Golf courses. Clubhouses. Swimming pools. "Active adults" enjoying the good life in their golden years.

This is the vision the developers have for 2,200-acre PebbleCreek Golf Resort, a new planned retirement community in Goodyear. The developers, SunCor Development Company and various companies operated by the Robson family, are proud of this palm-studded golf mecca for oldsters, just as they are of other Robson communities in the state.

But the lenders that made PebbleCreek a reality do not want the public to know how it was financed.

That's because PebbleCreek Golf Resort is funded by a $10 million loan from the retirement trust funds of Arizona's firefighters, police officers, judges, elected officials and prison guards.

"The Retirement System requests that there be a complete blackout on any form of publicity concerning their involvement in the PebbleCreek transaction. They should not be mentioned in any press release, and any inquiries regarding financing should be deflected," PebbleCreek executive Karl Polen wrote in 1992, after the loan was approved. Polen will not comment on the letter, which was addressed to another developer associated with the project.

"I don't think I used the words 'news blackout,'" says Jack Cross, the administrator for the three public retirement funds. But Cross admits he asked PebbleCreek developers to keep the $10 million loan quiet, because he doesn't have time to field phone calls from potential borrowers. It has nothing to do with keeping the information from retirees who are the beneficiaries of the fund, he says. "Do we want a big sign out saying we funded this project and helped the economy? No. If we put signs out, we'd get eight million phone calls. Everybody and their brother would call asking for a good deal," Cross says.

Even the retirees would have difficulty discovering the loan in the three funds' annual reports. All real estate loans made by the funds are listed in "bond portfolio" sections--right along with references to investments in national concerns like Pacific Telephone and Telegraph, Revlon and the Tennessee Valley Authority. "We're not trying to hide anything," says Cross, who answers to a five-member board appointed by the governor and the Legislature to oversee the three trusts--the Public Safety Personnel Trust Fund, the Elected Officials' Retirement Plan and the Corrections Officer Retirement Plan. Together, the funds total about $2.3 billion.

All real estate deals are listed on meeting agendas for the board, Cross says, and those agendas are posted at the State Capitol. Anyone who reads the minutes of those meetings can know what loans have been made, he says.

But unlike the massive Arizona State Retirement System--the $13 billion "Big Fund" that handles the retirement money of most state and county employees--the three "Little Funds" operate in relative obscurity.

The Big Fund is often scrutinized by activist retirees and news reporters. The "little" funds have escaped such attention. And that's the way Cross and the board like it.

They were quiet in the early 1990s, when the board decided the funds should begin investing in real estate ventures, real estate loans and venture capital partnerships. And they've been quietly lending a lot of money ever since.

So far, the funds have funneled about $59 million into "non-stock and bond" enterprises. And more deals are in the making. The board will allow up to 5 percent of its assets, or $115 million, to be invested in real estate and venture capital. The three funds have lent money for convenience markets in Nevada and apartment buildings in the East Valley. They have provided loans to developers of medical suites, office buildings, shopping centers, even a planned community with artificial lakes in Avondale. The gatekeepers to this pool of retirement dollars say they are very careful about who gets access to the money. Mortgage brokers, borrowers and investors have to be very qualified, they say.

Also, it seems, the borrowers must be very connected.
Real estate documents and other public records obtained by New Times reveal that in all but one of these "non-stock and bond" investments, friends or professional associates of state insiders benefited financially in some way:

* A close business associate of one board member reeled in a $1.8 million loan from the funds to purchase a building. The associate sold the building three months later for a six-figure profit.

* Developer John Stiteler, a business partner and employer of State Treasurer Tony West, has made money off retirement-fund deals twice. In one case, West and Stiteler persuaded the funds to purchase notes held by Emerald Homes, a company that at the time was embroiled in the Keating savings and loan scandal. Stiteler also got a six-figure fee for introducing another developer friend to the board. The funds lent the developer $13.7 million for a venture that was profitable--until it got tied up in the bankruptcy of UDC Homes.

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Terry Greene