Winnetka Park District's Land Swap With Billionaire Greenlit By Judge

WINNETKA, IL — A Cook County judge last week tossed out a lawsuit seeking to block the Winnetka Park District from trading some of its lakefront property with billionaire Justin Ishbia, who is currently constructing the most expensive home in state history on a 3.7-acre swath of Sheridan Road.

But the ruling from Circuit Judge Eve Reilly, which granting the park district's motion to dismiss the complaint, left option the possibility of refiling one of its three counts — the allegation that the district is attempting to transfer land in violation of the public trust doctrine.

Rob Schriesheim, a village resident, filed the suit last fall, alleging that the October 2020 exchange agreement between the park district and an Ishbia-controlled trust to trade land in between Elder and Centennial beaches.

Ishbia had earlier purchased 261 Sheridan Road, a house in between the two parks, for $6.2 million, and offered to give it to the district in exchange for getting more than 70 feet of additional beach at Centennial Park.

According to Reilly's ruling, the lawsuit falls short of alleging a violation of the public trust doctrine because, while it does sufficiently claim that the property has been set aside for public use and the district would use it for purposes inconsistent with its intended use, it fails to allege that the action was "arbitrary and unreasonable."

Paul Gaynor, who is representing Schriesheim, said in a statement that he intends to file an amended complaint.

“We appreciate the court’s ruling. The order allows us to pursue the crux of our case that the Winnetka Park District’s proposed exchange of Centennial Park beach is a violation of the public trust doctrine," Gaynor said.

"We plan to amend the complaint, consistent with the court’s guidance, to demonstrate that the exchange is arbitrary and unreasonable," he said. "We will continue to protect the public’s right to use and enjoy public land.”

Park district officials said the property exchange agreement with Ishbia's trust remains valid and enforceable, though a representative of Ishbia last month described it as "dormant."

Winnetka Park District Executive Director John Peterson said recent survey results indicated more than four of of five respondents supported the district's efforts to improve and reopen Elder and Centennial beaches.

“The court’s decision restores the opportunity to combine Elder Lane Beach and Centennial Beach to create an eight-acre park and uninterrupted 1,000 feet of lakefront property dedicated to public use," Peterson said in a statement responding to Reilly's ruling. "This is one of the principal goals of the Winnetka Waterfront 2030 Lakefront Master Plan."

Last month, days before village officials were scheduled began to discuss possible future regulations to potentially prevent property owners from destroying bluffs along the lakefront — discussions sparked by resident concerts over the nature of the ongoing lakefront construction on Ishbia's Sheridan Road property — Ishbia's representatives announced plans to negotiate another "donation" to the park district.

At a Sept. 7 park board meeting, Ishbia family representative David Williams read a statement behalf of the family, who he said was unable to attend due to a prior commitment.

"It's been almost three years since the Winnetka Park District and our family entered into the 261 Sheridan land swap agreement. At this time, we think it's best for us to call that agreement dormant and look to a new and different chapter for Elder and Centennial parks and beaches," it said.

The Ishbias' statement announced the family's intention to donate $3 million to expedite the completion of the first two phases of the Elder and Centennial improvement plan.

"These improvements include an ADA-accessible pathway from the Centennial parking lot to the beach, an off-leash dog park on the south end of Centennial and a stone breakwater system," it said.

"We feel fortunate we are able to contribute in a way in order to further these long-term goals," it said.

The Ishbia statement hinted that the family would expect some input on how its money was used.

"We look forward to working with the park district and the village in a collaborative way," it said, "to execute on their phase one and phase two of their plan and accomplish the goals laid out in the 2030 Lakefront Master Plan."

Five days later, the village council held a study session to discuss interest in regulating lakefront properties.

Village President Chris Rintz said he believed that there was a "somewhat justified" knee-jerk response to the construction of Ishbia's record-breaking mansion at 205 Sheridan but warned of the dangers of drafting an overbroad ordinance.

"There are two sides to this, certainly, but trying to find that sweet spot where we can actually do what's necessary to not have 205 happen again, which is what I keep hearing from multiple people," Rintz said.

"But ... we don't want to crap all over the people who live down there now who have been doing a wonderful job [maintaining the bluffs] forever," he said. "And I see one ordinance we're going to have many, many, many unforeseen instances of, 'Oh, we didn't mean to limit that,' or, 'We didn't mean to limit that,' or we thought we were limiting that but we're really stopping that."

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Before the $3 million offer was publicly revealed at last month's meeting, Ishbia reportedly said the donation was not connected to the land swap deal.

"There are no strings attached," he told Crain's Chicago Business.

Obviously, there are some strings attached. But it remains to be seen what they are.

If the Ishbia family wanted to give an actual "no strings attached" donation to benefit the Winnetka Park District, it could give money to the Winnetka Parks Foundation, a 501(c)(3) nonprofit that supports the district.

Winnetka Park District Board President Christina Codo said last week the board has not begun discussions with Ishbia regarding the conditions of the potential donation. The first step would be a private meeting, which has yet to be scheduled, followed by a public discussion at a park board meeting ahead of any potential vote to accept or reject the deal.

"This is a public board matter, and it will be discussed in public with the entire board," Codo said Friday.

"Obviously, it's interesting to us, but it is not urgent for us, as we have a budget process and a permitting process that will be higher priorities," she said. "However, we will obviously seek the first meeting available and report back promptly."

Commissioner Warren James, who noted that Ishbia representatives have indicated the family desires to attach its name to some of the parklands in exchange for the "no strings attached" donation, suggested that Ishbia's lawyers meet with park district attorneys and come up with a draft agreement.

“I think it would be very helpful if our two counsels were to communicate with one another and come together with a draft that they prepared for us to look at," James said. "I don’t think there’s any hope that seven people trying to openly negotiate a document that is, in essence, a donation would come to fruition, so why don't we just give counsel the opportunity to give us something to consider?"