VERO BEACH, FLA. -- From the gates, the towering palms and red-tile roofs of Grand Harbor's villas shimmer in the Florida heat like a mirage. Inside, sprinklers whir quietly. The well-kept courtyards, however, are empty and the villas sparsely occupied.

Tee off at 9 a.m.? No problem, there is always room at the community's two golf courses if any of the 42 year-round residents want to play. Dine on exotic game? Order antelope or buffalo steak at the Grand Harbor's beach club. Reservations are a snap.

More than 100 employees -- carpenters, laborers, gardeners, waiters and architects -- are tending and even expanding the massive, half-finished luxury community. They are paid by the federal government, which is pumping millions of dollars into Grand Harbor, a property it inherited from a failed savings and loan and is trying to sell.

"The residents are happy as blue blazes," said project manager John Fleming, especially since it finally looks like the long-promised marina and boat slips will be built.

Why is the government pouring millions of dollars into a project with losses expected to cost taxpayers $40 million to $50 million?

At the most basic level, the answer is simple: Sometimes, the only way to make a dollar is to spend a dollar. The Resolution Trust Corp. (RTC), the federal agency in charge of cleaning up failed savings and loans, is discovering that real estate adage as it tries to unload 40,000 properties now under its control.

For taxpayers already shaking their heads over the cleanup's estimated $500 billion bill, the government's success or failure in the real estate business has a bottom-line significance. Every dollar going into government coffers from a property sale is a dollar that won't have to be provided by the Treasury Department.

When Congress created the RTC last year to manage the savings and loan cleanup, the idea was that it would sell the real estate for cash, "as is," as fast as it could.

But things have changed. The RTC not only is saddled with a huge and growing real estate inventory, it is operating in a market that "stinks to high heaven," in the words of Deputy Treasury Secretary John Robson.

On top of that, a credit crunch has made it hard for potential buyers to find banks willing or able to finance the purchase of RTC properties.

The RTC now is scrambling to keep from getting buried in unsalable properties. The agency is finishing projects like Grand Harbor, systematically cutting prices and planning to auction 30,000 homes.

In addition, an aggressive program of government financing has been announced. And in cases where there is simply no market for some of its properties -- undeveloped land in Texas, for example -- the RTC is holding on to properties in hopes the market will improve.

The goal of these efforts is to help sell property when possible and maximize the government's proceeds when it does. But in the process, it will look to many like throwing good money after bad.

"It's a terrible dilemma: They are under pressure to conserve cash and not depress values, and to get rid of the stuff quickly," said Robert Litan, an economist with the Brookings Institution in Washington. Those goals, Litan said, are "mutually inconsistent."

There has been plenty of pressure on the RTC, from the real estate market to the halls of Congress, to find ways to move property. But a few voices have urged caution, especially when it comes to putting more money into projects or having the RTC provide financing.

The government's first efforts to to deal with the thrift crisis in 1988 underscored the problem. The deals worked out in those early years, before the creation of the RTC, have been widely condemned as a financial disaster, in part because the deals shackled taxpayers with years of government interest and subsidy payments to investors who agreed to take over troubled thrifts.

"The more liberal the terms, the easier to sell," said Steve Fritz, a top official of the Dallas office of the RTC. But the agency has reason to be careful, he said. The liberal terms S&Ls offered buyers also caused the very problem the RTC now is trying to cure.

"It was very easy for {these buyers} to walk away" from a project, Fritz said. "That's the reason we have a lot of these properties in our portfolio."

Many in the real estate industry, however, think the RTC has no choice but to make concessions to buyers. According to John G. Aldridge, an Atlanta lawyer who specializes in distressed properties, "Anyone who doesn't understand that doesn't understand the nature of the assets we're dealing with.

"Today's market is just brutal. The RTC real estate is not high quality, and we've got plenty of high-quality real estate in trouble. {For the RTC}, it would be better to get 10 {percent} or 20 percent cash down and never get another dime," Aldridge said.

Prospective buyers have found that loans for commercial properties have dried up in many parts of the country.

"A restructured project is almost by definition a lower-quality project, and banks are very worried by less than {highest-quality} projects," said Lachlan Seward, a specialist in distressed properties. "There's a stigma that attaches to it."

RTC officials have been hearing that from around the country and last month they changed regulations to make it easier for buyers to get government financing and increased the amount available to $1.2 billion. Where agency employees were told a few months ago to offer financing sparingly, they now have been instructed to "lend up to the limits" of the money available.

