Sea Isle City Explores New Redevelopment Plan for Former LaCosta Lounge Property as Hotel Project Faces More Delays

Affordable housing requirements have complicated plans for a boutique hotel at one of the city's most prominent intersections, with the developer now estimating another 18 to 24 months before an agreement is reached.

SEA ISLE CITY, N.J. — Plans to transform the former LaCosta Lounge property into an upscale boutique hotel are taking another turn, as Sea Isle City officials consider a new redevelopment strategy that could help resolve affordable housing issues that have stalled construction at one of the resort's most visible downtown locations.

City Council voted Tuesday, October 27, to retain the Collingswood law firm Maley Givens to advise the municipality on the possibility of declaring the property an area in need of redevelopment.

The move follows a request from the property's owners, Christopher Glancey and Bob Morris, who have been working for years to develop a hotel at the corner of John F. Kennedy Boulevard and Landis Avenue.

The site has remained vacant since the demolition of the former LaCosta Lounge and Ludlam buildings in October 2024.

Now, instead of moving directly toward construction, the project could require another lengthy round of negotiations, legal reviews and revised development plans.

Glancey estimates that reaching a redevelopment agreement with the city could take another 18 to 24 months.

City Hires Attorneys to Explore Redevelopment

Mayor Leonard Desiderio confirmed the city's new approach in his October 27 message to City Council.

"Also on today's agenda is the award of a professional services contract to the law firm of Maley Givens to assist and guide the council and administration on the development of the former LaCosta site," Desiderio said.

"The city received a request from the property owner to consider the site as an area in need of redevelopment, and the firm of Maley Givens has extensive experience in this matter."

Desiderio said the city's goal is to protect the community's interests as the project moves forward.

"Retaining this expert counsel ensures that the long-term interests of our community, our zoning standards, and the character of Sea Isle City are fully looked after and protected every step of the way as this process unfolds," the mayor said.

The hiring of legal counsel does not mean the property has already received a redevelopment designation.

Rather, the city is beginning to evaluate whether that approach is appropriate and what conditions could accompany a future agreement.

Under New Jersey's Local Redevelopment and Housing Law, municipalities can use redevelopment designations and plans to address qualifying properties and establish development standards.

Depending on the circumstances, the process can provide flexibility in land-use planning and potentially create opportunities for negotiated development agreements or financial arrangements.

Any such measures would require additional municipal action and compliance with applicable state law.

No redevelopment incentives or tax agreements for the LaCosta property have been announced.

Affordable Housing Requirements Complicate Hotel Plans

The central issue involves affordable housing obligations associated with the proposed development.

Glancey told Sea Isle News that he and Morris applied for hotel building permits in 2025 before learning that the project did not satisfy the city's affordable housing requirements.

He said the discovery forced the developers to reconsider how to proceed.

"At that point, we thought the best way to move forward is to request a redevelopment agreement with the city to satisfy the affordable housing requirements and the hotel," Glancey told Sea Isle News following Tuesday's council meeting.

Glancey characterized the situation as "kind of going back to square one."

The issue is particularly significant because Sea Isle City, like other New Jersey municipalities, is required to maintain a housing plan addressing its obligations under state affordable housing law.

In its amended 2026 Housing Element and Fair Share Plan, Sea Isle City proposed increasing the affordable housing set-aside in certain inclusionary zoning districts from 16.6% to 20%.

That amendment followed a December 2025 mediation agreement involving the city and the Fair Share Housing Center.

The city's housing plan provides important context for the redevelopment discussion, although it does not by itself establish exactly how many affordable units the former LaCosta project would be required to provide.

That determination will depend on the property's applicable zoning, the revised development proposal and any legally authorized redevelopment arrangements.

The developers and city officials have not publicly detailed how they intend to resolve the project's affordable housing obligations.

Original Plans Included Hotel Suites and Residential Units

The proposed development has undergone several changes since the property was acquired.

Earlier plans called for an upscale boutique hotel with 26 suites, 20 residential units, a restaurant, bar and small bakery.

