More than a year after Sandcastle Motel’s $13.2 million sale and $5 million renovation, the new owners have presented official plans for the Coast Hotel on Rehoboth Beach’s Second Street.
Accompanying the hotel will be Sirrocco, a Mediterranean-style restaurant that shares its name with the Sirrocco Hotel that once occupied space on Rehoboth’s boardwalk.
The Sandcastle Motel was bought by Harvey Hanna & Associates in late 2021, and a $5 million renovation began on the property shortly thereafter. Plans for the 60-room hotel and 2,800 square-foot restaurant have been in the works for some time now, but were presented during a permit-of-compliance hearing on Nov. 18.
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TKO Hospitality will take over management of the property, which is set to open sometime in the spring.
The company already oversees eight other hotels and restaurants in Delaware, including Dewey Beach’s Hyatt Place and The Lighthouse restaurant & bar. It’s also set to manage Hyatt Place’s newest location along Newark’s Main Street, also set to open in the spring.
Coast Hotel will be an extension of Hilton Hotels’ Tapestry Collection brand, which which the company says aims to balance affordability and a high-end experience.
Representatives from TKO Hospitality and Harvey Hanna & Associates could not be reached for comment.
The Sandcastle Motel was opened in 1986 by Rehoboth resident and former Rehoboth Beach Commissioner Don Derrickson. The property was passed onto his family in 2007 and the attached restaurant Conch Island opened in 2010.
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Rehoboth: the new hotel hotspot
Delaware Online previously reported on the ongoing development in Delaware’s beaches.
The former Dolle’s Candyland on the corner of Rehoboth Avenue was bought out by Grotto Pizza and its partner Onix Group. They plan to move the pizza chain’s Baltimore Avenue location there and develop a four-story boutique hotel on the same block.
Rehoboth Avenue’s south corner is slated to become the home of Belhaven Hotel’s newest location, a 116-room building with balconies, a zero-edge pool, conference center and underground parking. Additionally, new ground-floor retail is planned to take over vacancies of stores displaced by the hotel’s construction efforts.
Plans for 330 Rehoboth Ave. to become a four-story hotel have been in the works since 2019, and was sent to Delaware Chancery Court after a zoning change request was denied in March.
Hotel development in Rehoboth is reflective of a tourism boom Delaware beaches have experienced in recent years, even in the offseason. The tourism has generated billions of dollars for the state, but also has left some locals frustrated with crowds and a lack of parking.
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Contact Molly McVety at mmcvety@delawareonline.com.
