Plans for building out The Vault @ McHenry – apartments planned in a former downtown bank – were locked down this week.

The McHenry City Council voted 6-1 to approve the building’s zoning, changing it from commercial to residential, with a conditional use permit for apartments as a planned unit development at 3510 W. Elm St. Alderman Andy Glab, 2nd Ward, was the dissenting vote.

What has not been secured for the former First Midwest Bank building redevelopment is what tax increment financing incentive developer EM8 Properties may get from McHenry.

Alderwoman Chris Bassi, 4th Ward, specifically asked EM8 partner Etamar Deshe at Tuesday’s meeting if the developers plan to come back to the city asking for financial assistance.

“I hope so, and I hope for the city’s cooperation,” Deshe said, adding “we are asking for one thing, and want to make the project happen any way.”

The building sits inside downtown McHenry’s money district. Originally set to sunset this year, the TIF was extended to 2037.

A TIF district is a tax subsidy to developers, allowing new property taxes generated by redevelopment within the district to be channeled back into the property rather than distributed to the taxing bodies. Excess money in the TIF can be used for public improvements. In McHenry, the downtown TIF excess has gone toward developing its riverwalk.

What the bank building redevelopers will ask the city for in TIF help “is based on the property taxes and the property expenses,” Deshe said.

Deshe and business partner Michael Gallant are planning a $10 million project with 33 loft-style apartments in the two-story building, which closed to the public in 2016. Plans are to use the basement space for shared space, offices and storage, and the attic area would remain unused.

EM8 is also eyeing the parcel directly west of the bank – a boarded-up gas station – at the corner of Richmond Road-Route 31 and Elm Street-Route 120, according to city staff.

“There have been discussions. ... They are looking at it. There is nothing set in stone,” Community Development Director Ross Polerecky said of the site at 3522 W. Elm St. “It is a separate parcel there.”

In 2024, 7 Brew Coffee and the city talked about that site for the drive-through coffee company. The Illinois Department of Transportation later denied an application there due to traffic concerns at the busy intersection. 7 Brew is now looking at another site in McHenry, Polerecky said at a recent Council meeting.