Those downward trends overshadowed some of the high-profile growth stories of the year, which included the opening of Las Vegas Sands' Palazzo — the only major casino opening of the year — the continuation of work on several major resorts and the opening of the Solar One power plant.

The trend toward private equity deals in the gaming industry, the controversial merger of Sierra Health Services with UnitedHealth Group and the announcement of two arena projects also made the list of the Top 10 business stories for 2007.

Housing woes

What goes up must come down.

That saying proved correct for the Southern Nevada housing market in 2007 as the price correction that many predicted started to unfold and is likely to continue in 2008.

By the end of 2007, the median price of resale homes had fallen to $257,000, down 13 percent from its peak of $290,000 in 2006.

The price drop is attributed to the inventory of existing homes that was about 26,000 in December. The nation's credit crunch prevented many first-time and move-up buyers from purchasing homes because of requirements of larger down payments and proof of income.

The sale of existing homes was off about 40 percent in 2007.

In the new-home market, the housing recession was evident with sales down about 45 percent for the year. Builders scaled back even further: Permits were down 37 percent and the slowdown prompted builders to pare staffs.

The winners were consumers who saw builders go back to the drawing board to redesign homes to make them less expensive and more to buyers' liking. Many builders touted prices of less than $200,000, and by December the median price was more than $80,000 below the market peak in April 2006.

Master-planned communities such as Inspirada in Henderson opened during the tough market. Builders continued to pare land holdings and drop prices, and developments such as Lake Las Vegas faced losing land holdings to creditors because of the market slowdown.

Gaming deals

Big private equity gaming deals ranked as In Business's No. 2 story.

As 2007 came to a close, state regulators approved the purchase of Harrah's Entertainment by Apollo Management and Texas Pacific Group for $31.3 billion, the largest private equity deal in the industry's history.

That approval came on the heels of a $5.4 billion buyout of Station Casinos by a subsidiary of Los Angeles-based Colony Capital.

In both cases, existing management was left in place and both said they didn't expect any major operational changes — a source of comfort to the state Gaming Control Board and the Nevada Gaming Commission, which approved both deals unanimously.

Analysts have said private equity investors are good for the industry because they invest for the long term.

Another deal will be reviewed by regulators this year when Whitehall Street Real Estate Funds, a subsidiary of Goldman Sachs, acquires American Real Estate Partners, parent company of the Stratosphere and Arizona Charlie's properties for $1.3 billion.

Foreclosures

Nevada has garnered national and international attention for its No. 1 ranking in the country in property foreclosures, In Business's No. 3 story.

Media have come to Las Vegas to document the housing market woes worsened by a large number of investors who bought homes with the anticipation that the high rate of appreciation would continue.

When it didn't, many could no longer afford payments and some neighborhoods turned into ghost towns. People also started losing their homes because adjustable rate mortgages reset and upped payments by as much as 50 percent, sometimes more.

That was caused by many people buying more home than they could afford and expecting appreciation to help them refinance.

The crisis prompted Gov. Jim Gibbons and state leaders to weigh in, but the biggest step to prevent foreclosures was a new state law requiring incomes to be verified before loans are approved.

The high number has swelled an already huge inventory of homes and prompted price declines in neighborhoods as lenders looked to get homes off their books.

The problem isn't expected to improve in 2008 despite a plan by President Bush to prevent loans from resetting and helping homeowners refinance.

Merger in works

Minneapolis-based UnitedHealth Group awaits approval from federal antitrust regulators in its bid to acquire Las Vegas-based Sierra Health Services for $2.6 billion, In Business's No. 4 story of 2007.

UnitedHealth spokesman Tyler Mason said his company is optimistic and expects a decision any day. The company has had ongoing discussions with Justice Department officials since it announced its plans in March.

Nevada Insurance Commissioner Alice Molasky-Arman gave her conditional nod in August after California and Texas officials OK'd the deal.

The State Medical Association and the Service Employees International Union have been vocal opponents to the deal. The groups say a merged company would create a health insurance monopoly because the company would control 95 percent of Nevada's health management organizations.

