Forgotten history of Arrowhead Ranch
After the Republic reporter’s death , a story of mobsters and big money in the desert
Don Bolles looked at the thousands of lemon and orange trees in tidy rows in the desert north of Glendale and saw something sinister.
It was the 1970s, and Bolles was looking into whether Detroit mobsters had their hands in Arizona business ventures.
The Arizona Republic’s investigative reporter suspected the mob was tied to Arrowhead Ranch, one of the most fruitful citrus farms in the state.
Bolles looked back more than a decade and found that a tangled web of produce men and mobsters had owned the ranch.
The ranch was incorporated in 1955 by five men, two of whom were Detroit’s most wanted Mafia men during Bolles’ day. But by the 1970s, the ranch had been sold twice and was held by a corporation owned in part by Sen. Barry Goldwater’s brother, Robert. He denied knowing the mobsters. But Bolles’ suspicions lived on. They would help fuel his final act as a reporter.
In 1976, Bolles would leave his desk to meet with a tipster who said he knew more about all three: the mob, land deals and the Goldwaters — Arizona’s most powerful political family.
The tip was no tip, though. It was a setup. Bolles drove to a midtown Phoenix hotel for the meeting but soon found he had been stood up. As he left, a bomb left under his car exploded. Bolles died 11 days later.
More than 40 years after Bolles’ death, Arrowhead Ranch is no longer a citrus grove outside the city. It’s a sprawling development of red-tileroofed homes, green lawns and sparkling lakes within Glendale.
Like so many places in Arizona, it’s a shimmering new thing that emerged from a darker backstory.
That history reveals farm families, mobsters, oil and silver riches, illegal immigration and poverty, land and labor disputes, high-dollar deals and risky ventures backed by taxpayer funds.
Patched together, it’s easy to see how that ranch — today the ritziest neighborhood in one Phoenix suburb — created so much suspicion on topics that later would lead a reporter to his death.
Lettuce grower buys north Glendale desert
The first time Denny Isabell drilled a well in the desert north of Phoenix in the 1930s, it came up dry.
So the lettuce grower from Colorado looked west, to the vast open land north of Glendale.
He realized the area's potential. The land's elevation was slightly higher than the rest of the Valley and was “consistently 8 to 10 degrees warmer,” he told The Republic at the time.
A perfect climate, he thought, for citrus.
In 1945, he bought 3,000 acres just south of what is now Thunderbird Conservation Park and started a nursery of thousands of seedlings that would bud to lemons and oranges.
“Many of the acres, now treeless, will be covered with orchards in years to come,” Isabell predicted in a 1947 Republic article.
So began Arrowhead Ranch.
In 1949, he planted the first lemon trees on the ranch. Around them, he grew grapes and oranges.
He and a business partner, Elmer Hartner, maintained the ranch, along with thousands of acres of farmland in Deer Valley.
By 1954, though, Hartner wanted out of the business. They sold their vast empire to a group of California and Detroit produce men.
Mob money incorporates the farm
The out-of-state produce men purchased the Arrowhead and Deer Valley ranches — with 350 acres of cardinal grapes, 120 acres of navel oranges and 250 acres of lemons — from Isabell in 1955 for about $2.6 million.
Three men were involved in the venture, according to an Arizona Republic article at the time: A.A. Bianco Jr. of Fresno; Carl Jarson, a Detroit produce dealer; and Peter Nalbandian of Phoenix.
There were two others involved, though, who weren’t noted there, or in other Republic articles in the 1950s: Joe Zerilli and Bill Tocco.
By 1970, the FBI would consider Zerilli and Tocco two of the top Mafia leaders in Detroit. Zerilli was involved in bookmaking, drugs, loansharking, prostitution, labor racketeering and extortion, according to the New York Times.
That year, Bolles flew to Detroit to investigate the men’s ties to Arizona.
'Pillars of the community'
Something led Bolles to the ranches. He found that along with the three known incorporators — Fresno, Jarson and Nalbandian — Zerilli and Tocco owned part of the ranches. Together, they held one-sixth of the ownership, according to an October 1970 Bolles article.
Jarson and Zerilli had been partners in a Detroit produce firm between 1943 and 1959, Bolles noted.
Not many remain in Arizona who have connections to the ranches' original businessmen, said Phil Denaro, a local developer who established some of Arrowhead Ranch’s commercial districts in the last few decades.
