The 800 block of Davis Street epitomizes the gap between new and old downtown Evanston.

On one side of the street, a line of stores stands empty, with paint peeling off signs and discarded furniture piled just inside streaked window panes. In the former China Buffet & BBQ, a dirty white highchair and an empty bottle of Windex are all that remain of the once-bustling lunchtime eatery.

Across the street, a white construction crane looms overhead as workers scramble to build luxury condominiums. Plans filed by the developer, Optima Inc., call for 13-story towers, a pool and spa, exercise rooms and a courtyard with fountains.

But in less than six months, the two faces of downtown Evanston are scheduled to merge.

Sherman Plaza developers plan to demolish vacant stores on Davis and replace the brick parking garage with a $100 million shopping and living complex. City officials hope the move will help transform Evanston from a sleepy Chicago suburb to an epicenter of North Shore entertainment.

After a rocky start that ratcheted up the cost of acquiring land and forced Sears, Roebuck and Co., the proposed plaza’s original anchor store, to back out of the proposal, developers say they are still on track to break ground on the plaza by late winter.

“(Sherman Plaza) makes downtown a regional destination,” developer James Klutznick of Thomas J. Klutznick Corp. told the Evanston City Council in May. “If this project succeeds, it will have a beneficial effect on the entire downtown area.”

Klutznick said in an interview that he has replaced Sears with an upscale health club and several smaller shops. Developers also plan to build condominiums instead of the originally proposed senior housing.

The 250,000-square-foot plaza now comprises four main buildings that contain a city-sponsored garage, condominiums, shops and a health club.

Evanston resident Gene Scott said the new development will help the city compete with neighboring suburbs for sales and property tax.

“This project is sorely needed,” he said. “It’s important that Evanston maintain its image of being very progressive and on the forefront of education, public services and architecture. So far, none of the businesses that has been here has had a chance to be successful. This gives them their best shot.”

The Sherman Plaza development, which encompasses the Sherman Avenue block between Church and Davis streets, joins 23 acres of downtown areas under redevelopment. Major revitalization projects include the Church Street Plaza, with its 18-screen movie theater, and the Hilton Garden Inn. The Church Street Plaza opened in November and the Hilton in July.

Across the country, cities such as Cleveland, Detroit and several of Chicago’s outer suburbs reaped the rewards of the longest economic boom in U.S. history and revitalized their downtown areas, said Kellogg Prof. Edwin Mills, a specialist in urban economics.

But in the Chicago area, he said, Evanston has enjoyed more success in redevelopment than any of the inner suburbs.

“For the Cook County suburbs to do well is really new,” he said. “Evanston is the only city in the county that’s a shining example of success, and it’s because the university is a magnet for commercial development.”

Klutznick told the council in May that the the newly opened Century Theatres will help draw a “critical mass” of shoppers to Sherman Plaza as well.

“Evanston’s got it,” he said. “You’ve made the right choice.”

When the council agreed to the project in October 2000, the city had planned to pay the developer $2 million to attract the Sears store as the plaza’s anchor.

Several property owners on the block refused to sell, and the city initiated condemnation proceedings to seize the land parcels.

But Sears later backed out of the project when the company and the developer could not reach an agreement over how to handle the increased land costs.

To replace the department store, Klutznick said he plans to bring in a high-end fitness center for one of the upstairs floors. This summer, Klutznick also moved to replace the project’s senior housing with condominiums.

But some local store owners questioned whether the new condominiums would sell in the current economic slowdown, and whether the development might even harm local businesses.

Francisco Villagomez, owner of Davis Street Shoe & Luggage, said the condominiums probably would not help his small shoe repair business.

“I don’t think it’s going to sell,” he said. “The more people in the neighborhood, the better the business for me. But it’s never going to sell unless they give you a free parking place.”

Although many Evanston storeowners said the Sherman Plaza project would bring a much-needed influx of people to the downtown area, some worried that years of heavy construction would cripple sales.

“If the whole block is cut off, it’s going to stop people from traveling down our street,” said Michael Johnson, manager of Edward’s Shoes, 1627 Sherman Ave. “If anything, having people living across the street might bring business to us, but until it’s done, it’s going to take away from our business.”

But Theresa Miller, owner of New Age Astrology at 1730 Sherman Ave., said the condominium residents will increase her business.

“There just will be more people — more people looking for business, more people looking to shop,” she said.