Company renovating Sandcastle Motel applies for alcohol permit

Still no word on what the property is being turned into
September 1, 2022

Information on the new hotel going into the former Sandcastle Motel in downtown Rehoboth Beach remains limited, but the new owners appear to be gearing up to serve alcohol.

According to a public notice from the state’s Alcoholic Beverage Control Commissioner, property owner Rehoboth Hotel LLC applied for a hotel liquor license Aug. 19.

The property has an address of 123 Second St., but it’s at the corner of Rehoboth Avenue, across the street from the Rehoboth Beach Post Office.

The property was purchased by Newport-based construction company Harvey Hanna in November for $13.2 million. The company began a $5 million renovation earlier this year. The company has yet to reveal what the new hotel will be when work is completed, but they’ve built a number of Hyatt-related projects, including one in Dewey Beach and more recently another on Route 1 outside Lewes.

Earlier this summer, concerns were raised by city residents and commissioners when the developer was given permission by city staff to demolish a significant portion of the building facing Rehoboth Avenue without any notice to the public. Staff said interior renovation work revealed structural damage that required an emergency demolition.

The ABC commissioner is required to hold a hearing if it receives one or more documents containing at least 10 signatures of residents or property owners located within one mile of the property. Protests must be received by Monday, Sept. 19. To file an objection to the license, write the commissioner at the Carvel State Office Building, 820 North French St., 3rd floor, Wilmington, DE 19801. For more information, call the commissioner’s office at 302-577-5222.

Representatives from Harvey Hanna could not be reached for comment.


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