But Denaro does, and he said he never heard about any links to the mob.
Denaro said he didn’t know Zerilli or Tocco, and he didn’t know they were part owners in Arrowhead. Maybe they were silent partners, he said.
But he knew Jarson well, he said, after meeting him through a friend.
Denaro was so close with Jarson, he refers to him as his uncle.
“So now you’re going to say, ‘A ha, these are bad guys,'” Denaro said in a recent interview. “That’s not true.”
Jarson and Nalbandian were "pillars of the community" and family men, Denaro said.
“They weren’t gangsters, they were businessmen,” he said. “I never heard any stories that they were gangsters. All my life.”
Nalbandian told The Republic years ago that he met Zerilli through Jarson, but he said he didn’t know Zerilli and Tocco were criminals until he was questioned by the FBI.
“We were looking for finances and got in business with them,” he said.
He only saw Zerilli and Tocco one time, he said, in all the time they were in business together.
Goldwater pays big money for citrus
The ranches flooded just four years after the California and Detroit men bought them, according to a Republic article.
They decided to sell the land.
Del Webb and Henry Crown, the owner of the Empire State Building, paid $5 million in 1959 for the Arrowhead and Deer Valley ranches.
It was one of the largest cash real estate deals in Arizona history in that era.
Crown and Webb said at the time that Nalbandian would continue to operate the ranches, which were referred to in a Republic story as “the most highly-improved, best-maintained and equipped ranches in Maricopa County” with lemons, oranges, grapes, nectarines, peaches and cotton.
Webb and Crown’s ownership didn’t last long.
In 1966, Robert Goldwater and Joe Martori bought the ranches for $3 million under a corporation called Goldmar Enterprises.
When Bolles wrote about the Detroit mobsters in 1970, Goldmar owned the land.
Goldwater and Martori denied knowing Zerilli.
Martori, in that story, said he did know Jarson, though.
Martori also was a former partner with Herb Applegate, the president of Hobo Joe's, a popular local coffee chain. Bolles suspected that Applegate may
have also been in business with a Detroit mobster, and wrote a story that speculated as much.
Mexican workers suffer on the land
After Bolles’ death in 1976, reporters from across the country made it their mission to continue his work. Under Investigative Reporters and Editors, they formed what was referred to as the Arizona Project.
One of their first assignments was to look at Arrowhead Ranch.
In one story, reporters questioned the quick and numerous land deals that led to Webb and Goldmar's ownership of the land, and whether there was something nefarious behind them. Nothing was ever proven.
Mostly, though, the reporters found something else: hundreds of Mexican workers living in horrid conditions on the ranch.
By then, the ranch was the largest citrus operation in the county, if not all of Arizona, said Eduardo Pagán, a historian and professor at Arizona State University.
The workers on the ranch were Mexican nationals who lived in the United States only during the growing season, according to ASU research and articles from the Arizona Project and The Republic.
Goldwater and Martori consistently denied employing undocumented workers, even though reporters had proof of the workers' fake Social Security numbers.
The workers' undocumented status made them vulnerable to abuse, Pagán said.
The Arizona Project found that the workers “lived amid their own excrement and garbage in orange-crate shelters and fly-infested camps shielded from curious eyes by black plastic sheets hung on trees.”
They were "sleeping in beds made of cardboard or orange crates, cooking over fires, making shift without bathrooms, afraid to leave," the March 1977 story continued.
Even the best workers made just $10 a day, according to the report. The federal minimum wage was $2.20 or $2.30 an hour. The workers wanted $3 an hour, according to a Republic article.
Farm workers across the country were facing similarly poor working conditions and were unionizing. But the union that had taken hold in California and elsewhere, United Farm Workers, had taken a stance against illegal farm labor.
Maricopa County Organizing Project formed to help Arrowhead's undocumented workers unionize.
The local organizing group thought the workers were “the most exploited in the country,” according to a 1993 ASU research paper by Tinker Salas.
On Oct. 3, 1977, the Arrowhead workers went on strike. By the time the strike was over, an estimated 260 deportations had taken place, or nearly twothirds of the striking force. The workers kept coming back, though, usually within three days.
Goldmar and the workers soon reached a settlement, and the strike ended.
