Judge sends 330 Rehoboth Ave. rezoning denial back to city

Citing a failure to create a proper record, a Superior Court judge has remanded the denial of a rezoning request at 330 Rehoboth Avenue in Rehoboth Beach back to commissioners for a new hearing.

The property in question, 330 Rehoboth Ave., is about 42,500 square feet, of which about 23,000 square feet along Rehoboth Avenue is zoned C-1 commercial and about 19,500 square feet along State Road is R-1 residential.

The proposed rezoning of the residential portion has been on the books since January 2019, when Lockwood Design and Construction’s Don Lockwood first brought it forward. He had a 99-year lease on the property. A couple of years later, Lockwood, in partnership with former Gallo Realty owner Bette Gallo, purchased the property under the name 330 Hospitality LLC.

During a hearing in March 2022, commissioners voted against the requested zoning, citing a negative impact on the surrounding residential neighborhood and also being in conflict with Rehoboth Beach’s comprehensive development plan. It’s been working its way through court ever since.

Attorney Rick Berl represented 330 Hospitality. He argued the court should reverse the decision because the proposed rezoning met the requirements for a rezoning as a matter of law, the reasons for the denial of the rezoning are not supported by the record and the commissioners did not conduct a fair hearing.

Attorney Dan Griffith represented the city. He argued that municipalities have broad discretion over zoning issues, the decision was supported by the record, the reasons for the denial were properly articulated and the decision was based on the code. Griffith also argued the widespread opposition to the rezoning and that the planning commission recommended the denial.

Superior Court Judge Robert Robinson Jr. issued his opinion July 23. He said Commissioners Patrick Gossett, Jay Lagree, Susan Gay and Toni Sharp did not provide sufficient explanation for their votes.

Robinson said Mayor Stan Mills provided specific facts about the application and property, and appropriately connected his reasoning for his no vote. However, he continues, by the time Mills made his statement, the application had already received four no votes and was thereby defeated.

“From this record, a determination of the regularity and legality of the proceedings below cannot be made,” said Robinson. “... the record is not sufficient for review and the city must conduct a new hearing to provide an adequate record.”

When reached for comment July 25, Berl and Griffith said they had not yet spoken with their clients about the decision and would not be able to comment until they did.

This is the third hotel project in Rehoboth Beach that’s recently had action taken on it.

In late June, the city received word that a request made by the development team from the proposed One Rehoboth Hotel to get a portion of the flood zone map changed had been approved. The change allows the 58,000-square-foot structure at 1 Rehoboth Ave. to move forward to site plan review. As proposed, the building would have six levels – two levels of underground parking, ground-level retail and a 60-room hotel on three floors above the retail. Total building square footage excludes lower parking levels. The entrance to the hotel is planned for Baltimore Avenue.

During a meeting July 12, the planning commission approved the site plan for the proposed Belhaven Hotel at 2 Rehoboth Ave. The structure would have five levels – one level of underground parking, retail on the ground level and a 92-room hotel occupying the top three. The entrance to the hotel is planned for Wilmington Avenue; the main hotel lobby would be on the second floor. Total building square footage, excluding the underground parking garage, is approximately 115,000 square feet and has a floor-to-area ratio of almost 3.