SKOWHEGAN — A metal smith has his eye on the overnight “drunk tank” at the old county jail downtown.

A knitter is fixing up a retail area next to the jail’s former command center.

Pottery is being made in an area corrections officials used call the sally port, where prisoners were brought for booking and processing. This summer, there was a children’s vegetable garden and a farmer’s market in the once fenced-in parking lot.

And Amber Lambke, who bought the former Somerset County Jail last year, already has taken delivery of equipment for grinding locally-produced wheat into flour. Her business partner, Michael Scholz, of Albion, a baker and wheat farmer, will bake and sell bread nearby.

The Somerset Grist Mill and Lambke’s Maine Grains are no longer just a dream.

The space inside what were once thick, granite jailhouse walls — housing a basement, two floors of cell blocks and an attic — is being renovated into four floors for grain receiving, cleaning, milling and final-product trucking and shipping.

The plan for the 14,000-square-foot building also includes stone ovens for baking, a retail store to sell bread and locally raised fruits, vegetables, meat, cheeses and possibly a restaurant.

The old plumbing and oil-heat systems are being torn out and replaced to suit the needs of the mill operation. There will be about 75 percent less plumbing than the jail had.

Lambke and Scholz purchased the 1897 building and the adjoining parking lot last year for $65,000. The facility was closed in November 2008 and inmates were moved to a new jail a few miles away in East Madison.

In the area of the former command center, Julie Cooke of Cornville is preparing space for her shop, Happyknits.

“It will also be a spot to sit and be able to knit; to learn to knit and kind of get away and have a really relaxing place,” Cooke said. “I decided I wanted to become part of the town — I like the idea of people coming in and being able to do things with (their) hands.”

Lambke said she shares Cooke’s vision of uses for the old county jail.

“Julie’s idea fits well with the concept of a community gathering place that this is becoming,” Lambke said. “Julie and her husband are a great fit for what’s coming together here, not only because of the agricultural theme, but also because what I see happening here is a place for business incubation.”

Lambke said she is offering flexible arrangements for renting space to people with common themes and ideas as the grist mill project gets off the ground.

Lambke said the Somerset Grist Mill has received $250,000 in grant funding so far, some from the town of Skowhegan facade grant program, some from the U.S. Department of Agriculture and some from the state. There also have been personal investments and loans from local banks.

“The business plan is to create a marketplace for local food — including local flour and any bread that gets baked in the commercial kitchen,” she said. “Agriculture is a real strong point for this region and it’s growing and it’s attracting national attention.”

Lambke said she was part of a group of 22 researchers, farmers and millers from Maine and Vermont who recently spent a week in Denmark touring grain farms, mills and restaurants.

“We got to see a grain economy over there that is probably five-to-10 years ahead of where we are,” she said.

Jennifer Olsen, executive director of Main Street Skowhegan, said the burgeoning local food movement could be good for struggling downtowns everywhere, especially in Skowhegan.

“The value-added piece of retail is one that is really going to save our downtown,” she said. “For Skowhegan, the retail piece combines creative economy stuff with sustainability stuff and the entrepreneurial stuff — we’re growing within our community to serve our community.”