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The Red Frog Beach project was founded by a small group of US investors who formed Pillar Panama, S.A. in late 2003. It began with dramatic sales success thanks to a strong real-estate economy, explosive growth market in Panama, extraordinary location and property, a superior vision, and stellar marketing. As Full scale construction ensued with over 1000 workers, the original leadership team encountered enormous challenges including labor strife, cultural barriers, titling and land dispute issues, and governmental bureaucracy. The team adapted quickly to the learning curve and made some modest progress by completing $8M in infrastructure and closed on its first few houses. However, just 16 weeks away from completing the first 40 villas, the 2nd labor strike hit, sales began to slow, and the firm realized that it needed to raise significant debt to meet its obligations. Its efforts to secure funding working with over 100 lending groups throughout 2007 were without success as the global economy began to become another major impediment to its success. Finally, in December of 2007, the original partnership realized it needed to completely re-structure the firm, or perish.
In January, 2008, the firm landed its first and biggest shareholder group, Island Ventures, represented by Steve Bolton and Todd VanNispen. Not only did they bring significant much needed capital to the company, but also substantial depth in business acumen and experience in complicated business processes. Together, these two very successful entrepreneurs became the lead investors for the funding round that attracted 25 additional investors and over $20M in new capital. Most of the new shareholders were clients that saw their investment at risk and wanted to be part of the solution by converting their debt obligations into equity with the company. The new partnership purchased over 80% of the company and formed the foundation for the complete re-structuring of all clients and vendors as well.
This massive undertaking with clients and vendors took form in early 2008 when a group of concerned, dedicated, motivated clients put together a leadership team to confront the original partners head on with the state and future of the project. A meeting was held in Minneapolis in May where the clients were able to express their concerns and apprehensions to the original partnership group. The original partners accepted responsibility for the past mistakes and more importantly, for the future by presenting the plans for turning around the company and the project. The new combination of partners agreed to move ahead with an improved communication plan including full transparency with company financials and welcomed the newly formed client committee to participate in partnership meetings. This meeting was a turning point for the project, united with clients; the new partnership team knew it was going to forge ahead maybe not with its original vision, but with a new approach that would preserve the entire group's investment. For the remainder of the 2008, over 98% of the clients converted their investments into 1/10th share luxury fractional, land ownership, lots, or extending their contracts. In addition, nearly 200 vendors converted their payables into land ownership and un-needed inventory and equipment.
This truly was an all encompassing, unparalleled grass roots collective effort to turn around a massive project. The original owners are humbled and thankful to everyone for doing their part in such a prolific turn-around. With its strong new partners, balance sheet strengthened, construction back in progress, the first phase of the marina and village complete, and the project cleaned up, Red Frog was back.
Moving Ahead
In the second quarter of 2009, with the re-structuring complete and the project back on track, the new leadership group decided to re-brand the company to better fit the new ownership structure, ideals, and vision. Because Isla Bastimentos is surrounded by the ocean and because the new partnership group has put the environment first in its future plans, it changed its name to Oceans Group Inc,(OGI) now responsible for the development of Red Frog Beach. OGI's long term strategic plan is simple, complete its phase 1 of Red Frog Beach to have a profitable, operating, high service resort, center any future development plans on environmental sustainability, and continue to connect its clients to the leadership and direction of the project.
On a broad scale, OGI has already shrunk the overall size of the Red Frog Beach project from over 1000 units to just over 200 units and has decided to sell or joint venture the remaining lands with equally environmental responsible developers. OGI is targeting potential new development partners and buyers of phase 2 that have experience in sustainable development practices and support our vision of development with a project footprint of less than 20% of total original lands. These strict criteria will ensure Red Frog's neighbor is as environmentally responsible as OGI and that OGI does its part in setting the bar for responsible development in the Bocas Del Toro region. This is not only good for our projects and communities but this is also good business as buyers today are looking for developments with strong environmental ethics and sustainable tourism principles . Just as importantly, OGI is committed to building a stronger bond with the Bocas Community by using as many local contractors as possible, building partnerships with local businesses, providing transportation and access to Red Frog Beach, and instigating the re-launch of the successful Rana Roja Foundation.
OGI has also changed its own phase 1 plans to include more native designs and materials including Bocas style thatch in its entrance and its new concept of jungle lodge units. OGI has also decreased the size of the footprint of land used in Phase 1 moving its units closer together to allow for larger nature preserves. Finally, OGI will be using more sustainable construction materials and designs after it completes its first 57 units. These new design elements will include such enhancements as rigid insulation panelized construction, isoline insulation, pervious paving, improved windows and doors, natural ventilation concepts and more native woods from the local area.
OGI has improved its amenity plans for phase 1, focusing on the natural amenities of the project and area. The company has realized that the most valuable asset the project owns is the environment itself. Not only is the investment less, but the amenity experience is more unique and authentic for visitors and residents. The amenities include bird watching over 68 different species of birds at Red Frog, walking nature trails in our large preserve, viewing over 12 endangered species of reptiles, canoeing up one of our streams in a native dug-out. The possibilities for chance encounters with these species are endless. The potential to glimpse one of our white-faced monkeys around the bend or to witness a leatherback turtle lumbering to its nesting site up our white sand beach is truly a privilege. We hope that you pay us a visit to experience Red Frog Beach first hand and we are confident that our definition of paradise will soon become yours.
Finally, OGI is even developing a more economical way for visitors to experience the unique Biodiversity of the Red Frog environment, by launching its Bocas Bound Lodge to open the end of 2009. This lodge will accommodate over 100 guests being the largest hostel in Bocas and the only one located on Isla Bastimentos. Bocas bound will attract back-packers, surfers, hikers, bird-watchers, and other nature lovers at very modest price points. In addition, it will accommodate large events for guests with Spartan budgets including weddings and corporate retreats, Bocas Bound will also offer food for guests cooked fresh out of our main cafeteria for the convenience of those who want to stay on Bastimentos at modest rates. This initiative will be paramount to our community building program, bringing a diversified community together at Red Frog Beach. Bocas Bound will surely become the hot spot for adventure and discovery of the environmental opportunities that Isla Bastimentos offers.
