VILLAS – The Delaware River and Bay Authority is considering building a bay-front boutique hotel at the Cape May-Lewes ferry terminal in North Cape May.
Two DRBA officials outlined the proposal in a short presentation to the Lower Township Council on Monday, Aug. 4, saying the hotel would provide about 50 full-time jobs and have a $6.3 million annual economic impact.
The two officials, Heath Gehrke, director of ferry operations, and Shaun O’Brien, superintendent of food and retail, said that there is already infrastructure to support a hotel, that environmental and wetlands studies have already been initiated, and that there are opportunities for public/private partnerships for design and use.
James Salmon, the DRBA’s director of communications and marketing, said what is being proposed is a low-profile, first-class boutique hotel with amenities. Salmon said the authority is in “the fact-finding/information-gathering phase to determine viability and development interest.”
According to Gehrke, the idea of a hotel on terminal grounds is about nine or 10 years old and came up two executive directors ago. He told the Herald after the presentation that the DRBA is looking for sources of revenue other than fares and rents from vendors in the terminal.
O’Brien said the proposed site would be adjacent to the ferry terminal. He said the hotel would provide a strong link between the ferry and the Cape May area and would further connect Lower Township’s Douglass Park to local assets.
“This may be the first new hotel in Cape May County in over 50 years,” he said.
O’Brien went on to say that, since 2000, over half the hotel rooms in the area have been lost to condo conversions. He and Gehrke might have taken their lead from hotel developer Eustace Mita, who at a presentation in January said that, over the years, Cape May has lost 50% of its hotel rooms, and Ocean City has lost 70%.
There have been rehabilitated hotels that reopened under new names. In 2022, the Wildwood Planning Board gave its approval to a developer to alter plans for residential housing for J-1 students to create a hotel in the 3600 block of Pacific Avenue. The resulting hotel is known as the Seaport Suites.
A new hotel in Lower Township, however, would be a novel addition to the area; O’Brien said feasibility studies have shown a strong demand for a hotel. The DRBA would be looking at some point for a developer to build it.
The grounds of the ferry terminal, despite housing the existing structure, are currently zoned “conservation,” meaning a hotel is a nonconforming use. The DRBA anticipates needing stormwater, flood and wetlands approvals.
Township Solicitor Rob Belasco said changing the zoning might be inappropriate, as it would be considered spot zoning.
Belasco said the township could create a redevelopment zone, as it did for a housing project on Fulling Mill Road, but that would be a lengthy process. However, if the DRBA project could meet one of the criteria for a redevelopment project that is all that would be necessary.
Although there was no public comment after the presentation, O’Brien spoke of a “community engagement path” in which the DRBA would solicit public opinion to develop a community/stakeholder engagement plan and find what it would take to make the project successful for the DRBA and the community.
Gehrke said the DRBA had met with a developer and drawn up a plan, which was not immediately available for public viewing, that placed the hotel adjacent to the terminal building. Other potential sites included on the north side of the main parking lot, and a site near Beach Drive and Lincoln Boulevard.
The hotel, according to the DRBA’s consultants, could be ready to open its doors in 2029.
Contact the reporter, Christopher South, at csouth@cmcherald.com or call 609-886-8600 x-128.
