A Lake Michigan Land Swap Pits Old Money vs. New Money

Winnetka, Illinois, has long been considered Chicago’s marquee suburb with hotel-size homes at the end of heated driveways and faux-French country houses overlooking Lake Michigan. Popular with big-brand CEOs and lawyers, and familiar to non-Winnetkans as the setting of Home Alone, Ferris Bueller’s Day Off, and nearly every John Hughes movie ever made, it is a place where titanic wealth meets midwestern folksiness.

Four years ago, at the height of the pandemic, a mystery buyer began acquiring mansions along Winnetka’s waterfront and knocking them down. One of the mansions was less than a decade old and featured an indoor basketball court and a movie theater. Another, whose previous residents included a plastic surgeon and the inventor of the retractable seat belt, had a distinguished architectural pedigree. All three had sat next to each other overlooking a beach known for its fine white sand and would become part of a gaping construction zone.

Soon, the nameless buyer’s plans to build a 68,000-square-foot Nantucket-style mansion — a home nearly the size of the White House — abutting the town’s beloved waterfront Centennial Park, became known, leading to his unmasking. But the buyer, a young private-equity mogul named Justin Ishbia, had even bigger ideas. Ishbia acquired a fourth mansion in the same strip of beach, which he hoped to trade to the town in exchange for a strip of public parkland next to his future compound. The battle over that exchange has turned, to the delight of Chicago newspaper readers, into a public, personal, and seemingly endless conflict among the megarich.

Ishbia is one of the richest men in Illinois, a co-owner of the Phoenix Suns, and someone with the clout and connections to get his way. Unlike some other Chicago billionaires, he was known as agreeable, easygoing, and nonpolitical. This was his first taste of controversy, and he had little reason to expect any. In seeking to obtain public land for private use, he was following the lead of a growing number of extremely wealthy Americans across the country, from the Hamptons and Nantucket to Malibu, Aspen, and Montana. Often, the locals have limited recourse to resist. In Winnetka, they had the wherewithal to put up a fight.

When Americans give up public land, they frequently do so via an arcane, little-scrutinized procedure called a land swap. Such exchanges, usually between the government and a private individual or corporation, have resulted in enormous fortunes for the private parties, while the government often receives less valuable land that it nonetheless wants for specific projects, such as road construction. One relatively well-known example: In the 1990s, the Yellowstone Club, a members-only ski resort in Big Sky, Montana, with a billionaire clientele, received thousands of acres of prime national forest, while the government got property that had recently been cut over by a timber company.

The swap proposed in Winnetka was smaller than most. Its origins lay in the 1968 closure of a psychiatric facility for the wealthy called North Shore Hospital, which overlooked the lake and had an unfortunate reputation for losing patients to drowning. It was razed and turned into a grassy esplanade called Centennial Park. A little further down the beachfront sat an even older esplanade called Elder Lane Park. Between them was an odd neighbor: 261 Sheridan Road, a gloomy stucco mansion standing alone against the water with green space on either side. 261 Sheridan was privately owned, but over the next several decades, it often sat empty, dividing what could have been a ten-acre park. Winnetka officials longed to acquire and demolish it but lacked the funds.

In 2020, Ishbia saw an opportunity. At a meeting with the Winnetka Park District, he stood next to the fence separating his property from Centennial Park and offered to buy the stucco house and give it to the people. There was a condition. In exchange for 261 Sheridan, he requested a 70-foot strip of Centennial so he could build a buffer against public intrusion.

“It seemed like a win-win scenario,” said Ishbia. “There was one house in the middle of this park that didn’t make a lot of sense, and I had a solution everyone was excited about.”

The Winnetka Park District thought this was a good deal — “Opportunity of a lifetime,” said its president — and began negotiating with Ishbia’s lawyers. For years, Winnetka officials had been developing a grand vision for the lakefront: a spectacular, amenity-filled complex, potentially including a restaurant, marina, and other facilities that could generate public revenue. They would have to get public buy-in, though. Although plain, Centennial Park was popular with beach walkers and dog owners, who cherished its heritage elms and views of Lake Michigan.

As discussions over the land swap between Ishbia and the village continued, some officials worried that their decision-making had been less than transparent with one warning of “significant pushback” when residents learned of potential changes to the park. Nevertheless, they reached an agreement with Ishbia with details to be worked out. The officials were surprised when those details turned out to be unprecedented demands from Ishbia’s design team, which wanted a 17-foot-tall masonry seawall built at taxpayer expense. (Later, the design was shifted from masonry to steel panels, which the designers said were necessary to withstand “wave attack.”) The structure would have severed public access to the beach in front of Ishbia’s property and blocked views of Willis (née Sears) Tower and other parts of Chicago’s iconic skyline.

