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New hotel, restaurant coming to Rehoboth

Katie Tabeling

The Sandcastle Motel is under a $5 million renovation process, in order to turn it into an upscale boutique hotel and restaurant. | DBT PHOTO BY JACOB OWENS

REHOBOTH BEACH β€”Β  Harvey, Hanna & Associates have embarked on a $5 million renovation project of the former Sandcastle Motel, with visions of turning it into an upscale boutique hotel and restaurant in downtown Rehoboth Beach.

The developer has planned on demolishing parts of the building at 3 Second St. in the summer season, making way for boutique hotel. The hotel will still have 60 rooms, the same number as the previous Sandcastle Motel. But Harvey Hanna has filed plans with Rehoboth Beach officials to completely renovate the amenities, decor and the existing restaurant on the first floor.

Once opened, the hotel will be under the TKO Hospitality family, the hospitality arm of Harvey Hanna.

β€œEvery square inch will be refurbished. We’re staying within our footprint, and we’re not adding any rooms,” Vince DiFonzo, president and chief operating officer of TKO Hospitality, told Delaware Business Times.

Renovations include revamping the restaurant that faces Rehoboth Avenue, which was Conch Island, a Key West-inspired restaurant.

In its place will be Sirocco, an upscale southern European-themed restaurant. Named after the winds that blow from North America across the Mediterranean to Europe, DiFonzo said the venue will include Greek dishes and others from the region.

Harvey, Hanna and Associates bought the former Sandcastle Motel last year for $13.1 million, making it the 17th asset TKO Hospitality will manage and the eighth in Delaware. The motel was opened by former Rehoboth Beach Commissioner Don Derrickson in 1986, according to the Cape Gazette. Its location made it a popular place to stay because it was a quick walk to the beach and the boardwalk. The timing was perfect, as Rehoboth Beach had started to embrace the nightlife culture with more restaurants and bars opening for business downtown.

Harvey Hanna started renovating the site earlier this year, and contrary to city policy, will continue well into the summer. Rehoboth Beach has a four-month moratorium on demolition during high season. The commissioners declined to press the matter at a recent meeting, according to the Cape Gazette.

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