Lewes Mayor Amy Marasco has called a special council meeting to discuss rescinding a home-based business ordinance that was just approved Dec. 8.

The ordinance creates a path for start-up businesses in residential areas, but does not directly address the controversial dog-grooming business that a couple wants to open in their historic rowhome on Savannah Road.

Council passed the ordinance 3-2.

Marasco, Deputy Mayor Khalil Saliba and Councilwoman Trina Brown-Hicks voted in favor. Councilmen Tim Ritzert and Joe Elder voted against. Both suggested that they delay a vote.

After the approval, Marasco called the ordinance “forward thinking that ensures Lewes welcomes entrepreneurs.”

But now, the mayor says unresolved legal questions about land use and zoning, raised by Elder at the meeting, need to be considered. She said there also needs to be a clearer process for the public.

“We need to have time to debate and know what versions and drafts we’re working from,” Marasco said.

Marasco said she takes responsibility for letting the measure get to a vote in the first place.

“How did it get to that point? This has been a long time coming. It’s been on our plate for a long time. But, through public comment there were new pieces that came to light, potential legal issues, that we had no time to vet,” she said. “Sometimes we don’t get it right, so we need to pull back and take a fresh look.”

Marasco said council will discuss rescinding the ordinance at 9 a.m., Wednesday, Dec. 17, at city hall, but will not vote until its January regular meeting.

She said the home-based business ordinance will be the first to be run through a new council process of once-a-month working sessions, planned to start in January.

Marasco said they will not start from scratch with the ordinance. She said they will combine all previous versions into a new “2026 Version 1.”

The ordinance that was passed Dec. 8 included several key additions and omissions from the iteration that was discussed a month before.

Even the name was changed from home occupation to home-based business.

Council abandoned a proposed three-tier system – no impact, low impact and potential impact to a neighborhood – in favor of two tiers – low and high impact.

Low impact allows no more a one full-time employee and, at the discretion of the city manager, might require up to two off-street parking spaces.

High impact would require two off-street spaces and allow up to four full-time employees.

Council scrapped a proposed administrative process in favor of a more traditional conditional-use path to approval.

An applicant who wants to start a home-based business will fill out a form and check off whether their business is low or high impact.

The city manager, or their designee, will then confirm which category the proposed business fits into.

The applicant will have 30 days to notify neighbors who are within 200 feet of the proposed business.

If the city receives an objection from one or more neighbors, it will trigger the conditional-use process. That process starts with a Lewes Planning Commission public hearing, before it makes a recommendation to council.

Council will then hold its own public hearing, before making the final decision.

In 2024, Sarah Prieto and her husband Stephen Matthews applied to open a dog-grooming studio in their basement at 405 Savannah Road. Their license was denied because dog grooming is not on the city’s list of approved home-based businesses.

Complicating the matter, the couple lives in the middle of a line of historic rowhomes, zoned limited commercial historic. A business would be allowed to operate there.

But the neighbors who share walls on either side immediately objected, claiming the odor, noise and strain on already hard-to-find parking would be too much for the neighborhood to bear.

The issue has become super charged over the last year and a half.

The owners of 403 Savannah Road sold their home. The owner of 407 Savannah Road has put his home on the market.

Prieto and Matthews claim they have been harassed by their neighbors. The neighbors claim they have been verbally assaulted by the couple.

Neighbors who live nearby have expressed concerns over the impact of home-based businesses on property values.

“I bought a very expensive house, and I was told it was in a residential neighborhood. Now, someone can open a doctor’s office next to me? I’m disgusted. I’ll probably list my house, because they just wrecked the value of it,” said Pete Sanger, who lives around the corner on E. Fourth Street.

Prieto and Matthews said they will not give up their campaign to win approval to one day groom dogs.

“Everybody knows the neighbors are against us. And you know what? That’s fine. We’re going to keep fighting the good fight,” Prieto said.

City Manager Ellen Lorraine McCabe estimates that there are currently 30 businesses operating outside the commercial district.