The developers of the Belhaven Hotel in Rehoboth Beach received a year-long extension to the city’s site-plan approval during a planning commission meeting May 22.

First introduced in April 2019, the 105-room hotel will stretch the width of the block from Rehoboth Avenue to Wilmington Avenue, and also front the Boardwalk. The developers are the father-and-son team of John and Alex Papajohn.

Attorney Hal Dukes was at the meeting representing the development team. He reminded everyone that the site plan was approved in August 2025 and that there was a requirement that all the lots had to be consolidated before the city would issue any building permits.

The lot consolidation wasn’t approved until January and the city hasn’t received the official resolution, so the project can’t start, said Dukes. Now, the annual moratorium on demolitions is in place, so the project legally cannot start, he said.

Commissioner Nan Hunter asked for an overall update on the project.

Dukes said the old structures on the Boardwalk need to be demolished. They'll be looking to do that this fall and then begin working on the underground garage. Next summer will likely be the year no one can occupy the premises, but the goal is be to have retail open by May 2028, he said.

“But this is construction, so you know how those numbers are,” said Dukes.

The project has been on the books for years now, and there have been multiple versions of the site plan approved. Commissioner Susan Gay asked, if approved, how the planning commission can be sure the developer won't come back with more changes in the next year.

The team can’t afford additional changes, said Dukes.

“There’s a distinct possibility this may not even come to fruition because the cost has almost doubled from our original plans,” said Dukes. “When Mr. Papajohn came into my office, we were talking about a $50 million project. That project is significantly higher.”

Given the new financial outlook, Commissioner Phil Tobey asked Dukes if it is still a viable project.

Yes, said Dukes.

“When we started this project, financing was not the issue. It was design concepts,” said Dukes. “Now, it’s exactly the opposite. The design has been vetted in front of this board for the last eight years. Everybody seems to be content with the design. Now, suddenly, the financing has gotten expensive."

Prior to the favorable vote, Corey Shinko, director of the city’s Planning, Zoning and Development Department, said he had no objections to the extension.

Following the meeting, Alex Papajohn acknowledged the new financial constraints, but said projects of this size always face these challenges. Financials have been sent to a lot of possible financers, and they’re waiting for those to return before evaluating.

“Like a lot of developers around the country, we’re waiting to see if the financing makes sense,” said Alex. “It’s safe to say the costs have dramatically increased. Having said that, the family remains cautiously optimistic. We’re hoping for a positive outcome. We want to see the hotel go up. We believe it will be a wonderful addition to Rehoboth Beach.”