Oceanside Reserve takes small step forward in Rehoboth

The proposed Oceanside Reserve development went back before the Rehoboth Beach Planning Commission Oct. 24, to continue the preliminary review of the major subdivision. While nothing was approved, planning commissioners did vote in favor of allowing the developers to pursue approvals from other agencies while still continuing to seek approval from the planning commission.

Located off the Forgotten Mile area of Route 1, this is the same 7.75-acre lot where a neighborhood called BeachWalk was proposed. Those plans called for 58 single-family homes and one building with five units. The developer and the city were involved in a years-long court battle that was eventually won by the city, and that project didn’t happen. The property has sat virtually vacant since.

Under the name Cape Communities LLC, local developer Joe Reed is pursuing the project this time around. The planning commission got its first look at the new proposed development in June. At the time, plans called for subdividing the commercially zoned property into 31 single-family residential lots, but there were concerns about an alley running along the northwestern edge of the property behind some of the homes.

At the Oct. 24 meeting, Reed and his team came back with a different plan that does not include the alley, but now calls for 33 single-family homes.

Attorney David Hutt is representing Reed through the city approval process. He said Reed met with surrounding property owners to get feedback. He’s willing to put a few restrictions in the covenants of the homeowners association, including restricting construction access to the site from Terrace Road, implementing setbacks identical to the lots as if it were zoned R-1 and restricting rentals to a minimum of 30 days.

Planning Commissioner Susan Gay said the new plans are much better than before, but she raised concerns about the size of a residential house that can be built on land that’s zoned C-1. 

A C-1 lot of about 7,200 square feet would allow for a 4,300-square-foot house, while that lot in R-1 would only allow for a house of 3,600 square feet, said Gay. One of the lots is almost 12,000 square feet, which would allow for a house in C-1 that’s 7,200 square feet, she said.

“The residential restrictions have to go beyond the setbacks and height to include all the other provisions so that it matches what is expected in R-1,” said Gay.

Additionally, said Gay, lot coverage and natural area requirements are different in the two zoning districts. She said she would like to see all applicable residential code applied to the project.

Planning Commissioner Julie Davis said she has real concerns that only the covenants will protect the city and future residents from future commercial development if the property isn’t rezoned.

It may be compliant for the C-1 district, but as a practical matter, it’s not code-compliant for the zoning it wants to build as, she said.

Reed said he’s hesitant to agree to rezoning on the spot for a couple of reasons. He doesn’t own the property outright yet, and he’s not sure the current property owner will agree to the rezoning. Also, he said, he only has a year to get approval before the current property owner starts to pursue other offers.

Hutt said he’s concerned with putting too many self-restrictions in place because the plans submitted to the city are code compliant for building in a C-1 zone.

While there were concerns about stormwater management and how close houses would be built, neighbors surrounding the property were generally in favor of the new plans and credited Reed with being cooperative.

Silver Lane property owner Larry Richardson said he was a vocal opponent of the BeachWalk plan years ago, but he’s doubling down on his endorsement of Oceanside Reserve. The worst-case scenario at this point is if the developer runs out of time, he said.

Ultimately, the planning commission voted in favor of continuing review of the site plan, but also allowing Reed to pursue approvals from other agencies that need to weigh in on the plans.

There was no timetable set for when Oceanside Reserve would be back before the planning commission; however, the expectation from the planning commission and developers is that it will take months to get the additional approvals needed.