Building boom

Resort construction was strong in 2007, Southern Nevada's No. 5 business story.

The skyline began changing on both ends of the Strip with MGM Mirage's $7.8 billion CityCenter well under way. Dubai World, a United Arab Emirates-based company, bought a 50 percent stake in CityCenter and also invested in MGM Mirage.

Work continued on Encore, the accompaniment to the highly successful Wynn Las Vegas, while ground was broken by Boyd Gaming on its biggest project to date, the $5.4 billion Echelon on the Stardust's site.

A group of former Mandalay Bay executives hold top roles in the management of the 3,889-room Fontainebleau Las Vegas, under construction on the north end of the Strip, while a partnership successful in south Florida is building the 3,000-room Cosmopolitan next to CityCenter.

Donald Trump's name will be on twin towers being built on the Strip and the locals' market was represented with work on Aliante Station in North Las Vegas.

Ground was broken on M Resort on the southern doorstep of Las Vegas while plans are being drafted for a version of the New York Plaza on the site of the New Frontier, which was imploded after its 35-acre site sold for $1.2 billion. A collaboration between MGM Mirage and Sol Kerzner is expected to produce a resort on the Strip at Sahara Avenue. Construction on the MGM-Kerzner project is scheduled to begin in 2009, with an opening slated for 2012.

Arena deals

The construction of sports arenas in Las Vegas also made headlines in 2007. Two proposals were announced, ranking No. 6 on the In Business list.

In July REI Neon/ Warburg Pincus was chosen over three other groups by the Las Vegas City Council as the preferred developer of a downtown arena.

The proposed 22,000-seat arena is part of a $10.5 billion redevelopment project in an area centered on Charleston Boulevard and Main Street. The development also includes 1,500 residential units, 1.2 million square feet of commercial space, 6,000 hotel rooms and up to 300,000 square feet of gaming space.

REI Neon was expected to have a deal in place by Oct. 31, but the group failed to meet that deadline and was recently granted an extension until the end of February to try to come to terms with the city. The repeated delays have cast the future of the project in doubt and those concerns were compounded when Anschutz Entertainment Group announced plans for the competing arena project near the Strip.

There is speculation that the REI group will not be able to raise the money for the project but Jon Weaver of Michigan-based REI denied this, saying that once the deal is finalized, the money will be available.

City officials remain cautiously optimistic, but Councilman Gary Reese, whose ward includes the current arena site, seemed to waver a little at the City Council meeting where the most recent extension was approved. He asked Scott Adams, the city's business development director, to keep options open on an alternate arena site near City Hall, in case REI Neon cannot deliver.

Meanwhile, Anschutz, which owns Los Angeles' Staples Center and the National Hockey League's Los Angeles Kings, and Harrah's Entertainment, operators of Caesars Palace, Rio and Paris Las Vegas, announced plans for a 20,000-seat arena east of the Strip near its Bally's resort.

Anschutz and Harrah's collaborated on the highly successful Celine Dion show at Caesars Palace, and the deep pockets and experience of the two companies gave the public confidence the project would press forward even if the REI Neon plan failed.

Legislature

The No. 7 story for In Business were actions — and inactions — by the Nevada Legislature, which met early in 2007 and was the first overseen by Gibbons.

Critics said Gibbons was slow to step up with proposals to solve transportation and education funding shortfalls. Lawmakers cobbled together a $7 billion budget with the help of a one-day special session to wrap up unfinished business.

Gibbons stuck to his pledge of not raising taxes, a position that frustrated many lawmakers who pleaded for flexibility in funding fixes for a number of problems. Gibbons' plan to divert room tax revenue earmarked for the Las Vegas Convention and Visitors Authority met stiff resistance, with the compromise being a $20 million allocation of LVCVA funds to transportation projects.

Around the world

Although virtually every major Las Vegas business story had a local dateline, things happening halfway around the world had a major effect on the local economy.

The gaming industry continued to explode in Macau, where two major properties operated by Las Vegas companies opened their doors — the No. 8 business news story.

