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Rehoboth Grand seeks rezoning

Proposed four-story, 90-room hotel on Avenue is split-zoned commercial, residential
August 6, 2019

Story Location:
Rehoboth Grand
330 Rehoboth Avenue
Rehoboth Beach  Delaware  19971
United States

The developers of a proposed hotel on Rehoboth Avenue have submitted a request to the city seeking to rezone a portion of the property to allow their plans to go forward.

On behalf of developer Limitless Development Construction Consulting, attorney David Hutt sent city officials a letter June 7 requesting the rezoning of almost 19,500 square feet of the approximately 42,500-square-foot property. The parcel is currently zoned C-1 commercial along Rehoboth Avenue, but along State Road it is zoned R-1 residential. The C-1 commercial zone along Rehoboth Avenue is roughly 23,000 square feet. The State Road portion of the property, about 46 percent of the parcel, is currently a parking lot.

Limitless Development is a 99-year tenant at the property and is a branch of Milton-based Lockwood Design and Construction, which has an office in the Rehoboth Avenue building that occupies the property. 

The application seeks to rezone the R-1 portion of the property to C-1, which is identical to the remainder of the property, said Hutt.

The request for rezoning is not a surprise.

During a planning commission meeting in January, Hutt introduced plans for Rehoboth Grand, a four-story, 90-room hotel, with an indoor pool, underground parking, and retail and spa space on the ground floor. He said there would be total of 92 parking spaces, 48 underground, below the hotel, and 44 above ground, where the current parking lot is. He said the total height would be slightly more than 41 feet. The majority of the discussion during that meeting was whether Limitless Development would go before the city’s board of adjustment for variances or seek to rezone the residential portion.

During that meeting, city Solicitor Glenn Mandalas described the split-zoning as haphazard and said the law generally favors cleaning it up when possible.

In an email July 31, Mandalas the split-zoned lots are disfavored, however, this lot may have been zoned the way it is as a result of sound reasoning. If so, he said, there is no legal problem with leaving it split-zoned if the planning commission and commissioners decide that’s the appropriate option.

Mandalas said rezoning requests are rare in Rehoboth. An online search for rezoning requests produces two since 2010 – the Rehoboth Elementary School property in 2010 and 300 Bayard Ave. in 2015.

Hutt’s letter said he and Limitless Development are available as soon as the city is ready to consider the request.

The commissioners won’t make a decision on the application until after the planning commission makes a recommendation. Mandalas said he didn’t know when that would occur. A discussion on the possible rezoning is on the agenda for the planning commission meeting Friday, Aug. 9.

Lawsuit between developer and property owner ongoing

The rezoning request by Limitless Development does not mean a lawsuit between Limitless Development and 330 Rehoboth Ave. property owner J.J. Stein III Inc. has been settled.

Less than a week after the proposed project was unveiled, the planning commission received a letter from attorney Hal Beerman, representing J.J. Stein III Inc., saying the property owner had filed a complaint in Delaware Superior Court November 2018, against Limitless Development asking for termination of the ground lease. Additionally, Beerman said the property owner has asked for a monetary judgement in an amount less than $2 million.

On behalf of Limitless Development, attorney Richard E. Berl answered the complaint and filed a counterclaim. He argued his client has tried to develop the property, but the property owner has purposely interfered.

In an interview Aug. 1, Berl said the rezoning and the lawsuits are on two different tracks. Related to the lawsuit, he said the two sides are exchanging documents and a trial date is set for sometime in 2020.

In an interview Aug. 1, Beerman confirmed Berl’s assessment of the situation. However, he said, he and his client were unaware that Limitless Development had submitted the rezoning request to the city. He declined further comment.

Belhaven Hotel to go before board of adjustment Aug. 26

The Rehoboth Grand isn’t the only proposed hotel asking the city for changes so it can be built. Representatives from the proposed Belhaven Hotel, which fronts the Boardwalk and stretches to Wilmington Avenue, have submitted paperwork to the Rehoboth Board of Adjustment seeking a number of variances.

According to a public notice published Aug. 1, on behalf of property owner John Papapjohn, attorney Hal Dukes is asking for a list of variances from the floor-to-area ratio, including the parking areas, the pool, the second level covered terraces, balconies and the size of its meeting room. Variances are also being requested related to flood damage reduction and the height of architectural embellishments.

The address for the property is 2 Rehoboth Ave. and is located in the C-1 Commercial District. The property is on lot numbers 2, 4 and 6 on Rehoboth Avenue; lot numbers 3, 5, 7 and part of 9 on Wilmington Avenue; and lot numbers 17 and 18 of Surf Avenue.

The hearing is scheduled for 5 p.m., Monday, Aug. 26, in the commissioners room of city hall, 229 Rehoboth Ave.