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Dewey looking to expand town hall

Cape Gazette of Lewes, Delaware

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Town considering sale of Lighthouse Cove office space

Dewey Beach officials want to expand town hall, and they're willing to sell the town's 3,000 square feet of space in Lighthouse Cove to purchase property closer to the existing building.

Town officials say there is a benefit to keeping town hall in one facility or building, said Dewey Beach Town Manager Marc Appelbaum.

The town's desire is to own the property where new offices would be located, and that wouldn't be the case if they keep the space in Lighthouse Cove, said Appelbaum, speaking three days after town officials held a Jan. 2 executive session to discuss two amendments to an agreement with property redeveloper Dewey Beach Enterprises.

As part of a February 2011 agreement between the town and DBE, the town is supposed to receive 3,000 square feet of office space when the redevelopment of Lighthouse Cove, formerly Ruddertowne, is completed.

Town officials no longer want that space and began discussions about it with DBE after the company approached the town asking for clarifications to a formula in the agreement establishing a ratio for the number of hotel rooms and condos.

DBE partner David Sills attended the Jan. 2 meeting and was asked a few questions by council following the executive session. He said the company would like to double the number of condos that can be rented, using the hotel as a property manager, from 20 to 40 units, because based on the occupancy of the hotel through the first year, additional rental units were warranted. Sills said the proposed change wouldn't change the density of the project as a whole.

In a conversation after the meeting, Appelbaum said he wants DBE to have a successful project, and he said the proposed amendments to the agreement could be a win/win situation.

According to a resolution prepared for council to examine during the executive session, the town is asking $360,000 for the 3,000 square feet. The resolution also calls for an additional payment from the hotel of $37,500 a year in perpetuity if no state lodging tax is implemented on the units or $25,000 for 20 years if the tax applies.

The question arises because it has not yet been determined whether the owners of rentable condos in the hotel would be subject to a state lodging tax of 8 percent or a town accommodations tax of 3 percent. Appelbaum said he hopes to have that question answered soon.

Immediately following the executive session, Dewey Beach Mayor Diane Hanson declined to comment on any possible office locations, because, she said, it would hurt the town's negotiating position.

The websites of multiple realtors have a number of properties for sale or lease in town, and one specifically has the potential to create a town presence on Route 1.

Dewey Beach Town Hall's pitched roof on the bay side of Rodney Avenue can be seen directly behind two properties for sale, 1503 and 1505 Coastal Highway - the former homes of Seasons Pizza and Auntie Anne's Pretzels.

The New Castle County-based DSM Commercial Real Estate Services has the listing on both properties. According to the company website, there's a total of 3,500 square feet for sale between the two buildings at a price of $875,000.

Appelbaum said there are options for the town to expand closer to town hall other than the redevelopment project, but the former Seasons Pizza location would make a nice fit.

In the end, town council decided unanimously it was better to get property owner input before making any decisions.

Commissioners Courtney Riordan and Anna Legates voted against going into executive session.

Riordan said he believed that a proposal to amend the agreement that would benefit the town and DBE was a legitimate topic for public notice and input.

"We needed, in my view, to let the people know what was going on to get their input as well as to avoid the appearance of taking action to benefit a town special interest," he wrote.

A discussion surrounding the amendments will take place during town council's Jan. 24 meeting. The agenda has not been posted, but the meeting is scheduled to begin at 9 a.m.

Hanson said council intends to vote on the amendments to the contract following the discussion.

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Original Publication Date: January 9, 2015

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