Fenwick Hotel Owner Appealing Variance Rejection; Buas Calls Denial ‘Unreasonable’

FENWICK ISLAND – A local developer will appeal a state board’s decision to deny his hotel a variance for an outdoor pool bar with live entertainment.

In May, nearly seven months after a contentious public hearing, the Delaware Office of the Alcoholic Beverage Control Commissioner (OABCC) 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.

Now, the Delaware Alcoholic Beverage Appeals Commission will consider an appeal to reverse the OABCC’s decision.

“I think we have a good case,” said Fenwick Shores developer Spiro Buas. “I don’t think the decision was well thought out.”

In 2018, Buas demolished the aging Sands Motel on Coastal Highway 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.

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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 for alcohol service for hotel guests, Buas applied with the OABCC for a hotel license.

Last October, however, the agency scheduled a virtual hearing in response to written objections from community members.

At that meeting, the OABCC granted the hotel a license to allow the sale and consumption of alcohol inside the premises. However, a decision to license the hotel’s second-floor pool deck was deferred until the agency could further review testimony provided by more than 100 residents and property owners.

In a conclusion issued in May, the OABCC granted Fenwick Shores patio permit allowing the service and consumption of alcoholic beverages in the outdoor pool and seated dining area, but not the developer’s request for a variance permitting an outdoor bar, outdoor live entertainment, and external speakers and paging system.

“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.”

In an interview this week, Buas highlighted the challenges of having alcohol service on the second-floor deck without the use of the bar. Without the variance, he said, the hotel can’t possess, sell or allow the consumption of alcohol at the outdoor bar.

“The reason we’re appealing is the commissioner didn’t take all the evidence into account and may have ruled in error …,” he said. “To do what we’re required to do, it’s just unreasonable.”

A public hearing to consider the hotel’s appeal will take place at 11 a.m. on Aug. 17 at Milford City Hall, where the commission will hear oral arguments for each side.

The opposition will be presented by William Rhodunda, a Wilmington-based attorney representing a group of Fenwick Island property owners concerned about the pool bar and its associated live or recorded music.

Rhodunda did not return interview requests this week. However, in October’s public hearing, he argued the outdoor amenity would adversely impact nearby residents.

“The issue here is the accessibility to this party area, and it appears there is open access to this area where you don’t have to go through the hotel lobby,” he said at the time. “What our concern is here is that this is essentially a neighborhood bar.”

Rhodunda asserted the applicant had not provided proof that the variance was necessary to operate.

“The applicant has an obligation going forward to show good cause to need these things,” he said. “The applicant has completely failed to state good cause.”

In a separate matter, some of the concerned homeowners who have testified against the permitting of the outdoor bar have hired Rhodunda to represent them after alleging the town had violated its zoning code in allowing the bar to be constructed in the first place. A petition to have the town enforce its zoning code is currently making its way through Delaware Superior Court, but the results of that effort remain to be seen.

“As for the appeal to … the liquor board decision, that is a separate matter in itself and is not a zoning issue,” Buas said this week. “I understand the decision was complicated and overwhelming, with so many focusing on the ‘outdoor bar’ issue. The hearing went on until almost midnight and was cut short, not allowing many supporters to speak due to the late hour. I believe the hotel should have been granted the variances as applied for. Therefore, a decision was made to appeal the ruling.”

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.