Bloomingdale Mayor Franco Coladipietro took the action after the incident at the Indian Lakes Hotel. The hotel must stop all operations for 10 days, while the village considers taking more permanent action.
One person was killed and six others were wounded when gunfire broke out at a party in the western suburb.
Bloomingdale police released body camera footage from inside of the Indian Lakes Hotel that shows the scene. Officers can be seen running into the hotel to help the wounded.
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"People are running around, yelling, gunshot victims on the ground," said Frank Giammarese, director of public safety for Bloomingdale police.
Police were called to the hotel around 2:30 a.m. Saturday. Officers found several people hurt and applied tourniquets to gunshot wounds.
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Police say the shooting came after a huge hotel party in which two groups rented a few rooms at Indian Lakes, then invited nearly 200 people. The party spanned two floors.
Detectives believe the group was there to film a rap video.
"Two different groups and that is how this all kicked off - a verbal altercation got physical - then shots were fired," Giammarese said.
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People drove in from Chicago and surrounding suburbs. The man who was killed was identified as James McGill, 27, of Chicago's Englewood neighborhood.
Police said there was no security at the hotel at the time of the shooting, just the one employee who heard the gunshots and called 911.
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Police also said this is not the first time they have been called out to the Indian Lakes Hotel, and slapped it with a violation. A notice posted on the front doors reads the building is not approved for occupancy.
Mayor Coladipietro said he and the Village Board have shared their concerns over a lack of consistent security at the hotel for the last several years.
"I want to assure the Bloomingdale community that your safety is of utmost importance to me and the Board and that the area has been secured and is safe. We are now in the process of initiating legal proceedings to eliminate this threat to our community," he said in a Facebook post Saturday.
Hotel management said their thoughts are with those affected by the tragedy.
Anyone with information on the incident is asked to call Bloomingdale police at 630-529-9868.