A few months after gaining approval from the Rehoboth Beach Planning Commission, construction is set to begin on an addition of 10 rooms to Coast Rehoboth Beach.

Located on the corner of Rehoboth Avenue and Second Street, the planning commission approved the addition to the western side of the building that faces Rehoboth Avenue in July.

Construction fencing on the Rehoboth Avenue-facing side of the hotel has been installed and is covering a portion of the sidewalk, but does not restrict foot traffic. In addition, a portion of the alley between the hotel and the Rehoboth Beach Volunteer Fire Company alley will serve as a staging area for equipment.

Beginning in 2021, the hotel, known for decades as the Sandcastle Motel, received a top-to-bottom, multimillion-dollar renovation and reopened as Coast Hotel in July 2023. The hotel is owned by Rehoboth Hotel LLC, an affiliate of Harvey Hanna & Associates, and is operated and managed by TKo Hospitality Management. The argument made for the additional rooms was they were needed to recoup some of the unexpected costs associated with the earlier renovation.

As part of the approval process, the planning commission denied the addition of a third-floor bar near the rooftop pool.

The city’s board of adjustment also participated in approvals for the project. The city has a floor-to-area ratio of 2; however, the existing structure had a legal nonconforming structure with a FAR of 2.34. The board approved an increase in the FAR to 2.71 for the additional rooms.

According to a press release from the city Nov. 6, the work is expected to be completed by Memorial Day 2026.