Bob's Hope
Paolo Vescia

Bob's Hope

North Buckeye -- There's nothing to see here but high-voltage lines and empty highway heading nowhere between ho-hum Sonoran mountain and bone-dry gulch. You are way west of Phoenix without the vision of Robert Burns.

In 1986, at the height of the Arizona Land Rush, Burns, a young, brash, multimillionaire developer, bought this land on credit because he envisioned 300,000 people golfing and strolling and breathing clean air in affordable master-planned bliss. The empire builder had his empire: Sun Valley. He would be a billionaire by 40.

He drove out here often with potential investors and described his city. "You can really see it, can't you?" several of them asked. "Yes, I can," he'd say boldly. Then he'd make eye contact and from his mouth would flow statistics and from his essence would flow charisma and sales would be made because Robert Burns was the master at helping others see his vision.

Land prices in Sun Valley skyrocketed.

But there was no road. To complete the spine of a metropolis, to pay for the road, dozens of landowners solicited by Burns pulled together and agreed to assess themselves a per-acre charge every six months to pay off an $82 million bond, a deal ultimately guaranteed by Heron Financial Corporation, a subsidiary of London-based Heron International, which also owned Tucson-based Pima Savings and Loan.

Land values shot up to $12,000 an acre.

At the same time, though, lending and tax regulations were tightening and speculators were sobering. By 1988, savings and loans were going under. Land values were tanking. It was the beginning of the devastating Arizona land recession and the savings and loan debacle of the late 1980s.

Then a few landowners couldn't pay their assessments in Sun Valley. They discovered an awful little parasite deep in the contracts they had signed: When some of them couldn't pay, their share of the bond liability fell to the other landowners. Like a human pyramid supporting a faint white elephant, the whole deal collapsed, crushing everyone.

Some called it the most complicated, draconian bond in the history of U.S. bond underwriting, part of what has been called the biggest land fraud in the history of Arizona.

Heron, run by English billionaire Gerald Ronson, began foreclosing on landowners in 1989. As he did, accusations began flying that Ronson had surreptitiously inserted the reallocation provision to engineer a collapse. In this theory, Ronson would get all the land with little debt load, get rezoning from the town of Buckeye and resell the land for a huge profit. And Burns, who was still doing business with Ronson at the time, was being accused of facilitating the deal.

Dr. Lattimer Ford had $3 million of his and his employees' pension funds in Sun Valley land. The day after Heron foreclosed on his land, the prominent Phoenix eye surgeon and father of seven drove out into the desert and shot himself in the head. He did not leave a note blaming anyone. The vision placed in his head had just vanished.

Who was to blame? Attorneys who did or didn't disclose this clause, attorneys who did or didn't have conflicts of interest, investors who did or didn't know what they were getting into, S&Ls that did or didn't make arms'-length loans?

What many called the greatest financial disaster since 1929 was in full swing. The feds, in the form of the Resolution Trust Corporation, took over tanking S&Ls such as Western and Lincoln Savings and began digging for proof of illegal loans and false profits booked to make the S&Ls look healthier than they were. They found that some S&Ls and certain privileged clients had been illegally gambling with investors' money, much of which was backed by FDIC insurance. Names such as Charles Keating, Ivan Boesky, Michael Milken and, in Europe, Gerald Ronson became synonymous with a sort of post-industrial junk paper avarice. If the gamblers won big, they'd be fabulously rich, and if they lost big, the taxpayers would be fabulously poor.

The S&L bailout ultimately cost taxpayers a half a trillion dollars.

Back in Sun Valley, landowners sued banks, banks sued landowners, landowners sued landowners, landowners sued lawyers.

In 1990, a group of landowners sued Burns, Heron and a Phoenix law firm, Brown & Bain.

In 1992, the RTC brought its billion-dollar civil suit against Western Savings and numerous officers, accountants, lawyers and investors, one of whom was Burns. The government made sweeping claims of fraud, racketeering, negligence and breach of fiduciary duty. Burns apparently learned he had been named in the case while at a motivational sales seminar in Washington state.

In 1993, the RTC sued Burns on another loan, and, in 1994, on yet another.

In 1993, Burns sued one of the Sun Valley landowners for defamation. He was also suing banks that had lent him money saying they hadn't kept promises they made.

