Chicago Mayor Richard Daley last week proposed allocating $98 million in tax-increment financing assistance to support the transformation of the shuttered U.S. Steel Corp.’s South Works plant along the south shore of Lake Michigan into a new mixed-use community.

U.S. Steel and private developers want to redevelop the 87-acre site into a community with new office and retail space, residential buildings, medical facilities and parks.

If city officials deem the $400 million first phase of the project viable and the City Council approves the proposal, that could lead to the issuance of TIF bonds that would be repaid with the additional property taxes generated in the designated area.

The city subsidy would finance infrastructure improvements at the site. Construction is not expected to begin until 2013.

“This is one of the largest pieces of property on the lakefront and the Great Lakes. This has huge impact and it’s beautiful,” Daley said in announcing the TIF assistance.

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