McHenry’s 1st Ward Alderwoman Bobbi Baehne no longer lives in the downtown Tax Increment Finance District.

Baehne, elected to the McHenry City Council last year, lives in a home near the Riverwalk Place townhomes and has for six years.

Built in 2005, the townhomes are part of the downtown TIF district that includes Route 120 from Millstream Drive to the Fox River, Green Street, Waukegan Street and Riverside Drive.

When she was elected on April 1, 2025, Baehne was not aware that state law prohibits “corporate authorities of a municipality” from owning property in a redevelopment area, City Attorney David McArdle said.

It isn’t entirely clear in the law whether it means the entirety of a redevelopment area or a specific project in the district, McArdle said in his prepared report to the Council.

To address the issue, the board voted 4-2 to remove her unit from the TIF, with Baehne abstaining.

“The law says that is the way to solve this problem,” McArdle said.

Alderman Andy Glab, 2nd Ward, and Alderwoman Chris Bassi, 4th Ward, both voted against the change.

It was Bassi who brought the potential conflict to the city attorney’s attention, McArdle said.

“It is a legit point and we are doing the best we can at this stage,” he said.

The options, McArdle said, were either to remove the property from the TIF, for Baehne to not vote on any TIF-related developments or for Baehne to resign.

The issue has come up before. Mayor Wayne Jett purchased the Jett Heating and Air building at 1306 N. Green St. in 2018, after he was elected in 2017. That property was also removed from the TIF district.

Frank McClatchey, McHenry’s 3rd Ward Alderman from 2021-2025, lives on Green Street, within the TIF district and operates his computer repair business from there. Reached by phone, McClatchey said his residence inside the TIF was never brought up during his term.

While taking Baehne’s home – from which she also works – out of the TIF district solves the legal issue, Glab questioned the ethics.

“Ethically, I tend to wonder. This property is dead center in the middle of the TIF. Everything that is developed around it still affects that property,” Glab said.

Bassi said there “is arguable no property within the TIF more affected by future development,” due to the townhouses’ location between the city-owned parking lot on Green Street and the former wastewater treatment plant.

Baehne spoke about the issue recently.

Taking her townhome out of the TIF does not change her tax bill, Baehne said, but changes how it is allocated to taxing bodies.

If she were to move, a future mayor and City Council could vote to put the unit back into the TIF, which expires in 2037, she added.

She also disputed that her votes on development in McHenry would be any different from another alderperson’s.

“That is our job, to improve property values throughout the city. That is the question in all of the decisions that we make – will this enhance property values in McHenry in general, or in a specific area," Baehne said.