A long-vacant, 460-acre piece of Chicago’s South Side lakefront cleared one of its first hurdles toward a development that 7th Ward Alderman Sandi Jackson’s chief of staff, Bonita Parker, called “sorely needed” for the South Shore neighborhood.

The huge plot of land, centered around 83rd Street and South Shore Drive, has been abandoned since U.S. Steel demolished its last South Works plant building housed there in 1992, putting thousands out of work. Now a joint venture between McCaffery Interests, Inc. and U.S. Steel, called Chicago Lakeside Development, LLC, is trying to bring a $4 billion construction project to a space between Calumet and Rainbow Beach Park.

McCaffery Interests is a Chicago-based company that specializes in development and investment in “underperforming urban real estate.”

On April 15, the plan received approval from Chicago’s Plan Commission, with support from area Aldermen Jackson and John Pope (10th Ward). The decision by the commission gave the “Chicago Lakeside Development Master Plan” a planned development ordinance, providing the company with the necessary land use entitlements to proceed.

“The area of the property is as big as the Loop area, it’s just huge,” said Pope’s Chief of Staff Sue Loncar. “It has been vacant for quite some time.”

While the planned development is a joint venture between two private companies, it depends on the cooperation of the city of Chicago. The project will need $450 million in new public infrastructure, including new public transportation, a new public high school, city parks and the rerouting of Lake Shore Drive.

Loncar said she believes the rerouting of the highway will be one of the most important elements of the proposed development.

“That’s going to benefit the neighborhood,” she said. “That [new] route would bring Lake Shore Drive and South Shore Drive into the neighborhood.”

The needed infrastructure will be paid for by a recently created Tax Increment Financing District in the South Shore neighborhood. Tax increment financing is a method of funding development in the city that freezes the amount city and county services can receive from property taxes in an area for 23 years, then diverts any revenue from new development or increases in home values into a fund overseen by the city.

On March 10, Mayor Richard M. Daley introduced, and the City Council approved, the creation of the Chicago Lakeside Development Tax Increment Financing District in the South Shore neighborhood. The new TIF district will siphon money from property taxes of residents and use it in the lakeside development “as a way to revitalize residential and commercial investment in the South Shore community,” according to the mayor’s proposal.

That money is essential to the development’s success, according to the project’s manager Nasutsa Mabwa.

“We will be using Tax Increment Financing to do Phase One infrastructure work, and that’s why they’re our partner,” Mabwa said. “I think if there’s a reason to use TIF, this would be the best posterchild for the real true nature of TIF in an area that has … a void from the steel industry ceasing there.”

Phase One is slated to begin in 2012. Until then, McCaffery will be doing “marketing,” according to Mabwa, trying to sell or lease the planned 800,000 square feet of retail, restaurant, entertainment venues and residential units. The first phase will be built on a 76-acre plot of land in the development’s northwest corner.

According to Mabwa, the development has received nothing but support from South Shore residents during community meetings held in the area. But Loncar said residents have had some “serious questions” about the development, including how tall the buildings will be and how long the project will take. McCaffery estimates the entire construction will take 25 to 40 years.

The final result will be a massive change to the area, adding 125 acres of public land; 13,575 new homes; 17,500 square feet of retail and commercial space and miles of lakefront access.