By 1994, Robert Burns may have been involved in more civil suits than any non-attorney in Arizona.

For Burns, much of the past 10 years has been a continuous firestorm of civil suits, looming-but-never-landing criminal referrals, scathing local and national press, multimillion-dollar judgments, scurrilous divorce proceedings, gut pain, high blood pressure and diabetes. He has never been indicted.

Friends and close associates say Burns lost $100 million, massive chunks of land and numerous grand projects. In 1994, he lost his house and most everything in it.

The decade ended ignominiously for Burns with a 1999 government complaint in which the FDIC said it had found money Burns had been telling creditors he didn't have in his trusts and companies. This summer, in a settlement with the government, he agreed to pay $2 million plus, reportedly, a percentage of certain future profits to settle the government's judgments against him stemming from bad S&L loans.

For this uniquely driven and optimistic man, though, all these cases and charges and judgments weren't barriers, they were speed bumps. He kept making deals, he kept finding investors, he kept living a slightly reduced but nonetheless jet-set life.

And back in the early 1990s, he made a promise. No matter the obstacles, no matter how much money he owed, he would find a way to return to the crown jewel of his once great empire. He would be a part of Sun Valley.

He has kept that promise.

Sun Valley, under the new name of North Buckeye, is alive. A great metropolis is about to be built. And so Burns did have a vision and not just a hustle.

Now, thanks to a series of stunning financial coups, Burns is again part of this new metropolis. And this is why Robert Burns is now known by his longtime friends and longtime foes as the Great Survivor.

Even the great survivor of Europe, Gerald Ronson, calls Burns a great survivor.

"The last time Robert came to see me, he looked terrible," says the British financier, developer and, as the British press loves to note, convicted felon. Through Heron International, Ronson says, he lost half a billion dollars in the Arizona real estate debacle, much of it alongside Burns around Sun Valley.

"Robert looked like a man one step away from a nervous breakdown," Ronson says of their last meeting two years ago. "But he is a great survivor who has learned many shrewd lessons. And he is not a person who quits."

Ronson, who, through his own flights of supreme shrewdness, has reemerged as one of the top developers in Europe, did not elaborate on what shrewd lessons Burns had learned.

And Burns would not elaborate. Calls to him were returned only by his defamation lawyer, Kraig Marton, who said Burns "has no comment and will not respond further." He advised that "if you publish anything false or defamatory about Robert he will see you and the New Times in Court."

But through interviews with dozens of friends, old adversaries, associates, lawyers, ex-RTC officials and players throughout the banking, S&L and real estate industry, as well as from depositions and court papers littered throughout Arizona courts, this shrewdness has revealed itself as a sort of Burns survival mantra for the 1990s:

Lie low. If sued, countersue. If challenged, attack. Maintain the appearance of a major player. Be good to powerful friends and quality employees. Know thy enemy and thy potential investors and use what you know. Know everything about a deal. Take a Goldwater with you whenever possible. Keep making deals. Keep moving. Stay on task. Go, go, go. Never stop making deals.

Oh yeah, and dammit, if you lose something, get it back.

Robert Burns grew up in Coolidge, a small Arizona farming town that, like Buckeye, will fade away without realizing a great vision for the future.

His father was a part-time real estate appraiser, his mother a school teacher. They were poor. On occasion, the family had only potatoes from nearby farms for dinner.

He delivered papers before he was 10. By 12, he was working two jobs. By 16, he was buying watermelons from local farmers, loading up trucks and driving them to supermarkets in Tucson. He fixed up old homes in Coolidge. He skipped school because school meant nothing. He was going to make money.

His dad kicked him out of the house at age 15.

His principal graduated him and a few of his friends because the principal didn't want them back in school another year.

Old friends and ex-employees guess this upbringing was the wellspring of his motivation:

He was poor, so he worked to be rich.

He was dismissed by the authorities, so he worked to gain power.

He grew up without much culture, so he strove for culture.

But whatever the motivations for his great climb, old friends and ex-employees say, he was uniquely motivated.

"I have never seen anyone work as hard and well as Robert," says an ex-employee, who asked to remain unnamed.

Burns realized the real money was in real estate. He's told people he got his real estate license at 17 by claiming he was 18, the minimum age. His real estate instructor was Tom Hopkins, a guru of motivation and sales techniques. Burns floundered with the real estate minutiae but starred at mastering sales techniques.

