The Red Frog Beach project in Bocas Del Toro is an important one for that area as well as Panama. It is an ambitious project built on an island in one of the more difficult areas of the country in which to take on such a project. The challenges range from material acquisition and logistics to labor and financing. As a developer I sympathize with the difficulties these folks have faced. I have visited the property on several occasions and some of the property buyers receive my blogs and write to me regularly. Everyone wants to know, "When will this project get back on its feet and start building again?"
I recently asked the developer to give me an update and he has promised to do so in the near future, but I wanted to share some information with my readers that is from one of the homeowners. Mick Orton loves the project and the area and still looks forward to one day spending a lot of time there. Mick sent me the following information and asked me to share it with you.
Construction at Red Frog Beach on Bastimentos in Bocas del Toro has been silent for over a year. As an investor this made me very nervous that our home on the Caribbean would never be built. After all, we had dreams of keeping our boat at the boat slip, dining in the fine restaurant that they promised would be built, cooling off in our own private pool, waking up to the gentle crashing of waves of the ocean, lounging on the beach and maybe even surfing or waterskiing. Before construction stopped, several homes were finished, and many were under construction. When got our call to pick our options and colors we thought we were nearing the finish line. Then came word of a strike and pending financing problems. Months went by with no resolution to the problems that plagued Red Frog, and we got concerned.
During that time, not a lot of news was coming from the developers other than the 1 hour monthly conference calls. As a result, several owners started blogs like our Red Frog Blog and Red Frog Beach Forum to keep the buzz going, to stay informed and keep the dream alive. Some chose to use it as a negative forum, but mostly the comments were pleasant and upbeat. The general consensus was (and still is) that we owners wanted this project to succeed, and felt that the developers had the best of intentions to complete it.
Much has changed since we first invested in Red Frog. The government has made several revisions to the tourist visa and property tax exemption laws, not necessarily for the better. (Thanks to the Prima Panama Newsletter and Blog we are keeping a close eye on those changes.) We also found that with the housing and mortgage chaos in the United States, the Panamanian banks and lenders were also affected negatively. And though we were originally told the developers had funding sources for construction on rights of possession land, as money tightened up, these sources disappeared.
The situation has been very complicated with so many rights of possession lots and contracts coming due, it was time for the developers to begin looking for alternatives. Most recently we have seen a major push to move much of the equity from later phases into phase 1 with the introduction of fractional ownerships. Many of the people who were in the project early have seen their financial situations change and were very happy to participate. Money is getting tighter, and fractional ownerships are a great solution for many of the people involved. Another move by the developers to get this project back on track has been to make concessions to owners in order to get around problems with rights of possession land. I feel Red Frog has been exceedingly creative in working with the owners to turn this thing around and get back on course.
Since the beginning I have been bullish on Red Frog. The project will bring much needed money back to the business people of the area and to construction workers as well as their families. I am told the area has been hurt by the work stoppage, and starting construction again will be a boom to the local economy as it was in the past. There is hope that complications will be worked out soon and construction could begin again within a very short time.
Mick Orton – Red Frog Beach lot owner