A four-story luxury hotel is a step closer to becoming a reality at one of Rehoboth Beach’s most prime locations.

The Rehoboth Beach Board of Adjustment last week granted a variance that will allow the project to move forward in its current state – an amenity-laden hotel with ocean views at Rehoboth Avenue and the boardwalk – as opposed to a stripped-back proposal.

The hotel is designed as a new version of the Bellhaven Hotel, which stood at the same corner for decades before it was damaged by the Great Storm of 1962 and later taken down. It’s being proposed by the Papajohn family, which has owned the property since the late 1930s.

A rendering of the proposed Bellhaven hotel along the Rehoboth Beach boardwalk.

The variance is the most significant step forward in the family’s multiyear quest to redevelop the property in its former image. The project must still go through the city’s site plan approval process, starting with a hearing before the Rehoboth Beach Planning Commission, before construction can begin.

The Papajohn family, led by John Papajohn and his son Alex Papajohn, want to build a four-story, 116-room hotel with balconies, a zero-edge pool, a conference center, an exercise room and underground parking. The rooms would be larger than average and geared toward middle- to upper-middle-class visitors.

A document submitted to the City of Rehoboth Beach shows the proposed site of the Bellhaven Hotel at the corner of Rehoboth Avenue and the boardwalk.

Their plan includes ground-floor retail replacing some of the stores that would be displaced by the hotel’s construction, including Candy Kitchen, The Ice Cream store, The Spice & Tea Exchange and Grotto Pizza.

“It has all of these wonderful amenities that today’s modern traveler expects,” said Alex Papajohn.

The issue the Papajohns faced is the city’s zoning code allowed the property to be developed only at a 2.0 floor-area ratio (FAR), the measurement of a building’s floor area compared with the size of the parcel where the building is located.

The hotel the Papajohns want to develop requires a 3.0 FAR. The family said the higher FAR will allow them to include the higher-class amenities, such as the balconies, conference center and retail while keeping the hotel financially feasible.

The variance granted by the Board of Adjustment allows the higher FAR. 

Without the variance, the Papajohns said they’d have to consider building a generic boxed-shape hotel with more rooms and fewer amenities to fit the 2.0 FAR. Their plan for a 2.0 FAR-compliant hotel included street-level parking beneath the hotel and no retail, which city officials and residents opposed at previous meetings.

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Alex Papajohn contended there is a discrepancy between the city’s comprehensive development plan, which emphasizes the benefits of mixed-use development, and the city code. A 2.0 FAR-compliant hotel with amenities would have space for only about 75 rooms, according to Christopher Cylke of REVPAR International, a hospitality advisory firm, which would not be financially feasible.

Side-by-side renderings offer a comparison of how the proposed hotel would appear from Wilmington Avenue following a floor area ratios of 2.0 and 3.0.

More than 100 Rehoboth Beach residents signed a letter opposing the variance request. The letter argues the hotel would have an “adverse impact” on the town because its size goes against Rehoboth Beach’s character and would “open the flood gates” for further expansion in commercial areas and increased hotel density.

“We feel it sets a horrible precedent that will go all the way down through the commercial areas and even into the residential areas,” said Mark Saunders, president of the Rehoboth Beach Homeowners Association.

Liza Hodskins, a part-time Rehoboth Beach resident from Arlington, Virginia, told the Board of Adjustment she likes the look of the building but worries about the precedent it would set.

“There will be other so-called iconic locations,” she said. “I can’t believe their architects can’t do something better with 2.0 FAR.”

A historic image of the Bellhaven Hotel at the Rehoboth Beach boardwalk. The hotel was destroyed in the Great Storm of 1962.

Alex Papajohn said the family isn’t pushing the 3.0 FAR plan because it will be easier to make money – the 2.0 version with more rooms would yield a more immediate return on investment – but because the family wants to leave a legacy they and others can be proud of.

John Papajohn grew up in Rehoboth Beach, attending Rehoboth High School, after his father, Nick, bought the Bellhaven Hotel out of bankruptcy in 1938. The family renovated it multiple times over the years before its demise. It then consolidated much of the property around the site with hopes of someday building a new Bellhaven.