.

Metro State University rises above the bluff near E. Seventh and will be building a parking ramp to accommodate its popularity. Swede Hollow Cafe's lush community garden stands out even from a passing car.

The city has requested proposals of interest for the vacant former Hospital Linen site across from the cafe. Plans are in place for the vacant lot at the opposite end of E. Seventh that housed 3M but is now called Beacon Bluff. The former 3M buildings are in mid-demolition, but a comprehensive health care facility is on the way for lower-income residents, with doctors and dentists providing much-needed services to the area.

The St. Paul Port Authority, which owns the land, is planning a park-like area on the property to draw additional businesses. The Beacon Bluff property backs up to the Bruce Vento Nature Preserve.

Many a struggling neighborhood has hit the wall when trying to get back up, but Benci DeRango insists the foundation is firm for E. Seventh. She cites strong business and grassroots neighborhood support and the roadmap created by the Near East Side Task Force in 2010 for how to enhance the economic, social and physical prosperity of the area.

Lantry, who is in frequent touch with businesses, spoke of widespread support. "They built all this energy until they got the [city] money," she said.

Benci DeRango will lead a forum Sept. 13 for businesses that want to apply for grant money. They will be required to submit plans and match each dollar they receive. The money is likely to be used for rehabilitating old businesses, expansions, interior and facade upgrades as well as signage and streetscaping.

Rochelle Olson • 651-925-5035 Twitter: @rochelleolson