Rehoboth planning approves 10 more rooms for Coast Hotel

A 10-room addition to the Coast Hotel in Rehoboth Beach has been approved by the Rehoboth Beach Planning Commission. A request for a rooftop bar did not have as much support from commissioners. 

Beginning in 2021, the structure, known for decades as the Sandcastle Motel, at the corner of Rehoboth Avenue and Second Street, received a top-to-bottom, multimillion-dollar renovation. The 60-room hotel reopened as Coast Hotel in July 2023.

Later that year, the developer introduced a proposal for a 12-room addition, but ultimately only pursued 10 rooms. 

In April 2024, the developer went before the board of adjustment to request an increase to the structure's floor-to-area ratio so more rooms could be added. The developer, Harvey Hanna, argued, and the board agreed, the additional rooms were needed to recoup some of the unexpected costs associated with the renovation. The structural integrity of the building was in much worse shape than originally known.

The city has a FAR of 2; however, the existing structure had a legal nonconforming structure with a FAR of 2.34. The request was to increase the FAR to 2.71 for the additional rooms. The approval came with a condition that the facade of the addition look like the one shown as part of the applicant’s presentation.

Throughout the process for the addition, the developer had been requesting a rooftop bar next to the outdoor pool. Vince Robertson, the developer’s attorney, made the case June 27 the bar was allowed, and could be separate from the first-floor restaurant, because code allows alcohol to be served throughout the structure through room service. Planning commissioners weren’t convinced because code doesn’t specifically allow for a detached bar in hotel.

Agreeing to disagree, Robertson requested the commission approve the room expansion, but not the bar because the most important part of the plan was the additional 10 rooms.

The hotel is a neighbor on Rehoboth Avenue with the Rehoboth Beach Volunteer Fire Company. Company President Mike Simpler spoke in favor of the addition, saying the developer has been good to work with on a few issues over the years. From the firehouse side, there’s no problem with the project, he said.

Ultimately, the commission approved the 10-room expansion, but not the bar. However, the wording allows the developer to pursue another variance or an appeal to city commissioners, who have the ability to clarify code.

Planning Commissioner Earl Stockdale said what the developer does with the bar area is a matter for them to pursue, but he does believe the discussion that took place reveals it's an area of city code that could reoccur. Therefore, he said, it’s an issue that should be considered as a legislative matter.

Following the June 27 meeting, Robertson said no decisions on amenities have been made, but the developer hopes to have construction permits approved to proceed with building this fall.