He told Hopkins: "I'm going to break every [sales] record you ever [saw]." And Hopkins brushed him aside because he, like everyone else, underestimated Robert Burns.

Burns got himself a suit and began cold-calling throughout Coolidge. He would visit trailer courts and knock on doors and announce: "I can get you out of here and get you into something nicer. Wanna do it?" And who wouldn't want to do it? And the deals went down. And by age 21, he had made his first million.

He moved north toward Phoenix. He took an old banker out along the south side of South Mountain, described his vision and got a $29 million loan. He began the planning for The Foothills.

He assembled a massive information-gathering, brochure-creating marketing machine within Burns International. And the power of this machine manifested itself in one of Burns' favorite sales pitches:

"If I can answer all your questions, then you'd have no reason to say no."

The deals were all good. Everything seemed to work. Investors came to him wanting to ride his wave. Projects sprang up around Arizona. He opened offices in London and Los Angeles. He befriended a cavalcade of wealthy and powerful Arizonans. And he befriended Ronson, and they soon began discussing the vast acres west of Phoenix. It was tens of thousands of acres of cheap land near one of the fastest-growing cities in America. Ronson was intrigued.

Burns idolized Ronson, associates say, and hoped to one day work into his "inner circle." Ronson had risen from the tough streets of London to become one of the richest businessmen in Europe.

Burns bought a flat in London and an estate outside London. Europeans were better educated, more civil, he'd tell friends.

Friends began hearing hints of a British accent in his voice. Burns hired a butler. He began giving away solid gold cuff links.

When he wasn't absorbing British culture, Burns worked relentlessly, sometimes spending his days and nights riding around town in a limo making deals on his cell phone.

Through powerful friends such as attorney Joe Martori, Burns began meeting Arizona statesmen such as Barry Goldwater and Frank Snell. Here was a man who, through work, vision and savvy, rose from nothing to greatness. He became a poster boy for Reagan-era deregulation, an economic policy of loose money that allowed great men of little means to manifest their greatness. Goldwater, Snell and other luminaries soon served on Burns' "board of advisers."

If Burns was turned down for a loan, bank officials would receive calls from the old-guard powers of Arizona.

Burns read incessantly, including the biographies of great men. He slept little, often calling subordinates in the middle of the night with ideas. He kept a tape recorder with him at all times to capture his thoughts.

"Through his whole life, he has been doing business in his head 24 hours a day," one of Burns' longtime friends says. "Doing deals is his lifeblood. If he's doing deals, he's alive and having fun."

In 1983, he met Paige Phillips at a party in California. She had been Miss Alabama and the 1981 Miss America runner-up. He showered her with gifts and kept asking for dates and finally she relented. And in 1984, at 22, she became Paige Burns.

She asked him to give up the limousines. She told him he was being pretentious.

Still, he held lavish parties at his 14,000-square-foot mansion in Paradise Valley and invited all of Arizona's power brokers.

By the 1986 election, he was one of the largest campaign contributors in Arizona.

"We didn't discriminate between Democrats and Republicans," says one employee. "We gave to anyone with a vote."

John McCain, Goldwater, Snell, Terry Goddard, everybody came to his parties.

"He spared no expense to impress those he needed to impress," one associate says.

But close associates say Burns didn't enjoy the parties much because he didn't feel comfortable in groups. He is brilliant one-on-one, friends say, he is stilted and average talking to groups.

"It was weird," one says. "The magic would sort of disappear the larger the group."

And two ex-employees and a longtime friend say Burns, contrary to what onlookers might have believed, did not at all need to be the center of attention.

"The thing that set him apart," one friend says, "was that unlike about every rich guy I've known, Robert didn't want personal glory. He didn't crave attention, he didn't crave adoration, he didn't crave sycophants. In this way, he was very down-to-earth."

A few houses down from the Burns home lived ex-hockey star and real estate investor Hudi Bell, who had managed to pick up thousands of acres through massive land swaps with the BLM.

In 1986, Bell came to Burns and several others with an offer.

The year before, the federal government had been in a bind. Land was needed in northern Arizona for Navajo families dislodged by the Navajo-Hopi land dispute.

