Rehoboth backs theater plan, holds on funds

In an effort to entice Clear Space Theatre Co. to stay in Rehoboth Beach, city commissioners voted in favor of most of the terms in a proposed compensation package being offered to the theater. The one part not voted on during a special meeting Oct. 6 was the financials.

For more than five years, Clear Space has been publicly looking for a new home. Plans for a proposed theater on Rehoboth Avenue failed in 2022. After the dust settled, the theater conducted a market study, ultimately identifying two properties as possible locations – the city-owned land where the Cape Henlopen Senior Center is located and a piece of private property within the municipal limits of Lewes.

Rehoboth Beach officials have been actively pursuing a public-private partnership with the theater since the end of 2024. Those discussions have culminated with the city offering a development plan for the partnership to the theater.

There was a lengthy discussion on the plan in advance of the favorable vote Oct. 6, most of which was centered around the financials.

The five sections approved include the duration of the lease, preparation of the parcel, scope of the building, parking and autonomy.

The duration of the lease would be a 30-year triple net land lease with two 10-year options.

The city would be responsible for removal of the senior center. Clear Space would be allowed to construct a performing arts center of about 40,000 square feet, with the design to be determined later.

The city and the theater would explore options to maximize parking opportunities, with revenues from additional parking spots going to the city. Similar to the senior center, there would be a designated number of spots for Clear Space.

Among other things, the lease would in no way impact the theater’s full creative autonomy in its artistic and business endeavors.

As for the financials, as proposed, Clear Space would pay $1 per year for the land lease; the city would provide $1 million to the theater’s capital campaign; the city would waive building permit fees; the city would retain all parking revenues from additional parking spots; the city would impose a facility fee on all tickets purchased to events in the new building.

Commissioner Chris Galanty said he’s in favor of all sections, but still has questions about the financials. He doesn’t want to make any hasty decisions, he said.

Commissioner Craig Thier said he’s uncomfortable with the city spending any money if there’s any risk of Clear Space walking away. He said he’s in favor of creating milestones for the theater to meet before the city releases funds.

Clear Space Executive Director Joe Gfaller said the theater understands the concerns, and the theater also wants to make sure the terms are beneficial to both sides.

Commissioner Suzanne Goode said she has concerns about the public-private partnership because theaters in other Delaware cities aren’t receiving cash infusions from the local municipality.

Gfaller said public-private partnerships related to performing arts centers are all over the place. A lack of them being in Delaware is a reflection of no for-purpose facility in the last 40 years, he said.

A portion of the discussion centered around Lewes and a compensation package it offered the theater to move there.

Goode said she’s troubled by the idea that Lewes is negotiating with the theater in private, while Rehoboth is negotiating in public. She asked City Solicitor Lisa Borin Ogden to provide that information in advance of any action taken by commissions.

Ogden declined to go into specifics, but said Lewes’ offer was a strong competitive offer and comparable to what Rehoboth is offering.

Public comments on the terms were generally in favor of commissioners moving forward, but some people raised concerns about the city entering into an agreement too early in the process, zoning designations, the idea of free permitting because of the time spent by city staff on the project, a parking garage and the potential loss of open space.

At the end of the discussion, Galanty made a motion for the city to approve all the sections of the term sheet, except for the financials, to give city officials time to iron out the details. Commissioner Susan Stewart asked for a friendly amendment to the motion to include the portion of the financials related to land lease. Galanty accepted the amendment. Ultimately, Goode was the only commissioner to vote against the development plan.

Mayor Stan Mills said he expects the financials to be resolved by the commissioner meeting Friday, Oct. 17.

Following the meeting, Gfaller said Clear Space has a board meeting Wednesday, Oct. 22, and he expects the board to make a decision on what property the theater will move forward with at that meeting.