THE YEAR IN BUSINESS

Monday, Dec. 25, 2006 | 7:24 a.m.

In the world of Southern Nevada business, 2006 will be remembered as a year that real estate cooled, and multibillion-dollar projects began heating up.

A revered Strip resort closed, a billion-dollar one opened off-Strip, the biggest project of them all started rising and the biggest gaming company found a new owner.

Tourists from Asia found an easier way to get here, but we're still working on Strip gridlock and airport congestion.

A bunch of bunnies found a new home and a bunch of dealers were hoppin' mad.

Here are some highlights from 2006:

Real estate

After robust sales and double-digit home appreciation in 2004 and 2005, the market slowed down in 2006.

The high cost of new and existing housing had priced many Las Vegans out of the market. But when the market began to cool, investors began pulling out, the inventory eclipsed demand, prices softened even more and construction slowed.

The inventory of homes swelled to more than 20,000 for months, making it difficult for homeowners who wanted to sell their homes to purchase a new one. Buyers canceled their contracts with homebuilders who, stuck with inventory and facing pressure from Wall Street, offered trips, cars, pools and thousands of dollars in other incentives to lure buyers.

The appetite also cooled for high-rise and mid-rise projects, with several being canceled due to slow demand and rising construction costs.

Gaming

The casino industry's cash flow was an appealing target for private equity investors, and in 2006 several of them pounced.

In the largest deal, Apollo Management and Texas Pacific Group bought Harrah's Entertainment for $27.8 billion. How the world's largest gaming company will advance under private ownership will be a major story in 2007.

The management of Station Casinos Inc. is trying to take that company private, too. Station Casinos Chairman Frank Fertitta III, his brother Lorenzo, sister Delise Sartini and her husband, Blake - who collectively own 27 percent of Station's stock - teamed with Los Angeles-based Colony Capital LLC in a $4.7 billion bid for Station, which owns 12 Southern Nevada casinos and several real estate holdings across the Las Vegas Valley. (Among them: Red Rock Resort, which opened on the valley's west side as the first $1 billion off-Strip resort.)

Two other companies with gaming interests also were targeted for takeover this year. Columbia Sussex Corp. acquired Phoenix-based Aztar Corp., which owned the Tropicana, for $2.75 billion, and Kerzner International was taken private by an investment group led by the company's top executives.

One other deal, completed in July, resulted in Michael Gaughan leaving the board of directors of Boyd Gaming in exchange for $512 million in Boyd shares, taking over the South Coast casino and changing its name to South Point.

As MGM Mirage's $7 billion Project CityCenter - the largest development project in U.S. history - began to take shape in June, the company also was building a resort in Macau, the gambling enclave on the coast of China where Steve Wynn opened a resort in September. (The Las Vegas Sands Corp., which led the way into Macau in 2004, will open Venetian Macau next year.)

Tourism and travel

Korean Air in September began flights between Seoul, South Korea, and Las Vegas, offering connecting service to several Chinese cities.

But concern grows over how McCarran International Airport will be able to handle a growing number of passengers in coming years. The airport, the fifth busiest in the nation, is expected to reach its capacity of 56 million people a year before a new airport can be built in the Ivanpah Valley, near Jean.

Transit officials believe they made headway in addressing Strip gridlock, having won county approval to begin developing a route for the financially strapped Las Vegas Monorail between McCarran and the resort corridor.

The Las Vegas Convention and Visitors Authority approved a $737 million refurbishment and expansion, expected to be completed within three years.

Allegiant Travel Co., which operates Allegiant Air, went public, trading on the Nasdaq index. Allegiant specializes in connecting passengers from small cities in the United States to Las Vegas, Orlando and Tampa Bay, and has increased its focus on new revenue by charging for drinks, snacks and assigned seating.

Miscellany