So the government worked a deal with rancher Glen Spurlock. In exchange for two Spurlock ranches in northern Arizona, the Bureau of Land Management would give Spurlock 15,000 acres west of Phoenix -- in Sun Valley.

Spurlock quickly sold the land to Bell for $678 an acre.

Then Bell acquired an adjacent 40,896 acres -- appraised at $29 million -- in another government land swap. He quickly began selling off the land in Sun Valley for as much as $2,900 an acre.

Burns bought 28,000 acres through one of his subsidiaries at a cost of $2,400 to $2,700 an acre. Bell pocketed more than $70 million on land appraised at $29 million.

And Robert Burns now held the biggest piece of land he'd ever owned.

Bell sold another 20,000 acres to other investors, with the largest chunk going to Al Gardner. Gardner later sold a large chunk to developer Bill Bliss, the fiery Chicago Irishman who heads Scottsdale Development Inc. Burns then brought Bliss and others into his dream city, and the original 48,000 acres of Sun Valley, Arizona, was in place.

Within three years, though, the plan would be in disarray. And Burns, Bliss and Ronson, all high-dollar, savvy, obstinate brawlers, would be bitter enemies locked in a ferocious legal battle for survival.

In 1986, Buckeye was an ugly little desert town only Buckeye patriots could love. Its streets and downtown were buckling, its tax base was eroding, it was surrounded by farmers who were lucky if they were just getting by.

Annette Napolitano, who with her husband farms land near Buckeye, told her children they couldn't return to the homestead after college. There was no living to be made off the land.

"It breaks your heart," she says. "But this is reality."

Into this reality walked Robert Burns and several of his British investors. They described the kingdom they would build and they invited Buckeye to be part of the dream. Annex us, they said. Then pass our master plan.

Napolitano (no relation to state Attorney General Janet Napolitano) was a member of the city council at the time. She didn't like the smell of the deal. It felt like a speculative hustle. She was the only one on the council who felt this way.

"The whole thing didn't look like anything we could pay for," she says. "It was this giant fantasy. But people were just dazzled by it all. It was very overwhelming."

At the same time, the town seemed overcome with Anglophilia. Buckeye adopted a British sister city. Town dignitaries made trips to England and vice versa.

Napolitano says she was run off the board for her anti-development stance. But in her own feat of political maneuvering, she got herself immediately onto the planning and zoning board, the stopgap for plans before they reach the town council.

She believed Sun Valley was bad development that Buckeye was ill-prepared to absorb. Over the next decade, she and other residents worked to ensure that the town had the mechanisms and know-how in place to accept only good development that Buckeye could absorb.

In the late '80s, Buckeye annexed the area that would become Sun Valley and, by doing so, became a town, mostly empty, in the shape of a gigantic finger. Subsequent annexations have made Buckeye a city spanning 500 square miles, nearly the same size as Phoenix. At build-out, it will be a city of one million people.

Back then, though, build-out seemed a long way off, Napolitano says. Then the market crashed and build-out seemed like a silly dream.

The city hired a town planner in the early 1990s. Napolitano and others worked to educate themselves on development. With the Arizona Department of Commerce, they penned the North Buckeye Master Plan.

"We got the pieces in place to protect the town," she says. "Everybody knows we're going to ask the tough questions about schools, water, roads, everything. The safeguards are in place."

Buckeye's big plans lay dormant through the early 1990s. Then, in 1996, a holding company called Phoenix Holdings represented by a guy named Brent Hickey showed up back on the town's doorstep. Phoenix Holdings wanted to submit its area plan for a new, smaller Sun Valley.

It was a good plan, Napolitano says. And by the evening of the final vote, the board agreed it was a good plan.

That night, she says, the chambers were packed.

"So everybody is packed in there and then, out of nowhere, in walks Barry Goldwater," she says. "It was so odd. It was like you had this wax figure in the room.

"So Mr. Goldwater gets up and makes his God and Country speech. And in my head I'm thinking, 'What connection could this possibly have with the issue?' They were trying to impress us, I guess. But it had the effect of making you feel like somebody was trying to slip something past you."

By the early 1990s, the deals were drying up around the offices of Burns International. And, according to two ex-employees, it seemed like Robert Burns was the only guy who didn't realize it.

