Greenfire Development, remodeler of several historic downtown buildings, has set out to build from scratch: a $10-million, 88-unit apartment house near American Tobacco.

The Virginia construction firm Armada Hoffler is a partner in the apartment building. Construction is projected to start in July and finish by May 2013.

"Certainly for Greenfire and downtown, it's very good news," said Downtown Durham Inc. CEO Bill Kalkhof. "A nice shot in the arm for Greenfire."

The company announced its new project Wednesday, the day before city authorities held a demolition-by-neglect hearing on its dilapidated Liberty Warehouse.

Greenfire's announcement described the apartments as "the start of an exciting transit-oriented project" at the southeast corner of Jackson and Willard streets, near the downtown bus and rail depots. Managing Partner Paul Smith said the apartments will take up one acre of a two-acre tract the company owns, and Greenfire hopes to develop the other land in the future.

Greenfire owns more than 30 properties in and around downtown, and has a record of adaptive re-use projects such as the Baldwin Lofts, Kress Building condominiums and Rogers Alley on Mangum Street.

New construction, though, does "not at all" signal a new direction for Greenfire, Smith said, pointing out that a number of Greenfire's properties are vacant lots it bought with the intention to build on.

Greenfire sold one of its properties, on Morris Street, last year and City Manager Tom Bonfield said the company has had several offers for its 17-story SunTrust Building.

Smith, though, said selling properties is not part of Greenfire's "overarching strategy," but, "We're always open to a conversation."

He also said the company "is working very hard to program" the former Woolworth site on Parrish Street, which includes a fire-damaged building shell. Greenfire announced plans for a nine-story office building there in 2009, but construction has yet to begin.