When their youngest child headed off to college, Sharon and Rick Dahlstrom decided it was time to downsize from their large home in Shorewood.

"We had always dreamed of living in Excelsior and being able to walk to the lake, restaurants and the grocery store," said Sharon.

One afternoon they looked at a 1900, 1 ½-story Victorian in the heart of downtown Excelsior. It wasn't exactly their dream home.

"There were not any livable bedrooms upstairs," Sharon said, just a playroom and a small office in a cramped attic with low, slanted ceilings. The attic was accessible only via a steep "death-defying staircase." And the owners' suite was in the basement, which was a no-go for the Dahlstroms.

Other would-be buyers viewed the modest old house as a teardown.

The Dahlstroms weren't "up for that" kind of project, Sharon said. But remodeling seemed like a daunting prospect — at least to her.

"It wasn't a project I wanted to take on," said Sharon, but her husband "was all in. He could see the potential. I was scared to death."

They called their friend Brian Jones, owner of Jones Design Build, and asked him if he could come take a look at the house.

He saw a lot of pluses, including a great location, a deep lot and an appealing carriage house. "It was really charming," he said.

While he admitted that the house needed "a ton of work," he was confident it could be remodeled rather than torn down.

"Once I started working with Brian, I could see his vision," Sharon said.

'Still fits in'

The Dahlstroms didn't want to dramatically change the scale or character of the house. "I wanted to maintain the original Victorian style," said Sharon.

The front exterior wasn't dramatically altered.

"It didn't change from the street. It still fits in," said Jones.

In back is a new dormer, supported by trusses, above the kitchen. The addition created space for a second-floor owners' suite with bedroom, bathroom, walk-in closet and laundry room.

It's still a compact space, less than 400 square feet. "We knew it would be tight," said Jones. "We vaulted the ceiling to make it seem larger."

A floating wall between the bedroom and bathroom also helps the space feel more open. The death-defying staircase was removed, as was a brick chimney, to create space for a safer, more comfortable stair.

On the main floor, Jones removed interior walls to create a space that was open and airy rather than a warren of compartmentalized rooms.

"We think it was a boardinghouse, with all the little rooms," said Sharon.

The kitchen, which had been added in the 1980s, just needed a face-lift. A cabinet remodeling and new marble-topped center island provided that.

Sharon, who did most of the interior design, also found a banquette that fit the existing knee wall.

They uncovered "lots of surprises" during the project, said Jones. "Mechanically, it was a disaster," he said, with a DIY electrical system done by a previous owner, and plumbing irregularities.

To help cut costs, the Dahlstroms did a lot of the demolition work themselves. They also were able to salvage the original maple floors by patching where needed.

Saved from the dumpster

Teardowns and replacing modest-sized older homes with much larger new ones has been a contentious topic in Excelsior, so the Dahlstroms understood that their neighbors were wary when they started the project.

One of the first people they met after they started work was a longtime neighbor who lived across the street.

"She said, 'I see a dumpster. What are you planning to do?' " said Sharon. "We said, 'We're just going to remodel,' and she said, 'Thank you!' "

Other neighbors have "wandered over to thank us for protecting our little village — and not putting in a monstrosity," said Sharon.

Living in Excelsior has lived up to the couple's expectations.

"We made a pact we were going to walk to the grocery, the health club, the post office, and support local businesses," said Sharon. "We've tried to hold true to that. It's a great quality of life — walking and enjoying the lake."

Rick has taken over the carriage house for his picture-framing business. Sharon considers their owners' suite as her sanctuary.

"I could not be happier," she said. "We had no idea the magic Brian could do."

Kim Palmer has retired from the Star Tribune. To reach the new Homes editor, e-mail Nancy Ngo, nancy.ngo@startribune.com.