Grotto seeks variance for Rehoboth hotel

Board of adjustment to hear argument to exceed floor-to-area ratio limit Jan. 23
January 6, 2023

Story Location:
One Rehoboth
1 Rehoboth Avenue
Rehoboth Beach, DE 19971
United States

Two months ago, representatives from Grotto Pizza introduced a proposal for a hotel on the corner of Rehoboth Avenue and the Boardwalk. In the meeting before Rehoboth planning commissioners, they said the 58,300-square-foot hotel was set to be four floors with 60 rooms.

Vince Robertson, the attorney representing developer One Rehoboth LLC, said the floor-to-area ratio was 2.76 and that the project would be going before the city’s board of adjustment because it would need a variance for that ratio. City code calls for a FAR of 2.

As expected, the city’s board of adjustment will hear the case for a variance during a meeting Monday, Jan. 23.

The LLC is a partnership between Grotto Pizza and Onix Group, a real estate developer from Kennett Square, Pa. The property stretches from Rehoboth Avenue to Baltimore Avenue, faces the Boardwalk, and comprises the north Boardwalk Grotto Pizza site, former Dolle’s site, Sirocco hotel site and the area of Kohr Bros. ice cream.

In an interview Jan. 5, Grotto Pizza Vice President Jeff Gosnear said there are two aspects to the argument that will be presented during the hearing.

First is a fairness issue. Gosnear said almost every hotel on the Boardwalk has balconies and a pool, and to not allow them for this hotel would be harmful to the applicant. He said about 0.5 of the excess ratio comprises the balconies and the pool.

“So much of it with the excess has to do with those two things,” said Gosnear.

The second argument, Gosnear continued, will be similar to the one successfully used by the Papajohn family for a variance request for the proposed Belhaven Hotel.

Located in pretty much the same location – Rehoboth Avenue and the Boardwalk, but on the south side and stretching to Wilmington Avenue – the board of adjustment granted a variance to the Belhaven to allow an increase of FAR from 2 to 3. At the time, November 2021, the Papajohns argued the city’s 2010 comprehensive development plan encourages, and calls for, the revitalization of downtown Rehoboth Beach, especially the areas of Baltimore and Wilmington avenues. They argued the city hadn’t followed the plan, and the board agreed.

Gosnear said they’re taking the same approach.

“This is a significant investment,” said Gosnear, putting a $40 million estimate on the project. “We’re trying to do something great, and it’s impossible to do it within the parameters of FAR.”

The Belhaven variance approval was challenged in Sussex County Superior Court by Commissioner Francis “Bunky” Markert and upheld. Markert, who was not a commissioner when the lawsuit was filed, did not challenge the court’s ruling.

While that variance request was approved, the makeup of the board of adjustment is completely different more than a year later. The three board members who voted in favor of the variance – Jerry Capone, Walt Cassel and Randy Mason – are all gone. Remaining on the board are Barry Brandt, who was the no vote, and Jan Konesey, who recused herself from the vote because she had co-signed a letter to the board of adjustment against the Belhaven variance request before she was on the board. The letter was sent in August 2019; Konesey was appointed to the board a short time later.

New to the board since the Belhaven approval are Edith Herron, William Perlstein and Mark Saunders. Herron and Saunders were also co-signers of the letter against the Belhaven variance, while Saunders also spoke out against the request during the board’s public hearing.

Gosnear said he’s aware the board’s makeup is much different than it was 15 months ago. The city is in the process of redeveloping the area with a new beach patrol building, and Grotto Pizza is trying to do its part, he said.

“I’m hopeful the board members are going to be open-minded,” said Gosnear. “We’re not trying to build some monument that uses every inch of space. We want to build something that’s tasteful and goes along with what the city is doing.”

Similar to what the Papajohns said during their approval process, Gosnear said his team has created renderings showing what the hotel would look like within the FAR requirement. It’s just a block with a ground-level parking lot. That doesn’t work for anybody, he said.

The new board members came at the recommendation of Mayor Stan Mills, who in his position as mayor makes recommendations to fill vacancies for city committees and commissions.

In a statement provided after the deadline for the print edition Jan. 6, Mills declined to comment on whether there was any concern about a fair and impartial hearing. It would be inappropriate for him to do so prior to the hearing, he said.

The board of adjustment hearing is scheduled to take place at 2:30 p.m., Monday, Jan. 23, in the commissioners room of city hall, 229 Rehoboth Ave.

Editor’s note: The online story is different than the print version. Mayor Stan Mills provided a comment for the online version after the deadline for the print version.


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