The Rehoboth Beach commissioners, by a 4-2 vote, denied a license agreement with Agave restaurant that would have allowed Agave to place two dumpster enclosures and a propane cage in the public right-of-way behind the restaurant.

David Hutt, attorney for 232 Rehoboth Avenue LLC, said the agreement would help Agave be more efficient in its operation. Agave was granted a permit of compliance Dec. 21. Hutt said other restaurants in the area have dumpsters in the alleyway between Second Street and Christian Street - part of Wilmington Avenue - and theirs are not screened. He said there is also a 90-day termination clause in the agreement that would allow the city to cancel the agreement and force Agave to move the dumpsters and tanks. Under the agreement, 232 Rehoboth Avenue LLC would pay an annual fee of $177 or $1 per square foot of encroachment.

Commissioner Lisa Schlosser, who along with Commissioner Steve Scheffer were the only yes votes, said the city should honor the previously granted permit of compliance. “How can you want to do government business with a government that does not stand up to what it agreed to?” she asked.

On the other side was Commissioner Stan Mills, who was chairing the discussion as Mayor Paul Kuhns had recused, said he has never seen a situation like this, where an applicant was seeking a permit of compliance and a licensing agreement at the same time.

In retrospect, Mills said, the commissioners were improper to issue the permit of compliance. “If it were me, I would go back and nullify the permit of compliance and have us start over again,” he said.

In addition, Mills said the commissioners could not approve the license agreement because Agave has submitted two sets of plans. “We don’t know what floor plan they are going to take right now,” he said.

Mills also questioned the fairness of letting Agave use public property when they have other alternatives. “These people are asking for 175 square feet of public space out in the alley that is not afforded to other restaurants or retail stores. Why are we giving special favor to this place?” he said.

Commissioner Dick Byrne agreed with Mills’ rationale, as did public comment from former commissioners Jay Lagree and Walter Brittingham.“We should not be giving public land away for $177 a year,” Brittingham said. “We should know what plans they want to use.”

Lagree said, “You’re just going to propagate the next guy to say, ‘Agave sits in the alley. Summer House sits in the alley.’ Why can’t I?”

Resident Barbara DiMaggio said it was ridiculous that the commissioners were going back on the previously granted permit of compliance. She said she thought it would send a bad message to businesses trying to come to Rehoboth. “If I was a business, I wouldn’t come,” she said. “It’s unacceptable.”

Agave co-owner Mike Firetti first apologized for getting emotional and leaving the last meeting where Agave was discussed. He asked the commissioners to grant the license agreement. “We’ve done everything you’ve asked us to do. Grant us permission, and if we’re not good stewards, take it away,” he said.

Still, the commissioners voted against the agreement.

Commissioner Pat Coluzzi said, “These are lands belonging to the public. This is a new structure. There is no reason this shouldn’t have been planned before.”