Through negotiations, the workers received a 20% wage increase, daily pay, blankets, shower facilities, bathrooms, drinking water, free gloves, protective sleeves, bags and plastic covers.
The strike was significant because it led to improved working conditions on Arizona ranches at the time, Pagán said, although it didn’t lead to long-term changes for farm workers.
Developers purchase the ranch
The labor agreement at Arrowhead Ranch didn’t last long as farmland across the county gave way to development.
Glendale was still a farming community, and Arrowhead Ranch was mostly surrounded by farms and ranch homes. It wouldn't last.
Art Martori took a reporter on a tour of Arrowhead Ranch in 1978.
“Look down at all those beautiful trees,” Martori said. “One of these days soon, very soon, they will all be gone and the Valley will look like Sun City.”
Later that year, Arizona Biltmore Estates, a subsidiary of Talley Industries Inc., agreed to purchase the ranch, about 4,000 acres north of Union Hills between 51st and 83rd avenues, for $30.4 million, 10 times what Goldwater and Martori had paid for it 12 years earlier.
Labor problems had caused Goldmar to lose money for years, Martori told The Republic.
Talley created a master development plan for the land that would include two golf courses, commercial development, and homes for about 50,000 people.
To make it happen, though, the company had to convince Glendale leaders that the land was worth annexing.
Arrowhead Ranch was in the unincorporated county, about 6 miles north of the city.
It would cost Glendale millions of dollars to build roads and provide water and sewer service to the community.
It would also require city officials to trust that the developers had the money and gumption to bring their plan to life.
City officials understood the risk. There was a perception at the time that “you couldn’t sell a custom home west of I-17,” said Jon Froke, the city's former planning director.
In September 1979, the city annexed 12.5 square miles of land that included Arrowhead Ranch, Thunderbird Conservation Park and other citrus groves.
The annexation increased the city's size by about 50%.
After the city put its faith in Talley, though, less than a year later, it sold the
"The neighborhood was mostly empty lots, with houses here and there. A lot of coyotes running loose. You couldn't leave your pets out." Elaine Scruggs Former mayor and council member
land.
In March 1980, Texas investment firm Hunt-Stephens purchased the land from Talley for a reported $42.9 million.
The change of hands made city officials worry.
'We always liked Phoenix'
The new owners had a vision, though. The Stephens family had been visiting family in Arizona for years before they started to look at land for possible development, P.J. Stephens said in a recent interview.
His father, Paul Stephens, along with Paul's business partner, Herbert Hunt, were known in Texas for their masterplanned communities. Hunt was a billionaire whose family was attempting to corner the silver market.
“We always liked Phoenix, and always saw the growth potential,” P.J. Stephens said.
After considering land off Interstate 10, the investors spotted Arrowhead Ranch.
Much of the Valley had random housing and farms sprinkled throughout, making it hard to plan a community from the ground up, but Arrowhead Ranch was a large swath of undeveloped land, Stephens said.
Their dream was to create a $1 billion high-end community unlike any other in the state, with a country club, a resort, a commercial center and a mall. A city brochure from the early 1980s said it would be one of the state's largest developments.
It was to combine "the affluence of Paradise Valley, the toniness of Scottsdale, and the family atmosphere of Mesa," according to a Republic article. But Hunt-Stephens had some doubts. “It was a bunch of citrus trees, smudge pots, fans and irrigation,” Stephens said. “Where are we going to go with this, other than dove hunts every Friday? You kind of wonder what you can get there.”
To make matters worse, shortly after the company bought the land, the economy crashed.
Nothing happened for a year, and then two years. City officials' worry grew.
Hunt-Stephens, operating under Paloma Corporation, told the city in an August 1982 memo that the economy had caused "a severe depression in home starts due to the instability of home buyers to qualify for permanent financing."
"It would place an economic hardship on us to prematurely develop the property prior to there being a market for the (development)," the company wrote.
The next year, the company trudged forward.
Despite the doubts on both sides, in April 1983, the city and Paloma entered into a joint development agreement outlining how the community would come to life.
Hunt's money helped convince city leaders that the company would do what it promised, according to a 1990 Republic article. The developers were good at swaying city officials — inviting them to lavish parties and making promises.
