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A local development group wants to erect a five-story, $3.6 million mixed-used building at 324 S. Elm St. in the heart of downtown’s historic area.

The contemporary design project, which has raised concerns among some property owners and preservationists, would include two floors of restaurant space, two for offices and a top floor with two corporate apartments.

The developers, LindBrook Development Services, also want space in the adjacent public parking lot and a $100,000 forgivable loan from the city of Greensboro to make the project work financially.

“We’re kind of putting a little toe in the water of downtown,” said Jim Marshall, president of LindBrook, which has done several office building projects in Greensboro. “We’re excited.”

Marshall said the 25,000-square-foot building could be under construction by spring.

The building, which would go up next to the city’s South Elm-McGee street parking lot, would be erected on a vacant lot that used to house the Mantelworks Restaurant. Mantelworks burned in 2003.

Downtown officials said the project would be one of the few new buildings to go up along South Elm in decades.

“It’s great. It’s outstanding,” said Ed Wolverton, president and CEO of Downtown Greensboro Inc. “I think it speaks to the strength of the developer to be able to move a project forward in these times. It’s an extremely exciting project.”

The developer is asking for a $100,000 forgivable loan from the city to help buy a 3,600-square-foot portion of the city parking lot. LindBrook will use the space for an outdoor dining area for the restaurant and pedestrian path.

Marshall declined to reveal what the restaurant will be.

If the council approves the economic incentive , the city would forgive the loan once the developer invests $3.6 million in the property and the taxes paid on the property are equal to the loan.

The developers also want to rent part of the parking lot to provide off-street parking and Dumpster access for the building.

The economic incentive request was to be heard Tuesday night, but was delayed until Jan. 21.

The developer is “designing from scratch” and will take into account the historic elements of Elm Street, Marshall said.

Wolverton acknowledged that the building’s original design had raised some concerns but would not elaborate.

Drawings that circulated Tuesday showed a modern-looking building rising two floors above its historic-looking neighbor to the north.

“I think the building doesn’t necessarily match the architectural rules that have been established on South Elm for 125 years,” said Benjamin Briggs, executive director of Preservation Greensboro. “There is a massing that is not appropriate.”

Briggs and others have been working for months on a series of downtown development guidelines to protect the architectural integrity of the 100 through 600 blocks of South Elm.

“We need to try to work this out,” said Milton Kern, a downtown property owner who has been involved in drawing up the guidelines. “They are good folks. They don’t understand that downtown is not another office park. It is different. I want them down here.”

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

Contact Amanda Lehmert at 373-7075 or amanda.lehmert@news-record.com