State Board Issues Split Decision On Fenwick Hotel’s Outdoor Bar Variance; Commissioner Rules ‘Good Cause’ Burden For Alcohol Sales Not Met

State Board Issues Split Decision On Fenwick Hotel’s Outdoor Bar Variance; Commissioner Rules ‘Good Cause’ Burden For Alcohol Sales Not Met
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FENWICK ISLAND – Nearly seven months after a contentious public hearing, the state’s alcoholic beverage control commissioner last week denied a local hotel owner’s variance request for an outdoor pool bar with live entertainment and external speakers.

Last Friday, the Delaware Office of the Alcoholic Beverage Control Commissioner (OABCC), headed by Commissioner John Cordrey, denied the connections of the Fenwick Shores hotel a variance permitting an outdoor pool bar, outdoor live entertainment, and external speakers and paging system on the hotel’s second-floor pool deck.

The decision comes nearly seven months after a seven-hour-long public hearing in which community members both for and against the application made their case before the state agency.

At that meeting, Cordrey granted Sands Fenwick, Inc. a license to allow the sale and consumption of alcohol inside the new Fenwick Shores hotel, located along Coastal Highway in Fenwick Island. However, a decision to license the hotel’s second-floor pool deck was deferred until the agency could further review evidence and testimony provided by more than 100 residents and property owners.

In a conclusion issued last week, Cordrey granted the applicant a patio permit allowing the service and consumption of alcoholic beverages in the outdoor pool area and outdoor seated dining area. But a variance permitting an outdoor bar, outdoor live entertainment, and external speakers and paging system were denied.

“To be approved for a variance, an applicant must show ‘good cause’ for the requested variance …,” the decision reads. “This Office concludes the applicant provided no evidence to support the requested variance.”

Cordrey added that no other hotel or restaurant in Fenwick Island had an outdoor bar.

“The Seaside Inn and Fenwick Island Hotel, the only two other existing hotels in Fenwick Island, do not offer food or beverage service, and certainly no outdoor bar,” the decision reads. “In many other applications where bars and patios are requested, an applicant has suggested that the ‘good cause’ was the competitive disadvantage they have, given that all others surrounding them have such a variance. Here that does not exist, and in fact, granting the variances would actually provide the applicant with a significant advantage that others in Fenwick Island do not have.”

In 2018, local developer Spiro Buas demolished the aging Sands Motel and began building a new hotel in its place. Fenwick Shores – a 65-room boutique hotel developed under Hilton’s Tapestry Collection brand – opened to the public last fall.

In addition to its guest rooms and amenities, the hotel features an outdoor pool on the second-floor deck, as well as food and beverage operations.

To allow alcohol service for hotel guests, Buas applied with the OABCC for a hotel liquor license. Last October, however, the agency scheduled a virtual hearing in response to written opposition from community members.

Several property owners have voiced their objections to the outdoor bar and associated noise. Some have even hired an attorney after alleging the town had violated its zoning code by allowing the outdoor bar to be constructed in the first place. A petition to have the town enforce its zoning code is currently making its way through the state’s Superior Court, but the results of that effort remain to be seen.

In his decision last week, Cordrey noted the agency’s position for denying the applicant’s variance request lied solely on the inability to meet the burden of “good cause.” As a result of the decision, no sale, service or consumption of alcohol can be made at the hotel’s already-built outdoor pool bar.

“Because the applicant did not present any evidence – and meet its burden – of ‘good cause’ for the requested variance, this Office does not reach the step of discussing the objections raised by the concerned citizens … nor the concerns about the applicant’s compliance with Town ordinances or how the zoning approval letter was issued,” the decision reads. “This Office discussed and determined those items to a limited extent during the hearing and further discussion on this Decision and Order is not needed. Rather, this Office currently believes those concerns of the citizens are for the Town (and perhaps its solicitor) to address.”

In an interview this week, Buas said he was grateful to receive the patio permit but disappointed not to receive the variance. He noted he would be reevaluating his next steps.

“I believe the commissioner did the best he could, and he gave a little bit and he restricted a little bit …,” Buas said. “I feel like he had to split the baby on this one.”

About The Author: Bethany Hooper

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Bethany Hooper has been with The Dispatch since 2016. She currently covers various general stories. Hooper graduated from Stephen Decatur High School in 2012 and the University of Maryland in 2016, where she completed double majors in journalism and economics.