The Clear Space Theatre Company in Rehoboth Beach, Del., announced on Wednesday that it has dropped its plans to build a larger theater and an adjacent rehearsal theater in a new in-town location because it no longer has the financial resources to continue its lawsuit challenging local officials’ refusal to approve the building project.

The announcement by Clear Space to end the project comes nine months after it filed a lawsuit charging Rehoboth Mayor Stan Mills and the Rehoboth Board of Commissioners with violating local and state law by voting to overturn a decision by the Rehoboth Planning Commission to approve plans for the two new theater buildings.

Supporters of the theater, including many of Rehoboth’s LGBTQ residents and summer visitors, believe the mayor and commissioners based their action on opposition to the project by a small but vocal minority of homeowners and renters who don’t want the theater buildings near their homes, even though they would have been built on Rehoboth Avenue, which serves as the city’s main business and commercial boulevard.