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Grotto eyes former Dolle’s corner, possibly a hotel

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The iconic corner where Dolle’s Candyland once stood may be replaced by a Grotto Pizza, as the owners are evaluating plans. | DBT PHOTO BY JACOB OWENS

REHOBOTH BEACH — When Dolle’s Candyland stood at the corner of Rehoboth Avenue and the boardwalk for 60 years, it eventually became a symbol of the beach city with its orange Day-Glo sign memorialized in postcards and family photos for generations.

It may be iconic again, as the new owners are exploring the idea of relocating Grotto Pizza at 1 Rehoboth Ave.  — and building a boutique hotel with it.

Grotto Pizza Vice President Jeff Gosnear told the Delaware Business Times that while plans are still in the works, the company was looking to update and modernize the entire corner.

“As you can imagine, Grotto is still in the early stages of seeking approval for the redevelopment of the property along the Boardwalk between Rehoboth Avenue and Baltimore Avenue,” Gosnear told DBT. “We look forward to presenting this project to the city and we are hopeful that it will be positively received as a needed redevelopment of this end of the block.”

Grotto Pizza and their partner investor, Onix Group, of Kennett Square, Pa., bought the entire oceanfront block that stretches from Kohr Brothers Frozen Custard to Zelky’s Beach Arcade for $6 million in early 2021.

Grotto Pizza owns the land where its 15 N. Boardwalk location is, as well as the closed Sirocco Hotel on the other side. On the second floor of its North Boardwalk restaurant is a VRBO apartment that is popular with visitors. Onix Group, however, owns the 1. Rehoboth Avenue block itself.

The two companies have consistently presented as a unified group on buying the former Dolle’s storefront. Onix Group is a real estate development and investment firm, known for building the Hyatt Place hotel in Wilmington’s Riverfront, along with Big Fish Kennett, Milford Movies, Georgetown Apartments and the Terraces at Pike Creek.

By moving the Grotto Pizza on the corner of 1 Rehoboth Ave., Gosnear hopes to “update and modernize this entire corner” with a pedestrian-friendly, first-floor retail space.

“Grotto Pizza is an icon in Delaware and especially in Rehoboth Beach where the company was founded. Dom Pulieri, the founder of Grotto, is very excited to continue the 1 Rehoboth Ave. iconic location created by Dolle’s as a Grotto site for decades to come,” he added. “It is Dom’s vision to continue the Grotto legacy on this most important site.”

Behind 1 Rehoboth Ave., Grotto Pizza is considering building a boutique hotel with underground parking. The final hotel design will complement other hotels in Rehoboth Beach.

“It’s too early to talk about construction since we have not yet formally started the application process with the city. It is our hope to begin construction as soon as possible,” Gosnear added.

After 60 years in business, Grotto Pizza has 23 locations in the region and has become a Delaware titan in its own right. Pulieri first opened a pizza restaurant in 1960 as a way to fund his college tuition. Three years later, Grotto Pizza opened a second location on the boardwalk as a seasonal operation. In 1974, he opened the restaurant year-round to meet the demand.

Dolle’s Candyland announced it would move from the prime oceanfront block at the end of 2020, due to the landlord raising the rent. The candy store has since moved to 9 Rehoboth Ave.

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