The history of Lincolnwood is described by the Encyclopedia of Chicago as follows:
Cook County, NW of the Loop. Lincolnwood is an ethnically diverse, two-and-a-half-square-mile suburb. Potawatomi originally settled the wooded area, but vacated the land after the Indian Boundary Treaty of 1816. Rural development proceeded slowly on treacherous plank roads along present-day Milwaukee and Lincoln Avenues. Johann Tess, for whom the village was originally named, and his family came from Germany in 1856, purchasing of barren land in the area. Population slowly increased, and the first commercial establishment, the Halfway House Saloon, was established in 1873.
The Purple Hotel, located at the corner of Lincoln and Touhy avenues, has a place in local lore. The hotel was built in 1960 by the Hyatt Corp. and was originally called the Lincolnwood Hyatt House. Well-known Chicago pianist Myles Greene, who now performs at Tuscany's in Oak Brook, was the first performer to open in the hotel 40 years ago. In 1983, convicted mobster- insurance executive Allen Dorfman was gunned down in the hotel parking lot. The murder has never been solved. The hotel changed hands numerous times after the infamous crime, first becoming a Radisson, and then a Ramada. But vaguely criminal associations have nonetheless persisted, especially after prominent reports of "wild", "drug-fueled" parties taking place in 2004 in connection with allegations of political fixing. Since 2004, it has been independent, simply calling itself by the name locals have used for years: the "Purple Hotel." The name came about because of the building's distinctive purple facade, somewhat radical for earth-toned suburbia. In 2006, the Village sued the owners of the Purple Hotel because of health and safety code violations such as mold in guest rooms. In January 2007, it was announced the hotel was to be closed, with future plans unknown. In May 2007, Chicago-based Sertus Capital Partners entered into a conditional contract to purchase the hotel property, with plans to demolish the famed hotel and build residential and retail space. However, Sertus called off its proposed purchase of the Touhy Avenue property from the current owner Donald Bae in August 2007. The plans were scrapped due to the high cost that owners asked for the property and problems with an extended lease of one of the tenants on the property. In 2010, the Village again brought court action to either remedy more than three dozen building code violations, or demolish the building. In February 2011, the Village was granted authority to condemn and demolish the Purple Hotel at the owner's expense. In late 2011, Weiss Properties and North Capital Group bought the hotel's mortgage note with intentions to restore the hotel with additional amenities.