• By STEVEN WARD
• Advocate staff writer
• Published: Oct 15, 2009 - Page: 1B

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A Louisiana police pension fund stands to lose the $24 million it invested in a Texas golf resort if the primary lender, as expected, forecloses on the property.

A news release from a public relations firm in Austin, Texas, went out Wednesday stating that Lehman Brothers, the primary lender in Boot Ranch, would “initiate foreclosure proceedings on the Boot Ranch property” Wednesday.

The names at the bottom of the news release are Shreveport golf pro Hal Sutton, head of Boot Ranch Development, and Ken Jowdy of Legacy Properties.

A spokesman for Sutton could not be reached for comment Wednesday.

The golf course development, located in Fredericksburg, Texas, was completed in 2005 and opened in May 2006.

In 2007, Lehman Brothers invested approximately $73 million in the project, and Lehman Brothers brought in Legacy Properties of Las Vegas as a co-developer of the property.

The Louisiana Municipal Police Employee Retirement System provided “original start-up financing” for the 2,051-acre golf community, the news release says.

Baton Rouge lawyer Randy Zinna, attorney for MPERS, said Wednesday the pension fund’s investment in the project stands at $24 million.

MPERS maintains $1.4 billion in retirement benefits for 10,000 police department employees in Louisiana. Municipalities across the state pay 13.75 percent of their police payrolls to the system.

Initially, MPERS guaranteed a $30 million line of credit for the Boot Ranch golf project.

Then, MPERS paid off the $30 million line of credit with a fixed-income investment when the loan came due in 2007. Sutton used the pension fund money to build Boot Ranch.

Zinna said in 2007 that Sutton was supposed to repay MPERS with money he made on real estate sales and golf club memberships and other income from Boot Ranch. Sutton, however, had to personally borrow another $34 million to finish the project.

Zinna said he had not seen any legal filings Wednesday to make any comments about the Lehman Brothers decision to foreclose on Boot Ranch.

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