Monday, September 17, 2007

Red Frog Update

Did everyone see the latest update from Scott?

If you did and didn't report it here then help us out, will you?

Red Frog makes Sam's Blog!

Yesterday Sam posted a short article and some pictures from his trip to Red Frog. As you will see from the photos, the jungle has not overtaken the homes that have been started as was reported elsewhere.

Here's a link to the article and also a link to the photos.

It was suggested by Scott Harris's source in Panama that we owners post comments to Sam's story on his blog. Let me be the first!

Mick@ Lot 83

Thursday, September 13, 2007

ANAM and Red Frog make the front page of La Prensa

A friend of mine has a nephew who lives in Panama wrote me a brief note this morning which said:

...front page of the newspaper yesterday announces that ANAM (the environmental protection agency) has fined Red Frog Beach Project $130,000 for their behavior with regards to the environment and ANAM rules and regulations. They are also laying out some guidelines for the future development, calling for a section of the project to be used for
reforestation, and up to 25 hectares to be devoted to green or undeveloped areas.


This apparently is OLD news from last year and one can only imagine why this showed up in Wednesday's paper. Once again I went to the source and asked Scott to respond:

The report on the meeting held on September 29 of 2006 analyzes and features a chart containing the project’s mitigation and control measures in order to verify compliance and the submittal of evidence from the data obtained from the inspection and follow-up report presented by the company, and documents the following possible non-performances:
  • Verification of the 25-ha-conservation zone contemplated as a measure for compensating the felling that would result from the construction of the new infrastructure
  • Domestic waste management: waste from workers’ food lied all over the soil of the project, and certain findings (animals’ tracks) lead to think that wild animals may be getting used to eating processed food
  • The temporary solid waste dumping site was not adequate
  • Collapsed sediment meshes
  • The complex’s artificial lighting poses a risk to turtle nesting activities typical of the region

The Regional Environmental Administration of Bocas del Toro conducted another inspection on January 25 of 2007 at the request of the company through a proposal of evidence.

The Technical Report resulting from such inspection states that the non-performances are not generating findings and so there are no damages to the environment. Likewise, such report points out that the measures related to by-pass channels and temporary mounds of earth have been replaced by other more effective measures intended to contain sedimentation, as is the case of geotextile mesh barriers, which invalidate the deshredding force of rain impact on removed soil, covering them with plastics. The report also indicates that stake-supported barriers composed of hay bales and meshes were placed in construction areas, intended to control flow of sediments to the natural drain lines existing in the project area. The report concludes that the developer has been able to reduce sediment contamination of sea.

So clearly we are doing our best to protect the environment. While our guys aren’t perfect by any means, they really do a pretty good job. ANAM has just been trying to find other issues. In fact, instead of saying do this or do that to protect the environment, they basically are asking for Plans, reports, and monitoring programs, that’s it!

And I don't know if saw it but there was another article in the newspaper where Mr. Milciades ConcepciĆ³n, Chairman in the assembly for Environmental Matters, made some comments regarding ANAM being irresponsible and unprofessional in most of the cases. Obviously Ligia Castro (head of Catastro) came out to defend ANAM. Milciades is without a doubt referring to the Red Frog issue.

So there you have it, we will appeal the fine and keep on protecting the environment which is what we want to do.

- Scott Harris

Monday, September 10, 2007

Want rumors? Here are some GREAT ones!

Rumor 1: All the rumors about Red Frog being financially unsound are being started by several people who already own property on the island and have villas built. They want to be sure they have the island to themselves, so they are spreading rumors so the project will fail. I know of one person who has made contingency plans to become self sufficient for about $50K, so that's why I know this is what's going on. Once Red Frog files bankruptcy and moves out, the property can be picked up for a song and the current residents can have their own sprawling estates at our expense!

Rumor 2: Wait! No, that 's not the story. Red Frog is spreading the rumors themselves so we all bail out, and then when the strike is over, they will be able to sell the lots and villas back at much higher market rates thus making even more money!

Those are pretty good, but how about this? NONE OF THEM ARE TRUE!

Scott is getting tired (as am I) of going over the same issues again and again. Here are his responses below one last time. Questions are from Jake's Red Frog Beach Forum. His responses are in CAPS below:

"...reports that there were 3 investor-types on the grounds with some of the RFB principals the other day. So they're working on it!" TRUE BUT NO MYSTERY HERE, JUST AS EXPLAINED IN THE NEWSLETTER, WE HAVE MANY VERY INTERESTED PARTIES AND WE ARE WORKING WITH THEM ALL TO DECIDE WHO WE ULTIMATELY WANT TO USE...

"...one of the posters says they have significant debt, unlike what we've been told. He used the term "severe cash crisis." WE HAVE LESS THAN 10% DEBT TO EQUITY SO THIS INFORMATION IS FALSE...

"Scott says they're not out of money; maybe he's just answering the question literally. I've also heard stories that they're not maintaining the villas that are under construction and vines are growing all over them and the mold is a real problem and isn't being taken care of because of the cost cutting." NOT TRUE ONCE AGAIN, WE HAVE PEOPLE ON THE GROUND WHO ARE IN CHARGE OF MAINTAINING THE VILLAS. ANY MOLD ISSUES THAT COME UP WILL BE REPLACED AS EVERYONE HAS A WARRANTY...

So what does this tell you? Either Red Frog is lying... If so, then why even ask them what's going on? If Red Frog isn't lying, then others are. And if anyone wants to believe either of the other 2 rumors I posted above, feel free to use them as your own. As for me, I want them to get back to work and finish my villa so I can spend some quality time on the Caribbean!

