Clear Space Theatre Co. has decided it's going to be staying in Rehoboth Beach. The organization announced Oct. 24 it has accepted the offer from the city to form a public/private partnership that paves the way for a new theater.

Accepting the letter of intent is the first step in the theater’s commitment to work with the city as partners in creating an amenity for the region that serves not only residents and visitors here in town, but also audiences and families all across our region, said Clear Space Board Chair Megan Nehrbas in a statement Oct. 24.

Mayor Stan Mills said he is thrilled Clear Space selected the city’s offer.

“Clear Space has always enriched Rehoboth Beach culturally, socially, creatively and economically. It is a top-notch performing arts center that is near and dear to our residents, visitors and business owners. We believe it’s a win-win, and we look forward to many more years of our partnership with Clear Space,” said Mills in a statement Oct. 24.

The announcement comes after a yearlong search by the theater that ultimately ended with the organization narrowing the choices to a city-owned lot at 11 Christian St. in Rehoboth and a privately owned lot in Lewes.

In early September, Rehoboth commissioners agreed to offer Clear Space the right of first refusal on a future lease for the city-owned property on Christian Street.

During a commissioner meeting Oct. 17, members formally voted in favor of a terms package to offer to Clear Space. It addressed issues including duration of the lease, preparation of the parcel, scope of the building, parking, autonomy and an annual land lease fee of $1.

Commissioners considered some additional terms related to financials, but ultimately decided not to include them in the offer. Those items included the city providing $1 million to the theater’s capital campaign, waiving building permit fees, retaining all parking revenues from additional parking spots and imposing a facility fee on all tickets purchased for events in the new building.

The biggest challenge with the deal is the Cape Henlopen Senior Center’s presence on the Christian Street lot. It was established in 1966 and has operated at its current location since 1981. The senior center has owned land on Hebron Road since the early 2000s. Officials with that organization and a group of interested individuals have recently taken on a capital campaign that would help facilitate a move for the center.

Total project cost for the new performing arts center is approximately $40 million.

This will be the second time Clear Space has pursued a new home in Rehoboth. The theater tried to build a new facility at 413, 415 and 417 Rehoboth Ave. in the years immediately before COVID, but ultimately, that didn’t come to fruition after years of pushback from neighbors concerned about parking and other issues. All three properties are now under construction, with a three-story, mixed-use structure on each.

Lewes Mayor Amy Marasco sent the following response to the Clear Space decision: “Clear Space provides a wonderful offering, and though we had hoped they might relocate to Lewes, we are so pleased that they are still in the community and we wish them the best.”