Opening brief filed in Ocean Bay Mart case against Rehoboth

Attorney argues city shouldn’t be allowed to change rules halfway through game
July 28, 2020

The years-long saga of the Ocean Bay Mart development in Rehoboth Beach has continued with the recent filing of the opening brief in a lawsuit brought by the developer against the city.

In a 39-page brief filed July 2 with the Delaware Court of Chancery, Ocean Bay Mart attorney Richard Forsten argues property owner Keith Monigle did what every prudent developer would do – consider various options to redevelop the property; review applicable city codes; operate in good faith when submitting the plans for the residential condominium project.  

Forsten argues that only after the city’s board of adjustment and Superior Court both said a subdivision plan was not required did commissioners amend city code in such a way that a subdivision plan would be required. That ordinance was enacted almost four years after the submission of the site plan, he said.

“Governments aren’t free to simply change the rules in the middle of the game, particularly in a case like this, where the property owner has expended hundreds of thousands of dollars and forgone hundreds of thousands of dollars of rent,” said Forsten.

Monigle is seeking to build 63 residential units on a 7.75-acre parcel off Route 1, currently operating as Rehoboth Beach Plaza shopping center. His plans call for 58 single-family homes and five apartment-style units, but lots would not be subdivided; houses would be constructed on a single lot.

During a special meeting in May 2019, city commissioners voted unanimously to enforce an ordinance created in 2017 that applies to all pending and future applications, and an ordinance created in 2016 codifying that only one building could be built on a lot.

As expected by commissioners, Forsten filed a lawsuit on behalf of Monigle shortly afterward. Forsten continues to argue the development conformed with the city’s code when the plan was submitted in 2015. Forsten has asked for a declaratory judgment confirming the proposed development is not subject to the ordinance or any other ordinance adopted after submission of the plan.

Rehoboth commissioners haven’t discussed the project publicly since passing the ordinance over a year ago, but it was brought up at a July 24 planning commission meeting by member Michael Strange, when at the end of the meeting, he asked if there had been any progress made on the subject.

City Solicitor Glenn Mandalas reminded everyone that attorney Max Walton was handling the case for the city, and he said the answering brief would be submitted roughly 30 days from the date of submission.

Strange said he was curious because as a practical matter the issue will be coming back to the planning commission at some point, but added, “It will still be a long, long time before we ever see anything.”

Mandalas concurred with Strange’s evaluation of the situation.

“It’s been a long time and seems like it’s going to be a long time,” said Mandalas. “Without showing any cards, it just amazes me that there isn’t a better way to move that property forward from a development perspective.”

In an email July 27, Walton said the city’s answering brief is due by Tuesday, Aug. 11. Otherwise, he said, he declined to comment.

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