Pam Panchak, Post-Gazette Master Baker Darrin McMillen, center, manages Priory Fine Pastries on the North Side's East Ohio Street for Mary Ann and Ed Graf, rear. The Grafs also founded the Priory Inn in the same North Side neighborhood. Click photo for larger image.

East Ohio Street on Pittsburgh's North Side is the last place anyone would expect to find an upscale European-style bakery. The pawn shops and check cashing stores that dot the historic thoroughfare are testament to the hard times that have plagued the East Allegheny neighborhood.

Nevertheless, Ed and Mary Ann Graf never thought about opening Priory Fine Pastries anywhere else.

"This bakery is about helping bring back the neighborhood," said Ed Graf. "Forty percent of our motivation is profit; 60 percent is to improve East Ohio Street."

Settled in the 1800s by mostly German immigrants, East Allegheny was once a thriving neighborhood with East Ohio Street as its centerpiece. But misguided urban redevelopment projects and the construction of Interstate 279 butchered the area, eliminating half its business district. Residents and businesses left, and blight soon followed.

This did not deter the Grafs, who opened their pastry shop in October 2004. "I never thought opening the bakery here would be a risk," mused Mary Ann Graf. "East Ohio has a lot of beautiful, historic buildings. There's potential here."

The Grafs realized that potential when they opened The Priory Hotel on nearby Pressley Street in 1986. They bought the building, built in 1888 to house Benedictine monks, in 1984, restored it and turned it into an inn.

"We'd never taken a risk like that before," recalled Mrs. Graf. "I was an at-home mom for 18 years. The thing was, everyone told me it was impossible. That got the Irish in me going -- I would make it successful."

Today, after having been named Pittsburgh's top hotel by the Zagat Survey, the Priory attracts tourists and business travelers alike. In 1995, the couple expanded the business by opening the Grand Hall, a banquet facility, in the former St. Mary's Church next door.

For most entrepreneurs, this success would have been enough. But Mr. and Mrs. Graf were looking for bigger challenges. In 2003, they sold the Priory to their son John and his wife, Suzanne. The two then set their sights on East Ohio Street.

As a member of the East Allegheny Citizen's Council, Mr. Graf had been looking for ways to improve the street's less-than-stellar reputation. "The condition of the neighborhood was hurting us," he said. "Sometimes, Mary Ann would get a call from a potential customer who was driving in to look at the Grand Hall. They would call from their car to cancel the appointment because once they saw the area they felt uncomfortable"

The Grafs started thinking about the types of businesses that might improve East Ohio Street. Mr. Graf remembered the street had once been home to several bakeries. He and Mary Ann decided it was time it had another.

This time, no one doubted them. In 2003, the Grafs purchased their building at 528 East Ohio St. and set about restoring it -- an endeavor that would end up costing more than $500,000.

With the help of the Northside Community Development Fund, the Grafs were able to secure a $100,000 no-interest loan from the Pennsylvania Housing Finance Agency. As part of a pilot initiative called the Mixed-Use Funding Program for Neighborhood Revitalization, the loan helped pay for the construction of three loft-style apartments above the bakery. "This is exactly the type of thing we'd like to see on East Ohio," explained Mr. Graf. "Retail downstairs, residences upstairs. I think it's key to saving the street. We hope we inspire other developers."

As with the Priory and Grand Hall, Mrs. Graf was meticulous when it came to the restoration of the bakery. Turn-of-the-century tin ceilings were returned to their original condition. The apartments boast original mantels and moldings.

Mrs. Graf is clearly proud of what she and her husband have accomplished. "This building is historic. It was built by the founder of the Clark Candy Co. There's a nameplate in the building that says Clark," she beamed. "It was a lot of work, but worth all the trouble."

One trouble was renovating the building and working with the city to get necessary permits and variances. Mr. Graf complained that the city has done little to streamline its functions and contrasts its operations with those of the state. "We got our state sales tax license online in 10 minutes," Mr. Graf explained. "With the city, you usually have to go Downtown to get anything you need. The red-tape delayed our opening by months."

In spite of the obstacles, nearly 18 months later, it's apparent the Grafs have created what they'd hoped for. Each day, Master Baker Darrin McMillen and his staff fill the display cases at Priory Fine Pastries with a variety of cakes, pies and pastries. The store also sells bread from nearby Breadworks Bakery, as well as its own private label coffee.

A few tables and chairs provide a comfortable area for relaxing with a scone and a cup of coffee, making the store a popular gathering place. More importantly, people are starting to look at East Ohio Street in a new light.

"It brings a touch of class to the street," says Lind LeFever, a regular patron of the bakery and executive director of the Northside Community Development Fund. "East Ohio Street sends mixed messages. On one hand, there are historic buildings and a few destination establishments. On the other, there's blight. But Ed and Mary Ann have shown people what East Ohio Street can be."

Ms. LeFever believes the business district is primed for a renaissance. Recently, SD Properties, a local investment company, purchased several buildings on East Ohio. Ms. LeFever said the developer is planning to build lofts on the upper floors of the buildings and retail establishments at street level. "It's exactly the kind of development the Grafs have done, on a larger scale," she added.

And the Grafs have even bigger plans for their neighborhood. They recently purchased 401 East Ohio Street, situated just across the street from a city park. Eventually, they want to open a restaurant that serves breakfast and lunch. "We already have the architect's drawings," said Mrs. Graf. "It would be open from 6 a.m. to 2 p.m. I'd call it '6-to-2 on the Park.' I'm hoping by the time it opens, East Ohio Street will be a destination again."