On second try, Dogfish gets the go-ahead

Dogfish Head Craft Brewery convinced a Rehoboth Beach land-use board Monday to let it to tear down and rebuild its Rehoboth Avenue restaurant, reversing an earlier rejection.

Sam and Mariah Calagione, the owners of Dogfish Head, said their plans to erect a modern brewpub at 320 Rehoboth Ave. will benefit residential neighbors, other businesses and the more than 100 employees at the restaurant, which also brews beer and distills spirits.

"I know for sure our building as it is right now is no national treasure," Sam Calagione said at the Board of Adjustment hearing. "It's our goal to spend $4 million and make the building resonate with the people around the world the way our brand has resonated with people around the world."

It's the second try for Dogfish Head, which was shocked by a rejection from the Board of Adjustment in April.

Rehoboth has a law on the books keeping restaurants serving alcohol at or below 5,000 square feet. Dogfish Head, which clocks in at 8,280 square feet, has always been grandfathered in past that rule. But the major renovation the brewpub proposed, at 9,820 square feet, required Dogfish to seek a fresh exemption. The first time it sought one, the board said no.

"You want to expand right downtown, which is already crowded," board member Clifton Hilderley said at an April 27 hearing. "Why not go out of town? Find a place where they have no resistance and can do everything they want to?"

On Monday, after more than 90 minutes of new testimony from the Calagiones and others at Dogfish Head, the board voted 4-1 to approve the variance.

Hilderley switched his vote to a yes. "We should take into consideration the social aspects involved here," he said Monday.

Board member Charles Donohue cast the sole no vote. "We on this board are constrained by the laws, not the popularity of Dogfish Head or why it's so important," Donohue said.

The initial rejection caught many in Rehoboth Beach off guard, moreso because Dogfish Head is an unqualified small-business success story that's attracted much publicity, and many visitors, to southern Delaware. In addition to the brewpub, Dogfish Head has a substantial commercial brewery in Milton and a small hotel in Lewes.

Dogfish asked for a chance to present its case to the board a second time, citing revised calculations of how much of its designed building should count as restaurant-functioning space. On Monday, Dogfish Head attorney Mark Dunkle said the true amount of space devoted to restaurant space in the new building was 9,451 square feet, or 369 fewer square feet than the first proposal.

Not allowing the expansion, Dunkle argued, would present an "exceptional practical difficulty" in staying current with Dogfish's competition.

Calagione said the equipment the brewpub needs to keep current and improve service needs more space than the current structure allows.

"We're in a unique position. We have to create a building that's blissfully inefficient," Calagione said.

Mariah Calagione, the brewery's co-owner, said the company was trying to ensure it wouldn't need to close the brewpub to do the work, instead renovating in two stages. "This allows us to build while we're still in operation," she said.

Dunkle, the company's attorney, noted the city's laws about restaurant size are much more strict on establishments that serve alcohol.

"You could construct a 30,000-square-foot Cracker Barrel on this site with no variance at all. Because they don't serve alcohol," said Dunkle. The building Dogfish Head wants to build, he said, would have a nicer appearance on Rehoboth Avenue than that restaurant would.

Contact James Fisher at (302) 983-6772, on Twitter @JamesFisherTNJ or jfisher@delawareonline.com.