After years in limbo, the Zingerman’s Deli expansion is on the grow.

With a fire-damaged house demolished, a backhoe moving dirt, the tangerine-colored Annex Building moved temporarily and final design decisions being made, Zingerman’s is on target to complete its 10,400-square-foot addition in summer 2012.

The $6.7 million construction project at 422 Detroit St. will not interfere with a single corned beef and rye from the storied deli - and neighbors even say they welcome the changes.

With hard-won approval from Ann Arbor City Council and Ann Arbor Historic District Commission behind them, work has started: Earlier this month, site work began, digging up the patio between the deli and Zingerman’s Next Door to better even the grade, install storm water infrastructure and dig a basement for the Annex, which will be moved back to its location and connected to the deli and addition, said Grace Singleton, one of the deli’s managing partners.

The work has closed the side doors of the deli and Next Door, but should be completed by mid-May.

Construction of the foundation for the two-story addition is expected to begin in late May, with construction of the actual building beginning in the fall and finished by July or August 2012, Singleton said.

It will be a brick exterior with zinc panels dividing the glass front. There will be a polished concrete floor on the ground level.

Construction of a two-story glass atrium connecting the original deli to the addition won’t begin until a certificate of occupancy is issued and the kitchen operation is moved into the new building. This will allow Zingerman’s to stay open during construction, Singleton said.

Atrium construction and remodeling of the original deli is expected to take another three months, with the project completed by late fall 2012.

The new building will include the deli’s kitchen, dining space, bathrooms and an elevator and while the original deli will house meats, cheeses, breads and grocery items. And the Annex will hold order pick up and the cash stand.

When it’s finished, Zingerman’s will have three distinct but connected parts: The original deli, the two-story addition and the Annex. It’s a project, Singleton said, that is expected to position the deli to double annual receipts within a decade.

The original deli will house an expanded line of products that is now limited by space, such as a new olive oil Zingerman’s recently found in Croatia, Singleton said, and more sauces, pastas and nut oils.

“It will be expanded but we still want it to be cozy,” Singleton said.

The addition will offer seating on both floors and should help reduce the long weekend lines that wind around the corner, Singleton said. The new building will have an exposed ceiling and lighting and open faced block walls, giving it a more modern and urban feel. The larger kitchen will also allow the catering business to grow.

“We are now limited with our catering orders,” Singleton said.

The Annex will have a black and white tile floor, which will help tie it to the deli, along with a mural honoring the non-profit Food Gatherers, which had its first home on the second floor of the building.

“Our goal is to design a space that will allow us to expand our operation with good flow and a welcoming feel. We are not trying to recreate the deli. We want it to feel like you are going from one building into another,” Singleton said.

The building project also includes a tented pavilion within the campus that will include siding that can be unfurled for winter use.

The project will be a candidate for LEED (Leadership in Energy and Environmental Design) certification from the U.S. Green Building Council. Green features, Singleton said, will include energy efficient water cooled equipment, a heat pump, an underground snow melt system that captures heat from the deli’s coolers, a green roof on part of the original deli, edible landscaping and more. They are considering solar panels.

Zingerman’s Next Door will remain separate, but should become more of a coffee house than a deli, Singleton said, although customers will still be able to eat there if they want. And it will continue to house the deli’s chocolate and gelato.

Because the construction projects squeezes an already physically tight operation (the garage used for storage, for example, was razed) Zingerman’s signed a two-year lease for the space formerly occupied by eve the restaurant in Kerrytown for use as Zingerman’s Events on Fourth.

The space is being used for food preparation, storage, but also to host meetings and events, such as receptions, bar mitvahs and small weddings for up to 75 people.

After two years, Zingerman’s could opt to continue its lease on the space, Singleton said, for a new member in the Zingerman’s family of businesses.

Co-founder Paul Saginaw is currently in negotiations with the potential restaurant ventures, including a Tunisian, an Asian and a Tex-Mex eateries.

Zingerman’s has always has an over-sized neighborhood presence. That will only grow with the expansion, Singleton said, bringing more people to the Kerrytown area, and creating more pressure for parking.

The renovation will include a dedicated space for cars standing while someone runs in to pick up a carry out order, Singleton said, and valet parking may some day be offered.

Still, it will be good for businesses in the area, said Elaine Johns, owner of nearby Treasure Mart and the building that houses the Emerald Dragonfly, across Detroit Street from the deli.

"A new streamlined plan for deliveries should help unclog some of the congestions,” she said. “And it will make it better for their customers.

"It gets so busy, and the space issues are so difficult, people have to wait outside. Saturday, there was a huge line snaking around the corner.”

BY THE NUMBERS • The expansion is expected to add 65 employees - 45 at the deli and another 20 at the Zingerman’s family of businesses such as the Bakehouse, which supplies the deli. • Indoor seating will go from 93 to 180. Outdoor seating will go from 140 to 180. • Zingerman’s expects to see annual receipts at the deli increase 30 percent the first year after project completion, 5 percent the second year and another 10 percent three years later.