If it's just a bad location for the lilac, then move it. Eventually it will get big again like it was. Otherwise, it will grow back from the ground just fine where it's at.
The best way to keep a shrub like that constantly fresh looking is each year cut back 1/3 of the oldest branches to the ground. That way after 3 years you have a completely rejuvenated bush that still flowers each year and without the eyesore of waiting for it to grow.
