A 45-unit apartment complex is rising along East Cherry Street, reaching the third story of a planned five-story development.

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The Gramercy is a $10.4-million project by R2-N2 Properties, LLC, a partnership between DMR Construction and Netta Architects. The rental development will feature 23 one-bedroom units, 19 two-bedrooms, and 3 studios. The ground floor will include about 1,200 square feet of commercial space that’s expected to be a coffee shop at the corner of East Cherry Street and Monroe Street.

That corner currently is East Cherry Street and the entrance to Lot B but eventually Monroe Street eventually will be extended across Main Street, through Lot B, as part of the Main & Monroe project by Slokker Real Estate Group.

The five-story development was granted approval by the Planning Board in November 2015. The proposal first was presented to the Redevelopment Agency in April 2015 as a 33-unit concept plan with no parking. The concept plan was revised at least two times, in August 2015 and again in September 2015.

Three buildings spanning 38-52 E. Cherry St. were demolished this past spring.

The approved plans included 23 ground-floor parking spaces for the 45 units, 10 of which would be double-stacked, with tandem spaces assigned to the 19 two-bedroom units. With parking requirements of 1.25 spaces per unit, a 45-unit project required 57 spaces. The shortage of 34 spaces will be made up with a payment in lieu of parking for spaces in the Lewis Street parking deck.

City Council approved a 20-year Payment In Lieu Of Taxes (PILOT) in June 2015 that stipulates an annual fee of $78,000.

The five lots that will comprise the five-story project previously were assessed for $714,400. That normally would generate of property tax bill of about $45,000, however, two of the properties were exempt since they were owned by the city and Parking Authority, so the aggregate property taxes for the five parcels was about $26,000 annually per year.

Based on comparable developments, the 45-unit project could be assessed for as much as $2.8 million, which would normally generate a property tax bill of about $179,000, according to estimates I projected for 2016 tax rates.