At the inception of the Red Frog Beach project Phase 1 was to consist of 52 villas. Joe Haley didn’t offer an escrow of construction funds so the deposits on the villas were all put into one general fund and the money was used for construction but also for other purposes. During construction of Phase 1 apparently Joe Haley wasn’t paying vendors because he had underestimated the cost of building the villas. A labor strike ensued in December 2006 which lasted until October 2008. After the strike was resolved Joe was forced to confess to the villa buyers that the company didn’t have the financial resources to finish and deliver their villas. Some of the villa buyers had paid for 100% of their villas in advance. Can you say “misappropriation of funds”? Joe in effect held a gun to the heads of his own customers and told them that their only realistic choice was to trade their rights to their future villas back to the company in exchange for equity in the company. The alternative was to lose their entire investment in their villas. Most of the villa buyers made the conversion and that is why to this day most of the members of the holding company, Blue Sea Holdings LLC, are customers that Joe Haley swindled because of his inept management.
More recently, the Blue Pearl condos were supposed to be the salvation of Red Frog Beach. Joe Haley was so optimistic about Blue Pearl that he began construction on 3 buildings. However, 2 of the buildings remain just frameworks. One building has the exterior completed and the company is trying to finish the interior of one unit in that building. The other units are stud walls only.
Blue Pearl has sat in this condition for about 18 months, perhaps longer.
OPINION: These are classic examples of Joe Haley’s mismanagement of Red Frog Beach. Prudent management would dictate not beginning construction on any additional Blue Pearl buildings until the first one has been fully built and all units sold. Because of the financial problems caused by Joe Haley’s mismanagement potential buyers of future Blue Pearl units or any other real estate offering should be aware that if any deposits are paid to the company that are not escrowed and may only be used towards the actual completion of their specific unit that Joe Haley has a long history of misappropriating funds and using such deposits to pay for other things such as delinquent loans, penalties, funding general operations (which is losing money), fuel purchases for the diesel power generators, etc. Because Joe’s reputation precedes him savvy buyers have steered clear of Red Frog Beach. There is an excellent guide for potential buyers that can be found at redfrogproperty.info.
