Bob's Hope

After a decade of legal battles, the unsinkable Robert Burns is once again shaping his dream metropolis of Sun Valley

"He was a taskmaster, he was relentless, but through it all I never heard him yell," says another employee. "And he was very loyal to his employees."

"Robert was the fighter pilot, we were his ground crew," says one ex-employee.

And he kept selling and doing deals.

Robert and Paige Burns, in happier times.
Robert and Paige Burns, in happier times.

"Even in the bad times, he still had that remarkable strength one-on-one," a friend says. "If you were in his grasp, you were sold.

"As far as for everybody else, well, his plan was more or less to throw all the balls in the air and make everybody else pick them up. Keep it in turmoil. Be a moving target. He has a staggering ability to keep moving at all times."

By 1990, Bankruptcy Court had received 56 filings for protection from investors in Sun Valley. And one group of investors, led by Bill Bliss, the president of SDI, was suing the Burns and Heron companies and the Phoenix law firm of Brown & Bain. The suit claimed the companies conspired to defraud the other landowners of their property and that Brown & Bain failed to provide proper legal advice to investors, charges denied by the two companies and the law firm.

SDI investors stood to lose $15 million if Heron took back its land.

Through this time, a deep rift was also forming between Burns and Heron International. Burns considered turning on Ronson, according to a 1989 memorandum submitted into evidence in SDI's case.

"Burns could provide testimony that Heron was not merely a credit enhancer in the project, but also participated as a partner," one of Burns' attorneys relates in a memo.

Burns, the attorney said, suggested he would be willing to testify to indiscretions including that "Heron paid a lot for some properties to churn up the speculative value in the area and that it was actively orchestrating appearances to pull more people in to participation in the bond program."

The attorney said that Burns believed Ronson might buckle out of fear of more bad press and litigation. Ronson was, at the time, indicted in England in the Guinness stock case.

Indeed, as Heron International was reeling in the late 1980s and early 1990s, Ronson and his creditors did not want more bad press from Arizona.

But it was Bill Bliss and his associates who ultimately provided it.

Bliss had been assisting British reporters with their investigations of Ronson, who served prison time in the early 1990s for his part in Europe's largest white-collar-crime case, the Guinness scandal. In 1992, the BBC produced a documentary from Arizona on Ronson's role in Sun Valley. And apparently, the fear of additional bad publicity from Arizona had an impact on Heron's decision to settle with the landowners led by Bliss.

Bliss got back control of 4,164 acres from Heron, a settlement that associates say infuriated Burns. Burns reportedly went to London to get an explanation from Ronson, but Ronson refused to discuss the matter with him.

As the civil cases ground on, stories appeared exploring the fact that state and county prosecutors were not pursuing Burns on criminal charges. Attorney General Grant Woods and Maricopa County Attorney Richard Romley said they were awaiting the results of the FBI investigation before moving on their own investigations. Woods declared a conflict, citing his friendship with Burns.

The FBI eventually referred the case to the U.S. Attorney, who did not pursue a criminal case against Burns.

And as the legal dramas slowly played out, Sun Valley was once again taking shape.

With the Heron case behind them, Bliss and his partners and investors assembled about 10,000 acres of what had been the southern quarter of Sun Valley.

One of the partners, Gil Gillenwater, approached Citibank, which had control of 10,000 acres it had foreclosed on because Burns had defaulted on a $12 million loan. Gillenwater proposed a deal to merge their lands for development.

Gillenwater says he worked with a Citibank official refining a plan in which Citibank and SDI would put their land into a master partnership, get the land master-planned and then hold onto it for five to 10 years until the market around the White Tank Mountains matured.

"The banker liked the proposal," Gillenwater says.

"Then, all of a sudden, the banker does a 180-degree turn on me. He wouldn't return my calls, anything. And I'm thinking, boy, this is really strange. Then I find out he sold the land for less than $1,000 an acre. We were like, 'That doesn't make any sense. Our proposal was coming in at about five times that.'

"Then I tried to call him a week after that and he was gone."

Gillenwater later discovered the land was bought by a group of investors called 10K L.L.C. The land was held and being developed by a group called Phoenix Holdings II.

It wasn't until several years later that Gillenwater learned that Phoenix Holdings II was owned primarily by Robert Burns.

Amid the turmoil of the late 1980s and early 1990s, many of Robert Burns' companies and partnerships fizzled.

But during that time, too, many new partnerships, limited liability companies and trusts were born. Some held the names of Burns' associates, some had names that seemed to signify nothing. Nobody seemed to pay much attention.

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