(1) Ishbia’s Under-Construction Mansion. (2) Centennial Park. (3) 261 Sheridan Road, purchased by Ishbia to land swap with town of Winnetka in exchange for a sliver of Centennial Park. (4) Elder Lane Park/Beach.
Photo: Larry Malvin Photography

Town officials squirmed, anticipating public reaction. Although Winnetka would hardly be the first affluent community where private residents have been accused of monopolizing water access (see Malibu, East Hampton, Nantucket, and Half Moon Bay), few places in America are more touchy about their shorefront than Chicago. “Other lakefront cities have walls of smoking plants and shipping docks on their shores,” Pulitzer Prize–winning journalist Lois Wille once wrote. “Chicago has mile after mile of sand beaches, green lawns, flower beds, and bicycle paths.” Wille, who died in 2019, attributed the bonanza of public space to a fierce strain of “citizen action and citizen pressure.”

Within months of striking their preliminary deal with Ishbia, Winnetka officials had buyer’s remorse and were preparing to litigate their way out, citing the “unacceptable requests of the homeowner.” By now, though, Ishbia had the upper hand. He’d spent $6.2 million to acquire 261 Sheridan, which the village needed to build its dream park. At one point, when the land swap seemed to be going sideways, Ishbia threatened to walk away and buy yet another mansion, expanding his property in the opposite direction.

When a member of the Park District pointed out the property in question wasn’t for sale, Ishbia waved him off. “Everything is for sale,” he retorted, according to the Park District’s minutes, “because everybody and everything has a price.” (Ishbia denies saying this.)

Justin Ishbia (left) in January 2024 and Robert Schriesheim outside Ishbia’s property-line fence in December 2023. Photo: Taylor Glascock/New York Times (Ishbia); Lyndon French (Schriesheim).

Justin Ishbia (left) in January 2024 and Robert Schriesheim outside Ishbia’s property-line fence in December 2023. Photo: Taylor Glascock/New York Tim… more
Justin Ishbia (left) in January 2024 and Robert Schriesheim outside Ishbia’s property-line fence in December 2023. Photo: Taylor Glascock/New York Times (Ishbia); Lyndon French (Schriesheim).

In some respects, Winnetka is a typical rich-person community. The population is almost entirely white, if not as Anglo-Saxon or Protestant as in the past. The political bent used to be Republican but has lately turned Democrat. A pinnacle of social life remains the Indian Hill Club, the inspiration for Bushwood, the country club in Caddyshack.

But Winnetka differs from its glitzier coastal counterparts in significant ways. The village, as it insists on calling itself, has more of a small-town feel, the result of decades of effort by its leaders to limit commercial development. For a suburb with an average household income of $417,000, the highest in the state, there are relatively few flashy restaurants or boutiques and certainly no shopping malls. Some new arrivals, young and flush with recently earned fortunes in finance or tech, say they are frustrated by the lack of amenities in Winnetka that are found in neighboring towns, such as beach complexes with cafés, boat launches, and pickleball courts. But the Old Guard still rules. The social life of much of this cohort revolves around book clubs, walking groups, and especially local politics. The village is governed by an all-volunteer caucus system that often elects older commissioners passionate about preserving Winnetka’s expensive simplicity. A popular joke is that Winnetka’s unofficial motto is “Progress without change.”

In the months after Winnetka park officials began negotiating behind the scenes with Ishbia, word spread of impending changes to the lakefront. In the summer of 2021, Randy Whitchurch, a resident who lives a block away, noticed that the Centennial Park redevelopment plan did not include what had long been its most popular feature: a dog beach.

“I said, ‘What the hell’s that about?’” says Whitchurch, a retired technology executive. He started asking other residents if they knew about the elimination of the dog beach, which, though public, is open only to a few hundred key holders, who must fill out a four-page application if they’re not from the community. “Nobody knew,” he says. “So I started informing people and collecting signatures for a petition.”

“People started probing,” says Angie Dahl, a former Park District president. “They would try to access minutes of meetings, but there was nothing available.” Some residents began filing Freedom of Information requests. The Chicago Tribune revealed Ishbia’s involvement in June 2021. Eventually, Winnetkans put the pieces together: The mansion purchases, the park project, the beach redesign, and the land swap were all parts of the same story.

That summer at a raucous meeting in the Park District headquarters, next to the AC Nielsen Tennis Center, a posse of infuriated dog-park users spoke out. Meanwhile, Ishbia’s house-construction plans were starting to impact the neighborhood. The residents of one nearby house, rather than have their view of Lake Michigan obstructed, decided to move, selling a $5 million villa with eight bathrooms and 18-foot windows. The house was torn down, and the property lies vacant.

In the spring of 2022, as the park redevelopment moved forward, Winnetkans seemed to realize that their new beach was also going to be something else: a containment pen. Although some of the proposed features were popular, such as improved swimming access, it added the imposing breakwater separating Ishbia’s property, shaped like a pincer curling inward. “Perhaps in the next revision they could add a moat full of crocodiles in case any of the peasants make it over the wall,” wrote a commenter on Nextdoor.