"They were calling me up every 30 days, wanting to take you for a helicopter ride," former Councilman Quentin Tolby said. "And for an old pilot like me, you know, God — a helicopter ride was a little bit better than sex."
Paloma agreed to construct a sewage treatment plant, build at least one 18hole golf course, pay water and sewer fees for city service, and provide rightof-ways.
In turn, the city agreed to build the community's roads and drainage, provide water and sewer services and operate the sewage plant.
The plan was to do everything upfront, before the development came — a rarity in the city's history.
Glendale had high hopes for what it would get in return — development fees of $31 million, and annual sales tax revenue exceeding $9 million by build-out.
Eventually, though, the city would spend millions more than expected — a total of $80 million, Froke said. Those at City Hall today couldn't confirm that number.
The city started to realize that its agreement with Paloma was vague, leaving the city on the hook for unexpected costs.
Economy crashes and project is in jeopardy
In 1983, the company and the city started building roads, a 465-acre artificial lake system and other necessities.
The upfront investment started to pay off as the first homes were sold at Arrowhead Ranch in 1986.
Elaine Scruggs, who would go on to serve on the City Council four years later and lead the city for 20 years as mayor, was one of the first buyers in Arrowhead Ranch Phase I. Now retired, she lives in Arrowhead Lakes.
"The neighborhood was mostly empty lots, with houses here and there," Scruggs remembers. "A lot of coyotes running loose. You couldn't leave your pets out."
Development lagged and the economy crashed again in 1987.
The Hunt family's finances were in trouble, Stephens said.
Stephens said he will always remember the day in 1987 he realized the HuntStephens partnership was over.
Paloma declared bankruptcy. Its assets reverted to lenders.
Banks took over much of the land.
City becomes master planner
By 1990, Arrowhead Ranch was without a master developer, and still mostly a dream. The majority was still vacant, and the lakes and surrounding property began to deteriorate.
In 1991, the city's agreement with Paloma was officially over. The city was left holding it all together.
Froke, a young city planner at the time, was instrumental in making sure the original vision for Arrowhead Ranch came to life, Scruggs said.
Froke had a nickname of “Mr. Arrowhead” for a while. He and other planners worked with the banks that owned most of the land, and essentially the city became the master planner.
He refers to the early 1990s as the “dark time” for Arrowhead Ranch.
Plans for mall in the heart of Arrowhead Ranch, where Abrazo Arrowhead Hospital is today, dissolved.
The city pushed through without revenue from home building flowing in, but “it hurt," Froke said.
He and other city officials pushed developers who had purchased the foreclosed land to agree to less dense developments in an attempt to increase property values, and to install more green space.
Negotiations with land owners weren't easy.
"I told them we won't rezone the land to get more dense development," Scruggs said, "and they told me they would see me in jail and I could fight it from there."
She, former Mayor George Renner, and the rest of the council, had to "fight to make it something nice," she said. They won.
That green space and the community's golf courses and lakes have come to define Arrowhead Ranch, making it stand apart from the rest of Glendale.
Neighborhood reaches build-out
The tide turned for Arrowhead in the mid-1990s as the economy improved and builders showed up.
Another mall, Arrowhead Towne Center, opened just south of Arrowhead Ranch in 1993. Midwestern University chose to locate a campus in Arrowhead Ranch in 1996.
Stephens maintained ownership of some of Arrowhead's commercial districts and eventually built higher-end restaurants and shops.
Arrowhead Ranch was near build-out by 2008, with nearly everything that Hunt-Stephens had envisioned. That is, except for a resort.
It was meant to be at Thunderbird Conservation park, with fancy features such as a tram to take visitors from the base of the mountain to a restaurant on the top.
"That's part of the folklore of Arrowhead Ranch," Scruggs now says.
More than 90,000 people live within a three-mile radius of the center of Arrowhead Ranch today.
The median household income is $106,725, more than double the city's as a whole.
And, just as originally expected, the city brings in about $8.6 million in sales tax revenue from the area each year, according to 2016 numbers, making it one of the most profitable areas in the city.
Arrowhead Ranch is now complete, 40 years after the original dream, and 70 years after the first citrus tree was planted.
A few of those citrus trees remain scattered within neighborhoods, some along 75th Avenue and some at the hospital.
The rest of the community's history is largely relegated to old newspaper clippings and a file cabinet containing the work of reporter Don Bolles.