Hammerheads closes at Indian River Marina

Hammerheads Dockside has closed, as its ownership said that its contract with the state will expire at the end of February and likely will not be renewed. | PHOTO COURTESY OF GEORGE BENDLER

REHOBOTH BEACH — Hammerheads Dockside has closed the doors at its popular restaurant and bar at the Indian River Marina after apparently losing its lease contract with the state, and Big Fish Restaurant Group is reportedly looking to take over the venue.

Hammerheads Dockside announced it had closed the doors on Jan. 31. The contract on the marina in the Delaware Seashore State Park, owned and controlled by the Delaware Department of Natural Resources and Environmental Control on the narrow  peninsula between Dewey Beach and Bethany Beach, is set to expire on Feb. 28.

“Our hope was to make Hammerheads a year-round destination, so we could offer stable employment and health insurance for our employees as well as an amazing place for our customers,” Hammerheads owner George Bendler told the Delaware Business Times on Feb. 3. “We tried to have conversations with the state, and it didn’t happen … I just want to know why they wouldn’t speak with us.”

Big Fish Restaurant Group co-founder Eric Sugrue told DBT that no contract has been signed yet, and declined to comment further.

Hammerheads and Big Fish were the only two restaurants that offered bids to DNREC for the marina by the end of November. While the contract is set to expire at the end of the month, no final decision has yet to be made by DNREC as of this week.

“The division is still actively engaged in the bid process and a contract has not been fully executed at this time; the timeline is to be determined,” State Parks Community Relations Coordinator Shauna McVey told DBT.

Hammerheads first opened in 2008 in Dewey Beach by Bendler and three other partners. When DNREC first solicited requests for proposals in 2013, the Indian River Marina was half-full with commercial tenants including a hot dog stand. Terms of the contract show that Hammerheads were to pay $5,000 in a flat contract fee for the next five years, and a percentage of gross receipts that started at 1% and grew to 3%. In 2016, the receipts clause was renegotiated to 8%.

The venue underwent $200,000 in renovations, including three bars and a pergola, Bendler said. Before the COVID-19 pandemic, Hammerheads had 90 employees, although due to post-COVID labor shortage, that has scaled down to 50 employees.

Hammerheads in Dewey closed in 2021, and The Starboard owner Steve Montgomery bought the land to build Starboard Claw, which is slated to open this year.

The state contract was extended in 2019 until 2023, in addition offering a food truck and delivery services to the Inlet Campground. 

The fees were renegotiated to pay 8.5% of gross receipts of sales under $1,500, 7.5% of gross receipts on sales between $1,500 and $2,000 and 6.5% on sales above $2,000. The annual contract fee remained $5,000.

Hammerheads posted on social media at the end of January that it would be closing its operations by the end of February, and that the state was leaning on contracting with Big Fish.

“Since the contract expires at the end of February, there were rumors swirling and we had to let our staff know. We had no other options, and our voice needed to be heard,” Bendler told DBT. “It’s extremely emotional – I met my wife there, and we had our wedding party there. We worked so hard on this, and it’s a lot to process.”