"He never seemed down," says one employee. "He had this totally undefeatable spirit. His take on it was simple: He hadn't done anything wrong. And he wasn't going to allow people to kick him around. And he was going to keep doing business."

He was still doing business in his head 24 hours a day, still carrying his tape recorder everywhere, still coming into work in the morning after sleepless nights with tapes that his secretaries were to transcribe. The staff called these transcriptions "Robograms." And when you got one, you acted on it because Robert Burns, no matter how much was flying through his head, never seemed to forget one tiny detail.

"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.

"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.

But in 1992, Wall Street Journal reporter Ralph King wrote a story detailing how Burns was purchasing tracts of land at fire-sale prices from the RTC at the same time the RTC was suing him. He was allegedly buying the property through straw entities.

A month later, the Phoenix Gazette detailed what appeared to be another audacious Burns deal. In 1992, as the RTC was preparing its massive $1.3 billion civil racketeering lawsuit against Burns and others, Burns and his associates paid the RTC $9 million for a Sedona resort they had bought from Western Savings in 1988 for $23 million.

Legislators voiced outrage. After those stories appeared, the RTC implemented a new policy to screen out buyers who had defaulted on loans. Under the new policy, buyers were required to settle their debts before making deals to purchase property.

Some simply called it the "Burns Law."

By the end of 1995, the FDIC, into which the RTC was absorbed, owned three judgments against Burns: $2.5 million for MeraBank loans, $8.25 million for American Savings loans and $6.88 million for Southwest Savings loans.

But Burns paid almost nothing, the government later claimed. FDIC officials said Burns told them he couldn't pay because he didn't have enough assets or money.

Government officials looked for assets but found none. Soon they stopped looking, and it began appearing the judgments would never get paid.

If Robert Burns is an Anglophile, Buckeye's current mayor, the irrepressible cowboy Dusty Hull, is an Anglophobe.

"Look, I don't like the Beatles, never did," he says. "And if I see one more of those British types walk through the door, I'll be the first one to light the fire there."

Hull became mayor two and a half years ago. Before that, he was the town janitor.

He says he became disgusted by the way the town was being run. So he got elected and, with the town council, fired the town manager and, also, immediately canned Buckeye's sister-city program.

"Other mayors have taken their little trips over there -- you can't hide it, it's in the books," he says. "But it isn't going to happen anymore. We're going to run a tight ship."

A month into his tenure, he says, he was contacted by a representative of Phoenix Holdings II who invited him to one of Phoenix's poshest hotels to meet the investors for the Sun Valley project. According to Buckeye's town manager, the group needed Buckeye to approve a development agreement for Sun Valley so it could secure investment funds to start its master plan.

"So I get on my suit from the Salvation Army and drive my Taurus over to this fancy hotel and a guy in a tuxedo parks my car and escorts me into this room with all these big-cushioned chairs," Hull says. "And there is this guy Brent Hickey with all these British guys in these black suits with high-neck collars. I swear, I thought I was meeting the Beatles.

"So we sit down and have these little cups of tea and they said, 'We're so happy you're the new mayor, we're so happy about the new council.' And one of the British guys says how they're going to make Sun Valley this wonderful thing and they asked if I was excited and I said yes. They didn't make a pitch. Then Brent cut out of there because he had to catch a plane to England. Then I left.

"Well, then they misrepresented our meeting to the town manager and one of the city council members. Before I got back to the city limits of Buckeye, they had already told several people that I had promised them $100 million worth of infrastructure back to them over a 10-year period.

"I'm a real street-fighting guy. And now you've lost my confidence."

Joe Blanton, who became Buckeye's town manager in 1998, confirmed that negotiations with representatives of Sun Valley were sour at first.

"They stated that they had the mayor's support, or that they had pitched it to the mayor and he had okayed it."

Blanton says the developers said that since their project would pump $800 million into Buckeye, Buckeye should help out by paying them back $93 million through sales-tax rebates and other mechanisms.

The problem: "The plan could have bankrupted us," he says.

"They would give us a draft of the development agreement, and each time, we'd comment on this section of reimbursement and repayment. It kept appearing. And we kept saying we would not approve it.

"Finally, they hired a new lawyer and the clause disappeared. And since then, everything has gone smoothly."

For Phoenix Holdings II and investors, though, it meant they needed a lot more money. According to sources close to the deal, it meant that once again, Burns had to seek out more European investors.