Park officials kept facing accusations that they were denying beach access to the public and catering to a private citizen. However, what seemed to enrage opponents most was feeling shut out — as the Park District had feared — of what were supposed to have been community discussions. That’s common with land swaps. “Land-exchange proposals come from private parties, not government agencies,” says Chris Krupp, an attorney with WildEarth Guardians, a nonprofit that has challenged hundreds of exchanges. “The general parameters of a trade are often hashed out between the private party and the government before the public is given notice. When it comes time for public comment, the government isn’t really asking, ‘Should we do this?,’ so much as saying, ‘We want to do this, but tell us if there are sufficient legal reasons for us to change our position.’”

Most land-swap opponents are rural, blue-collar, and voiceless. But in Winnetka, the opponents had pull. One was Robert Schriesheim, the former chief financial officer of Sears Holdings. A member of nearly a dozen corporate boards, with a career focus on distressed companies and Chapter 11 restructurings, Schriesheim did not fit the profile of a community activist. Yet he began attending public meetings and speaking out against the land swap. In October 2022, he sued the Park District for violating Illinois’s park code. (The suit was thrown out and refiled on different terms.) He alleges that the Park District violated the public trust “during a process that lacked transparency, accountability, and fairness.” As the suit progresses through the court system, the land swap is on hold.

Ishbia’s megamansion under construction in October 2023.
Photo: Lyndon French

Throughout the fight, Ishbia has largely kept silent. He grew up in Birmingham, Michigan, a suburb one might describe as the Winnetka of Detroit. He was the oldest son of a schoolteacher and an enterprising lawyer and the grandson of immigrants from Turkey and Russia. In high school, where he was a baseball star, he and his younger brother Mat became known as ambitious student athletes with wide social circles.

“Justin is a builder,” says Brad Morehead, Ishbia’s business partner and a fellow Winnetka resident. “He wants to make things better.” After graduating from Michigan State (where Mat, who is now a Suns co-owner, as a five-foot-ten Jewish point guard, was a celebrated member of the school’s NCAA-winning basketball team in 2000), Ishbia talked his way into Vanderbilt Law School, where he is now a trustee of the university. Although no strangers to wealth, the Ishbias like to point out that their money is self-made — much of it in a $16 billion SPAC deal in 2021. That transaction, the largest ever of its kind, brought the family business, United Wholesale Mortgage, public. UWM is run by Mat, and his brother and father are on the board of directors.

The next year, the Ishbias bought the Suns. The team has spent aggressively on player acquisitions, including the superstar Kevin Durant. Meanwhile, the Ishbia siblings seem to be competing against each other for the disapproval of sustainable-living advocates. Mat Ishbia is building a 60,000-square-foot mansion — replacing five he leveled — in Bloomfield Township, Michigan. According to DBusiness Magazine, a Detroit business publication, it includes a trampoline park, a waterfall, a 200-foot “lazy river,” and an enchanted forest.

That kind of extravagance plays better with some kinds of rich people than others. “Money talks,” wrote Dahl, the former Winnetka Park District president, in an email. “Wealth whispers.”

Last year, despite the hold on the land swap, construction began on Ishbia’s Winnetka home with the arrival of a towering crane and security guards whose manner suggested the building of a U.S. Embassy in a hostile country. Not long afterward, a derrick anchored offshore and began clawing apart the bluff, clouding Lake Michigan as neighbors, standing on tiptoes, held their phones above the privacy netting and gaped.

Some locals accused Ishbia of trying to artificially contour the beach in order to restrict public access, a claim he denies. Illinois law says that beaches on Lake Michigan are public property up to the “normal water line,” an imprecise standard that has left room for interpretation. A more widely accepted guideline is the “wet feet rule,” an understanding that citizens are allowed to roam the shore anywhere below the water’s edge.

That sort of confusion is neither an accident nor limited to Illinois, says Josh Eagle, a professor of property law, environmental law, natural-resources law, and ocean and coastal law at the University of South Carolina. “It’s not hard to create clean, clear property lines, but when it came to beaches, the people who wrote the laws in this country never did, probably because they regarded beaches as shared property,” says Eagle. “It’s only begun to matter now that we have private landowners intent on keeping everyone out, which is new.”

For Winnetkans, the conflict over the land swap has been an awakening. Many were shocked to find out how few restrictions the village had in place to slow down an ambitious builder like Ishbia. Last winter, in response to the Centennial Park controversy, the village passed its first limits on shorefront construction. Homeowners along the lake promptly sued. The village now faces a nasty internal battle on two fronts, as it prepares to sort through the ongoing conflict over the park’s unresolved development plans.

Even with the land swap in limbo and his 17-foot-tall seawall unbuilt, Ishbia has declared victory and moved on. “I never imagined that it would become a public spectacle,” he says. Looking back, he says, “I would probably handle things a little bit differently in that I didn’t go ask people who are of a different generation.” 261 Sheridan Road remains intact and vacant. And Centennial Park remains a grassy, amenity-less esplanade with spectacular views of Lake Michigan — plus Ishbia’s stone breakwater, which began inching outward last spring, boulder by boulder.