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.
Update June 6, 2024
In a recent communication to Red Frog property owners SVF General Manager, Elio Palacios, said “The initial phase of the collaboration will see SVF assessing current operations and implementing modest improvements”. We believe we have identified one of the modest improvement he was talking about. At Blue Pearl there is a small shed that has something to do with supplying electricity to the dormant construction site. Apparently it needed a new, waterproof roof. Some poor, unfortunate golf cart that was past its prime was cannibalized for its roof so that the shed could be upgraded.
We commend SVF for their commitment to delivering “modest improvements”. As far as the big ticket items that are envisioned such as a 1.2 MW solar farm, 2.5 MWhr battery array, desalination plant, new sanitary plant, new generators, etc. there’s no discernible progress. SVF and OGI claim to be working together to close funding for all of this. There’s just one small wrinkle – ASEP has just ruled against OGI and OGI must now apply for and obtain the required concession and comply with all regulations regarding power generation, distribution and marketing as well as having the rates that it charges being regulated instead of charging whatever it wants. We expect this to put a damper on their fundraising efforts. We hope that Joe Haley can actually keep a promise (which would be historic) and do it within the four corners of the law, but we’re not going to hold our breath until he does.
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.
