Grotto hotel on Rehoboth Boardwalk granted variance

The Rehoboth Beach Board of Adjustment has approved a variance request that will allow the proposed Grotto Pizza hotel on the Boardwalk to have a floor-to-area ratio of 2.76 instead of the code-mandated 2.

The 5-0 vote was made during a hearing April 24. Explaining his vote, board Chair Barry Brandt said pedestrian traffic will stop going north if the variance is denied. It would be a travesty for the city to have ground-level parking along the Boardwalk, he said.

Known as One Rehoboth Avenue, the proposed 58,300-square-foot hotel, with four floors, 60 rooms, a pool and underground parking, is a partnership between Grotto Pizza and Onix Group, a real estate developer from Kennett Square, Pa. The property stretches from Rehoboth Avenue to Baltimore Avenue, faces the Boardwalk, and comprises the north Boardwalk Grotto Pizza site, former Dolle’s site, Sirocco hotel site and the area of Kohr Bros. ice cream.

Representing developer One Rehoboth LLC was attorney Vince Robertson. He began by requesting that board member Jan Konesy recuse herself because she had already recused herself from a hearing related to FAR and the proposed Belhaven Hotel 18 months earlier. She had co-signed a letter to the board of adjustment against that hotel’s variance request before she was on the board. The letter was sent in August 2019; Konesey was appointed to the board a short time later.

Konesy did not recuse herself, saying this was a different case and she was able to participate without bias.

While Robertson did not request board members Mark Saunders and Edith Heron recuse – they signed the same letter as Konesy – they also made brief statements saying they could also participate without bias.

Over the course of about two hours, Robertson argued the board should grant the variance for a number of reasons – the hotel wouldn’t be financially viable otherwise; the hotel design fits into the character of the surrounding neighborhood and wouldn’t have any effect on neighbors; the comprehensive development plan calls for improvement of decades-old buildings; and there would be a competitive disadvantage because most of the hotels nearby have a pool.

Robertson showed examples of other design options, which included ground-level parking and no balconies.

The current design is the only viable project, said Robertson. The worst thing that could happen would be for the project to fail because the right thing wasn’t done, he said. 

Robertson said much of the hotel’s excess in FAR is related to having the ground-level retail and restaurant space, the pool and pool deck, and room balconies. The current hotel plan doesn’t include conference or meeting space, he said.

Ultimately, the board agreed with Robertson.

The most appealing option is to have retail on the ground level, said Konesey. People come to Rehoboth for nostalgia, so having restaurants and shops on the Boardwalk provides that, she said.

Saunders appeared to be on his way to voting against the request because he was concerned about the increase in density, but he said Konesey was able to persuade him.

Board member Bill Perstein had questions about granting the variance because city commissioners had the opportunity to change the code since the Belhaven decision but did not act. He said he was concerned the board was circumventing the will of the commissioners.

Board attorney Fred Townsend said it is the board’s responsibility to address issues such as this. If the commissioners changed the code because of Belhaven, then it would apply to everyone, and they might not want that, he said.

Public comment on the project was limited.

Resident Cindy Lovett said she supported the project and the variance request. Let them build the hotel they want and not a box, she said.

The Rehoboth Beach Homeowners’ Association submitted a letter in opposition to the request, but no one representing the group attended the meeting.

Immediately following the favorable decision, Grotto Pizza Vice President Jeff Gosnear acknowledged there were some concerns about a fair hearing, but he credited board members with asking thoughtful questions, listening and ultimately recognizing the value of the project. This is an unbelievable location and a once-in-a-generation opportunity to build something right, he said.