A Delaware Court of Chancery judge has denied a Rehoboth Beach couple’s motion to intervene in the case of a proposed 63-unit housing development to be built near their property.

Jim and Carol Tello sought to intervene in a Chancery Court lawsuit between developer Ocean Bay Mart and the city. Ocean Bay Mart, owned by Keith Monigle, is seeking a permanent injunction against the city for retroactively enforcing an ordinance stating that only one building can be built on a lot.

Ocean Bay Mart wants to redevelop Rehoboth Beach Plaza shopping center into a 63-unit housing development called BeachWalk. The Tellos, who own property adjacent to the 7.75-acre parcel on Terrace Road, oppose the development of 58 single-family units with five and six bedrooms, and five apartment-style units. Monigle proposed the development as a condominium, not as a subdivision.

BeachWalk plans were submitted to the city in the summer of 2015. Building inspector Dam Molina ruled that BeachWalk could not move forward because it violated city code by having more than one building on a lot. The board of adjustment overruled Molina, and BeachWalk has interpreted that ruling as binding.

The city commissioners then passed an ordinance stating that only one building can be built on a lot.

The matter then went before the planning commission, which ruled BeachWalk was a major subdivision. The commission’s ruling was upheld by the city commissioners, but BeachWalk took the decision to Delaware Superior Court. Judge E. Scott Bradley chose to remand the matter back to the city. The Tellos had attempted to intervene in that case, but Bradley denied their motion.

In May, the commissioners voted to enforce the one-building-on-a-lot ordinance and apply it to all pending and future applications. That led BeachWalk to file another suit, this time in Chancery Court.

The Tellos again sought to intervene - the city took no position on their motion - but Judge Sam Glasscock said the Tellos, who do not live within the city limits of Rehoboth, have no legally cognizable interest in the application of city ordinances. Glasscock said even if the Tellos did have such an interest, they have not shown that the city could not adequately represent that interest.

The Tellos, in their motion, argued the city could compromise with BeachWalk to resolve the matter without a final ruling from the court. But Glasscock said even if that were the case, the BeachWalk application is still subject to a public site-plan review process before it can move forward. Glasscock said the case only concerns the applicability of the ordinance stating there can be only one house per lot.