Phoenix Holdings II is now represented in Buckeye by Craig Hunter. Hunter is a well-respected player in Arizona planning and development circles. He is also American. Blanton, Hull and Napolitano all say they feel comfortable moving forward with the master plans for Sun Valley.

The town has since written a boilerplate development agreement from which no plans are allowed to deviate, Blanton says.

"The safeguards are in place," Napolitano says. "And no matter where things went in the past, the fact is they have excellent people making good plans that are good for Buckeye."

"I haven't seen a single Englishman since then," Hull says. "So things are moving forward just fine."

As Phoenix Holdings II was out courting Hull and Buckeye, Robert Burns was in court battling his wife.

And as it turned out, Paige Burns, a soft-spoken, affable, religious mother of two, was arguably a tougher foe than the U.S. government.

The couple's marriage had eroded through the troubles of the 1990s. They filed for divorce in 1997. She wanted to return to Alabama and start over. In a 1998 Arizona Republic story, she says her husband told her he "just wanted to make a hundred million dollars in the next five years."

But Mrs. Burns sensed something else was going on. She hired a private eye. She soon had evidence that her husband had a girlfriend.

The fight turned ugly. Paige sought $10,000 a month in spousal support plus $4,000 more for the children. Robert said he didn't have that kind of money.

But Paige had watched his lifestyle -- jet-setting around Europe, among other things, shopping trips to Valentino's boutique in Monaco and Charles Jourdan clothier in Paris, a stay at a swanky Italian resort.

In the Republic article, Burns' defamation lawyer, Kraig Marton, denied his client was living gratuitously well. He told the Republic that Burns' travel and expenses were business-related and paid for by employers. He said Burns did not have an ownership interest in any corporations, partnerships or trusts that hold property. And he once again reiterated a key point in the Burns saga: "What is significant about this is that nothing has ever come from any of those allegations" from the criminal investigations of Burns.

Mrs. Burns hired an accountant, Craig Reinmuth, to tear apart Burns' books looking for the assets she knew he had. They had an advantage over Burns' other creditors: She had a right to 54 boxes of privileged attorney records.

Burns fought his wife's attempts to explore his books. In particular, he fought attempts to look at the books of Phoenix Holdings II.

But Reinmuth had uncovered a critical piece of evidence showing Burns owned a trust that the developer had earlier said didn't exist. That trust owned most of a limited partnership called Phoenix Residential Land Holdings which in turn owned 99 percent of Phoenix Holdings II.

Court records show the judge in the case fined Burns $25,000 for abuse of the discovery and litigation process for not disclosing his ownership position in the trust.

Reinmuth got the Phoenix Holdings II books. He found assets. After more than a year of investigation, the accountant pieced together a dizzyingly complex matrix of Burns' entities.

Paige Burns settled for only a little more than $3,000 a month in child support, saying she was tired of the fight and pining to return to her friends and family in Alabama.

But Reinmuth's financial road map, on file in the divorce case, had the FDIC salivating.

So, in 1999, the FDIC went after Burns again. FDIC officials contended that although Burns owed millions of dollars, he had failed to make any substantial payments to his creditors. And he has never filed for bankruptcy.

Instead, the government said in a complaint filed against Burns, the developer protected and hid millions of dollars in assets from his creditors. "His plan is carried out through a complex web of limited liability companies and partnerships, closely held corporations, family-owned trusts and friends acting as nominees," the FDIC said.

The flagship entity for Burns' current business, and his most significant asset, was Phoenix Holdings II, the complaint alleged. And his most ambitious project was a "downsized resurrection of the failed Sun Valley development," it said.

Through Phoenix Holdings II, the government says, Burns participated in a multitude of real estate ventures, but rarely took direct ownership in any of them, instead creating companies and joint ventures to purchase or participate in transactions.

"Through Phoenix Holdings II, Burns manages and promotes these projects in exchange for consulting fees and profit interests once the property is ultimately sold," the complaint says. "A profit interest of 50 percent after expenses is common."

On September 2, 1999, a U.S. District Court judge approved the FDIC's motion for a temporary restraining order, which prohibited Burns and numerous associates from moving assets from any of the entities the government believed to be tied to Burns, including Phoenix Holdings II.

