Clear Space Theatre Company and the City of Rehoboth Beach have agreed to create a public-private partnership to redevelop city-owned land into a new performing arts center, the theater announced Friday. 

The CSTC board of directors formally accepted the letter of intent from the city on Oct. 23, wrapping up an 18-month process for site selection for its new performing arts center.

With the agreement, Clear Space commits to remaining in Rehoboth Beach, where it has been based since 2010.

Based on the terms of the letter of intent, Clear Space will enter into a land lease of 11 Christian St. after the Cape Henlopen Senior Center relocates to its next home outside the city limits on Hebron Road, according to the announcement. The senior center has been a tenant on city land for 45 years, but was gifted land to expand its operations and will move after the completion of a capital campaign. At that time, Clear Space will begin a lease of up to 50 years. The land, which has been valued at $7.2 million, will be made available to Clear Space for $1 per year. 

The new performing arts center will include a proscenium mainstage, a flexible seating black box, a rehearsal studio, expanded lobby, concessions, and backstage facilities, and gallery space, according to the announcement. Parking will be provided on site

“On behalf of the Board of Commissioners, I am thrilled that Clear Space has selected our offer and plans on staying in the City of Rehoboth Beach,” Mayor Stan Mills said in a statement. “Clear Space has always enriched Rehoboth Beach culturally, socially, creatively, and economically. It is a top-notch performing arts center that is near and dear to our residents, visitors, and business owners. We believe it’s a win-win, and we look forward to many more years of our partnership with Clear Space.”

“We are grateful to Mayor Mills for first proposing that Clear Space consider the site at 11 Christian Street back in March 2024,” said Clear Space Managing Director Joe Gfaller.“Without his encouragement, the site might not have been explored as one of the nine in our 2024 market study. As our analysis winnowed down our preferred sites, the City of Rehoboth Beach’s staff and elected officials were consistently excellent partners, negotiating fairly and transparently in the interest of the citizens, business owners, and visitors of Rehoboth Beach.”

The total cost for the new performing arts center is approximately $40 million, according to the announcement, with a national RFP process for the project’s architect coming soon along with community forums for residents and audiences to follow in 2026.

The development ends years of contentious debate about the location of the new theater complex. In 2021, The Rehoboth Beach Board of Commissioners voted for the second time to overturn a decision by the city’s Planning Commission to approve plans by Clear Space to build a larger theater and adjacent rehearsal theater in a new downtown location.

Supporters of the project expressed outrage at the time over the Board of Commissioners’ 4 to 3 vote to reject the Planning Commission’s approval and deny the Clear Space application to build its proposed new theaters on Rehoboth Avenue, which serves as the city’s main commercial boulevard. The controversy led to speculation that Clear Space could relocate outside of Rehoboth to Route 1 or even to nearby Lewes, Del.