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Commercial Real Estate News Sussex County

Boardwalk hotel clears hurdle with variance

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A rendering of the proposed Belhaven Hotel, a four-story hotel with commercial space on the ground floor and an underground parking structure | DBT PHOTO COURTESY FILLAT + ARCHITECTURE

REHOBOTH BEACH – The argument was simple enough. Make a zoning exception allowing a beautiful, iconic Rehoboth Beach property to regain its former glory.

The BelHaven is a storied hotel with ownership that wants the showplace resurrected as part of their family legacy. So invested are they in the vision that the larger, better-looking design they’re submitting is also substantially less profitable. 

The Papajohn family, which has owned the BelHaven property for decades, successfully applied for a variance that would allow them to exceed the town’s current floor area ratio (FAR), allowing them to build a 115,425-square-foot hotel on a property that could normally accommodate a 76,950-square-foot development.

Opponents say that conferring a variance that would move the FAR from 2 to 3 is a slippery slope setting precedent for allowing variances on aesthetics alone, and the property owners didn’t necessarily disagree.

“Not all precedents are bad, some are good,” said Alex Papajohn, representing the family who owns the property during a hearing in November.

Papajohn successfully argued that because the proposed building was a reimagining of an iconic place and because there was only one other iconic place in town there were no floodgates to open. The other iconic place changed hands in February, though, when Grotto Pizza bought the Dolle’s building on the opposite corner. 

The ‘spirit of the law’

During the hearing, Rehoboth Beach Board of Adjustments Chair Jerry Capone likened the development process to an interlocking, 3D puzzle. 

“There are many facets that need to be considered,” he said. “And the facets, like Rubik’s Cube, are interrelated.”

To carry the analogy forward, the BelHaven project is a blue square in the middle of an orange field. There are scores of other standards to meet from the planning and zoning departments, and there may be more questions coming from the state. 

None of the other questions can be asked, and none of the other approvals settled, without the variance either approved or denied.

Board member Barry Brandt made his motion to deny the variance, saying none of the claims of unnecessary hardship or exceptional practical difficulties were substantiated with evidence. 

His main point was that even if approved, the design presented didn’t have to be adhered to.

“We could approve it and anything could be built there,” Brandt said.

His motion died for lack of a second. 

The argument had been that a hotel built to specifications would be unattractive and that the zoning code as written was against the spirit of the town’s comprehensive development plan for future growth. If you think of the comprehensive plan as the spirit of the law, the zoning rules are the letter of the law.

Board member Randy Mason said that the project could move forward because the town hadn’t changed the zoning code to more easily accommodate mixed-use developments, as prescribed by the town’s comprehensive development plan. He was able to get the votes to pass his motion. 

Mixed-use developments usually include a residential aspect, but this project appears to have none. Board members declined to comment on the discrepancy. 

Litigation feared in Clear Space’s wake

The board passed the motion 3-1, but there was a member missing. 

Board member Jan Konesey recused herself from the proceedings, though she stayed on to watch.

Konesey had led a petition campaign against different iterations of the same property back in 2019. 

She was able to get 75 signatures as the meeting deadline approached. Having since been appointed to the Board of Adjustments, she wanted to make sure that what would have been her “no” vote didn’t undermine the integrity of the proceedings.

In August, the Clear Space Theatre filed suit against the town over another Board of Adjustments ruling. The case is ongoing and fresh in everyone’s mind. 

The Clear Space suit was in response to a “no” vote. Asked why the board might be worried about a lawsuit, Konesey said she couldn’t think of anyone who would sue over the “yes” vote.

The body most likely to challenge the decision is the Rehoboth Beach Home Owners Association (RBHOA), which has been vocal in its opposition to granting a variance.

Mark Saunders, RBHOA president, said the organization has no intention of suing over the decision, though it does intend to keep fighting the proposed development as it makes its way through the other stages of approval.

He expressed disappointment at the decision, which he believes opens the door to any aesthetic argument for expansion. He rejects the assertion that changes would only be sought by “iconic” properties. 

Neighborly concerns

If you imagine a square cut into fours, the BelHaven owns a roughly diagonal parcel where Rehoboth Ave. meets the boardwalk; the front left and right rear sections if you’re facing the ocean. Dr. Michael Trahos, who owns the surrounding properties of the square, pointed out that the only fire access would be over the top of his buildings.

He also worried that the amount of space that would be available to the developers upon approval would raise other setback concerns.

While the board understood his objection, whether it passed muster further down the line wasn’t something they considered – like the more than 100 objections submitted by members of the RBHOA and others. Capone suggested that given the confusing nature of the comprehensive plan, issuing the variance was the only way to get the project moving forward.

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