Highway One and Starboard owners to face off over Dewey Beach's northbeach

Ryan Cormier
The News Journal

More than two months after Dewey Beach Lions Club rejected their board's recommendation for Highway One Group to continue its lease at northbeach, a new round of meetings have been scheduled, The News Journal has learned.

Highway One's 20-year lease with the Lions Club for the scenic bayside bar expires in early 2020. That's left Highway One in a bidding battle with another high-profile Dewey bar owner: the team behind The Starboard, which has partnered with Big Fish Restaurant Group for their proposal.

When that date comes next winter, the location will either convert to a new, more restaurant-centric spot with The Starboard and Big Fish behind it, or remain as northbeach run by Highway One, which also owns Dewey Beach landmarks Bottle & Cork and The Rusty Rudder.

Here is what we know about what has become a long, drawn-out process.  
Bidding kicked off in March and a decision was "imminent" in September.

My Hero Zero performs at northbeach in Dewey Beach last year.

New details on initial vote

The Lions Club's 14-member board met last fall to decide which proposal they would get behind and offer to the membership for a final vote.

northbeach, a bar located along Rehoboth Bay in Dewey Beach, is the new home for the town's "Taco Toss" happy hour.

The board's vote was overwhelmingly in favor of Highway One with the final tally 12-2, The News Journal has learned. 

But when the public service organization's full membership weighed in at an Oct. 25 vote, they rejected the board's recommendation 45-41.

The board retreated to re-group.

Next step: Highway One, The Starboard to make presentations

Earlier this month, Lions Club members received an e-mail from the group's secretary, Susan Frederick, announcing a board of directors meeting for Tuesday, Jan. 15 at 6 p.m.

"All members are welcome to attend. On the agenda is to discuss the final presentations and voting process for the DBLC property," she wrote in the e-mail obtained by The News Journal.

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The meeting will be followed by the main event: Both sides will make new presentations in person to the membership on Thursday, Feb. 7. A vote will follow either that night or two weeks later, said Jimmy O'Conor, Dewey Beach Lions Club treasurer.

The Jan. 15 board meeting was called to help decide how the presentations and vote will proceed Feb. 7, including what would happen if the membership rejects the board again.

A view of northbeach from Rehoboth Bay last summer.

Will the other bidder automatically win? Or will the board huddle once more?

"If I had it my way, we would vote that night," said O'Conor, owner of Woody's Dewey Beach. "But after the Jan. 15 meeting, we'll send a letter to the two groups saying exactly how the vote will happen and what will happen after the presentation."

O'Conor said he's confident a final decision will be made one way or another by Feb. 21.

Reaction from Pires, Montgomery

Businessman, attorney and restaurateur Alex Pires, leader of the Highway One Group, declined to comment.

Steve "Monty" Montgomery, co-owner of Dewey Beach's The Starboard, who has bid in partnership with Eric Sugrue, president and managing partner of the Big Fish Restaurant Group, was more talkative.

Bar-goers relax at northbeach's fire pit in May.

"Dewey is a small town where we are all friends. Hopefully having both groups present to the members gives the two remaining bidders an equal opportunity to present their ideas — and for the Lions Club members to choose which option they feel is best for their property," Montgomery said Tuesday morning.

"I believe we'd all like to see this process completed so that we can each move forward with whatever plans to prepare our businesses for this upcoming season," he added.

How we got to this moment

Dewey Beach Lions Club decided to start taking bids back in the spring for future leasing and redevelopment of the property.

With Highway One's lease expiring, the Lions Club decided to examine how to maximize its profits from its prime piece of real estate in the 380-resident beach town, which is two blocks wide and 19 blocks long.

The club turned to Atlanta-based real estate services firm Red Rock Global LLC. It searched for operators interested in the club known for its boisterous atmosphere, cover bands and DJs.

Red Rock was picked to escape any built-in conflicts that seem to always arise in a small town.

Highway One Group partner Alex Pires on stage at Dewey Beach's  Bottle & Cork.

