The new plan, presented this week at a neighborhood meeting, is a compromise reached between the neighborhood and the Phalen Corridor Initiative, a group of organizations and government agencies that is backing the new city road designed to spur the economyon St. Paul's struggling East Side. The larger scale plan would have been cost prohibitive given the expense of acquiring the 100-some homes and relocating the owners.

The St. Paul Port Authority's role in the deal would be to build Phalen Westminster, a 15-to 24-acre business center. The center would be bounded by Westminster and Whitall streets, Payne Avenue and on the south by rail lines. The city is planning to build housing in the area and renovate some of the existing housing as part of the project.

While there is neighborhood support for the new plan, ome did have reservations about how it would affect the value of the remaining homes and what problems it might create. But backers of the plan argue it will remove a dumping ground and a recycling business, replacing them with clean, light industry. They said the Burr Streetisland will be shielded from the commercial area by landscaping and elevation.