Former Chez La Mer building in Rehoboth to be razed

February 27, 2026 4

A commercial building on the corner of Second Street and Wilmington Avenue in Rehoboth Beach that’s been the home to a number of restaurants over the years, most notably Chez La Mer, is set to be demolished. It will likely be replaced with a three-story, mixed-used building.

The city issued a demolition notice Feb. 9 for a two-story, multi-use structure and an accessory structure at 60 Wilmington Ave. The businesses always used a Second Street address, but it’s the same building, which is zoned C-3, secondary commercial.

The demolition notice says the property is owned by Lewes Farmers Market LLC, but the project has nothing to do with the Historic Lewes Farmers Market.

Instead, Sussex County property records show the LLC has a mailing address for the Berkshire Hathaway HomeServices PennFed Realty property on Rehoboth Avenue Extended. For many years, that real estate office was home to Gallo Realty, which was founded by Sal and Bette Gallo in 1979.

Lee Ann Wilkinson, a local real estate agent and the daughter of the Gallos, said it’s been a family-owned property for at least 15 years. The name of the LLC is decades old, she said, and is related to a farmers market her dad started in the early 1990s outside Lewes that was located in the building where Tile Market and GoGlass are now located.

The market went out of business, but the family kept the LLC name, said Wilkinson.

Back to the property on the downtown Rehoboth corner, fine-dining French restaurant Chez La Mer operated on that corner lot for nearly 30 years before closing in 2007. Since then, it’s been a rotating list of restaurants including Cabo Modern Mexican & Tequila Bar, Papa Grande’s Coastal Taqueria, Azzurro Italian Oven & Bar, UnWined at the Beach and, most recently, Jam Bistro.

Nobody since Chez La Mer could make it work, Wilkinson said, and the family was tired of dealing with it, so a decision was made to tear the building down and put up a new one. The plan is to build a mixed-use building, with a nice store on the first level and a two-story condo on top, she said, pointing to a Wilmington Avenue neighbor a few feet away that has furniture store Hunt & Lane on the first floor and a two-story condo above as an example of what’s going to be built.

The city’s public notice says the demolition can’t begin before Thursday, March 12.

The goal is to get the new building constructed as soon as possible, said Wilkinson. There will be permits and approvals needed, so it’s unknown how long that will be, she said.

Two additional demo permits issued

The demolition permit for the commercial property is the third one issued by Rehoboth Beach so far in 2026. The city issued two permits Jan. 27 for two separate two-story residential structures – one 116 Laurel St. and one at 136 Columbia Ave. Neither were permitted to be demolished before Friday, Feb. 27.

Last year, after a bit of a lull, the city issued 34 demolition permits, which tied the record set in 2019.