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Proposed Rehoboth hotel site sold for $4.2M

Katie Tabeling

330 Rehoboth Avenue was recently sold to Bette Gallo, founder and president of Gallo Realty, and Don Lockwood, owner of Milton-based Lockwood Design and Construction. | DBT PHOTO BY JACOB OWENS

REHOBOTH BEACH — The Rehoboth Avenue property previously planned for a four-story hotel has been sold to Bette Gallo, founder and president of Gallo Realty, and Don Lockwood, owner of Milton-based Lockwood Design and Construction.

The sale for 330 Rehoboth Avenue was finalized on Jan. 12 for $4.2 million, according to county land records. JJ Stein III Inc., a limited liability company registered by the late Stuart Kingston Gallery owner Jay Stein, was listed as the seller. 

JJ Stein III had owned the property that sits on the corner of Rehoboth Avenue and State Road since 1997, according to property records. 

The property had been the site of the proposed Rehoboth Grand, a hotel with 90 rooms, dining and retail space. When the project was first proposed by Lockwood Design and Construction in early 2019, plans included underground parking and an above-ground parking lot. Inside the hotel, space would be allotted for a spa and an interior pool.

But because the property is split between two zones – roughly 23,000 square feet zoned C-1 commercial along Rehoboth Avenue and just under 20,000 square feet of R-1 residential along State Road, the Rehoboth Beach Planning Commission debated the measure. Lawsuits between JJ Stein III Inc. and Limitless Development Construction Consulting, a division of Lockwood Design and Construction, also pushed the planning commission to delay any vote on rezoning until the matter was settled, according to the Cape Gazette.

Gallo confirmed that the court matters had ended, and that right now the hope was to continue with plans to create a hotel there.

Back in 2019, Don Lockwood proposed a 90-room hotel at 330 Rehoboth Avenue. The idea was put on hold pending court cases. | PHOTO COURTESY OF REHOBOTH BEACH

“It would probably be the best use, although it could go commercial in that corridor. But it has to go through the zoning process. We shall see,” Gallo told the Delaware Business Times. “We still haven’t heard anything from our attorney [David Hutt] yet at this point.”

Gallo has been a longtime resort real estate agent, starting Berkshire Hathaway Homeservices with her husband Sal. The couple first opened their first office on Route 1 between Lewes and Rehoboth, and then opened a second one in the city. As the business grew, the Berkshire Hathaway office expanded to larger locations in Rehoboth Beach, Lewes and Bethany Beach.

Gallo said she has known Lockwood, a prominent Sussex County developer, for years and that he had built the Berkshire Hathaway office in Bethany Beach.

Limitless Development is a 99-year tenant at 330 Rehoboth Ave. Before that, Ocean Atlantic Sotheby’s operated there for 15 years, and before that the Sea Horse Restaurant was there for years, according to the Cape Gazette.

Lockwood could not be immediately reached for comment.

Rehoboth Beach Chief Building Official Matthew Janis told DBT that to date nothing has been submitted for 330 Rehoboth Ave. under the new ownership.

We have had very limited meetings and everything that was discussed was preliminary in nature with the gist of conversations being what uses and construction types would meet the relevant codes,” he said in an email.

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