The concept also included a second-floor swimming pool for hotel guests.

The property encompasses approximately 1.2 acres at one of Sea Isle City's busiest intersections, near the entrance to the downtown commercial district.

Glancey and Morris originally acquired the LaCosta property in 2018 for approximately $7.3 million.

The former nightclub continued operating for several years before closing in 2021.

The property was subsequently converted into The Ludlam, which included hotel accommodations, dining and other hospitality uses.

The buildings were demolished in October 2024 to make way for the proposed new hotel.

But the site has remained empty as the redevelopment plans have encountered additional obstacles.

Glancey now acknowledges that the original hotel design will have to change.

He told Sea Isle News that he intends to work with City Council on a new plan.

"We'll come up with a plan to sit down with City Council. I think that's the better option," he said.

The developer has not released a revised building design or a new breakdown of hotel rooms, residential units and other amenities.

Council Members Raise Concerns About Project Size

The possible redevelopment designation is not without concerns among city officials.

Council members Mary Tighe and William Kehner told Sea Isle News they had not yet seen revised plans from the developer.

Kehner also expressed concern about complaints he has heard from local business owners regarding the potential size of the hotel.

"I'm just hearing that it's going to be a monstrosity," Kehner told the publication.

The concern highlights a potentially difficult balancing act for the city.

The property occupies a prominent downtown location where a major new hotel could bring additional visitors and customers to surrounding businesses.

At the same time, the size and design of the development could affect the character of the commercial district, traffic, parking and nearby properties.

The redevelopment process could give city officials an opportunity to negotiate conditions addressing those issues.

However, no final plan has been presented, and the scope of any future redevelopment agreement remains unknown.

Vacant Property Frustrates Nearby Businesses

While the legal and planning questions are being addressed, the former LaCosta property remains an empty lot surrounded by fencing.

The prolonged vacancy has become a source of frustration for some neighboring businesses.

Kehner told Sea Isle News that the condition of the property has generated complaints.

"You'll come into town and it's a dust bowl in bad weather," he said.

"We need something on that property. There are other businesses that are crying."

The location is particularly visible because John F. Kennedy Boulevard serves as a principal gateway into Sea Isle City's downtown.

For decades, LaCosta Lounge was one of the resort's best-known entertainment destinations.

Its demolition created an opportunity for a major new development, but it also left a conspicuous vacant property in the heart of the commercial district.

The longer the project remains delayed, the greater the uncertainty for neighboring businesses and residents.

Temporary Outdoor Bar Could Open in 2027

With the hotel potentially years away, Glancey is considering a temporary use for the property.

He told Sea Isle News that the developers hope to establish an outdoor bar on the site beginning in 2027 while the larger redevelopment process continues.

That proposal could bring activity back to the property before construction of the permanent hotel begins.

However, the outdoor bar remains a plan rather than an approved project.

The developers would still need to satisfy applicable zoning, licensing and other municipal requirements.

Glancey also addressed rumors that the property might be sold.

"It's not for sale," he told Sea Isle News.

He said he remains committed to developing the hotel.

"Things always take longer than people think they will in the development world," Glancey said.

What Happens Next?

Several steps remain before the former LaCosta Lounge property can move toward construction.

The city's newly retained attorneys will help evaluate the legal requirements and potential implications of designating the site as an area in need of redevelopment.

Municipal officials will also need to determine how any revised hotel proposal would comply with affordable housing requirements.

If the city proceeds with a formal redevelopment process, additional planning reviews, public meetings and council action could follow.

Among the questions still to be resolved are the size of the proposed hotel, the number of residential units, any affordable housing component, parking requirements and whether the developer will seek financial or zoning concessions.

The cost of the revised project and its anticipated construction schedule also remain unclear.

For now, the former LaCosta Lounge property remains vacant, with no approved timetable for beginning hotel construction.

The latest action by City Council represents an effort to find a workable path forward rather than a final approval.

For Sea Isle City, the outcome could determine not only the future of a landmark downtown property but also how the resort balances new commercial development, affordable housing obligations and the character of its central business district.