After Billionaire Justin Ishbia started work on his $44 million megamansion, officials in Winnetka passed a series of ordinances to prevent similar projects — a move that could potentially devalue lakefront property in one of the toniest areas of the North Shore.
Winnetka is the lone North Shore town or village without an existing lakefront ordinance, which are typically an additional set of regulations that lakefront property owners have to follow when building new homes, additions or adding pools to a property.
Other towns like Evanston and Highland Park require a 40-foot setback from the property’s bluff, an ordinance many Winnetka homes are in violation of. If the ordinance passes, it wouldn’t impact current structures but could mean future home builds would have less usable land for construction on their lots.
The village was pressed by residents on its decision.
“Is anybody who’s going to buy a $10 million property going to do something negative to that property?” Michael Hera, a lakefront resident, said. “We’re the stewards of these properties. I grew up in the city of Chicago, in an apartment my whole life, never had a backyard. But I’m fortunate enough to have moved to Winnetka and have this incredible property now, and I take care of it.”
Chris Ritz, president of the village board, did not respond to a request for comment, but on Tuesday night at Winnetka Village Council meeting said the intent wasn’t to punish those who are responsible stewards of their land.
“Folks we’ve seen this time and time again in this village, it isn’t homeowners who care about their property… where developers are buying larger properties, combining them into much larger properties and turning around building a large product on that and turning around to the marketplace to support their activities. They’re profiteers. And there’s nothing wrong with that, that’s how some people make their living. But the fact of the matter is, we as homeowner-residents have a much higher investment because we’re here for the long haul.”
The ordinances were a direct response to the Ishbia property, which several speakers and council members mentioned by name during the meeting.
Construction is visible to the community because it’s adjacent to a park that is part of a complicated land-swap Ishbia is doing with the village to expand his property. Ritz said that any homeowner can go look at the Ishbia property’s bluff excavation to better understand the issues the council is trying to prevent.
“Tell me if that’s something you would want to live with in its current state for the next two or three years of your life, and that’s what we’re trying to help with,” Ritz said.
There are 88 properties on the lakefront, which have some highest property taxes in the village, according to Jena Radnay, a broker with @properties Christie’s International Real Estate, who lives in Winnetka and specializes in lakefront property up and down the North Shore.
Radnay, who spoke at meeting, told The Real Deal that it’s too soon to know if the moratorium will have a tangible impact on buyers and sellers in the future, but that many lakefront buyers have flocked to Winneka instead of other communities because it didn’t have such strict ordinances for lakefront development.
“I think it’s unfortunate with what Ishbia did, that now we have to figure out what’s next,” she said during the meeting. “His building permits are in hand, he’s going to build a house, and unfortunately it’s the lakefront owners now that are dealing with the aftermath of this situation.”
Lakefront real estate in Winnetka has historically gotten some of the highest prices in Chicagoland. Homes on the lakefront regularly exceed $6 million, with at least three selling for more than $11 million last year.
Glencoe directly to its north has had only four sales over $6 million, and none over $11 million during the same time period. Neither Wilmette nor Kenilworth to the south, which have smaller shorelines, had any lakefront sales in the last two years.
Those who wish to build new homes or structures on the lake in Winnetka, however, do have to comply with the village’s permitting process, which includes a structural, civil and landscape review.
Around 50 people attended the meeting and many spoke out against the moratorium, saying it would be harder to get one of the few contractors hired with the nine month delay. Some who spoke noted that it’s in the best interest of the property owners to ensure the bluff on the property is structurally sound, which is still not a guarantee, even with a multimillion-dollar price tag.
Ishbia spent millions acquiring four lots for his planned megamansion. Three of his lots are contiguous, while another is separated by a public beach. Ishbia has been negotiating with the village’s park district to swap the property he purchased at 261 Sheridan Road that is currently between two parks — for land that is currently public so he would adjoin it to his other three properties.
Radnay pointed out that what Ishbia is doing is completely legal, and that the village approved the permitting for his project. She said that there will always be the ability for someone to come in, purchase and assemble land, but creating additional regulations for those that spend a lot to ensure their bluffs are stable puts the burden on those already willing to follow the rules.
“There’s always going to be an Ishbia,” Radnay said.
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