Las Vegas Sands opened the Venetian Macau, one of Asia's largest hotels, in August. MGM Mirage in December opened its MGM Macau with partner Pansy Ho, daughter of casino kingpin Stanley Ho, who used to have a monopoly on gaming in the Chinese enclave.

Las Vegas Sands, successful in Macau already as its Sands Macau opened two years ago, plans to duplicate its Las Vegas convention model overseas and has booked several trade shows and conventions.

The Venetian Macau is larger than the Las Vegas version: Its Canal Shoppes retail area has three times as many stores as the mall on the Strip. The Venetian Macau is the first resort property to open on the Cotai Strip, among a collection of high-end resort brands that will open on Cotai over the next several years.

In addition to MGM Mirage establishing its foothold in Macau, Harrah's Entertainment entered the market — sort of.

The company purchased a golf course near the Cotai Strip and some analysts believe it may be angling for an entry in that gaming market if new licensing concessions are offered by the Macau government.

Energy issues

Spanish solar energy developer Acciona Energy completed construction on the world's third largest solar thermal array in Boulder City in July, the 9th of the top 10 business stories. The $260 million, 65-megawatt plant achieved 100 percent production capacity by fall.

The completion of the 400-acre plant paved the way for more large-scale solar energy development in Southern Nevada.

Other developers are planning new solar thermal arrays in the same area, and Nevada Solar One is contemplating an expansion that would include increased energy storage capacity, energy experts said.

But the news out of Boulder City has been eclipsed in recent weeks by announcements of the completion of a unique solar photovoltaic array at Nellis Air Force Base and the establishment of a solar thermal manufacturing plant owned by competitor Ausra in Las Vegas.

The Nellis plant is the largest photovoltaic array in the world. It consists of thousands of solar tracking units built, owned and operated by SunPower, a private company that will sell the power directly to Nellis.

The plant is on 140 acres on the base and includes a four-acre topped-off dump. Its unique sit-on-top technology allows the photovoltaic stands to be installed strategically, like chess pieces, without disturbing the soil beneath.

The array is expected to produce enough energy to meet 20 percent to 30 percent of Nellis' power needs and to save the base about $1 million a year. It also will help it meet government-directed renewable energy goals.

The year had its share of labor disputes, construction project triumphs and disappointments and stories that bode well for Southern Nevada's future.

Palazzo opens

Megaresort openings usually are big events that generate a large volume of media attention, but the relatively quiet opening of Palazzo was a departure from the traditional and the No. 10 story of the year.

The $1.8 billion, 3,025-room resort had a soft opening last weekend with a higher-profile grand opening on tap for later this month.

When completed, the combined Las Vegas Sands-built Venetian and Palazzo will have more than 7,000 rooms. A new arm of Canal Shoppes, featuring the upscale Barneys New York, will open in mid-January.

Palazzo was the second major opening for Las Vegas Sands in 2007: In August the Venetian Macau on the Chinese enclave's Cotai Strip opened.

Other top stories:

Although Culinary Workers Union Local 226 managed to settle contracts or continue negotiations with several Strip and downtown properties, the new owners of the Tropicana are seeking concessions on the union's established health plan and guaranteed 40-hour workweek.

The union, which represents about 60,000 people in Nevada, opened talks with casinos in March.

Sierra Pacific Resources' Ely Energy Center has been delayed because of a backlog of needed environmental evaluations for public projects on Bureau of Land Management land. The controversial coal-fired power plant in eastern Nevada is needed to boost energy production for expected growth in Southern Nevada, the utility said. It is opposed by environmentalists, renewable energy advocates and Senate Majority Leader Harry Reid. To ensure the state has enough power production capability by the plant's intended opening date in 2011, Sierra Pacific Resources is building an addition to a natural gas-fired power plant at Apex, north of Las Vegas.

In late 2007, the Nevada State Education Association and Las Vegas lawyer Kermitt Waters announced plans for petitions to place separate initiatives on the November ballot. The association wants to raise the tax on gaming from 6.75 percent to 9.75 percent to raise pay levels for teachers and increase spending for education, while Waters' proposal would raise the tax rate to more than 20 percent to eliminate property taxes and finance several state needs, such as education and transportation. The gaming industry vowed to fight both efforts and has filed a legal challenge to the association's effort. Gaming executives have spoken out against both efforts.

