The Clear Space Theatre Company in Rehoboth Beach, Del., announced on Wednesday that it has dropped its plans to build a larger theater and an adjacent rehearsal theater in a new in-town location because it no longer has the financial resources to continue its lawsuit challenging local officials’ refusal to approve the building project.

The announcement by Clear Space to end the project comes nine months after it filed a lawsuit charging Rehoboth Mayor Stan Mills and the Rehoboth Board of Commissioners with violating local and state law by voting to overturn a decision by the Rehoboth Planning Commission to approve plans for the two new theater buildings.

Supporters of the theater, including many of Rehoboth’s LGBTQ residents and summer visitors, believe the mayor and commissioners based their action on opposition to the project by a small but vocal minority of homeowners and renters who don’t want the theater buildings near their homes, even though they would have been built on Rehoboth Avenue, which serves as the city’s main business and commercial boulevard.

Opponents have said the back walls of the two proposed theater buildings would face a residential street lined with houses and would create excessive noise and parking problems among other adverse effects. Wesley Paulson, the Clear Space Theatre executive director, has said steps had been taken to minimize noise and parking related issues. He pointed out that plans for the two theaters were in full compliance with local zoning and building codes.

“Following months of serious debate, the board and staff of Clear Space Theatre have decided to end the project on Rehoboth Avenue,” the theater announced in a July 27 statement. “This was an extremely difficult decision, as Clear Space has spent years working on the development with the goal of expanding the vibrant arts community in Southern Delaware,” the statement says.

“The excessive financial commitment to fight the City of Rehoboth in court over approved site plans makes the project untenable,” the statement continues. “As we were met with roadblock after roadblock, legal action was justified and necessary to move forward,” it says. “However, the financial hardship it would require has led the Clear Space Theatre Board of Directors to vote to end the lawsuit. The three lots on Rehoboth Ave., which we’d hoped would serve as an arts destination, will be sold,” according to the statement.

The statement adds, “We will seek other options to allow for growth and the ability to better serve residents and visitors to southern Delaware.”

Paulson told the Washington Blade on Wednesday that Clear Space will continue its operations at it current theater building on Baltimore Avenue near the Rehoboth boardwalk, where it has produced and held Broadway plays and musical performances and instructional classes on theater for young people since 2011.

“We have a full season of shows and classes scheduled for the remainder of 2022 and are excited to produce seasons for many years to come,” the nonprofit theater company says in its July 27 statement.

Some of the theater’s supporters have said the effort by opponents to prevent Clear Space Theatre from moving to the Rehoboth Avenue site, if successful, would likely result in a commercial developer buying the property and building a larger building with restaurants or bars possibly planned for the lower floors that could create far more noise and parking problems than the theater.

Gay D.C. attorney Harvey Shulman, who was one of the leaders of the opponents of the Clear Space building plans for Rehoboth Avenue, has said he was confident that residents of the neighborhood located behind the property where the theater buildings were planned would succeed in stopping another project that would create neighborhood disturbances.