“See you in court”: Winnetka OKs lakefront restrictions, irks wealthy homeowners

Some wealthy Winnetkans fear their lakefront mansions just lost millions of dollars in value.

The Winnetka Village Council on Tuesday night unanimously approved a new set of regulations that will limit development and alterations of private land on and near the bluffs along Lake Michigan.

The move was widely viewed as a response to the $77 million megamansion being built by billionaire Justin Ishbia at 205 Sheridan Road. Spanning 68,000 square feet, it will become Illinois’ most expensive home.

The council signed off on the new rules despite threats of lawsuits being lobbed at local officials by lakefront residents and their lawyers, who vowed to sue if the ordinance is passed. The wealthy North Shore suburb was home to the two priciest home sales in all of Chiacgoland last year, both lakefront mansions that sold for more than $12 million.

“Some of these properties, you’d be taking 30 to 37 percent of their land. These are very valuable properties,” said Mark Karasik, an attorney who said he represents more than 30 lakefront homeowners. “These people will fight for their home, and if you pass this ordinance, we’ll see you in court.”

The ordinance creates a setback for development that starts at either the toe of a property’s bluff or 50 feet from Lake Michigan’s high water mark, whichever is farthest from the high water mark.

“If we had known that (this ordinance) were going to be potentially in place or adopted, we would have looked at other communities … and we would have definitely reconsidered the price,” said Vijay Kotte, the CEO of Chicago-based GoHealth, who, along with his wife Shiraz, paid $12.3 million for the 10,000-square-foot home at 445 Sheridan, the second-priciest residential transaction in Cook County in 2023. He opposed the ordinance.

Several residents spoke in support of the tighter regulations, arguing they would protect the lakefront’s natural features.

A few directly referenced Ishbia’s project, which has included the controversial leveling of bluffs. The Winnetka Park District recently accepted a $3 million donation from Ishbia that will help fund improvements to the parkland next door to his Sheridan Road property, which some neighbors opposed.

A spokesperson for Ishbia said he was unavailable to comment on the board’s decision. Residents opposed to the ordinance pointed out that he gained village approval through all proper channels in place when he applied for his construction permits.

Resident Steve Juliusson called Ishbia’s project an “ecological disaster,” while Laurie Petersen claimed the park board — which also raised concerns with the village’s proposed ordinance — has been “putting the demands of an individual above those of the community as a whole.”

Other lakefront communities on Chicago’s North Shore as well as oceanfront and riverfront towns in the U.S. have similar steep slope development regulations to the Winnetka rules, village trustee Kim Handler said.

“We’ll be sued,” said village trustee Bob Dearborn, who supported the ordinance anyway. “We’ll see who the 30 or more litigants are. … We will defend ourselves and reallocate our budgets appropriately to do so.”

Lakefront property owners could still seek variances to allow for certain improvements. Work to repair, stabilize or enhance the bluffs would be allowed, as would work to replace and fix structures in the steep-slope zone that already exist. However, new structures could only be built to the size of the preceding structures, and additions of new space wouldn’t be allowed.

Lakefront homeowners fear they won’t be able to build pools and cabana houses, for example, in areas of their properties that would provide the best views and add the most value. And requests for variances could get bogged down by the village permitting process, they argued.