Donald Crocker, president of the Alexandria real estate management firm J.E. Robert Co., said that financing extends and magnifies the government's risk if property values decline further, if interest rates decline or the buyer later turns around and sues the government, claiming to have been mislead.

Thrift industry analyst Bert Ely also is concerned. "This has put the RTC in a very difficult situation. How much risk do they take in the financing?"

The RTC, however, is going beyond financing in its efforts to sell real estate in the poor sales climate. The efforts include:

Cutting prices. "We want to make aggressive adjustments on properties that have not been selling," said Al Esther of the RTC's Tampa office. The current list prices are often too high, he said, because they are based on appraisals that do not account for the recent market deterioration. RTC officials are systematically cutting prices for property that has languished six months or more, or updating appraisals.

Auctioning huge blocks of residential real estate to the highest bidder. RTC Chairman L. William Seidman recently said the agency will auction about 30,000 homes worth less than $100,000 each next year.

Offering large institutional investors -- pension funds and insurance companies -- packages of real estate, bonds and loans at deep discounts.

To sell Grand Harbor in a sluggish market, for example, RTC officials believe they must spend money to keep the community alive in the eyes of potential buyers.

The former developer's hard-won permits to build a marina on the ecologically fragile Intracoastal Waterway will expire at the end of 1991.

If the $4 million construction project doesn't get underway soon, project officials said, the market value of the property, estimated by some at $40 million to $50 million, could deteriorate by half.

In that case, said project manager Fleming, Grand Harbor could become "Lost Harbor," a gigantic white elephant carried on the backs of taxpayers.

The RTC inherited Grand Harbor nearly a year ago when it took over City Savings Bank of Somerset, N.J. City Savings had taken the project back from the developers in 1988, after sinking nearly $100 million into the resort community.

The project originally was planned as a community of 2,800 condominiums, with two golf clubs, a beach club, an upscale shopping center and a marina envisioned as a small-scale version of Baltimore's Inner Harbor.

"It may have been a project that was too big for what they were capable of doing," said Fleming, who took over the project for City Savings.

The thrift's plan, he said, was to get the infrastructure and some amenities in place, then sell it piecemeal to builders for about $100 million. But in the end, said Fleming, "It was too big a bite for the bank, too."

Late last year, the RTC arrived.

"Officials from Atlanta and Washington came down and worked the figures for a week," Fleming said. "They said {to} only spend to protect and preserve the value of the property. We agreed to reduce expenses as low as possible, and they agreed to keep the clubs open and the {construction} activity up."

Since then, said Peter Brignet of the Atlanta office of the RTC, "We have expended great effort and money ... to keep it alive in the eyes of homeowners and the eyes of buyers."

The nearly 500 completed condominiums, about 200 of which have been sold, are carefully maintained, as are the two golf courses. Construction workers are busy completing 48 town house villas, as well as dredging the harbor and preparing for the marina.

The RTC has put at least $12 million into the project, agency records show. Officials have an interested buyer, and they said they do not want to tip their hand should that deal fall through by revealing what they hope to get for the project or what they expect it to ultimately cost taxpayers.

The RTC has taken a similar approach to other large projects. One of them, Huntington, a 1,245-acre mixed-use project near Miami, was in the early stages of development when the RTC took it over.

The agency has spent about $10 million on land preparation and completion of two office buildings on the site to help bring in buyers.

A completed office building, especially one already occupied by tenants, is cheaper to carry and much easier to sell because the buyer has a stream of rental income coming in from tenants, real estate experts said. But if the upfront costs to the RTC for tenant improvements and for brokerage fees are too high, the final sales price may not be enough to cover the extra expense.

"These are very difficult decisions," Brignet said.

Across the state from Huntington, in Fort Myers, the RTC decided not to complete a Holiday Inn hotel. The exterior was already largely done, so it was protected from the elements. And the agency decided it did not intend to get in the business of running a hotel if it didn't sell when it was completed.

Project completions, seller financing, price cuts, auctions, "it doesn't matter what you wrap it in, it's all a fancy way of dealing with price," Robson said. "Nobody's gonna buy this stuff for its souvenir value. They want to make a profit."

The cost to taxpayers is not lost on Grand Harbor residents like Archibald Nevitt, a retired businessman who praises the RTC's efforts at the project.

"Everywhere I go people have said 'I'm paying for your Grand Harbor,' " he said. "I'm very sorry that it's part of the savings and loan fiasco."