Sunday, September 2, 2007

More rumors put to rest

I have been in contact with a Bocas Realtor whose name I will keep confidential for now. He made some assertions about the Red Frog project that seemed like they needed to be responded to. Charges were made that there would not be enough water for our project and that this lack of resource had caused problems during contruction. So again I went to Red Frog and asked them to respond to the assertions. Here's the gist of it:

I don't want to bad mouth your investment, but there were problems from the onset. I met the first manager in Bocas for the project named Neil Sanders, when he first arrived in Bocas and we had a casual conversation. I had already been working here on a smaller project of mine for over a year and have lived and worked in the tropics before. I knew what difficulties they were facing in developing in a rain forest area with little or no infrastructure. Scott's reply: Neil turned out NOT to be the expert that he sold himself as.

One of the first things that caught my attention was the true lack of understanding in the original groundwork. For example, he said that each of the houses would have a pool. I asked what type of rain catchment system they were going to use? The answer was none! To build several hundred homes with a typical water consumption of 50 gallons per person per day (not including the pool) and to depend on the ground water in that area to supply this was probably not reasonable. If we had cachment system – we would have needed over 400,000 gallons of storage which would have required a massive investment in tanks and still we would have had poor water quality vs. 30,000 gallon storage tank with high quality ground water that we have obtained through ground well systems.

You probably don't know this, but I had walked that property a year before there was a sale to Red Frog and I had a pretty good idea what water supplies were there. One of the major limited forces of the Mayan Empire was water. The major water source for the project is to be the large spring on the property. I don't know if a hydrologist had ever been called in to give a true capacity reading on that spring. Scott's reply: He is right when he says that spring wouldn’t be enough. Hydrologists have determined the number of wells we will need as the project grows. And most of that water is coming through aquafurs from the mainland and under the water out to these islands.

The ownership of the spring was also in a dispute with the adjoining land owner, Teddy Bendiberg (who had some documents, not conclusive ones, but enough to not make Red Frog the owner either). He also had previous use rights to the springs and those I have for my Red Frog lots as well. Those rights may be enough to give him continued use of the springs (like an easement). This means Red Frog does not control the primary water source for the project. Scott's reply: Teddy claimed he bought these rights from the former owner who has always contested this claim - [as I explained above] we have total control of the water sources.

I also heard a water shortage shut the project down or at least curtailed many water dependent activities (concrete production) for a while this year. Scott's reply: Totally false.

I'm a biologist by trade and worked for the government in the Federated States of Micronesia. There I conducted Environmental Impact Studies and I have a good understanding of what puts the breaks on a studies approval (it seems to be similar in Panama). I remember this project being started without the EIS being completed (I don't know if that has anything to do with the withdrawal of the promised golf course from the project at this time). Every promise not met erodes the buyers' confidence in the project as you are well aware. Scott's reply: His project and ours started at the same time, yet he does not have a good enough understanding to get his approval after 3 years! Our first phases we started with temporary approvals, and we haven’t done anything in the EIS phase II area except securtity roads.

Also, I was at a meeting with the ministers Economy and Finance for Panama (who were in control of the Rights of Possession lands) when Red Frog came to them. I was in the meeting scheduled just before Red Frog. We were asking for the same thing they should have asked for from the beginning (a year before)..."can we definitively Title this land or not and what will the cost be?" We got no real answer except to go for a concession to be prepared if and when Titling occurs. The Solarte Project got themselves into trouble because of many things, but one of the biggies was to promise what they could not deliver. Today, you are aware they [SOLARTE] are in a class action lawsuit with the owners [of Red Frog], who may eventually take over the project from the developer (who knows). I believe Red Frog promised so much in its marketing campaign that they were NOT sure they could deliver and that has come back to bite them in some areas. Scott's reply: We never promised this only have said that we will work hard at obtaining all of our amenities and we have already been successful in step one of the titling process which was to lobby for law 2 – which we now have - and now can get it titled, just takes time. We ACT not talk.

I was also in the Red Frog project with other local realtor's once and one of the marketing team. They showed us a new Villa being completed (the first one) and the marketing guy said, "we had a little problem with this one. It was over engineered...too much steel in it, but we now have that under control for the next one". A project with this much capital had its architects "over engineer" the first house? That doesn't instill much confidence in the overall project. Scott's reply: When you start first few houses of a massive project there are variations that you can’t plan for until you begin including supply chain issues, soil, transport, etc. that you have to learn your way into the right design protocol.

So when I say we use them as an example I don't mean on every point. But I told the project I'm now working with that I could only sell their project if they got all of their permits, EIS, concessions done first so we know we can deliver what we promise. They have taken two years to get to the point where they can start to sell by doing this, but everyone I talk to about the project is very happy to hear that this will be done before they buy. As I said earlier, the EIS may be approved this week and the master plan is only waiting for that to occur to also be approved, I understand from the developers.

Red Frog was a huge under taking and its progress is not to be over looked, but I feel an equal amount of pre-planning (by experienced developers in the may have had some and I may be talking out of my hat here) and marketing would have been a better. It has a great marketing organization! Scott's reply: His only correct statement.

1 comment:

Eric@Lot 14 said...

I think maybe I read this improperly. Red Frog had a problem with having enough water. Everyone told them this. And they solved the problem by drilling beneath the ocean and finding water from the mainland.
I believe they had a choice of having separate systems that recycled water. A backup plan in case the drilling didn't work.
It appears Red Frog knew better than any locals on the issue of water.