The project would create 250,000 sf of retail space, 196 units aimed at retired residents and a 1,400-car public parking garage on most of a city block bounded by Sherman Avenue, Benson, Church and Davis streets.

The site is immediately east of a Metra commuter rail station, Chicago Transit Authority elevated rail line and Pace bus terminal. A parking garage already stands on the property, as well as office and retail storefronts occupied by businesses such as Citibank and Osco Drug. The latter would have space in the new development.

The developer, Sherman Plaza Venture LLC, includes James Klutznick, whose family developed the Water Tower Place, Old Orchard and Oakbrook shopping centers.

The parking garage would be the first of four buildings constructed on the site, with an opening expected in November 2002. The retail project, likely to include a health club, home goods store along with an Osco Drug store, would open in the spring of 2003. The multifamily building, with 150 to 160 studio, one-bedroom and two-bedroom units for independent living with the remainder for assisted living studio units, would open late summer or early fall of 2003.

City council members approved a redevelopment plan in October that included a Sears store. The Hoffman Estates, IL-based retailer dropped out, says US Equities executive vice president Martin Stern, Evanston's development consultant, and land acquisition proved more costly and arduous than expected.

On one hand, a city subsidy of $2.5 million to lure the retailer is no longer necessary, but the city has lost revenue the tax increment financing district would have generated had the project proceeded earlier, Stern says. For the developer, the project's rent roll has improved but land acquisition costs are higher than the original budget, he adds.

However, Klutznick says four "first-rate" health club operators have approached the development team about taking at least 60,000 sf on one or two levels for a fitness center that would rival the upscale East Bank Club Downtown.

"We became more and more enamored with the concept of Downtown Evanston being the urban lifestyle experience of the North Shore," Klutznick says.

The payoff for the city is expected to be $2.3 million a year in additional tax revenues, according to the developer's projections.