Package sources checked into git.centos.org are in exploded SRPM format. This means that the package working directory should have at least a SPECS/ subdirectory.
New Package (from source)
To work on a package that is not already checked into git.centos.org from upstream sources:
# Let's start on a package called new-package by creating the rpm structure
[bstinson@localhost]$ mkdir -p ~/src/rpms/new-package/{SOURCES,SPECS}
[bstinson@localhost]$ cd ~/src/rpms/new-package/# Write your spec file. Starting from scratch is ok, but rpmdevtools provides a skeleton [bstinson@localhost new-package]$ rpmdev-newspec -o SPECS/new-package.spec
New Package (from existing SRPM)
To work on a package that is not already checked into git.centos.org from an existing Source RPM:
# Let's import new-package-1.0.1-2.el7 from a source RPM into an empty workspace [bstinson@localhost new-package]$ rpm --define "%_topdir `pwd`" -Uvh ~/Downloads/new-package-1.0.1-2.el7.src.rpm