Rehoboth may bar door to new breweries

• Rehoboth Beach is revising rules on breweries in the city.
• Critics say the town unfairly treats businesses serving alcohol.
• The mayor says it's sensible to limit the proliferation of liquor-serving establishments.

A plan by Rehoboth Beach officials to revise city laws that define brewpubs is meeting opposition from business owners and others who say the effort needlessly stifles a growing part of the beach area's economy.

The draft law, not yet passed by the Board of Commissioners, is written with an eye toward keeping craft breweries — companies that make and sell beer, but don't run restaurants alongside the brewing rooms — firmly out of town. For brewpubs, which combine beermaking with food service, the town is contemplating special rules beyond those applying to all Rehoboth restaurants.

Supporters say that's necessary to keep rowdiness out of the upscale resort. But opponents of this effort to ward off the microbrewery industry, including the well-known Dogfish Head brewpub that's a mainstay of Rehoboth Avenue, say it's madness to actively avoid the craft brewing boom. Some say the town unfairly treats businesses serving alcohol as inherently suspect.

"Every single publication that deals with food says this is the place to come for a culinary experience. Part of that experience now includes beer and wine," said Jeff Hamer, who owns restaurants both inside and outside Rehoboth, including a brewpub, Fins Ale House, on Del. 1, outside the city limits. "We're not trying to do things to hurt our town. We love this town. We're asking to be treated fairly under the law."

Rehoboth Mayor Sam Cooper says he sees craft breweries untethered from restaurants as industrial factories — which, he says, Rehoboth simply doesn't have room for.

"It's a very small town. A manufacturing facility like that is just not suited to the city of Rehoboth Beach," Cooper said. "We're cramped. It just doesn't seem appropriate."

Beyond that, Cooper says, it's sensible to limit the proliferation of alcohol-serving establishments. If Rehoboth doesn't, he says, it may turn into Dewey Beach, which Rehoboth residents tend to view as a bacchanal of boozing.

"I've got no problem with, at restaurants, people having a glass of wine, a cocktail, a beer with their dinner," Cooper said. "But later in the evening, some of these establishments go from where food is the main product to all-alcohol."

Rehoboth's commissioners have launched efforts to revise municipal laws before in ways that made some of the resort's business owners scratch their heads. Last year, the seven-member commission weighed limits on rental properties and home construction intended to discourage the building of large homes, five-bedroom models or bigger. Dramatic measures, like requiring homes being rented to cover and lock any on-premise pools, were considered in the name of controlling noise and nuisances, but ultimately didn't make it into law.

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This spring and summer, their efforts have focused on defining "brewery-pubs" in city code and deciding how those businesses should be regulated. In practice, Rehoboth has only one brewery-pub: Dogfish Head, which founder Sam Calagione started in 1995. Along with a major brewery in Milton where the vast majority of its beer is made and bottled, Dogfish has grown to become one of the country's largest craft breweries, and some credit it with driving more than a little bit of Rehoboth's tourism.

The draft code addressing brewery-pubs, drafted by Cooper and discussed at a Monday workshop, would mandate that no more than half of a brewpub's floor area be used for brewery functions, as opposed to restaurant uses. It would also ban outdoor storage of any raw materials, supplies or kegs, and it would order the businesses to have "no offensive brewery-related air-borne or water-borne emissions including odors."

Dogfish Head, in a letter to the city from its general counsel, Shauna Barnes, vigorously objected to the draft ordinance. In unusually blunt language for a company with a laid-back vibe, it said the city seemed unwilling to compromise on any points. Last year, Dogfish fought a city land-use board over how a redesigned, expanded brewpub could look; that project is now underway.

"Dogfish is disappointed with the lack of cooperation with the city," Barnes wrote. "We still remain hopeful that we can work together to find common ground on this matter, but we are beginning to lose hope in that possibility."

The company, Barnes said, "will take all steps necessary to preserve our right to continue to operate as we have for the last 21 years, well into the future."

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Cooper said he's willing to meet Dogfish Head leaders in person to discuss their concerns. But at a workshop meeting Monday, he was firm in discussions with other commissioners about wanting to keep in place limits on the size of restaurants with alcohol licenses.

When a Rehoboth resident commented, "we're kind of an impaired nation," and said alcohol served in excess can lead to "mob behavior on the streets," Cooper responded: "I think you made a very good point.

"A restaurant that doesn't serve alcohol could be any size," Cooper pointed out, according to the city's code. "I think that's absolutely fair." Offering to allow "unlimited size of watering holes," he said, was a bad idea.

Commissioner Paul Kuhns said he didn't want to be suspicious that brewpubs and craft breweries would, from the start, be a bad influence on the town.

"We're basically saying 'thanks, no' to somebody who wants to make our community better," Kuhns said.

But Cooper was firm. "We don't want a microbrewery," he said. "Knowing these things are becoming more popular, my sense was we needed to address it."

Another commissioner, Patrick Gossett, said he was intent on passing the draft ordinance to make clear the city didn't want new microbreweries to take root. "They're currently not a permitted use," Gossett said. "This would just clearly define it."

Hamer, the restaurant owner, said he's not at all interested in launching businesses involving brewing within Rehoboth's limits, although he does have a new restaurant in the city awaiting land-use approval. The next expansion of his Fins restaurant network, he said, is in Lewes, expected to open in November.

But he said at the Monday meeting, as well as in an interview, he thinks it's wrong for some of the city's commissioners to fundamentally fear alcohol sales.

"A warehouse where they serve alcohol — it's not what we do in this town," Hamer said. "But I think the people involved, and I would say the mayor in general, believe that alcohol should almost not be present in your life at all."

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