Demolition crews in downtown Evanston have taken the first step toward what will become a block-sized residential and commercial development.

Crews began demolition at Davis Street and Orrington Avenue for what eventually will become the Sherman Plaza development and a city parking lot.

The project initially was approved in October 2000. A series of changes in the plan — including the departure of Sears, Roebuck and Co. as the anchor and the subsequent addition of condominiums and a health club — have delayed the project.

The Sept. 11 terrorist attacks also affected the project, according to Judith Aiello, assistant city manager.

But the project’s standstill is over, she said.

“We are not at all worried that they’re not going forward (yet),” Aiello said at a Sept. 9 meeting.

Despite the demolition, the construction will still not begin as early as originally planned. The city is confident of the plan in the face of delays, Aiello said, because Klutznick has had success in leasing retail space.

Thomas J. Klutznick Co., the development company, originally obtained a permit to begin construction Saturday. At Monday’s Evanston City Council meeting, aldermen approved a four-month extension for the permit.

This extension was needed to incorporate alterations being made to the plan. Representatives from the developer will present a revised blueprint to the plan commission tonight.

Plaza construction likely will halt soon for the holiday season and begin again after the new year, said developer James Klutznick. The start date to demolish the current city parking garage is pending a final decision by the city, he said.

Klutznick said he has been contacted by many quality tenants, allowing his company to be selective in leasing spaces.

“We feel confident we can have (retail space) full by the time it opens,” he said.

In addition to retail negotiations, Klutznick also has begun marketing for the condominium units.

One indication of the project’s success is the city’s readiness to move forward with the construction of the new parking garage.

The city will sell about $34 million in bonds this month to finance the garage, and plans to repay them with $5 million promised by Klutznick and with money from the tax increment finance (TIF) district that includes the Sherman Plaza block.

The TIF district caps the level of property taxes that may be charged and reinvests excess revenue back into the area — in this case, the garage.

Although some aldermen questioned delays in the project, they eventually passed the permit extension unanimously.

Some aldermen voiced their satisfaction with the development.

“It seems to me that everything on this project is going well,” said Ald. Arthur Newman (1st) at the Sept. 9 meeting.