July 18th, 2014 (InsideCostaRica.com) Two West Michigan area real estate developers have established a new management firm to “restore the credibility and long term value” of the beachfront properties currently managed by DayStar Properties Management in Jaco, Costa Rica. The new company is “entirely independent” of DayStar and its incarcerated owner, Patrick Hundley, according to a statement sent to Inside Costa Rica by David Byker, one of those responsible for the formation of the new company, called the “Lost Beach” group of companies.
Byker, a Grand Rapids businessman who has investments in Jaco, Costa Rica, including 25 condominiums under DayStar’s management, recently sent a letter to the home owners association (HOA) members of Diamante del Sol, Bahia Encantada, Bahia Azul, La Paloma Blanca, and The Palms. The letter outlines the process that Byker and other members have followed since Hundley’s arrest in February 2014.
“Soon after these events unfolded, a number of owners began to discuss our concerns about the management and decided immediate action was necessary to protect our interests. I’ve since worked in conjunction with Denny Cherette – an experienced commercial real estate developer and a fellow Diamante del Sol owner – to conduct forensic accounting and attempt to reconcile all HOA accounts and Owner accounts. What we discovered about the management practices is very disconcerting,” Byker said in an emailed press release to Inside Costa Rica.
The statement says that Lost Beach companies will “protect owners’ interests in the properties by providing rental, resale, management, and maintenance services.”
Byker says the group has spent thousands of dollars of its own money and countless hours to investigate DayStar and establish the new companies, as well as forming the new management firm and hiring staff.
“Lost Beach and its leadership will be absolutely focused on transparency to the ownership groups, financial best practices and accountability, clear and honest communication, and optimizing value and financial performance,” Byker says. “It’s our belief that this organization will provide a level of confidence and peace of mind for the owners who have been so deeply disappointed. We are confident that the Jaco resorts will be successful with proper management.”
Patrick Hundley, the owner of DayStar Properties, has remained incarcerated since February.
According to prosecutors, Hundley convinced investors to back his purchase of a 15,850 square meter property in Jaco, known as “Miro’s Mountain.”
Allegedly, the investors signed contracts and began making monthly payments of up to $500,000 for a year and a half, with the promise that they would become shareholders in a corporation holding the property after the $7 million was raised and the purchase was made. The investors say they have never received their shares.
Furthermore, prosecutors say Hundley failed to inform investors that the property in question was tied up in the courts as part of a divorce trial between its former owner, now deceased, and the man’s former wife.
Hundley is being charged with fraudulent administration, punishable by up to 10 years in prison.
Hundley, for his part, claims the charges against him amount to nothing more than a “business dispute.”
Hundley was arrested in February and has remained in preventive detention in a Perez Zeledon prison ever since, where Hundley and his supporters say his human rights are being violated.