UPDATE: Board denies plan to replace Canalside Inn with two homes

REHOBOTH BEACH, Del. - The owners of the Canalside Inn sought multiple zoning changes to tear down the longtime lodging property on Sixth Street and build two detached single-family homes in its place but the request has been denied.

At a public hearing on Monday, Sept. 22, the Rehoboth Beach Board of Adjustment voted unanimously 4-0 to deny the application. Board members said the proposal did not meet the necessary standards for a variance and encouraged the applicants to explore other development options that better align with existing zoning regulations.

"We decided that we wanted to create a home for ourselves in Rehoboth Beach," said Bryan Deptula, who, along with his wife Kristin, had hoped to build two new single-family homes on the site of the Canalside Inn, pending city approvals.

"We’re going to live in one," Deptula said prior to the hearing. "Then we hope to redevelop the other and work with the seller and buyer to actually create a home for them as well."

Documents submitted by the couple indicated that the existing inn would be demolished to make way for the homes one intended as their primary residence, and the other for sale.

The proposal included requests for variances related to:

• Lot area per dwelling

• Number of dwellings permitted

• Floor area ratio

• Setback requirements

According to the owners, the project aimed to:

• Remove a commercial business and replace it with two private residences

• Reduce traffic, parking pressure, and commercial activity in the area

• Add green space and landscaping

• Ensure new homes match the scale and character of nearby properties

• Strengthen property values and enhance neighborhood continuity

Despite these intentions, board members expressed concern that the project would exceed zoning limits and set a precedent that could undermine the city’s development code. 

The Board's decision effectively halts the project in its current form.