The development team behind the One Rehoboth Hotel project hasn’t called it quits in Rehoboth Beach, but it is now proposing a “significant, necessary, cost-driven redesign,” that will mean fewer rooms, less retail space, no pool, no second-floor lounge area and no underground parking.

The developers are slated to go before the Rehoboth Beach Board of Adjustment Monday, Aug. 24, for a variance request related to the width of a drive aisle in the structure’s parking garage, which is now proposed to be two levels and above grade. In advance of that meeting, documents were provided by the city on its municipal government website.

“The approved parking structure was designed as a single level below grade,” reads a support document included with the variance application. “Site conditions and construction costs required relocation of the garage to at-grade level plus one level above. The relocation of the garage was a necessary change for the project to be constructable and feasible.”

As a direct result of moving the garage above grade, said the document, the development team has been forced to reduce the project's retail square footage by roughly 44%, and eliminate the pool amenity, second-floor lounge area and 12 guest rooms.

If approved, the variance request would allow for a section of a drive aisle in the structure’s parking garage to be 8 feet narrower than code allows – 16 feet instead of 24 feet.

The application says requiring the connector segment to be widened to the full 24 feet would eliminate approximately 1,100 square feet of retail space. The connector segment serves no parking space, accommodates only single-vehicle valet movement and will never be accessed by the general public, according to the application.

The primary argument for allowing the variance is financial.

The loss of the pool, second-floor lounge and retail space carries a direct financial consequence beyond the physical space, said the application.

“Resort fee revenue built into the project’s original financial projections was predicated on these amenities being available to guests,” said the application. “Their elimination reduces what the project can reasonably charge in resort fees, further impacting the revenue base the project was underwritten against.”

The applicant has provided the full 24-foot aisle width everywhere in the structure where parking spaces are directly served. The development team, a partnership between Grotto Pizza and Pennsylvania-based real estate developer Onix Group, estimated an annual rental income loss of $77,000 if the full width of the drive aisle is required.

Floor plans provided with the application show the new parking structure basically located where the pool was once planned – immediately east of The Admiral on Baltimore, but not visible from the Boardwalk.

Development team representative Jonathan Silver, Onix Group vice president, could not be reached for comment.

The board of adjustment hearing is set to take place at 1:30 p.m., Monday, Aug. 24, in the city hall commissioners' room, 229 Rehoboth Ave.