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GREENSBORO — Work is expected to begin today on a $5 million, five-story building on South Elm Street, an area better known for the renovation of existing structures than the creation of new ones.

The construction comes at a good time for downtown, given the impact the recession has had on several projects in the center city.

“It is a substantial development project that is occurring in a difficult financing environment,” said Ed Wolverton, president and chief executive officer of Downtown Greensboro Inc. “This speaks to the strength of the investors to have the ability to bring the project forward.”

The project, called 324 South Elm, will occupy a vacant lot that used to house the Mantelworks Restaurant, which burned in 2003. Part of the building’s patio will sit in what is now the city’s South Elm-McGee street parking lot.

Some neighbors have complained that the building’s more modern design doesn’t fit with the street’s historical buildings, some of which date to the 1890s. And they’ve been upset that the project will reduce the number of parking spaces in the lot.

But developer Jim Marshall says he’s made design changes to the building and met with property owners to allay their concerns.

“I think they have seen the benefits in new development, which is going to increase traffic for their businesses,” said Marshall, president of LindBrook Development Services. “That clearly trumps having a couple of extra parking spaces. Downtown will thrive because of new activity and new development and that is what we are providing.”

LindBrook is best known for the creation and ownership of several medical buildings near Moses Cone Memorial Hospital.

“We are putting our little toe in the market,” Marshall said of his center city venture. “If it turns out to be really successful, then we will certainly look at doing another project downtown, but we are rather conservative.”

The 25,000-square-foot building will include a two-story restaurant called Bin 33, which should seat about 200 and open next June.

It will also include at least two stories of office space and perhaps a third. Or, the top floor could become corporate apartments.

“You play to the market,” Marshall said. “Right now, the market looks stronger for offices than residential.”

Marshall said construction of the building should begin in three or four weeks and take about 10 months to complete. But work should begin today on reconfiguring the parking lot beside the building site.

The city agreed to give Marshall a $100,000 loan so he could buy part of the lot. The city will forgive the loan once Marshall has made the full investment in the property and the taxes paid on it are equal to the loan.

The reconfiguration will mean that Downtowner Park, a small green space that runs through the parking lot, will be reduced. Existing trees will be cut down and replaced with smaller ones.

Although the project has been controversial in its planning phase, some downtown leaders see the building as a major plus.

“The biggest plus is the fact that Jim Marshall is doing it,” said Milton Kern, a downtown developer. “To have him put his time and effort and money into South Elm Street is fantastic. It just shows how he feels about the future of downtown. ... It is going to make a big difference.”

Contact Donald W. Patterson at 373-7027 or don.patterson@news-record.com