The players: Highway One and Pires

The fight for the future of the northbeach property has pitted two of the town's best-known bar owners against each other, with each angling to claim the well-known watering hole with sandy outdoor patios.

Highway One Group, which is led by attorney Pires, is the largest owner of nightlife spots in town, including the Bottle & Cork, The Rusty Rudder, Jimmy's Grille and northbeach.

It began its boozy Dewey takeover in 1989 when the group purchased the Bottle & Cork for $2.3 million. Ten years later it bought the Ruddertowne complex for $12.5 million, which at the time included The Rusty Rudder; the Baycenter, a music and banquet hall; the Crabber's Cove restaurant; and the restaurant/bar The Lighthouse.

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Pires, usually barefoot and wearing a Boston Red Sox hat supporting his beloved World Series champions, often can be spotted on stage handing out free cans of Bud Light to the crowd at Bottle & Cork's legendary "Jam Session" party each summer Saturday afternoon.

He and his group are also the ones behind the 4,000-capacity outdoor concerts that have been held at Hudson Fields since last year, bringing shows that include major country acts such as Jake Owen and Cole Swindell.

The Players: Starboard, Montgomery ... and Big Fish

Steve "Monty" Montgomery co-owner of the Starboard in Dewey Beach works the bar and crowd at his establishment along Coastal Highway and Saulsbury Street.
Special to the News Journal / CHUCK SNYDER

As for Montgomery, the public face and part owner of The Starboard, he's been at the fun-loving bar since he was 18, starting as a doorman.

Now 50, he's king of the bar best known for its Orange Crushes and Bloody Mary-infused "Suicide Sunday" parties.

He has a mini empire of his own.

Montgomery is a part owner of Dewey's Starboard Raw, Bethany Blues restaurants in Bethany Beach and near Rehoboth, the waterfront restaurant at Bethany Beach Ocean Suites named 99 Sea Level and Rehoboth-based Atlantic Transportation Services.

He is also a partner in the ownership group with Nick's Fish House in Baltimore with Under Armour CEO Kevin Plank and others as well as president of the Dewey Business Partnership, a group he helped form that brings together property owners in an attempt to better the town's way of life.

A restaurant heavy-hitter in his own right, Montgomery's Starboard group is joined for this proposal by Big Fish, which is becoming one the state's biggest restaurant groups.

Along with their beach spots such as Big Fish Grill, Summer House, The Crab House, Salt Air and Sting Ray in Rehoboth, they have aggressively moved into the Wilmington area in recent years.

You'll find their name on the menus of city eateries and bars such as Trolley Square Oyster House, Mikimotos Asian Grill and Sushi Bar and Washington Street Ale House. Last month, the group made another big splash by purchasing Trolley Square-area restaurants Scratch Magoo's and OldBanks.

The club

When it comes to wild times in Dewey Beach, northbeach has always delivered, whether through its drinking games, late-night dance parties or the bar's whipped cream-topped frozen Dewey Devil drinks.

In recent years, you could sometimes spot the bar's Dewey Devil mascot flying above Rehoboth Bay using a jetpack. 

The location has been the site of controversy in recent years with town officials criticizing the bar for unmanageable crowds drawn in by mid-week drink specials that often lead to fights and arrests in the parking lots nearby.

Highway One first opened northbeach in 2000 after signing the 20-year lease.

Lease options

Potential lessees were offered two possible redevelopment opportunities for northbeach, according to the request for proposal.

The first option was to lease the existing northbeach site, which includes the parking lot that hugs the restaurant and totals about 51,300 square feet.

The second option includes a second parking lot between northbeach and the Lions Club, totaling about 79,300 square feet. The larger proposal would include a new residential development. 

Montgomery says he bid for the smaller proposal, which sticks to the current northbeach property. Pires did not comment on the details of his proposal.

Contact Ryan Cormier of The News Journal at rcormier@delawareonline.com or (302) 324-2863. Follow him on Facebook (@ryancormier), Twitter (@ryancormier) and Instagram (@ryancormier).