CHICAGO—The opening this weekend of a new two-mile stretch of road along Lake Michigan marks a milestone for a proposed multidecade development project on the city's South Side, an area best known for its poverty and violence.

The $65 million Lake Shore Drive extension officially opens to vehicles on Sunday, extending one of the city's signature roadways that runs north approximately 10 miles to downtown Chicago along the lake.

Artist's rendering of the Lakeside development in south Chicago on the former site of a U.S. Steel plant. Skidmore, Owings & Merrill / MIR

Commuters will have a new bypass of clogged neighborhood streets and, in the future, access to what is being called the Lakeside development, a planned community that is expected to take decades to build.

The wide road, with a leisurely 30 mph speed limit, runs through nearly 600 acres of prime vacant land where a U.S. Steel Co. plant once stood. With most of Chicago's lake front taken up by parks or already built up, the parcel is considered ripe for development.

"The steel mill's gone, and when it left nothing really took its place," said Dan McCaffery, CEO of McCaffery Interests, a developer of the project. "This is an opportunity for this part of the city to stand tall."

 

U.S. Steel shut down the plant in the early 1990s, and in 1997 demolished more than 100 buildings on the site. The land has since sat fallow, sprouting trees and prairie grasses as nature slowly reclaimed the site. The Illinois Department of Natural Resources is trucking in mud dredged from lakes and rivers to provide top soil for 17 acres of slag on the property.

Nearly a decade ago, plans for the road and eventual development began when Mr. McCaffery, U.S. Steel and architects Skidmore, Owings & Merrill LLP sketched out a complex of houses, businesses, schools and parks. Final blueprints and building plans will be re-evaluated in the coming years, and Mr. McCaffery said the local community will be called on to help determine the direction of the project.

Buses and commuter railroad will serve the development, but as of yet there are no plans for subway or elevated train lines to run to the site, according to Mr. McCaffery.

"The community has been separated from the site since the steel mill closed," said Alderman Natasha Holmes, who represents the area. "It's a new beginning to residents and neighbors."

Aerial view of the site of the Lakeside development. Chicago Lakeside Development

Ms. Holmes said that the new project will do much to boost the reputation and fortunes of part of the city that has lost many industrial jobs. Gang violence has also plagued the area for years.

"Hopefully this road opening and more light on this development will show...there's a lot of opportunity on the South Side," she said.

The alderman, a former policy adviser in the Illinois Department of Transportation, said the opening of the road will allow for further development of arterial roadways that connect to it. "We can start focusing on the roadways that lead up to the development," she said.

Some critics worry the project could raise taxes on existing residents. And Ms. Holmes said some of her constituents have expressed concerns about having to cross a major roadway.

"There have been some complaints," she said, "but change is something we all have to accept at some point."

As the economic fortunes of the area change, so too will the property values, Ms. Holmes said

Some residents, meanwhile, are cautiously looking forward to the new road and development.

"It's too early to tell, but I think it's going to be good for the area. They're going to get a lot more traffic through there," said George Floyd, the owner of the Carpetman Store, a neighborhood flooring business.

As for the long-term development plan, he said, "I think it'd be great."

—Joe Barrett contributed to this article.

Write to Ben Kesling at benjamin.kesling@wsj.com