It will still take some redesigning, but a proposed hotel for Baltimore Avenue in Rehoboth took a step forward when the board of adjustment granted two variances to hotel developers.

During a public hearing March 25, the Rehoboth Beach Board of Adjustment voted to allow a proposed 40-room hotel to have five floors as long as the total height did not break the city’s 42-foot height limit. The board also approved not counting an 8,000-square-foot underground parking garage against the building’s floor-to-area ratio.

Property owner Gene Lankford of Lankford Properties LLC introduced the proposed Atlantic Crown Hotel and Retreat during a planning commission meeting in July. The hotel is planned on three lots – 17, 19, and 21 Baltimore Ave. Jam Bistro, 21 Baltimore Ave., would be torn down to make way for the hotel. The lots at 17 and 19 Baltimore Ave. are parking lots.

City code allows for a maximum of four floors, which led Building Inspector Damalier Molina to deny the plan. He said it was his opinion the first floor of the building was the restaurant space, which would give the hotel four floors of rooms and a restaurant floor.

Attorney Vincent Robertson represented Lankford at the hearing. He argued the project should be allowed because the city’s comprehensive development plan specifically calls for the redevelopment of Baltimore and Wilmington avenues. In the name of redevelopment in accordance with the plan, he said the board approved similar variance requests for the Avenue Inn on Wilmington Avenue in 2014.

Robertson said the restaurant floor of the building shouldn’t count as a floor because the actual floor is below grade. Ultimately, the board agreed with Molina that the floor may be below grade, but the restaurant level still counts as a floor. They then approved a variance allowing five floors as long as the structure does not rise more than 42 feet.

City code allows for the FAR of a building in the commercial district to be twice the square footage of the building site. The three lots to be used for the hotel site are each 50- by-100-foot lots, for a total square footage of 15,000 square feet, which means the FAR is 30,000 square feet.

The board approved not counting the parking garage against the square footage allowed because it was underground and would be consistent with the city’s comprehensive development plan.

As proposed, the building is still roughly 7,600 square feet larger than FAR would allow. The majority of the excess square footage is related to the size of meeting rooms, which are taller than 12 feet, so the square footage of each room is counted twice. The remaining excess is made up in a roofed-over patio and a hotel overhang.

Lankford, who owns the Atlantic Sands and Breakers Hotel, said the meeting rooms were needed to make the new hotel a year-round destination. He said the Atlantic Sands, because of its ballroom and meeting rooms, attracts clientele through the winter months, while Breakers Hotel, which doesn’t have meeting rooms, is essentially seasonal. Lankford requested a variance on the remaining excess square footage against FAR, but the board denied it.

It’s a bridge too far, said Chair Jerry Capone.

In an interview later in the week, Lankford said the next step would be to redesign some of the elements so the building would fall under FAR. He said one option would be to take one floor of hotel rooms and turn them into meeting rooms, while another option would be to eliminate the meeting rooms altogether, which he said, would ultimately create a seasonal hotel.

Lankford said the hotel might go back before the planning commission to get their ideas on what the next acceptable steps are, but he said he hopes a redesign can be worked out in the next two to three months so work can begin in September.