Sunday, September 9, 2007

Closing down the blog

Everyone,

It's been a good ride, but it seems that Jake's Red Frog Beach Forum is the preferred place to speculate and spread rumors, so I am going back to my day job!

I only started this forum because there were so many stories going around after Ron closed his blog that I wanted to get the information out. But it seems people like to live in high drama around the Red Frog Project on the other blog; I'm just not one of them.

Either I am in or I am out. Right now I am in and supporting the project! We all have a lot to lose if the project fails, and I am not going to help it do so by spreading rumors, speculations or lies.

So for that reason, I'm closing up shop effective tomorrow evening. Thanks for all of you who participated.

Mick @ Lot 83

Saturday, September 8, 2007

September 2007 Newsletter

Well, folks, what do you think? My personal assessment was that it could have been more detailed and given an estimate of when the strike will be over, but it was more informative than the last conference call! Here are my thoughts:

Alliances:

GOOD! They need a construction partner, and I see the fact that a US based company wanting to get in the mix is a good sign. I am going to do more investigation on the Gates construction company, but I take this as a positive step.

Of course, if you read the blog regularly, you know how I feel about the alliance with Sam Taliaferro and Paul McBride of Prima Panama. I think this is a wise step and may have had something to do with the decision to bring in another construction parter.

After my last post about my Paul McBride call, but they were scheduled to have another conference call later in that week with Red Frog. I have not heard how that went, though I did get a voice mail from Sam. We have yet to connect.

I was told after their trip to Red Frog that something would be posted about it on their Prima Panama Blog. I have seen nothing yet.

Rumors:

Rumors... we have tried to dispel some of them here, but the latest ones on Red Frog Beach Forum are just malicious. Packing up hard drives and shipping them back to the US? They moved offices in Bocas, and Scott shipped home a hard drive with contracts on it to avoid shipping the whole computer!

I suggest anyone with concerns e-mail Scott Harris first. If you don't want to submit your question directly for some reason, send it to me and I will pose it as my own.

Bocas Notes:

I have a nephew of a good friend whose parents own a resort on the Pacific side of Panama called Mangofish Resort and is now for sale with a price tag of $10M. He visited Red Frog before construction began and was offered some of the land before Joe and the boys purchased. He has some strong ideas about what is going on and will be in Bocas for the festival. Perhaps I can get him to share his thoughts when he gets back.

Client Corner:

As hint at, only a certain amount of work can be done to maintain the structures before it is considered contruction. Paul McBride said they have a crew that is busy "beating back the rain forest" which, as you know if you have seen the sprouting fence posts, can be pervasive.

Legal and Financial:

Sounds like the strike is nearing an end, but they always try and make it sound like that. At least this time the ROP issue was addressed. What they said here is exactly what they reported to me in an e-mail, so I believe it is the government that is holding up this process.

The land dispute becomes clearer now. It was my belief from the beginning that Red Frog being sued in the US seemed odd. I'm glad they took the time to explain this incident a little better. Hopefully we will prevail, but with the current judicial system, who knows? And it means more money that can not be spent on construction.

I spoke in an earlier post about the Florida bank who has visited Red Frog to hopefully provide more traditional financing as we find here in the US. That would put some of the current home owners at ease as they go into the final phases of construction.

I am looking forward to my next trip to Panama and intend on making EJ show me the new "secret spot" next time I'm there. As soon as Janis gets her passport, I want to book a trip so we can see the project first hand and stay in a Tortuga... the model we "reserved" for our beach front lot.

Your comments?

Mick @ Lot 83

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 tropics...you 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.

Taking a vote to open up the blog

I wanted to put it to a vote as to whether or not we open up the blog to outsiders. I am still on the fence about this due the negative posts by "users" such as 507 and the idiot environmentalist I had a run in with early on. But I wanted to run it by the rest of you. As it stands, if people find us, the page just says you have to log on to view, but does not tell people who to contact or how to get an account. So I want to hear from you whether or not we open it back up. You can e-mail me at micko@sfresidence.com or just post a comment on the blog. Thanks.

Mick @ Lot 83

Saturday, September 1, 2007

Trying to stay positive...

It's getting hard, the longer this goes on. I decided because some people weren't playing by the rules, they had to go. I will not tolerate anyone posting anything that is negative when it is unsubstantiated and rumor, and especially when they do so anonymously. It puts all of us at risk.

Recently there have been some posts by a person who has decided to identify themselves as 507. They were allowed in by Ron along with some other users, so I removed all of them from the contributors' list. If they wish to get back on, they should first e-mail me and identify themselves and their property (interest in Red Frog). It is for the good of the group.

Regarding the latest post, comment to "Lots for Sale", I have asked Scott to send a response that I can post regarding these (as far as we know) rumors. As I noted on Friday, I had a conversation with Paul McBride who told me some corporate changes were in the works, but it was to get past the strike, correct the errors RFB made due to their ignorance of the "Panama way" of doing business, and get back to work. NOT because they were out of money. So until I hear otherwise, I believe this is totally untrue. And people who post this type of gossip anonymously are probably out to hurt the project. Therefore, I removed them from being able to contribute any more.

This is a caution to everyone to please send all requests through me, even though you can add users yourselves. So far everyone has played by the rules except for Ron and the users he set up. Thanks for letting me vent, but it has been a long several months of real estate headaches, not just in Panama, but with some of our other investments!

Be of good cheer, and let's hope the next newsletter and/or conference call yield some great news!

Mick @ Lot 83