Sources close to the case say the temporary restraining order was never fully enforced by the FDIC. If it had been, Phoenix Holdings II would have been crippled, they say. However, the FDIC had an interest in keeping Phoenix Holdings II healthy. After all, if Burns entities such as Phoenix Holdings II were healthy, the government had hopes of getting some of its money from him.

In March, the FDIC and Burns began settlement discussions, and reached an agreement this summer, according to Burns' testimony in yet another lawsuit.

In a deposition in a defamation case Burns had filed against a Sedona man (their beef involved a right-of-way dispute in Sedona), Burns said he owed the government $2 million. Sources close to the settlement said the government also receives a percentage of certain sales made by some Burns-related entities.

So, now, in what may be the strangest twist in the Sun Valley saga, the American government and its taxpayers are benefiting from Burns' success in projects such as Sun Valley.

Still, not everyone is happy. Gillenwater, for one, is still irritated that Burns and his investors got the Sun Valley land from Citibank, out from under his own group.

Now, Citibank is apparently lending Phoenix Holdings II money for the Sun Valley project, even though Burns defaulted on the $12 million loan from the bank.

Tom Belin, who was in charge of the Sun Valley land for Citibank, says: "We now have a lending relationship with the entity that holds that dirt. Given that, it would not be prudent for us to talk about that relationship."

"Can you imagine owing millions and being treated like that by a bank?" Gillenwater says. "That doesn't happen for your average human. To me, it's still just absolutely amazing."

Joe Blanton came to Buckeye in 1997 as the town's planning director. At a town council meeting in late summer 1998, Hull and the town council dismissed the town manager. Hull then asked Blanton to stand up before the council.

"They said I was now acting town manager," Blanton says as he leans back in his chair in his office in Buckeye's town hall. "From that point on, I was working 60 hours a week."

And those were the good old days.

Because in March, Blanton and the town started getting bombarded with the first drafts of several community master plans. Within a month, Blanton and the town were confronted with several thousand pages of information laying out a new metropolis of more than 600,000 people.

So now he works 80 hours a week.

In fact, the flood was building up months before in the offices of Lyle Anderson, SDI, Stardust, Phoenix Holdings II and Hancock. The Citizens Growth Management Initiative, Proposition 202, was making its way onto the ballot in Arizona. And it seemed to be very popular. And as developer lawyers pored over the wording of the initiative, they began to believe it could drive a stake through the heart of North Buckeye.

Alarms went off. As developers and builders mobilized a massive anti-202 campaign, law firms such as Gallagher and Kennedy quietly fired off lengthy and detailed memos advising their clients to move as quickly as possible to do as much as possible to grandfather their projects before Proposition 202 reached Arizona's voters on November 7.

For most with land in north Buckeye, that meant getting a community master plan through both the planning board and the town council.

And all of sudden, several longtime enemies were now working together like a well-oiled machine.

"I guess money heals all wounds," Gillenwater says.

And for sure, there is money to be made in Sun Valley.

"Look, somebody is going to make a billion dollars out there," Ronson says. "It will happen."

Robert Burns is slowing down a bit, or at least he's trying to. Doctors have told him he is showing signs of an insomniac workaholic -- high blood pressure and diabetes. He has told friends he'll retire in the not-too-distant future. He has claimed he wants to spend more time relaxing and enjoying life. He loves boating, reading, even playing the drums. And when he says he'll do more of these things and less business, those close to him just laugh.

"He's a heart attack waiting to happen, but he can't stop himself," says a longtime female friend who was the alleged mistress in the divorce proceedings. "He'll die doing deals."

And here is the heart of the frustration felt by those who care about him. They say he is misunderstood, and so has been wrongly villainized through the S&L and real estate crashes of the past decade.

"He didn't do anything wrong, so he stood his ground," she says. "His attackers were just people who were jealous. They're making 20 grand a year and they just want to find out where he's making more.

"But Robert loves this [Buckeye] project, it's his baby," she says. "He knows it's going to be great someday. And he knows that someday is almost here."

Ronson agrees. Even though Ronson is no longer involved with Arizona property, he says he's sure the original Burns vision will soon be realized.

"He lost everything," Ronson says. "And on top of that, he lost his wife and his family to boot. So I don't think life has been too comfortable for him. But he's a survivor. He'll make it through."


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