Winnetka Lakefront Projects Delayed Due to New Rules

Homeowners on Winnetka’s wealthiest stretch of lakefront properties have had mixed results getting approval for construction after the village tightened development regulations along the bluffs of Lake Michigan.

Documents obtained by The Real Deal shed more light on the contentious divide between lakefront homeowners and city officials that has spurred a lawsuit seeking to overturn the new rules.

Of at least 11 permit applications made to the village of Winnetka since February 2024 for work along the so-called steep slope zone, four have been approved. Two homeowners withdrew their applications, and five are still in the review process, in one case more than a year after it was submitted. The village granted one exception to the rules for a new house, but the construction plans have since changed.

The village passed the regulations in early 2024 in an effort to protect the bluffs of Lake Michigan from damage and instability because of construction. The rules were largely seen as a reaction to billionaire Justin Ishbia’s sprawling $77 million construction project, where he leveled the bluffs across multiple lakefront lots.

Even as some plans have been approved, the process has been cumbersome even for minor work, said Jena Radnay, a broker with @properties who sells lakefront homes in Winnetka and has clients who have worked with the bluff regulation.

“They are torturing lakefront owners,” Radnay said. “They are making it as hard as possible to do an improvement.”

Peter Friedman, Winnetka’s village attorney, said the ordinance has clear requirements, it’s been working well and construction has been continuing under the new law.

“Village staff is committed to working with property owners to ensure a smooth and fair process,” Friedman said. “The village is always open to resident suggestions about how, if necessary, to make the process even more responsive.”

After a court dismissed their initial complaint in October, a group of homeowners filed a new lawsuit claiming the rules were designed to block any construction on the bluffs. The village countered by pointing to exceptions it has granted as proof that the rules are flexible, and arguing plaintiffs can’t claim damages without first exhausting their options.

“In order to determine what’s allowed and what’s not allowed, property owners have the opportunity to apply for relief, such as variations and exceptions,” Friedman said. “The Village Board deliberately included those in the ordinance to provide some flexibility.”

But Radnay said the cost involved in applying for permits and seeking exceptions makes it too burdensome for homeowners to attempt. Applicants need to pay architects and engineers to prepare plans before paying application fees, which can reach six figures for major projects.

“You could be investing $300,000, $400,000 on a whim, knowing that the chances of getting approved are slim to none,” she said. “It’s ridiculously oppressive in terms of why sellers would even want to spend their money.”

Homeowners and contractors who had submitted plans for bluff construction didn’t return requests for comment from The Real Deal.

Here’s more about the applications that have worked and those that haven’t.

Mixed Results for Plaintiffs

Michael Rauchman, the owner of 645 Sheridan Road, is the only person who applied for a permit in the restricted area that’s still a party to the lawsuit.

He applied to build a new residence for $4 million in February 2024. Review comments from the village directed Rauchman to provide more information about plans to replace a gazebo and install a sewer pipe in the steep slope zone, but it was ultimately approved in October 2024 after four rounds of revisions, documents show.

Rauchman remains a plaintiff in the lawsuit, and the homeowners’ complaint claims his property lost 6,300 square feet of developable land, leading to a $3 million value reduction.

Mandy Day, formerly the owner of 381 Sheridan, applied for repairs to a retaining wall. The lawsuit alleges the village requested more information for the application several times, and rejected her proposal because a proposed walkway repair added a third of an inch to the existing structure.

Documents provided by the village show Day applied for a permit for a retaining wall and indicate the application was withdrawn by the homeowner. In its reply to the homeowners’ lawsuit, the village said the denial of Day’s permit was because it didn’t comply with the village code and she did not try to appeal the decisions.

The village used Day’s sale to attack the core premise of the homeowners’ lawsuit, that the regulations have destroyed property values. The filing notes that Day purchased the home for $7 million in 2022 and sold it for $9.6 million in May 2025, a profit of over 36 percent achieved after the regulations were in effect.

The other former plaintiff who applied for work in the steep slope zone, Vijay Kotte, got approval to build a $10 million house on his property in 2025, and later withdrew as a plaintiff.

Projects face long reviews

Whether or not they were approved, projects in the regulated area have undergone months of review over multiple rounds of application, the documents show.

At 1215 Whitebridge Hill Road, owner Yong Park has been working for more than a year to get approval for an extensive engineering overhaul of the property’s fragile cliffside, expected to cost $1 million. The plans include a mechanical tram to transport residents down the bluff, a new boat house, retaining walls, and a private pier extending into Lake Michigan.

In review comments, city officials regularly flagged design issues that conflicted with the bluff protection ordinance. The city rejected a proposed design for a retaining wall that had a flat top, on the grounds that it effectively extended the home’s backyard, a violation of the ordinance.

The city also blocked a plan to replace a stone terrace on the property with a new terrace, noting that it extended four feet beyond the original footprint.

Friedman said the village is “committed to working with property owners who have projects to review and respond expeditiously to permit requests and submittals.”

Other proposals received similar comments as homeowners sought approval to build along the lakefront bluffs. Frequently, applications were rejected for adding and backfilling walls that extended the table land of the properties into the bluff zone.

“There shouldn’t be four meetings to discuss a new pool if it’s in the exact same place,” Radnay said. “That is a waste of time.”

Village granted variation

The village granted one variation to the bluff rules but the homeowner scrapped the plan when the adjacent property came up for sale. The village board approved a measure in 2024 allowing the owner of 473 Sheridan Road to build a new home in the same spot as the existing home, about 30 feet from the lake, closer than the 50-foot setback required under the bluff protection ordinance.

But the owner, an LLC managed by Robert Delaney, later purchased the adjacent property at 499 Sheridan Road for $5.3 million. After getting approval to combine the two properties, which allowed for an existing deck and gazebo that were outside the required setback area to remain, the owner is no longer seeking an exception for the new house.

Still, Radnay said that the initial exception was limited and would have constrained what the owner wanted to build.

“That is why he had to buy the house in front, so then at that point he could actually build what he wanted,” she said.