The success of Nevada's tourism industry continues to be a major story. Although the final statistics won't be tallied until February, 2007 was on course to be a record year for visitation in Las Vegas and Nevada. Traffic at McCarran International Airport also was on a record pace. The Las Vegas Convention and Visitors Authority said the room inventory expanded by more than 4,000, thanks primarily to the opening of the Palazzo and several small motels and hotels and despite the demolitions of the New Frontier and Nevada Landing.

The federal minimum wage increased 70 cents to $5.85 an hour in July. There will be a 70-cent annual increase until 2009, when the hourly minimum wage reaches $7.25. The federal increase comes eight months after Nevadans voted in November 2006 to adopt a $1 hourly increase above the federal level if approved health benefits aren't provided by the employer.

After threats of a strike and a required 60-day cooling-off period, two of Valley Health System hospitals settled contracts with nurses represented by the Service Employees International Union Local 1107. The union won pay increases of 18 percent to 30 percent over three years, but failed to gain enforceable nurse-to-patient staff levels and mandatory overtime.

Two major resort implosions helped to clear the path for future Streip redevelopment. The Stardust was imploded in March as Boyd Gaming Corp. makes way for Echelon, a five-hotel-tower resort with significant meeting and retail space that is scheduled to open in 2010.

The New Frontier was imploded by the site's new owners in November, making way for a $5 billion Las Vegas version of their famed New York hotel, the Plaza.

Mixed-use projects continue to be a hot commodity on the development front.

Town Square, a mixed-use development by Turnberry Properties, opened on Las Vegas Boulevard South just before Christmas. The project includes retail, entertainment and office space.

Several projects in just about every part of the valley are on the drawing board.

The Village at Queensridge, an $850 million retail, residential, entertainment and office complex being developed by Executive Home Builders at Rampart Boulevard and Alta Drives, is scheduled for completion later this year.

General Growth's Summerlin Centre at Sahara Avenue and Interstate 215, will include a 100-acre community hub that combines retail shopping, dining, office space, a hotel and residences.

In Henderson, Plise has broken ground on City Crossing, a 126-acre, $2 billion mixed-use project that is expected to fill a much-needed retail void in the southern valley.

Retail experts say the valley is behind the curve because in recent years much of the retail development has taken place on the Strip. Now the focus has begun to shift toward projects geared toward locals.

In 2007 the Las Vegas Convention and Visitors Authority spent part of its time defending its existence, but an even greater amount of time planning for a major face-lift to the Las Vegas Convention Center. The LVCVA eventually parted with $20 million of its budget, which will go to the Nevada Transportation Department for highway construction after fighting off proposals to cut even more, spurred largely by the management of Las Vegas Sands, which owns the Sands Expo & Convention Center. Sands executives say it is unfair to use funds raised by a room tax on tourists to subsidize rates for exhibitors at various conventions and trade shows. Meanwhile, organizing and planning continued for the $890 million enhancement project which will take another three years to complete as conventioneers attend shows that will continue to meet while construction occurs.

Embattled District Judge Elizabeth Halverson remains on paid administrative leave as she awaits a dismissal hearing. Halverson has been on leave since late spring and has several times sued to overturn her temporary suspension. She is accused of incompetence, falling asleep in court and abusing her staff. The Nevada Supreme Court ruled last summer against Halverson's appea, but warned that if the Judicial Disciplinary Commission did not act expediently to call a dismissal hearing it might be forced to reinstate her. The commission has yet to set a hearing date.

The busiest airline at McCarran is expected to get even busier after the establishment of a crew base by Southwest Airlines in the fall. The 17,000-square-foot facility handles 394 pilots and 460 flight attendants with room to expand 650 pilots and 900 flight attendants by 2009. The base enables Southwest crews to make Las Vegas their home and, more importantly, assures the airline's growth for several years.